Case Information
WO
IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA IN RE: Bard IVC Filters Products No. MDL 15-02641-PHX-DGC Liability Litigation, ORDER
The Law Offices of Ben C. Martin and the law firm Martin|Baughman (collectively, “BCM”) have filed a motion to reduce and exempt their clients’ recoveries from common benefit fee and expense assessments. Doc. 22144. The motion is fully briefed, and no party has requested oral argument. Docs. 22148, 22149, 22151, 22160. For reasons stated below, the Court will deny the motion.
I. Background.
This multidistrict litigation (“MDL”) involves personal injury cases brought against Defendants C. R. Bard, Inc. and Bard Peripheral Vascular, Inc. (collectively, “Bard”). Bard manufactures and markets medical devices, including blood clot filters. The MDL Plaintiffs each received implants of Bard filters and claim they were defective and caused serious injury or death.
The MDL was transferred to this Court in August 2015 when 22 cases had been filed. Doc. 1. More than 8,000 cases were filed before the MDL closed in May 2019. Docs. 18079, 18128. Thousands of the cases have settled. Many others have been remanded or transferred to appropriate districts because they no longer benefit from centralized pretrial proceedings. See , e.g. , Doc. 22042 (final remand and transfer order).
At the outset of the MDL, the Court entered Case Management Order (“CMO”) 1, which directed counsel to select and appoint a Plaintiffs’ Steering Committee (“PSC”) to coordinate pretrial activities and trial planning. Doc. 248. [1] While the configuration of the PSC changed during the course of the litigation ( see Docs. 248, 4016, 5285), Ben Martin has been a member since its inception ( see Docs. 176 at 8, 248 at 2). [2]
CMO 6 was issued early in the MDL to provide for the fair and equitable sharing among plaintiffs and their counsel of the burden of litigating this complex case. Doc. 372 at 1. A common benefit fund was established to ensure that attorneys who performed work that benefited all plaintiffs and their counsel would be reasonably compensated. Id. at 1-2; see also Doc. 18038 at 4. Compensable common benefit work included meetings and conference calls, discovery, document review, expert retention and discovery, motion practice, court appearances, plaintiff-specific discovery and motion practice on bellwether cases, bellwether trials, and settlement efforts. Doc. 372 at 1-2, 7-8.
CMO 6 further provided for the establishment of two interest-bearing accounts to receive and disburse common benefit funds – the Bard IVC Filters Fee Fund and the Bard IVC Filters Expense Fund. Id. at 9. The Court granted the PSC’s request to establish these accounts and appointed Citibank as escrow agent. See Docs. 16932, 17777. The accounts are funded through assessments on the gross monetary recoveries received by plaintiffs and their counsel. Doc. 372 at 9-10.
CMO 6 established a total common benefit assessment amount of 8%, which included 6% for attorneys’ fees and 2% for expenses. at 10. In May 2019, the Court found that significant unanticipated common benefit work justified an increase in the attorneys’ fees assessment percentage to 8%, but declined to increase the 2% assessment for expenses. Doc. 18038 at 3-5. [3]
As a member of the PSC, BCM was included as “Participating Counsel” under CMO 6. Doc. 372 at 2-3. As Participating Counsel, BCM agreed to the terms of the “Participation Agreement” which were incorporated into CMO 6. Id. at 14-27. The Participation Agreement is a voluntary agreement between plaintiffs’ attorneys to share common benefit work. Id. at 15-16. Under the agreement, an attorney is entitled to receive and use common benefit work “created by those attorneys who have also executed, or have been deemed to have executed, the Participation Agreement[,] . . . regardless of the venue in which the attorney’s cases are pending.” Id. at 15. In return, Participating Counsel agreed to pay common benefit assessments from the gross recoveries obtained in all cases benefitting from common benefit work, including MDL cases and “all un-filed cases, tolled cases, and/or cases filed in state court in which [Participating Counsel] have a fee interest[.]” Id. at 17. This commitment was repeated several times in the Participation Agreement. [4] The agreement further provided that “Non-Participating Counsel are not required to pay an assessment on state court cases or on un-filed cases[,]” but they are not entitled to receive common benefit work or common benefit payments for any work performed or expenses incurred. Id. at 17.
BCM moves to exempt and reduce client recoveries from common benefit assessments. Doc. 22144. BCM contends that no assessment should be paid by BCM clients whose cases were filed in federal court after the MDL closed, were filed in state court, or were never filed in any court. at 11. BCM further contends that assessments for its cases that were at one time part of the MDL should “be capped at the average fee and costs amount paid on those cases that settled solely as the result of common fund work.” Id. The Common Benefit Fee and Cost Committee opposes the motion. Doc. 22149. [5] Bard has filed a brief urging BCM to be mindful of its confidentiality obligations under the various settlement agreements and asking the Court to deny BCM’s request to conduct discovery regarding the value of other settlements. Doc. 22148.
