A recent Law 360 story by Celeste Bott, “Ill. Judge Needs More Info To OK $57M Chicken Antitrust Fee”, reports that an Illinois federal judge overseeing a sprawling antitrust litigation against broiler chicken producers said he couldn't rule on class counsel's renewed bid for a $57 million attorney fee award thrown out by the Seventh Circuit last year without more information on one of the firm's graduated fee arrangements in a similar 2015 antitrust case, which wasn't disclosed in the first go-around.

U.S. District Judge Thomas Durkin said during a remote hearing that he wanted more briefing from the both plaintiffs' firms — Hagens Berman Sobol Shapiro LLP and Cohen Milstein Sellers & Toll PLLC — and from class objector John Andren as to what effect the 2015 case has had in assessing the attorney fee award in the $181 million deal for chicken buyers.

In the earlier case, Cohen Milstein took on some of the nation's largest investment banks while representing the Public School Teachers' Pension and Retirement Fund of Chicago, a sophisticated plaintiff which negotiated attorney fees ex ante, or ahead of case resolution.

In that case, the plaintiff adopted a graduated scale.  If the same scale were to be used in the chicken case, class counsel estimated they would be entitled to $44 million for the $181 million settlement, or roughly 26%.  But the counsel argued they would have negotiated a higher rate in the broiler chicken case because it doesn't involve a trillion-dollar financial market.

Andren, meanwhile, said Judge Durkin should apply a similar fee schedule agreed to by Chicago Teachers, which entail fee brackets that decline both by the size of the settlement and by the stage of settlement.

"The latter is as important as the former, because sophisticated plaintiffs realize that trials are expensive and risky," Andren said in his opposition to the firms' renewed bid for a $57 million fee award in the chicken case.  "To align the incentives of class and counsel, attorneys need to receive a larger share of the recovery for more procedurally-advanced settlements and verdicts. This cannot occur when relatively early settlements are paid at 33%."  Judge Durkin also noted Tuesday that both are large, complex antitrust cases with many defendants and astronomical damages.  "There's enough similarities where I want to hear from both sides," he said.

The law firms, however, have contended "there is an ocean" between the size of the potential recovery, and potential fee awards, in both cases, and noted that in the chicken case, they represent indirect purchasers, which increases the risk relative to the banking cases.

"Indirect purchasers face defendant attacks that direct purchasers do not, and these attacks increase the chance of waking away with nothing.  And even though they take on this additional risk, the total damages indirect purchasers can recover based on state law claims is about half of what direct purchasers can recover for their federal claims," the firms said in a renewed fee motion filed in September 2023.

In that motion, they argued the court applied the correct methodology for determining fees the first time and came to the correct conclusion in awarding just over 33% of the settlement fund.  "Not only does the original award align with other awards in this specific case, it also aligns with the best available data on negotiated rates in antitrust cases," the class counsel said.  The fee award is back for reconsideration by Judge Durkin after the Seventh Circuit held last year that he failed to adequately consider bids made by class counsel in auctions in other cases and fee awards in different circuits.

Andren had taken issue with the roughly one-third cut of the settlement that Hagens Berman and Cohen Milstein were to receive in a deal the firms had struck with Fieldale Farms Corp., Peco Foods Inc., George's Inc., Tyson Foods Inc., Pilgrim's Pride Corp. and Mar-Jac Poultry.

Private plaintiffs began suing the nation's largest broiler-chicken producers in September 2016, claiming the producers coordinated and limited chicken production to raise prices and exchanged detailed information about capacity, sales volume and other data through statistical research compiler Agri Stats Inc.

The settlements at issue in this appeal were reached with Tyson for $99 million, Pilgrim's for $75.5 million, Peco for $1.9 million, George's for $1.9 million, Fieldale for $1.7 million and Mar-Jac for $1 million.  The agreements were awarded final approval by a district judge in December 2021.

A three-judge Seventh Circuit panel complimented the lower court in August 2023 for its "fine job of shepherding" the complex litigation, but said it made a mistake when it discounted bids made by one of the two firms serving as class counsel in other cases because the proposals had declining fee scale award structures.

Andren had also argued that the lower court should have taken into account that class counsel frequently did work in Ninth Circuit district courts, which employ a lower 25% "benchmark" for presumptively reasonable attorney fees.  The Seventh Circuit panel agreed the Illinois district judge shouldn't have categorically assigned less weight to Ninth Circuit cases in which counsel was awarded fees under a mega-fund rule.  In addition to vacating the fee award, the panel remanded the matter for "greater explanation and consideration" of the factors it laid out, noting it expressed no preference as to the amount or structure of the award, just the need for further review.

A recent Law 360 story by Lauraann Wood, “Ill. Justices Weigh Whether Rule Violation Merits Fee Award”, reports that the Illinois Supreme Court has questioned whether two law firms should be allowed to preserve their $1.7 million fee award for their work on a family dispute that settled after they were fired, as the justices asked whether fees are appropriate if the firms never disclosed how they would split the money.

