A recent NLJ story, “Girardi Keese Loses SCOTUS Bid in Avandia Fee Fight,” reports the U.S. Supreme Court has refused to take up Girardi Keese’s fight against turning over more than $10 million in proceeds from a 2012 settlement to the lead attorneys in multidistrict litigation involving the diabetes drug Avandia.

Plaintiffs firm Girardi Keese filed more than 4,000 cases against GlaxoSmithKline PLC alleging that Avandia increased the plaintiffs’ risk of heart failure.  Most were in California state court, but 25 were in the multidistrict litigation, which is pending in the U.S. District Court for the Eastern District of Pennsylvania.

In 2014, a federal judge overseeing the MDL ordered GlaxoSmithKline to hold back 7 percent of the proceeds that Girardi Keese obtained from the settlement of all its cases, including those in state court, which the U.S. Court of Appeals for the Third Circuit affirmed on July 2.  The holdback money is designed to go to a fund that lead attorneys used to finance the costs of the MDL, such as depositions and discovery, which in turn provides a “common benefit” for all plaintiffs lawyers with Avandia cases.

Girardi was represented by Paul Clement, a partner at Bancroft in Washington.  Jason Richards, an attorney for the plaintiffs advisory committee in the MDL, wrote in an email: “Obviously, we are very pleased with the Supreme Court’s denial of certiorari today.  We never believed this issue, which essentially concerns a breach of contract, was worthy of the Supreme Court’s time.”

Fights among plaintiffs attorneys over MDL fees have become more common, arising recently in litigation against Zimmer Biomet Holdings Inc. over its Durom Cup hip implants and against Bayer CropScience L.P. over genetically modified rice claims.  Last year, the Supreme Court denied a petition to review an Eighth Circuit decision involving challenged fees in the modified rice case.

In the Girardi Keese case, the Third Circuit found that U.S. District Judge Cynthia Rufe had authority to enforce a contract between the MDL’s lead attorneys and Girardi Keese attorney Keith Griffin in 2009 in which the firm agreed to a holdback of 4 percent of its fees and 3 percent of the client’s recovery.

In its Nov. 24 petition, Girardi Keese said the Third Circuit broke with precedent by inappropriately applying federal court jurisdiction on state court plaintiffs. 

“In our cases, our firm put out $18 million in costs—the MDL didn’t do any of that—so it was really somewhat inequitable,” Girardi said.  “If you have state court cases and you do all the work, all the experts, you do all that effort, then you should have a state court judge say what your fees are, not a federal judge who has nothing to do with the cases.”

In a Dec. 28 response, Richards, a partner at Aylstock, Witkin, Kreis & Overholtz in Pensacola, Florida, representing the plaintiffs advisory committee, argued that the Third Circuit’s decision wasn’t precedential and that the case involved “a single law firm's refusal to pay common benefit assessments in the Avandia multidistrict litigation (MDL) despite agreeing to do so."