BCM primarily relies on Judge Chhabria’s decision
In re Roundup Products
Liability Litigation
,
II. The Roundup Decision.
Plaintiffs’ lead counsel in
Roundup
requested an order requiring that “whenever
anyone in the country recovers money from Monsanto based on allegations that its
Roundup product caused their cancer, 8.25% of their recovery be held back and placed into
a [common benefit] fund to compensate lawyers who took the lead in litigating against
Monsanto.”
Judge Chhabria understandably found this request “far-reaching” and “breathtaking [in] nature,” and largely denied it. at 952-53, 957; see also id. at 968 (noting “how badly lead counsel overreached when they asked the Court to tax every Roundup-related recovery by anyone in the country, regardless of any connection to the MDL”). With respect to recoveries by people who were not plaintiffs in the MDL but who hired a lawyer with a client in the MDL, Judge Chhabria found that he could not “exert authority over the recovery of a person with so tenuous a connection to the MDL.” Id. at 963. He concluded that “[n]either the common fund doctrine nor the district court’s inherent power to control its docket justifies an order affecting the recovery of a nonparty merely because they happened to hire a lawyer with a client in the MDL.” Id. And he found that the “same logic applies to disputes where the claimant has not filed a lawsuit in any court.” at 964.
Judge Chhabria did not address the question presented here. Although he found it
“questionable whether a district court has authority . . . over the recovery of someone
whose lawyer signs a participation agreement,”
Judge Chhabria’s decision was influenced by several factors that are not present here.
First, in contrast to the very broad fee requests at issue in Roundup , the common benefit assessments in this case apply only to unfiled or state court cases whose attorneys elected to become Participating Counsel in this MDL. Docs. 372 at 17, 22149 at 3, 6. BCM could have avoided paying assessments on recoveries from its unfiled and state court cases by declining to become Participating Counsel and forgoing the opportunity to receive and use common benefit work. See Doc. 22149 at 14. BCM instead joined the PSC, became Participating Counsel subject to the terms of the Participation Agreement, accessed common benefit work frequently while pursuing its unfiled and state court cases, and received common benefit payments for work it did in the MDL and in its state court cases. See Doc. 22149 at 2-8, 14. BCM expressly agreed in the Participation Agreement that common benefit assessments would “apply to all” of its “un-filed cases, tolled cases, and/or cases filed in state court[.]” Doc. 372 at 17; see also id. at 10, 15 (same).
Second, the Roundup court noted that much of the common benefit work in that case had been placed on the public docket and was available to any member of the public for free. The court found “[i]t would not be appropriate to take money from anyone’s recovery based on access to that information.” at 972. This MDL is different. The common benefit work in this case includes millions of pages of reviewed documents, substantial ESI discovery, scores of depositions (including trial preservation depositions after the MDL closed), and numerous experts retained and developed by the MDL’s lead counsel. See Docs. 18038 at 2-3, 22036 at 7-31. Although some of this work product can be found in the public docket (albeit with considerable difficulty as the docket itself now includes more than 22,000 separate entries), much of it is not public and would not be accessible to lawyers who are not Participating Counsel.
What is more, even for materials that have been made public, lead counsel fought expensive battles that later-settling lawyers do not have to fight, including numerous Daubert challenges, multiple summary judgment motions (including one that would have defeated all plaintiffs’ claims on the basis of preemption), numerous motions in limine, three multi-week bellwether trials, post-trial motions and appeals, and substantial settlement efforts. See Doc. 22036 at 4-31. The common benefit work also includes scores of depositions of general causation experts and Bard witnesses that do not have to be repeated in individual cases. See id. at 19-20, 29-30. BCM notes that it had to produce experts and take or defend a number of depositions, but the vast majority of these undoubtedly were plaintiff-specific witnesses that were not addressed in the MDL and that would have been required in every individual case. Doc. 22144 at 5-6 (noting that depositions were taken of plaintiffs, treating physicians, and sales representatives).