Every justice on the state high court bench offered either a question or a criticism during oral argument as they weighed whether the quantum meruit claim by Stephen J. Schlegel Ltd. and Andrew W. Levenfeld & Associates Ltd. was correctly sent back to the trial court for an award that ignores their illegal fee agreement with former clients Maureen V. O'Brien and her nephew Daniel O'Brien III.

Some justices highlighted on one hand the 3,000 hours and years of work the firms put into the O'Briens' underlying family dispute before they were fired and the case settled about two weeks later.  Other justices, including Justice Joy Cunningham, noted the firms' failure to properly disclose their fee-sharing agreement to the O'Briens and questioned whether allowing them to recover fees essentially rewards them for violating a rule of professional conduct.

"Rules exist for a reason," Justice Cunningham said.  "It seems to me from looking at the figure that … they basically got what they would have gotten anyway, so the rule means nothing, and as a Supreme Court, are we supposed to agree that it's OK not to follow our rules?"

Representing the firms, Jeremy Boeder of Tribler Orpett & Meyer PC argued that his clients should receive an equitable fee award for their work because the trial court considered their rule violation and its potential effects before awarding their fees.  Pressed by Justice Cunningham to identify the consequence they would then face for violating the state's fee-sharing disclosure rule, Boeder said there would be none.  "And it's our position that there shouldn't always be a consequence in a case like this for a violation of a rule of professional conduct," he argued.

Acknowledging Justice Lisa Holder White's suggestion that the trial court could award the firms the same amount in fees even without considering their client contract, Boeder argued that spending the time "to get to the point that we've already reached" is unnecessary.  That process would also be wrong because sending the case back would essentially tell the trial court that it "has to go with the second-best option" despite considering all the relevant evidence in a six-day bench trial, he told the justices.  "Why should that be a command upon a trial court of equity, who really was in the best position to evaluate all of the issues here?" the attorney said.

The O'Briens' counsel argued that the firms should not receive any fees even if the justices agree they should go back to the trial court for a new award. Indeed, the O'Briens believe the firms' work is worth "less than zero," partly because they advised Maureen O'Brien to resign as the coexecutor of her parents' estate, which was her "only source of leverage, or power, or control" in the underlying dispute, John Fitzgerald of Tabet DiVito & Rothstein LLC told the justices.  "It is impossible to overstate how catastrophic that legal advice was," he told the court.

The state high court has previously voided a fee agreement that violated professional conduct rules in a case between a litigation consultant and an expert search firm, and the reasoning then should still apply because "there's no public policy reason or any other reason to treat lawyers differently from anyone else who enters a contract that violates public policy," Fitzgerald argued.  "Quantum meruit means 'as much as he or she deserves. 'No one deserves anything that violates public policy," he said.

Fees are also inappropriate because although the firms litigated some issues in the O'Briens' underlying dispute and made some settlement offers, there is no proof the O'Briens' subsequent counsel relied on the firms' earlier work to eventually reach their $16.85 million settlement, Fitzgerald argued.  Any outstanding settlement offers had been withdrawn, and no new offers had been made for weeks by the time the firms were fired, so any potential numbers had gone back to zero by the time the O'Briens' subsequent counsel began handling their case, he said.  "The fact that the next lawyer was able to settle the case on certain terms, I don't think that necessarily means these plaintiffs could have gotten that deal done on the same terms or comparable terms," Fitzgerald said.

Blasting that contention on rebuttal, Boeder argued that it was the firms' settlement back-and-forth that ultimately brought the underlying litigants to their agreeable meeting points and resolve their family dispute.  The firms had made an $18.3 million demand that was met with a $16.25 offer, which then prompted a $16.75 million counter-demand the firms were prepared to send back before they were ultimately fired, he said.  "The settlement was on almost exactly the same terms as the counter-demand that my client proposed," Boeder argued.  "Why wasn't that counter-demand made?  Because Dan and Maureen O'Brien refused to allow my clients to make it on their behalf."

A recent Law 360 story by Jack Karp, “Quinn Emanuel’s 2nd $185M Fee Bid Blasted as ‘Indefensible’”, reports that Quinn Emanuel Urquhart & Sullivan LLP's second attempt to win $185 million in attorney fees in $3.7 billion litigation over the Affordable Care Act still fails to justify the "indefensible" amount and barely pays "lip service" to a reevaluation ordered by the Federal Circuit, health insurers told the federal claims court.

The Federal Circuit already wiped out the $185 million attorney fee that the U.S. Court of Federal Claims awarded to Quinn Emanuel and directed the claims court to reexamine objecting class members' insistence that the firm hadn't justified its fee request, Kaiser Foundation Health Plan Inc. and UnitedHealthcare Insurance Co. said.

