617 F. App'x 136
3rd Cir.2015Background
- Girardi Keese signed an Attorney Participation Agreement (May 2009) with the Avandia MDL Plaintiffs’ Steering Committee agreeing to contribute 7% of recoveries (4% from fees, 3% from clients) in exchange for Steering Committee work product and coordination.
- The MDL district court issued Pretrial Order 70 (Aug. 2009), creating a common benefit fund, incorporating a materially identical Participation Agreement form, and directing assessments on covered Avandia claims (including state, tolling, and unfiled claims) for counsel who signed the agreement.
- Girardi Keese used MDL work product in thousands of California state-court Avandia cases and settled all its cases in Aug. 2012, but refused to pay the 7% assessment on the state-court settlements.
- The Plaintiffs’ Advisory Committee moved to compel payment; the MDL district court held Girardi Keese’s agreements and settled claims were subject to the 7% assessment and ordered GSK to withhold that amount.
- Girardi Keese appealed, arguing lack of district-court jurisdiction over state-court cases and contesting the fee determination; it also sought credit for alleged common-benefit work it performed.
Issues
| Issue | Girardi Keese's Argument | Plaintiffs’ Advisory Committee / MDL Argument | Held |
|---|---|---|---|
| Whether the appellate court has jurisdiction over the district court’s order assessing 7% on settled claims | Order is interlocutory/like an interim MDL fee award and not a final appealable order | Assessment reduced to a definite amount for settled cases so order is final | Appealable as a final order under 28 U.S.C. § 1291 |
| Whether the MDL transferee court had jurisdiction to impose/force collection of assessments on state-court cases | District court lacked jurisdiction over claims not transferred to MDL and cannot compel non-parties in state cases | Girardi Keese signed an agreement that was incorporated into Pretrial Order 70, so court could enforce breach of its order | District court had ancillary jurisdiction to enforce the agreement incorporated into its order |
| Whether Girardi Keese’s separate Attorney Participation Agreement was incorporated into Pretrial Order 70 | Agreement predates order and is not identical to form attached, so not incorporated | Agreement materially tracked the order, contemplated court order, created continuing obligations, and thus was incorporated | Agreement was incorporated into Pretrial Order 70; breach could be adjudicated by district court |
| Whether Girardi Keese was entitled to offset/credit from the common benefit fund for its claimed common-benefit work | Girardi Keese spent significant resources and thus should get credit/award from the fund | No record evidence showed Girardi Keese provided common benefit to all plaintiffs; it must make proper showing under Pretrial Order 70 | District court did not abuse discretion in denying credit; Girardi Keese may apply for fund distribution per the order’s procedures |
Key Cases Cited
- In re Diet Drugs Prods. Liab. Litig., 401 F.3d 143 (3d Cir. 2005) (interim MDL fee award that anticipates further proceedings is not a final appealable order)
- In re Diet Drugs Prods. Liab. Litig., 582 F.3d 524 (3d Cir. 2009) (final, definite fee awards are appealable; district court may craft leadership compensation)
- United Auto. Workers Local 259 Soc. Sec. Dep’t v. Metro Auto Ctr., 501 F.3d 283 (3d Cir. 2007) (fee awards reduced to a definite amount are final and appealable)
- Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375 (1994) (a contract incorporated into a court order makes breach a violation of the order enforceable by the court)
- In re Showa Denko K.K. L-Tryptophan Prods. Liab. Litig.-II, 953 F.2d 162 (4th Cir. 1992) (MDL transferee court lacks jurisdiction to bind plaintiffs in cases not before it)
- In re Genetically Modified Rice Litig., 764 F.3d 864 (8th Cir. 2014) (district court cannot compel state-court plaintiffs not before it to contribute to MDL fund)
- Hartland v. Alaska Airlines, 544 F.2d 992 (9th Cir. 1976) (district court lacked jurisdiction to compel payments from lawyers not parties to the action)
- D.H. Blair & Co. v. Gottdiener, 462 F.3d 95 (2d Cir. 2006) (parties may consent to personal jurisdiction by contract)