Anticipating that some attorneys would need to try cases on remand from the MDL, the PEC created a trial package and made it available to Participating Counsel. See Doc. 22149 at 2. The trial package is designed to assist counsel on remand in presenting their clients’ cases at trial. It contains almost all the work product developed in the MDL and qualifying pre-MDL cases, including tens of thousands of documents, motions, transcripts, exhibits, corporate documents, legal memos, and post-bellwether preservation depositions that can be played at trial in lieu of live testimony. See id. The trial package is maintained in a secure online business repository (Dropbox), with access strictly controlled by one PEC law firm (Heaviside Reed Zaic). See Docs. 22149 at 4, 22149-1 ¶¶ 1-4. The trial package and other common benefit work represent the efforts of more than 200 attorneys and staff who spent more than 100,000 hours creating MDL work product. See Doc. 22149 at 4. The Court cannot conclude, as did the Roundup court, that the common benefit work in this case conferred little benefit on BCM and other Participating Counsel.
Third, Judge Chhabria found no correlation between the lawyers who signed the participation agreement in his case and those who were granted access to common benefit work. This was because lead counsel “did not take the time to ensure . . . that attorneys who requested access to MDL work product signed the agreement.” 544 F. Supp. 3d at 972. As a result, Judge Chhabria found “it would not be reasonable to require a holdback from the recoveries of non-parties whose attorneys happened to sign the participation agreement[.]” Id. The same is not true here. The PEC took reasonable measures to ensure that only Participating Counsel receive access to common benefit work. Docs. 22149 at 4, 22149-1 ¶¶ 1-4; see also Doc. 372 at 15 (“Upon execution of this Participation Agreement[,] . . . the [PEC] will provide Participating Counsel access to the Common Benefit Work Product, including . . . full access and availability of work product within the private, secure and confidential plaintiffs-only website.”). More will be said about this below.
Fourth, to the extent lawyers for nonparties actually received access to confidential common benefit work, the Roundup court doubted “that access to that work product is what truly advanced the ball for those attorneys and their clients.” In this case, the Court has no doubt that BCM’s use of the trial package advanced the ball for its clients. BCM reached a settlement with Bard that includes more than 500 clients, and accessed the trial package more than 5,000 times while representing those clients between January 2020 and the present. Docs. 22144 at 2, 22149 at 4 (citing Doc. 22149-1 ¶¶ 6-7). BCM claims that this fact “proves nothing, as BCM clearly was entitled to access that material an unlimited number of times[.]” Doc. 22151 at 3. But BCM enjoyed unlimited access only because it signed on as Participating Counsel and agreed that common benefit assessments would “apply to all un-filed cases, tolled cases, and/or cases filed in state court in which [BCM has] a fee interest[.]” Doc. 372 at 17. BCM argues that had it “simply downloaded the materials to its own internal database, [it] could have made exactly the same use of those materials while accessing them via the Dropbox site fewer than a dozen times.” Doc. 22151 at 3-4. True, but the point is that BCM enjoyed access to the MDL work product – whether online or by downloading it – only because it entered into the Participation Agreement and agreed to pay common benefit assessments. Roundup ’s concern about claimants paying for work that did not benefit them simply is not present here.
Fifth, because of the very large verdicts returned in three
Roundup
trials ($289
million, reduced to $20.5 million; $80 million, reduced to $25 million; and $2.55 billion,
reduced to $87 million), the
Roundup
court expressed doubt about whether lead counsel
needed any more compensation for their work.
Seventh, the
Roundup
court did not set a common benefit assessment amount at the
beginning of the
Roundup
MDL and had not set an amount at the time it addressed these
issues.
In short, the Roundup court faced very different circumstances than this case. Those circumstances surely influenced Judge Chhabria’s evaluation of his power to make common benefit assessments against plaintiffs who did not participate in the MDL. This Court reaches different conclusions about its power to hold BCM and its clients to the agreements and orders entered from the beginning of this case.
III. The Court Has Authority to Impose the Common Benefit Assessments.
Roundup and other cases have addressed three possible sources of authority for an MDL court’s power to impose common benefit assessments on plaintiffs in and out of the MDL: (1) the federal MDL statute, (2) inherent judicial power, and (3) the common fund doctrine. The Court will address each of these possible sources and relevant reliance interests.
A. MDL Statute.
The Court agrees with
Roundup
and other cases that the MDL statute is procedural
in nature and does not clearly confer on federal courts the power to create a common benefit
fund or make assessments for that fund.
See Roundup
, 544 F. Supp. 3d at 958;
In re
Genetically Modified Rice Litig.
,
The Court adds one observation here. In
Roundup
, Judge Chhabria quoted Judge
Furman’s observation in
In re General Motors LLC Ignition Switch Litigation
, 477 F. Supp.