"Despite this clear direction, class counsel's second petition again fails to justify its lodestar and again seeks to avoid a lodestar cross-check.  It instead asks the court to rubberstamp the same $185 million award," the health insurers said in their opposition to the firm's latest motion for approval of its fee request.

That motion for approval fails to support the 10,000 hours Quinn Emanuel says it spent on the case, suggests that the firm double-counted hours by including time spent on a separate multibillion-dollar class, and tries to skew its rates higher by seeking 2023 rates, even though its first fee petition was filed in 2020, according to the insurers.

"Trying to reverse-engineer defenses for its indefensible fee demand, class counsel uses inflated and unproven hours, multiplies those alleged hours by unprecedented rates, and then proposes a multiplier that is miles outside accepted norms.  That is akin to applying no cross-check at all," the insurers said.

Quinn Emanuel and a group of healthcare plan insurers the firm represents have insisted the firm used a novel claim and achieved a 100% recovery for the class in litigation over so-called risk corridor payments under the ACA.  But objectors Kaiser Foundation, UnitedHealthcare and others have argued that class counsel was entitled to just $8.8 million after a lodestar cross-check.

A Court of Federal Claims judge granted Quinn Emanuel's request for $185 million, or 5% of the total $3.7 billion settlement, in 2021 finding that a lodestar cross-check was unnecessary.  But that conclusion "was legal error," according to the Federal Circuit, which vacated the award in 2023.

That $185 million amount was inconsistent with promises made in class opt-in notices, and the "extraordinarily high award" wasn't justified, the three-judge panel ruled, ordering the fees to be recalculated.  But Quinn Emanuel's renewed request for $185 million "does little more than pay lip service" to the Federal Circuit's order, according to the insurers.

While the insurers still think their original $8.8 million fee request is reasonable, they are willing to agree to a fee award between $11.77 million and $23.14 million in "the interest of finality," they told the claims court.  "[T]he objectors sincerely want class counsel to be handsomely rewarded.  $11.77 [million] to $23.14 million represents an incredibly large fee award that also fulfills class counsel's promise of a lodestar cross-check," the insurers said.

A recent Law.com story by Amanda Bronstad, “Roundup MDL Lead Counsel Defend Fee Allocations: ‘Limited Funds Available’”, reports that lawyers doling out fees in Roundup litigation stood by their decisions on how to allocate the funds, despite objections raised by other firms.

The fee committee, which is comprised of the three lead plaintiffs firms in the Roundup multidistrict litigation, allocated 81% to themselves and the rest to four other firms, including those who helped win the only bellwether trial, which ended in an $80 million verdict in 2019.  Three of those firms objected to their share of the so-called common benefit fund, which totaled $20.23 million.

Lead counsel originally had sought an order that would have granted about $800 million in common benefit fees, enough for the firms to “each afford to buy their own island,” U.S. District Judge Vince Chhabria wrote in a 2021 order significantly trimming the scope of common benefit fees in the Roundup litigation.

Several firms had objected to the original request, which they called a “money grab,” but lead counsel insisted that Bayer, which owns Monsanto, would not have entered into settlements but for their work.  In 2020, Bayer announced it planned to settle about 125,000 Roundup claims for an estimated $10.9 billion, but thousands of cases remained unsettled.

The significant reduction in the common benefit fund appeared to influence the committee’s allocation amounts.  For instance, San Francisco’s Andrus Anderson, whose partner Lori Andrus served as co-liaison counsel in the Roundup multidistrict litigation, had wanted closer to $550,000, the amount the firm actually billed, rather than the allocated $200,000, or 1% of the common benefit fees.  The committee, in a response, acknowledged that Andrus Anderson’s request was reasonable.  “But, unfortunately, the limited funds available for distribution in this litigation do not allow this to happen,” the committee wrote.

The committee members are co-lead counsel Aimee Wagstaff, of Wagstaff Law Firm in Denver; Robin Greenwald, of New York’s Weitz & Luxenberg; and David Dickens, who took over following partner Michael Miller’s 2021 death, at the Miller Firm in Orange, Virginia.  Among the fee committee members, Wagstaff Law Firm is set to receive the most, with 30%.

‘Thousands of Hours of Common Benefit Work’

Common benefit fees are used in multidistrict litigation to compensate lead counsel for costs and fees associated with discovery, trials and settlements, while preventing “free riders,” or lawyers who collect fees on cases they generate but don’t necessarily litigate.  Lawyers with related state court cases, in past years, have challenged common benefit fees, which are funded through assessments against their settlements.

Chhabria, in the Northern District of California, called common benefit fees in multidistrict litigation “totally out of control,” sending shock waves through the mass tort bar.  In his Roundup order, he excluded a large amount of the legal work, including state court cases, from being reimbursed through common benefit fees.

