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Category: Holdback Fees

Fee Dispute Looms Over $800M in Fees in Roundup MDL

February 5, 2021

A recent Law.com story by ‘Money Grab’: Objections Fly Over $800M in Fees for Lead Counsel in Roundup MDL”, reports that lawyers are pushing back against a request in the multidistrict litigation over Monsanto’s Roundup pesticide to turn over portions of their settlement amounts to provide lead counsel with what some estimate to be $800 million in attorney fees.  More than a dozen firms with thousands of lawsuits across the country, including Beasley Allen, The Lanier Law Firm and Gibbs Law Group, filed objections to a Jan. 11 motion that lead counsel filed asking for an 8.25% assessment on their Roundup settlements to pay for fees and expenses spent on the “common benefit” of all lawyers.

Many said the holdback for so-called common benefit fees equates to $800 million for lead counsel—what one attorney called a “colossal amount.”  “This court should not condone what is essentially nothing more than a money grab,” said Karen Barth Menzies, of Gibbs Law Group in Oakland, California, who filed an objection on behalf of her firm and two others.  Menzies insisted that the $800 million is on top of an estimated $2 billion in attorney fees that lead counsel made from contingency fee contracts associated with their own cases, which they settled last year for greater amounts than Monsanto is now offering.

In June, Bayer, which now owns Monsanto, announced it planned to settle about 125,000 Roundup claims for an estimated $10.9 billion.  The agreements were not part of a global settlement, however.  Lawyers have conducted their own negotiations, which have been confidential, and many cases remain unsettled.  Many lawyers objecting to the common benefit fee assessment argue that lead counsel settled their own cases for much more than everyone else.

“Now you have a defendant who’s offering people $45,000 for a cancer case,” said Hunter Shkolnik, of Napoli Shkolnik.  His New York firm filed an objection with appellate attorney Thomas Goldstein, of Goldstein & Russell in Washington, D.C.  “And there was no common benefit tax associated with those initial billions of dollars in cases that were settled,” Shkolnik said.  “They intentionally did not tax their own cases and put them into the fund.  You now have the next series of cases settling at much smaller amounts, and they’re seeking 8% common benefit.”

Lead counsel—Robin Greenwald, of Weitz & Luxenberg in New York; Michael Miller, of The Miller Firm in Orange, Virginia; and Aimee Wagstaff, of Andrus Wagstaff in Lakewood, Colorado —declined to comment about the objections.  They are due to respond Feb. 18.  In their request, lead counsel noted that the proposed holdback, of 8% in fees and 0.25% in expenses, includes an assessment on their own cases.

Meanwhile, U.S. District Judge Vince Chhabria of the Northern District of California, overseeing the Roundup multidistrict litigation, has his own questions—including whether a holdback is even necessary and, if so, how much it should be.  On Jan. 26, he asked lawyers to address four questions he had about the lead counsel’s request, including whether he could issue a holdback “without understanding how much of a premium co-lead counsel has already received on their settlements compared to the typical settlement.”  He also asked, “If a hold-back is truly warranted, why shouldn’t it be much lower than the 8% requested by co-lead counsel?”

The objections are the latest dispute among plaintiffs lawyers over common benefit fees, used to reimburse lead counsel in multidistrict litigation for costs and fees associated with discovery, trials and settlement.  Much of that work ends up benefiting lawyers not in leadership positions in the event they want to pursue trials or settlements of their own cases.

In their fee motion, however, lead counsel emphasized that six firms, including their own, did most of the work in the Roundup litigation, including in state courts.  Other firms, they noted, did not want to take the risks early on in the litigation.  “The world was watching this litigation; there can be no doubt that it was high risk for contingency fee lawyers, which explains why all the heavy lifting and lion’s share of litigation costs and risks were left to the MDL leadership,” they wrote.

A “tsunami of advertising” following their big wins, such as the Roundup verdicts in 2018 and 2019, led to thousands more cases filed by “law firms that hedged their bets and previously sat on the sidelines,” they wrote.  “That argument doesn’t at all describe us,” said Rhon Jones, of Beasley Allen in Montgomery, Alabama, who filed an objection to the holdback.  “We very much want to try our own cases and work our own cases, so I don’t see where any of that applies to Beasley Allen.”

Many of the objectors, like Beasley Allen, have cases in state courts that they say are not subject to multidistrict litigation—a response to one of Chhabria’s questions asking whether the holdback should apply to state court cases.  Jones estimated that as much as 90% of the cases over Roundup are in state courts. His own firm, he said, has only six cases in the multidistrict litigation, but 2,000 in state courts, mostly in Missouri.

Many firms argued that Chhabria, as a federal judge, did not have jurisdiction over state court cases, particularly where plaintiffs firms that did not sign any participation agreements with lead counsel.  “We’re not saying they didn’t do good work—there is going to be a common benefit order in the Roundup case,” said Shkolnik, who said he has 100 Roundup cases in the multidistrict litigation but several thousand lawsuits in state courts in Missouri.  “I just question whether or not the court has jurisdiction to apply to purely state court cases.”