3d 170 (S.D.N.Y. 2020), that “[a] subset of plaintiffs’ lawyers do the lion’s share of the
work, but that work accrues to the benefit of all plaintiffs. If those other plaintiffs were not
required to pay any costs of that work, high-quality legal work would be under-incentivized
and, ultimately, under-produced.”
Id
. at 174;
see Roundup
,
B. Inherent Power.
“[I]t is well established that federal courts . . . possess certain inherent powers,
‘governed not by rule or statute but by the control necessarily vested in courts to manage
their own affairs so as to achieve the orderly and expeditious disposition of cases[.]”
Gen.
Motors LLC Ignition Switch Litig.
,
While a district court’s inherent managerial power is particularly important in a
large MDL like this one, the power is not unlimited. As Judge Furman explained in
General Motors
, “‘the outer boundaries of a district court’s inherent powers’ have never
been ‘precisely delineated,’ but courts have articulated certain limiting principles.” 477 F.
Supp. 3d at 189 (quoting
Dietz v. Bouldin
,
CMO 6 falls within these limits. “It is beyond dispute that the Court may ‘establish
fee structures designed to compensate [lead counsel] for their work on behalf of all
plaintiffs involved in [this MDL].”
Id.
at 189-90 (quoting
Smiley v. Sincoff
,
The Court’s exercise of its inherent power to impose common benefit assessments on BCM’s unfiled and state court cases is bolstered by the fact that BCM knowingly entered into the Participation Agreement incorporated into CMO 6. The Third Circuit addressed a similar situation in In re Avandia Marketing, Sales Practices & Products Liability Litigation , 617 Fed. App’x 136 (3d Cir. 2015). In that case, a law firm entered into a participation agreement with the plaintiffs’ steering committee, pursuant to which it agreed to pay 7% of the recovery on its clients’ claims into a common benefit fund in exchange for use of the steering committee’s work product. Id . at 138. The district court incorporated the agreement into a common benefit fund order, which mandated an assessment on “all Avandia claims, regardless of whether those claims are subject to the jurisdiction of the MDL, tolled, unfiled, or filed in another jurisdiction if, among other things, the attorney signed on to the Participation Agreement[.]” at 138-39 (quotation marks and brackets omitted). When a global settlement was reached, the firm argued that its state court cases should not be subject to any assessment. See id. The district court disagreed, reasoning both that the firm had “used MDL work product” in its state court cases and that the “Participation Agreement covered all claims for which [the firm] served as counsel at the time of resolution.” Id. at 140.
The Third Circuit affirmed on the ground that the firm was bound by the district
court’s common benefit order. “A district court that supervises a multidistrict litigation,”
the Circuit explained, “has – and is expected to exercise – the ability to craft a plaintiffs’
leadership organization to assist with case management. Included in that ability is the
power to fashion some way of compensating the attorneys who provide class-wide
services.”
Id.
at 141 (citation and quotation marks omitted). The district court “permitted
the Steering Committee to, essentially, trade work product for a share in the recovery in
cases
not
before the MDL.”
Id.
at 141 (emphasis in original). Because the district court
incorporated the Steering Committee’s agreement with the firm into its own order, and the
breach of an agreement incorporated into a court order is a violation of the order itself, the
district court “had jurisdiction to determine whether [the law firm] breached [its] agreement
and, if so, to remedy that breach.” at 142 (citing
Kokkonen v. Guardian Life Ins. Co. of
Am.
,
The same reasoning applies here. As Participating Counsel, BCM knowingly
assented to the terms of the Participation Agreement which were incorporated into CMO 6.
See
Doc. 372 at 14-27. BCM took advantage of those terms when it repeatedly accessed
common benefit work for the good of its clients, and when it applied for and received
payments of common benefit funds for its own common benefit work, including its state
court work. Doc. 22149 at 8 n.6;
see also Nat’l Opiate Prescription Litig.
, No. 1:17-
md-2804, at *13 (“MDL courts appear virtually unanimous on their authority to subject a
recovery in a non-MDL forum to an appropriate assessment if the plaintiffs or their counsel
actually used
common benefit work product.”) (citing
Gen. Motors LLC Ignition Switch
Litig.