Los Angeles-based Wisner Baum and its predecessor, Baum Hedlund Aristei & Goldman, focused heavily on Roundup cases in California state courts, where partner R. Brent Wisner won verdicts of $289 million, in 2018, and $2 billion, in 2019.  But the firm is set to receive 10% of the fees because “no other firm contributed more to the common benefit of the MDL,” according to the committee’s response, filed on Friday.

The allocation, the committee wrote, is based on Wisner Baum’s “good faith effort” to estimate its time.  But the firm didn’t have adequate billing records that divided up the hours tied to the multidistrict litigation versus state court cases.  The fee committee, as a result, was forced to reduce Wisner Baum’s requested amount.  “Applying such a reduction is consistent with how courts typically handle attorney fee determinations for firms that have failed to submit time records,” the committee wrote.

Jennifer Moore, of Moore Law Group, based in Louisville, Kentucky, was co-lead counsel with Wagstaff in the bellwether trial, which Monsanto appealed all the way to the U.S. Supreme Court.  Moore had argued that 6% was not enough given her work in that case or the $3.4 million her firm contributed to the common benefit fund, but the fee committee countered that the Miller Firm and Weitz & Luxenberg, both lead counsel firms, also anticipate receiving less than they paid.

“Moore Law contributed to the advancement of this MDL.  There is no question about that,” the committee wrote.  “But Moore Law also greatly benefitted from the thousands of hours of common benefit work that was done before it had any involvement in this MDL.”

Another objection came from David Diamond, of Diamond Law in Tucson, Arizona, who insisted he did not rely on lead counsel’s work in his Roundup cases.  He was joined by David Bricker, of Thornton Law Firm in Beverly Hills, California.  Diamond suggested returning the money to lawyers, like them, who took their own risks.

But the committee disputed his characterization.  “Diamond Law was able to resolve 300 MDL cases without having to draft and issue general discovery, brief and argue preemption and other general dispositive motions, depose a single Monsanto employee, or retain general experts in epidemiology, toxicology, pathology, and regulatory affairs,” the committee wrote.  “With this backdrop, it is difficult to comprehend how Diamond Law can boldly declare that it received no assistance from MDL leadership.”

A recent Law 360 story by Aaron West, “Flint Water Crisis Firms Agree To End Settlement Fee Dispute”, reports that three law firms that negotiated a $626 million settlement related to the Flint, Michigan, water crisis reached a settlement of their own after McAlpine PC agreed to end claims that Cohen Milstein Sellers & Toll PC and Pitt McGehee Palmer Bonanni & Rivers PC unfairly cut it out of their original co-counsel agreement.

The Michigan-based firms agreed to dismiss the lawsuit without prejudice or costs, according to an order signed by U.S. District Judge Judith E. Levy.  The judge's order follows the defendant firms urging the court in October to dismiss McAlpine's lawsuit against them after it "sat on its hands for years" before bringing a claim over the settlement split, according to court documents.

The dispute, which McAlpine initially filed in state court, claimed that the Auburn Hills-based firm was only paid a paltry sum by its co-counsel for its contributions to the underlying litigation.  McAlpine argued its work was instrumental to the lawsuit, contributing about $16 million worth of labor, or about 24% of the total lodestar figure of $84.5 million.  But Cohen Milstein and Pitt McGehee offered to pay just $500,000, McAlpine said.

"Defendants breached the co-counsel agreement by failing to distribute an attorney fee award reflecting McAlpine's respective lodestar, in favor of distributing a greater share to themselves," the firm alleged in its complaint.  The defendants argued in a subsequent filing that McAlpine was too late in bringing its claims.  "McAlpine had a full and fair opportunity to litigate the amount of any attorneys fee award in the appropriate place to do so — the federal Flint class action," the defendants said.

The class action at the heart of the law firms' dispute was settled in 2021 when Judge Levy gave final approval to a $626 million settlement, a deal expected to provide payments to more than 100,000 people affected by lead-contaminated water.  Government officials were accused of switching the city's water supply to the Flint River despite information cautioning them against doing so, and working to cover up the ensuing public health crisis.

In December, McAlpine said that the court should deny the firms' request to toss the fees case because it wasn't suing for recovery from the common benefit award, as Cohen Milstein and Pitt McGehee argued. Rather, McAlpine's claims were centered on "breaches of obligations" between the firms that were independent of the Court's order, the firm said.  The defendants' reply said what McAlpine was requesting went against their original agreement.

"McAlpine's argument is not supported anywhere," the defendants wrote.  "To the contrary, McAlpine agreed to work under the supervision of Co-Lead Counsel and the Executive Committee, and never challenged Co-Lead Counsel's authority to apportion fees among class counsel based on their respective roles in the litigation and contributions to the settlement until after the common benefit fee was distributed."

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