Not only did some law firms claim they did not use discovery obtained in the multidistrict litigation, but they insisted that lead counsel purposely kept the experts to themselves and attempted to get other lawyers to refer cases to them.  Several firms submitted declarations, including Mikal Watts, of Watts Guerra in San Antonio, and W. Mark Lanier, of The Lanier Law Firm in Houston, stating they not request help from lead counsel in the multidistrict litigation.  Watts and Lanier both noted, however, that leadership also did not offer them “a trial packet, discovery documents, transcripts, or any other MDL work product,” according to their declarations.

In his objection, filed on behalf of her own firm and seven others, Arati Furness, of Dallas-based Fears Nachawati, wrote that lead counsel “refused to help any of the Roundup victims they do not represent,” and some even solicited referrals from other firms “to enhance their own settlements.”  “In some instances,” she wrote, lead counsel “attempted to push firms into settlements with threats that they were going to be left out in the cold with no experts, no depositions, and no trial package.”  Chhabria has scheduled a March 3 hearing on the fee dispute.

Retired Players Blast Holdback Fees in NFL Concussion Case

August 1, 2020

A recent Law 360 story by Ryan Boysen, “Ex-NFLers Blast Seeger Weiss for Concussion Holdback Fees,” reports that retired NFL players and law firms active in the historic concussion settlement are raising alarms over Seeger Weiss LLP's request to levy a 5% fee on injured players' payouts to fund its future work on the case, calling it a cynical cash grab that's unsupported by facts.  Seeger Weiss has already faced years of attacks accusing the firm of burning through the lion's share of a $112 million attorney fee fund with hardly any oversight.  A series of opposition briefs filed reiterated concerns over an alleged lack of transparency in Seeger Weiss' billing practices and argued the stakes of the latest request are even higher than the previous ones.

The $112 million fund was paid for by the NFL, but the money Seeger Weiss is now requesting would come from the injured players themselves, as well as their lawyers, in the form of a 5% haircut levied on the awards of all players who successfully get paid from the uncapped settlement program.  That haircut has already been applied to the roughly 1,150 players who've had $788 million worth of claims approved thus far, resulting in $37 million sitting in an account and awaiting a decision by U.S. District Judge Anita B. Brody.  If she grants Seeger Weiss' request, that money would be released and the haircut would also be applied to all players who get paid in the future.  Seeger Weiss said it anticipates it will need between $2 million and $2.5 million per year to cover the costs of its settlement-related work.

The lawyers behind the filings said that, if granted, the 5% haircut would essentially reward Seeger Weiss for spending the NFL's money as quickly as possible by allowing the firm to collect millions of dollars from the concussion settlement annually for the rest of the program's lifespan, 61 years, even as the work required to oversee the case declines precipitously going forward.

The objecting firms are Locks Law Firm, Langfitt Garner PLLC, Girardi Keese, Lubel Voyles LLP and Goldberg Persky & White PC, as well as a handful of retired players who are not represented by counsel and are led by Mary Andrie-Brooks.  An outspoken critic of the settlement, Brooks is the daughter of famed defensive end George Andrie, a member of the Dallas Cowboys' legendary Doomsday Defense who died in 2018.

Gene Locks of Locks Law Firm served alongside Seeger Weiss' Chris Seeger as co-lead class counsel in the case until last year, when Judge Brody abruptly terminated Locks and all of the other lawyers in that role except for Seeger.  In an interview, Locks said Seeger's latest request makes no sense.  "Chris Seeger has submitted no budget for this whatsoever," Locks said.  "It's an open-ended annuity for his firm for the next 61 years."  "Ninety-eight percent of the work in this case is done," Locks added. "It's outrageous to continue to bill for whatever's left at the rates he's seeking, while providing no details whatsoever as to why it's actually necessary."

Seeger has vehemently denied all the allegations in previous attacks on his fee requests, saying his detractors fail to appreciate the immense amount of work it takes to oversee the complicated and contentious settlement.  Touting the nearly $800 million paid out by the program thus far, Seeger said in a statement that the haircut is "appropriate as it will ensure work performed by any firm over the settlement's 65-year life is compensated fairly."

Any money generated by the haircut would almost certainly be available only to class counsel, however.  That means only Seeger Weiss would have access to the money because it is the only remaining class counsel firm, although Seeger Weiss said in its request that it may hand off that role to another firm at some point.  The settlement was approved in 2015 and put to rest claims that the NFL knew for decades about the long-term dangers of repeated concussions, but did nothing to warn its players.

The uncapped program covers a class of about 20,000 retired NFL players, all of whom are potentially eligible for payments ranging from a few thousand dollars to $5 million, depending on their age and the severity of their football-related brain injuries.  The $112 million common benefit fund was set up to pay attorneys for work that broadly benefits the class as a whole, as opposed to work that involves shepherding a single player's claim through the Byzantine program.

After the settlement was finalized, mass tort fee expert William B. Rubenstein of Harvard Law School said the $112 million fund should be enough to cover class counsel fees for the program's 65-year lifespan, which began counting down in 2017.  But just three years into that timeline, only $13 million remains in the fund.  That number will be further reduced to $6 million if Seeger Weiss' pending fee requests for about $7 million are granted.