,
Although BCM does not address what it told its clients about the common benefit assessments that would apply to their claims in light of the Participation Agreement and CMO 6, it surely informed them of those obligations and obtained their agreement. Ethical rules required BCM to advise their clients of the terms of their fee arrangements – which would include the common benefit fund assessments established by the Court and to which BCM had agreed – and to include those terms in their written agreements. See , e.g. , Ariz. Sup. Ct. R. 42, ER 1.5(b) (“The scope of the representation and the basis or rate of the fee and expenses for which the client will be responsible shall be communicated to the client in writing, before or within a reasonable time after commencing the representation[.]”); ER 1.5(c) (“A contingent fee agreement shall be in a writing signed by the client and shall state the method by which the fee is to be determined, including the percentage or percentages that shall accrue to the lawyer in the event of settlement, trial or appeal, litigation and other expenses to be deducted from the recovery[.]”); Tex. Disciplinary Rs. of Prof’l Conduct, ER 1.04(c) (“When the lawyer has not regularly represented the client, the basis or rate of the fee shall be communicated to the client, preferably in writing, before or within a reasonable time after commencing the representation.”); ER 104(d) (“A contingent fee agreement shall be in writing and shall state the method by which the fee is to be determined. If there is to be a differentiation in the percentage or percentages that shall accrue to the lawyer in the event of settlement, trial or appeal, the percentage for each shall be stated. The agreement shall state the litigation and other expenses to be deducted from the recovery, and whether such expenses are to be deducted before or after the contingent fee is calculated.”); Am. Bar. Assoc. Model Rs. of Prof’l Conduct, ER 1.5(b)-(c) (same).
What is more, BCM and its clients clearly benefitted from the MDL work product.
BCM not only received the trial package containing a vast amount common benefit work
ready for use in trials, but BCM also was not required in its unfiled and state court cases to
take scores of depositions of Bard witnesses and general causation experts that were taken
in the MDL. Nor was BCM required to obtain and review the numerous documents and
ESI produced during consolidated pretrial discovery in the MDL. And it was lead MDL
counsel, not BCM, who successfully opposed Bard’s numerous motions in limine on
general causation experts and its motion for summary judgment on preemption grounds.
See
Docs. 5396, 7369, 8872, 21632;
see also In re Bard IVC Filters Prods. Liab. Litig.
,
No. MDL 15-02641-PHX-DGC,
In addition, the Court made many key legal and evidentiary rulings in the MDL that would affect remanded and transferred cases, including rulings on discovery matters, privilege and work product issues, Daubert challenges, the admissibility of evidence regarding the FDA clearance process, Bard’s Simon Nitinol Filter, and scores of deposition designations for trial. Doc. 22036 at 16-30, 48-59. As explained to other courts in the Court’s final remand and transfer order, “[b]ecause all general fact and expert discovery has been completed in this MDL, the courts receiving cases need not be concerned with facilitating general expert, corporate, and third-party discovery.” at 31. The receiving courts also were provided a stipulated designation of record that included all significant rulings made in the MDL. See id. at 2, 32.
BCM does not state how closely the courts in its seven trials followed these MDL rulings, but the four trials it identifies all occurred in federal court (Doc. 22144-1 at 3 n.1), and those courts were specifically advised of key MDL rulings and encouraged by this Court to follow them (Doc. 22036 at 16-31). Thus, although BCM notes that it had to take a number of depositions and produce experts, the vast majority of these undoubtedly were plaintiff-specific matters that were not addressed in the MDL. See Doc. 22036 at 31 (discussing case-specific discovery and trial preparation for remanded and transferred cases). BCM’s cases for its clients were built on the foundation of the MDL work. It is simply incorrect to assert that they did not benefit from that work.
For all these reasons, the Court concludes that it has the inherent power to enforce
the terms of CMO 6 and the Participation Agreement, to hold BCM to its promise to pay
the Court-ordered common benefit assessments on recoveries obtained in its unfiled and
state court cases, and to hold BCM’s clients to the agreement made by their counsel and
surely included in their fee agreements with BCM. Judge Furman reached the same
conclusion: “[T]he Court concludes that it had both jurisdiction and authority to mandate
assessments on the settlements of . . . unfiled claims. It follows that the Court may, and
will, enforce Order No. 42 as written.”
Gen. Motors LLC Ignition Switch Litig.
, 477 F.
Supp. 3d at 192;
see also In re Vioxx Prods. Liab. Litig.
,
C. Common Fund Doctrine.
“[U]nder the ‘American Rule,’ the prevailing litigant is ordinarily not entitled to
collect a reasonable attorneys’ fee from the loser.”
Pennsylvania v. Del. Valley Citizens’
Council for Clean Air
,
The common fund doctrine typically has been used to award attorneys’ fees in class
actions.
See Vioxx Prods. Liab. Litig.
,
In light of the equitable principles underlying the common fund doctrine, “MDL
courts have consistently cited the . . . doctrine as a basis for assessing common benefit fees
in favor of attorneys who render legal services beneficial to all MDL plaintiffs.”
