October 12, 2018
A recent Law 360 story by Juan Carlos Rodriguez, “10th Circ. Tosses Dow Pollution Class Attys’ Fee Appeal,” reports that the Tenth Circuit rejected a bid by three individual class counsel to snag a share of $150 million in attorneys' fees paid as part of a $375 million settlement with Dow Chemical Co. and another company in a nuclear pollution lawsuit. While acknowledging that Louise Roselle, Paul De Marco and Jean Geoppinger McCoy, attorneys who used to work at the now-defunct firm of Waite Schneider Bayless & Chesley, “significantly contributed” to the litigation, a unanimous three-judge panel said they did not have standing to appeal a Colorado federal judge’s fee award.
“The WSBC attorneys argue they have been injured because they were not allocated personal bonuses separate and apart from the fees allocated to WSBC for their hourly work,” the panel said. “Although pecuniary injury of that kind usually satisfies the injury requirement of standing ... such is not the case here because the WSBC attorneys do not have a ‘legally protected interest’ in any portion of the common fund.”
Because the attorneys were employees, not partners or other equity shareholders at WSBC, “all proceeds corresponding to their work on the Cook litigation belong to the firm,” the panel said. And it said the attorneys never showed they were parties to any other contract or agreement with the firm that would have granted them a legal interest in WSBC’s share of the common fund. “Even assuming a deficiency in lead class counsel’s fee allocation, any injury is to WSBC, not to its employees,” the panel said. “And because the WSBC attorneys ‘cannot bring suit to vindicate the rights of others,’ they do not have a legally protected right for purposes of standing.”
The attorneys say they spent more than 4,500 hours working on the case at WSBC. The long-running case, brought by Colorado residents who claimed injuries from exposure to waste from a nuclear weapons facility, was settled with Dow and a former Rockwell subsidiary now owned by The Boeing Co. in 2016. The residents claimed they were exposed to plutonium releases from the Rocky Flats nuclear production facility, increasing their cancer risks, contaminating their properties and lowering property values.
The Colorado federal court issued final judgment on the suit in April 2017, the same day it granted $150 million in attorneys' fees and ordered lead counsel Berger & Montague PC to allocate them to various class counsel as reflected by their contributions. The attorneys filed an objection to Berger & Montague’s distribution in July 2017, which was denied by the district court in August of that same year.
According to Berger & Montague, WSBC, although operating in bankruptcy, submitted a timely fee application — including for time worked by the objectors — and WSBC was allocated some of the fee award. But the three former WSBC attorneys never filed a separate petition on their own behalf. Berger & Montague had also asked the Tenth Circuit to sanction Roselle, De Marco and Geoppinger McCoy, calling their appeal frivolous, but the panel denied that motion in a footnote of the opinion.
Merrill Davidoff, Berger & Montague's chairman emeritus and managing shareholder, said the Tenth Circuit reached the correct decision. "The appellants were attempting to collect personal bonuses on the same time for which their prior firm had been paid. As such they had no 'legally protectable interest' in their time charges and so lacked standing," he said.
The case is Roselle et al. v. Berger & Montague PC, case number 17-1328, in the U.S. Court of Appeals for the Tenth Circuit.