Seeger Weiss has already taken home roughly $66 million from the fund, while about 20 other firms split approximately $33 million for their work on bringing the deal to fruition.  The 5% haircut fee was conceived of as a Plan B, something that could be tapped into if class counsel costs exceeded Rubenstein's predictions.

In his request, Seeger said Rubenstein's predictions were unrealistic and estimated that he will continue to spend between $2 million and $2.5 million per year on concussion settlement-related work for the foreseeable future.  The 5% haircut, he said, is the only way to make sure he's paid for that work.

The firms that filed opposition briefs, however, said Seeger has presented no evidence whatsoever to back up that assertion.  Seeger's request runs 51 pages, but nearly all of that space is spent rehashing the work he's already done on the settlement.  The firms opposing the 5% haircut said that's highly misleading because the number of new claims being submitted by players has slowed "to a trickle," and all of the major issues that initially sparked major battles between players' attorneys and the NFL have now been settled, for better or for worse.

"Seeger continues to bill hours upon hours for work that seems to be making no impact on the greater good," Locks Law wrote.  The attorneys that oppose Seeger also said an analysis of his previous fee requests seems to indicate he's dramatically marking up the hourly rates charged by his attorneys.  Langfitt Garner said Seeger appears to be charging $260 an hour for paralegals and about $485 an hour for associates, roughly 10 times the going rate for both roles in Manhattan, one of the nation's priciest legal markets.

"These numbers suggest mark-ups that are no longer reasonable in light of the fact that class counsel has already received fees in excess of $63 million, and the fact that class counsel now demands that pro se players and counsel to players pay its fees and expenses," Langfitt Garner wrote in its opposition.

Langfitt Garner said Seeger Weiss should only receive 20% of the $37 million that's currently been collected from the 5% haircut, and the rest should be returned to players.  Going forward, Seeger Weiss should only receive a 1% haircut rather than 5%, Langfitt Garner said, and even that should only be done as a last resort.  The firm added that Seeger Weiss should be required to submit a detailed budget plan if it wants to access any of that money, a request echoed by other firms that filed opposition briefs.

The Nation’s Top Attorney Fee Experts of 2020

June 24, 2020

NALFA, a non-profit group, is building a worldwide network of attorney fee expertise. Our network includes members, faculty, and fellows with expertise on the reasonableness of attorney fees.  We help organize and recognize qualified attorney fee experts from across the U.S. and around the globe.  Our attorney fee experts also include court adjuncts such as bankruptcy fee examiners, special fee masters, and fee dispute neutrals.

Every year, we announce the nation's top attorney fee experts.  Attorney fee experts are retained by fee-seeking or fee-challenging parties in litigation to independently prove reasonable attorney fees and expenses in court or arbitration.  The following NALFA profile quotes are based on bio, CV, case summaries and case materials submitted to and verified by us.  Here are the nation's top attorney fee experts of 2020:

"The Nation's Top Attorney Fee Expert"
John D. O'Connor
O'Connor & Associates
San Francisco, CA
 
"Over 30 Years of Legal Fee Audit Expertise"
Andre E. Jardini
KPC Legal Audit Services, Inc.
Glendale, CA

"The Nation's Top Bankruptcy Fee Examiner"
Robert M. Fishman
Cozen O'Connor
Chicago, IL

"Widely Respected as an Attorney Fee Expert"
Elise S. Frejka
Frejka PLLC
New York, NY
 
"Experienced on Analyzing Fees, Billing Entries for Fee Awards"
Robert L. Kaufman
Woodruff Spradlin & Smart
Costa Mesa, CA

"Highly Skilled on a Range of Fee and Billing Issues"
Daniel M. White
White Amundson APC
San Diego, CA
 
"Extensive Expertise on Attorney Fee Matters in Common Fund Litigation"
Craig W. Smith
Robbins LLP
San Diego, CA
 
"Highly Experienced in Dealing with Fee Issues Arising in Complex Litigation"
Marc M. Seltzer
Susman Godfrey LLP
Los Angeles, CA

"Total Mastery in Resolving Complex Attorney Fee Disputes"
Peter K. Rosen
JAMS
Los Angeles, CA
 
"Understands Fees, Funding, and Billing Issues in Cross Border Matters"
Glenn Newberry
Eversheds Sutherland
London, UK
 
"Solid Expertise with Fee and Billing Matters in Complex Litigation"
Bruce C. Fox
Obermayer Rebmann LLP
Pittsburgh, PA
 
"Excellent on Attorney Fee Issues in Florida"
Debra L. Feit
Stratford Law Group LLC
Fort Lauderdale, FL
 
"Nation's Top Scholar on Attorney Fees in Class Actions"
Brian T. Fitzpatrick
Vanderbilt Law School
Nashville, TN
 
"Great Leader in Analyzing Legal Bills for Insurers"
Richard Zujac
Liberty Mutual Insurance
Philadelphia, PA