Vioxx
Prods. Liab. Litig.
, 2013 WL 1856035, at *3 (citing
In re Guidant Corp. Implantable
Defibrillators Prods. Liab. Litig.
, MDL No. 05-1708,
The Roundup court interpreted the common fund doctrine narrowly, noting that the doctrine “stems from cases holding that district courts may, in rare circumstances, invoke their equitable power to award attorneys’ fees to successful plaintiffs.” 544 F. Supp. 3d at 958. The court found that “despite the superficial similarity based on the name of the doctrine, the common fund cases are a questionable source of support for creating and requiring contributions to a fund in [an MDL].” Id. The court noted that “[t]he common fund line of cases typically involve a plaintiff recovering or preserving some money or property – for example, a trust – which can be loosely understood as a ‘fund.’” Id. Because a “similarly situated group of people typically has an interest in that fund,” the court explained, “the Supreme Court has held that the prevailing plaintiff may seek, and the district court may order, reimbursement of attorneys’ fees and litigation costs from the fund produced by the plaintiff’s litigation.” Judge Chhabria deemed it “a stretch, however, to apply the common fund doctrine to the type of arrangement contemplated in [the Roundup ] case (and in many other MDLs)” because lead counsel did not ask the court “to reimburse them from some fund or property interest that was preserved or established as a result of a victory against, or settlement with, Monsanto. Rather, lead counsel asked the [c]ourt to create a fund at the outset – before any judgment was entered and before liability was established – and to require contributions from individual recoveries down the line, whenever they were reached.” Id. at 959.
The Court cannot conclude, as did the
Roundup
court, that the common fund
doctrine is limited solely to cases where a lawyer’s work creates a
res
that resides in the
court and from which others seek to recover. The doctrine has been applied repeatedly to
MDL cases.
See
,
e.g.
,
Vioxx Prods. Liab. Litig.
,
Nor does the Court find the historical beginnings of the common fund doctrine to
be meaningfully different from its applications in MDLs. Although it is true that MDLs
generally do not produce an actual fund paid into court on which all plaintiffs can draw,
the advantage conferred on all plaintiffs by a successful MDL prosecution is no less real.
The equitable reality underlying the common fund doctrine – that substantial work and
expense by few has conferred a significant financial benefit on many – is the same. And it
certainly is true in this case. BCM and its clients, in and out of the MDL, stood on the
foundation created by the MDL common benefit work, freely and frequently accessed that
work, and secured substantial financial benefits from it. The compelling equities of the
common benefit doctrine apply fully here.
See Nat’l Opiate Prescription Litig.
, No. 1:17-
md-2804, at *12 (“MDL courts, using their equity powers when applying the common
benefit doctrine, regularly extend that authority over counsel’s other, non-MDL cases in
order to ‘preempt . . . the free-rider problem[.]’”) (quoting
Gen. Motors LLC Ignition Switch Litig.
,
BCM’s reliance on
Hartland v. Alaskan Airlines
,
D. Reliance Interests.
Reliance interests are also relevant. See Doc. 18038 at 4; Roundup , 544 F. Supp. 3d at 970. The common benefit fund was established early in this MDL to ensure that attorneys who performed work for all plaintiffs and their counsel would be reasonably compensated. See Docs. 372, 18038 at 4 (concluding that “simple fairness requires that [settling] firms – which will benefit financially from the work of the PSC – pay reasonable compensation to the lawyers who secured the benefit”). In reliance on that arrangement, in which BCM was a full and knowing participant, the PSC managed and litigated this complex MDL to a conclusion, tried three bellwether cases, withstood Bard’s preemption challenge, and amassed evidence and experts useable by all plaintiffs and their counsel. See Doc. 18038 at 4. The PSC and other attorneys who performed compensable common benefit work justifiably relied on Participating Counsel’s agreement to pay common benefit assessments on all cases in which Participating Counsel have a fee interest. [12] Now, more than six years after BCM agreed to pay assessments on all its cases in return for access to common benefit work, and after obtaining and utilizing that work, BCM seeks to avoid paying assessments on its non-MDL cases. Doc. 22144 at 1-2, 11. Simple fairness requires that its request be denied. [13]
IV. BCM’s MDL Cases.
BCM contends that its post-remand litigation efforts have “significantly increased the average settlement value for clients of BCM far above and beyond the average settlement value that would have been achieved relying solely on the common fund work[.]” Doc. 22144 at 3. BCM claims that any fee amount above the fee for the average settlement value achieved by members of the Committee and other attorneys who chose not to litigate cases post-remand “was earned 100% due to the additional time, effort and money that BCM invested since September 2019, rather than as the result of common fund work.” at 4. BCM requests, “for the sake of equity and fairness,” that the Court reduce the common benefit assessment amounts applied to BCM’s remanded cases “to the average assessment paid on cases that settled based on the MDL proceeding’s efforts.” Id. at 2.
