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$245M in Attorney Fees in Pinnacle Hip Implant MDL

March 12, 2020 | Posted in : Billing Record / Entries, Class Action / MDL, Contingency Fees / POF, Expenses / Costs, Fee Allocation / Splitting, Fee Award, Fee Award Factors, Fee Dispute, Fee Expert / Member

A recent Law.com story by Amanda Bronstad, “Lawyers Suing Over DePuy’s Pinnacle Hip Implant Set to Receive $245M,” reports that a federal judge has approved an estimated $245 million in fees and costs to lawyers leading the multidistrict litigation over Pinnacle hip implants, of which more than 75% will go to the five firms in charge of allocating the award.  The order by U.S. District Judge Ed Kinkeade of the Northern District of Texas approved a special master’s report last month that recommended a disbursement of $215 million, which is the amount calculated from settlements so far, including $182.5 million in “common benefit” fees to about 40 law firms whose work assisted in 10,000 lawsuits over the Pinnacle.  The amount also includes nearly $7.9 million in expenses and $24.7 million for reimbursements of contributed assessments.

“This was unlike any litigation of my 35 years,” wrote Mark Lanier, whose firm, The Lanier Law Firm, is set to receive $77.2 million in fees after winning billions of dollars in verdicts against DePuy Orthopaedics Inc., a unit of Johnson & Johnson.  “Nine years of litigation; five trials, generally of three months each; over 30 million dollars spent; and a defendant that refused to engage in settlement discussions until the very end.  Many firms abandoned the litigation, as reflected by time entries and failure to pay assessments.  The judge’s distribution tracked carefully the time, money and level of work and commitment of firms.”

Lanier is one of five lawyers on a fee committee tasked with reviewing how much each firm should get.  He is co-lead counsel in the multidistrict litigation with Larry Boyd, of Houston’s Fisher, Boyd, Johnson & Huguenard, which is set to receive $17.2 million in fees.  Another firm, Neblett, Beard & Arsenault of Alexandria, Louisiana, is set to receive $47.9 million in fees.  Partner Richard Arsenault, who is on the plaintiffs executive committee, noted in an email that Kinkeade specifically mentioned in a Sept. 11 order that “the fee committee was composed of the primary hands-on lawyers.”

“Additionally, as a consequence of many firms abandoning the litigation, the fee committee members were required to bear over 90% of the litigation’s costs and contributed over 83% of the common benefit hours,” Arsenault wrote.  Another executive committee member, Jayne Conroy, is from Simmons Hanly Conroy in New York, to which the special master allocated $32.1 million, along with $11.4 million to its predecessor, Hanly Conroy Bierstein Sheridan Fisher & Hayes.  The fifth lawyer on the fee committee, Steve Harrison, is from Harrison Davis Steakley Morrison Jones, of Waco, Texas, which the special master ordered would receive nearly $2.7 million in fees.

In 2014, Johnson & Johnson won the first bellwether trial, but federal juries in Dallas followed with verdicts of $502 million, $1.04 billion and $247 million.  Johnson & Johnson agreed to pay nearly $1 billion to settle more than half of the cases in 2019.  In 2018, the U.S. Court of Appeals for the Fifth Circuit reversed the $502 million jury award, finding that Kinkeade had committed “serious evidentiary errors” and allowed Lanier to make “misrepresentations” before the jury.

In a prior ruling, a split Fifth Circuit also criticized Kinkeade for committing “grave error” in asserting jurisdiction over certain bellwether trials, which have featured plaintiffs in California and New York.  In a July 22 order approving a 10% holdback on all future settlements for common benefit fees following a contested fee fight, Kinkeade gave a stinging rebuke of Johnson & Johnson’s lawyers, whose “actions increased both time and expenses incurred for the common benefit throughout every phase of this litigation.”

He cited two motions for sanctions that plaintiffs attorneys had filed earlier last year that accused Johnson & Johnson’s lawyers of failing to disclose discovery that would have demonstrated “ghostwriting” of scientific studies, among other things.  “Those documents are a bombshell,” plaintiffs’ attorneys wrote in one of the sanctions motions, and represented a “long-standing problem” in the cases.  “Throughout the course of this MDL, defendants’ conduct has repeatedly followed a pattern of obfuscation and obstruction.”

Kinkeade also cited the novelty of the issues and the “undesirability” of the cases in approving the holdback.  “Plaintiffs could have agreed to a settlement that devalued their claims,” the judge wrote.  “Instead, plaintiffs’ counsel fought through years more discovery, three more trials, two mandamus proceedings, and three appeals just to reach this settlement.  The court is aware that some plaintiffs’ firms declined to participate in common benefit assessments after the first trial; those that stayed well deserve their fees and costs.”