A recent Law 360 story, “High Court Won’t Hear $72M Bayer MDL Fee Fight,” reports that the U.S. Supreme Court passed on an appeal from plaintiffs’ attorneys in multidistrict litigation against Bayer AG over the contaminated rice to reconsider a decision that awarded $72 million in fees exclusively to the lead plaintiffs’ attorneys.

In its denial of a petition for writ of certiorari from Goldman Phipps PLLC, Keller Stolarczyk PLLC and Mikal C. Watts PC, the Supreme Court preserved the Eighth Circuit’s refusal to award them a piece of the fees in an MDL brought by rice farmers who accused Bayer of contaminating their crops with genetically modified rice. 

Bayer agreed in July 2011 to pay $750 million to settle claims with thousands of rice growers.  In the settlement, Bayer was ordered to hold back 11 percent of any federal court recovery by the plaintiffs in a common benefit trust fund.  The law firms argued that they were wrongly ordered to pay into a common benefit fund from state court verdicts they had won before their cases were involuntarily consolidated in an MDL.

“We’re happy – but not surprised – by the Supreme Court’s decision, given that the petitioners agreed to pay the common benefit assessment when they opted into the common benefit fund,” MDL lead counsel Don Downing of Gray Ritter & Graham PC said.  “The circuit’s decision also reaffirmed the principle that the trial court is the best position to exercise discretion for attorneys’ awards.”

The firms had told the high court that the practice of MDL fee-shifting has become widespread despite the “American Rule” that holds each party in a suit pays their own attorneys, regardless of the outcome.  There is no statutory or case law supporting the MDL fee-shifting, the firms said.  The Phipps group asked the high court in their petition to address whether fee-shifting is authorized in MDLs and, if so, what guidelines MDL courts use in awarding fees to court-appointed lead counsel.

“Only with this court’s guidance will there be uniformity in the manner in which attorneys’ fees are allocated in this burgeoning area of law,” the Phipps group said in the petition.  “The manner in which attorneys’ fees were allocated in this case was not only wrong as a matter of law, but also conflicted with the court’s precedent, creating a split in the way courts deal with the issue.”

MDL lead counsel Don Downing and Adam Levitt of Grant & Eisenhofer PA asked the court for $72 million in attorneys’ fees and submitted a “generalized” 10-page spreadsheet in support, the Phipps group said.  The Phipps group said that when Congress established the legal procedures to govern MDLs, they left out a provision that would authorize MDL court to order fee-shifting between parties.

The case is The Phipps Group v. Downing and Levitt, Case No. 14-786, in the U.S. Supreme Court.  NALFA also reported on this case in “Firm Loses Bid for Attorney Fees in Rice Farmers MDL”