The Court will deny this request. BCM agreed at the outset of this MDL that the fixed percentage assessments to be applied for common benefit work would apply to all cases, including those that did not settle in the MDL. Surely Participating Counsel knew at the beginning that some cases would not be resolved in the MDL and would require additional work by counsel, and yet they uniformly agreed on a fixed percentage assessment. It would be manifestly unfair at the end of the process – after reliance by all Participating Counsel – to renegotiate this agreement. It would also be impossible to evaluate thousands of settlements to determine what factors affected each settlement negotiated by each group of plaintiffs’ counsel. BCM does not propose such an evaluation, but it would not be fair to do so for BCM and not for others.
The Court determined that an 8% assessment for attorneys’ fees and a 2%
assessment for expenses would be appropriate for the extensive common benefit work to
be done in this MDL.
See
Docs. 372, 18038. BCM cites no legal authority suggesting that
established assessment percentages should be changed merely because participating
counsel obtained recoveries in remanded cases without relying entirely on common benefit
work. Doc. 22144 at 9-11, 22151 at 7-8. And the Committee notes that other courts
have rejected requests to exempt attorneys and cases from assessments when attorneys and
their clients have benefited from MDL work product. Doc. 22149 at 9-10 (citing
Gen.
Motors LLC Ignition Switch Litig.
,
BCM seeks to have the assessments applied only to the portion of the recoveries “fairly traceable” to the use of common benefit work. Doc. 22151 at 2. But BCM does not explain how this approach would be feasible, even if appropriate. Other courts have rightly found such a proposal impractical. See Diet Drugs Prods. Liab. Litig. , 553 F. Supp. at 497 (explaining that “a case by case analysis was untenable” as the court would need to “wade into the morass” of determining which of the materials and services available through the work of the common benefit attorneys were actually used in particular cases). Also untenable is BCM’s proposal that assessments for its remanded cases “be capped at the average fee and costs amount paid on those cases that settled solely as the result of common fund work.” Doc. 22144 at 11. As the Committee notes, there is no realistic way to reliably trace what factors led to Bard’s decision to settle with BCM or other plaintiffs’ lawyers. Doc. 22149 at 13. [14] If BCM’s post-remand efforts enhanced the value of its settlements, BCM and its clients will benefit financially from that increased value. The overall results were, however, due at least in part to the work done in the MDL, and the Court will not attempt to parse the value between the common benefit work and BCM’s work. See Doc. 22149 at 13. [15]
BCM’s request to conduct discovery on confidential settlement amounts received by non-BCM clients is denied. See Doc. 22144 at 10 n.14; see also Doc. 22148 (opposing discovery regarding other settlements because it would “decimate Bard’s interests in confidentiality [and] unnecessarily complicate the final proceedings of this MDL”). The Court also denies BCM’s related request that the entire fee assessment at issue be set aside and held in escrow. See Doc. 22144 at 10.
IT IS ORDERED that BCM’s motion to reduce and exempt client recoveries from common benefit fee and expense assessments (Doc. 22144) is denied .
Dated this 20th day of May, 2022.
Notes
[1] CMO 1 was later amended to establish a Plaintiffs’ Executive Committee (“PEC”) 26 to assist in the administration, organization, and strategic decisions of the PSC. See Doc. 4016. 27
[2] Mr. Martin’s current partner, Laura Baughman, is not a member of the PSC, but 28 has at all times during the MDL worked for PSC firms (Martin | Baughman and Baron & Budd). See id. ; Doc. 22149 at 2 n.1.
[3] BCM did not object to the proposed increase in assessments. See id. at 1; 25 Doc. 22149 at 4. 26
[4] See id. at 10 (“The assessment shall apply to all of the cases of the plaintiffs’ attorneys who are subject to this Order, whether as sole counsel or co-counsel, including 27 cases pending in the MDL, pending in state court, unfiled, or tolled.”); id. at 15 (“Participating Counsel agrees that all cases in which Participating Counsel has a fee interest, including unfiled cases, tolled cases, and/or cases filed in state and/or federal court, 28 are subject to the terms of this Participation Agreement.”).
