In Re: Law Offices of Ben C. Martin v. Babbitt & Johnson Pa, 81 F.4th 897

Background

MDL: In re Bard IVC Filters — district court created a common benefit fund (CMO 6) requiring a percentage holdback on recoveries to compensate counsel who performed work for the common benefit.
Participation Agreement: Counsel could sign a participation agreement (incorporated into CMO 6) that granted access to MDL common-benefit work product in exchange for agreeing to assessments (fees and costs).
BCM’s role: Ben C. Martin / Martin|Baughman (BCM) served on the Plaintiffs’ Steering Committee, was treated as participating counsel, accessed MDL work product, and received common-benefit payments.
Non-MDL cases: BCM represented many claimants with cases outside the MDL (state-court, unfiled, or filed after MDL closed) and later settled all clients’ claims.
Procedural history: BCM moved to exempt its non-MDL recoveries from the assessment; the district court denied the motion and the Ninth Circuit affirmed.
Core holding (synthesized): A district court may enforce common-benefit assessments against recoveries in non-MDL cases when counsel voluntarily agreed to a participation agreement (incorporated into a court order) and received access to the common-benefit work product.

Issues

Issue	Plaintiff's Argument (BCM)	Defendant's Argument (Appellees/PLC)	Held
Authority to assess non-MDL recoveries	District court lacked judicial authority/jurisdiction to impose holdbacks on non-MDL recoveries	MDL court can regulate MDL counsel and enforce an order incorporating a participation agreement	Affirmed — court may order assessments on non-MDL recoveries where counsel voluntarily agreed and received MDL work product
Whether question is subject-matter jurisdictional	The order exceeds court’s jurisdiction over non-MDL cases	Not jurisdictional here; court regulates MDL counsel and ancillary enforcement of its orders	Held not a jurisdictional defect; court had authority to regulate conduct of MDL counsel and enforce the order
Applicability of common-fund doctrine to non-MDL recoveries	Common-fund doctrine doesn’t authorize assessments from strangers/unfiled/nonparticipating recoveries	Equitable common-fund principles apply when counsel and clients received a benefit from MDL work product	Held equitable common-fund principles support assessments where counsel accessed and used the MDL work product
Precedent that forbids assessments on non-MDL claimants	Relies on Hartland, Vincent, Genetically Modified Rice, Showa Denko to argue assessments on non-MDL recoveries are prohibited	Those precedents are distinguishable because there the claimants/counsel were strangers who did not sign participation agreements or use MDL work product	Held those cases are distinguishable and do not control where counsel consented via an incorporated participation agreement and used the work product

Key Cases Cited

Hartland v. Alaska Airlines, 544 F.2d 992 (9th Cir. 1976) (MDL court lacked power to compel contributions from nonparticipating strangers)
Vincent v. Hughes Air West, 557 F.2d 759 (9th Cir. 1977) (common-fund doctrine permits MDL assessments for counsel who benefited MDL plaintiffs)
In re Genetically Modified Rice Litig., 764 F.3d 864 (8th Cir. 2014) (MDL court cannot require holdbacks from state-court plaintiffs who did not participate)
In re Showa Denko K.K. L-Tryptophan Prods. Liab. Litig.-II, 953 F.2d 162 (4th Cir. 1992) (MDL court cannot extend obligations to nonparticipating claimants)
Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375 (1994) (an agreement incorporated into a court order may be enforced as a violation of that order)
Boeing Co. v. Van Gemert, 444 U.S. 472 (1980) (statement of the common-fund doctrine: attorneys who create a common fund are entitled to a reasonable fee from it)
Trustees v. Greenough, 105 U.S. 527 (1881) (historical foundation of the common-fund rule)
In re Avandia Mktg., Sales Pracs. & Prods. Liab. Litig., [citation="617 F. App'x 136"] (3d Cir. 2015) (participation agreement incorporated into an MDL order can be enforced against counsel’s non-MDL recoveries)
In re Roundup Prods. Liab. Litig., 544 F. Supp. 3d 950 (N.D. Cal. 2021) (district court questioned authority to assess non-MDL recoveries where plaintiffs were strangers and declined to exercise any such authority)
In re General Motors LLC Ignition Switch Litig., 477 F. Supp. 3d 170 (S.D.N.Y. 2020) (discussion of MDL court powers and limits)