A recent NLJ story, “GM Trial Spotlights MLD Flaws” reports that the rift among plaintiffs lawyers that followed last month's stunning collapse of the first trial over General Motors Co.'s ignition-switch defect raised serious accusations of backroom deals and lucrative fee arrangements.  It also underscores some common concerns about flaws in the multidistrict litigation process.

The lead attorneys in the MDL against GM were forced to withdraw their first bellwether case Jan. 22 amid revelations that their client might have ­committed fraud and perjury.  A few days later, a plaintiffs lawyer, Lance Cooper, who once worked on the MDL's executive committee, filed court papers claiming the botched trial was doomed from the start, having capped a "long series of poor decisions and mismanagement" by lead attorneys, one of whom might have arranged a "quid pro quo" with GM that maximized his fees.

The lead attorneys and GM denied the allegations and said Cooper had a "fundamental misunderstanding" of the MDL process, in which bellwether trials are used to determine the valuation of a potential settlement — not win every case.

Lurking behind the slugfest that erupted between attorneys in the GM case is a common dispute in MDLs, typically between lead attorneys and individual lawyers whose cases get transferred to an MDL.

"Once people are in control of the litigation, the lead lawyers, as Cooper's motion points out, are the ones who dole out the work," said Elizabeth Burch, a professor at the University of Georgia School of Law.  "And these are substantial fees.  The fees really drive this litigation."

To help the lead attorneys pay for the costs of litigation that could involve hundreds or thousands of cases, MDL judges typically approve a common benefit fund in which individual plaintiffs attorneys contribute a percentage of their contingency fees.  Lead attorneys use those fees to pay for discovery, depositions and other costs, which can total millions of dollars.  Another way in which lead counsel get fees is by negotiating an amount with a defendant as part of a confidential settlement.

But a lack of transparency in the process means that most MDL settlements don't have the "checks and balances" that class actions do, Burch said.  "It's really difficult to figure out where the money goes," she said.  "You don't have a judge ensuring the settlement is fair, reasonable and adequate."

Control of the MDL extends beyond the pool of fees.  In the litigations over DePuy Orthopaedics Inc.'s hip implants and National Football League concussion injuries, some plaintiffs lawyers have criticized settlements for excluding claims brought by their clients.  "There's benign explanations — too many cooks spoil the broth — and then there's other explanations for why some people are shut out of the decision-making," said Alexandra Lahav, a professor at the University of Connecticut School of Law. "Somebody has to control it, and lawyers are used to controlling their own cases and find it frustrating."

Attorney infighting became acute in the GM case.  Cooper, of The Cooper Firm in Marietta, Georgia, was appointed as one of 10 members of the executive committee.  Although Cooper admits he never served on an MDL committee, he sought the appointment after one of his cases first revealed the ignition-switch defect.

His role, however, was short-lived. On April 20, 2015, Cooper told Robert Hilliard, one of the lead plaintiffs lawyers in the MDL, that he would no longer be on the committee, according to an email that Hilliard ­submitted on Feb. 1.  In an interview, Cooper said he had grown frustrated after the lead attorneys gave him unspecified assignments and shut him out of some of the most significant depositions in the MDL.

"Given the way it was run, I didn't want to be a part of it anymore," Cooper said.  "It was just a process that seemed to be more focused on billing hours than actually helping the client."

He filed a Jan. 25 motion asking U.S. District Judge Jesse Furman in New York to remove the lead lawyers — Hilliard, Steve Berman and Elizabeth Cabraser — from their leadership positions.  Two days later, Cooper filed a second motion asking Furman to reconsider his approval of a fund for 1,385 of Hilliard's clients who settled confidentially with GM on Sept. 17.  Cooper alleged that Hilliard cut a deal with GM to put his five remaining lawsuits up as bellwethers so as to maximize his fees in exchange for minimizing the automaker's potential exposure.

Lead counsel defended their management of the MDL and countered that Cooper owed $100,000 in cost assessments.

Hilliard presumably would have gotten his share of the common benefit fund regardless of whether he won or lost the first bellwether trial, Burch said.  Lead lawyers, like Hilliard, front much of the costs at the start of an MDL, unlike individual lawyers, who don't contribute to the common benefit fund until their cases go to trial or settle.  In their Feb. 1 response, lead counsel said that members of the GM executive committee had advanced $1.6 million so far for the MDL.

By settling most of his cases, Hilliard likely got a "great fee upfront" and "money in his pocket immediately," Burch said.

Hilliard has defended his settlement, which he said in court filings excluded his five bellwether cases simply because GM didn't want to settle them.

What happened in the GM case also has highlighted criticism of the bellwether trial selection process.  The most common method of selecting bellwethers is one in which plaintiffs attorneys pick some cases, and defendants pick some cases.  But that process doesn't necessarily result in cases that could represent the entire MDL, Lahav said.

"[The defendant] picks three.  They'll pick the absolute worst cases from the plaintiffs' point of view.  Plaintiffs, we think, pick the best cases," she said.  The GM bellwether was a case that plaintiffs attorneys picked.  Hilliard has defended his bellwether choice.

Even so, in their Feb. 1 filing after the trial imploded, lead counsel admitted there were flaws in the system and said they planned to "present to the court a proposal to improve the bellwether ­process."

Furman, however, doesn't appear to be halting the trial schedule.  The next GM starts trial on March 14.