[5] The Committee was formed to provide recommendations to the Court (in 26 conjunction with the Special Master, the Honorable Marina Corodemus) for distributions of fee and expense reimbursements to Participating Counsel who have performed common 27 benefit work. See Docs. 372 at 12, 21480 at 1. The Committee consists of twelve Plaintiffs’ attorneys, including Co-Chairs Howard Nations and Wendy Fleishman, and Plaintiffs’ Co-Lead Counsel Mark O’Connor, who filed the response on the Committee’s 28 behalf. Docs. 21480 at 2, 22149 at 15.
[6] The Committee notes that even counsel opposing the proposed assessments in 27 Roundup acknowledged that “[t]he situation might well be different if” — as is the case here — “(1) we had voluntarily entered into a participation agreement with Co-Lead Counsel and (2) that agreement was incorporated into an order of this Court.” Doc. 22149 28 at 6 & n.5 (citation omitted).
[7] In a similar vein, the Roundup court suggested that lead counsel in an MDL 26 possesses more bargaining power and therefore likely will obtain larger settlements. Id. at 962 (“After all, once you’ve been appointed lead counsel and have taken control of the 27 MDL, you and your clients will typically have much greater bargaining power compared to other plaintiffs.”). Not so here. Co-lead counsel for Plaintiffs in this MDL complained in court more than once that Bard was willing to negotiate and reach settlements with other 28 Plaintiffs’ counsel, but not with him.
[8] Judge Chhabria found it “strange to exercise power over a nonparty’s recovery
26
from a state court judgment or settlement when the same purpose could be achieved . . .
[by] authorizing lead counsel to directly charge a lawyer who wishes to use confidential
27
MDL work product, and then allowing that lawyer to decide, with their client and without
involvement of a federal court, who should shoulder that cost.”
[9] It is worth noting that the common benefit work that lead counsel undertook in this
MDL “serves the interests of not only the litigants but also the Court and the nation. ‘By
making manageable litigation that otherwise would run out of control, [lead counsel] serve
interests of the court, the litigants, the other counsel, and the bar, and the public at large,
who are entitled to their chance at access to unimpacted courts.’”
Id.
at *1 (quoting
Air
Crash Disaster
,
[10] The Ninth Circuit noted that Vincent’s position was “unique” because “[s]oon 23 after receiving word of her husband’s death in the air crash, she determined, first, that because liability was (to her) clear, she had no need to and would not file a lawsuit against any person in any court but rather would use nonjudicial means to secure recovery, and, second, that no outsider would ‘profit’ from her husband’s death.” at 765. Accordingly, “she directed the law firm that previously had assisted her and her husband in their business activities to commence [settlement] negotiations . . . without filing suit[,]” and “her attorneys undertook this task on a per hour, rather than on a contingent fee, basis.” Id. 24 25 26 27
[11] BCM’s reliance on Showa Denko fares no better. Doc. 22151 at 7. That case did not involve voluntary participation agreements, and the non-MDL claimants instead were required to “obtain a waiver of assessments by petitioning the district court.” 953 28 F.2d at 166.
[12] Doc. 372 at 10 (“The assessment [on gross monetary recoveries] shall apply 23 to all of the cases of the plaintiffs’ attorneys who are subject to this Order, whether as sole counsel or co-counsel, including cases pending in the MDL, pending in state court, unfiled, or tolled.”); id. at 15 (“Participating Counsel agrees that all cases in which Participating Counsel has a fee interest, including unfiled cases, tolled cases, and/or cases filed in state and/or federal court, are subject to the terms of this Participation Agreement.”); id. at 17 (“Counsel who sign this Participation Agreement further agree that the assessment shall apply to all un-filed cases, tolled cases, and/or cases filed in state court in which they have 24 25 26 a fee interest, regardless of the size of that fee interest.”). 27
[13] Further, as the Committee correctly notes, BCM’s argument to exempt its state 28 court cases “does not smack of fairness or equity” given that BCM itself has been awarded common benefit funds for its work on state-court cases. Doc. 22149 at 8 n.6.
[14] As already noted, Bard disputes BCM’s description of the value of their settlements and the value of BCM’s litigation efforts since cases were remanded from the MDL. Doc. 22148 at 2.
[15] This conclusion would not change even if, as BCM alleges, thrombosis injuries were not adequately addressed in the MDL. Doc. 22144 at 5, 10; Doc. 22151 at 8. Individual cases litigated outside of the MDL naturally would focus on factors unique to those cases – factors that may not have received primary attention in the MDL. This does not change the fact that each case benefitted substantially from the foundation built by the MDL common benefit work.