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Special Fee Master Defends Fee Allocation Work in $1.5B Syngenta MDL

May 8, 2019 | Posted in : Billing Record / Entries, Class Action, Contingency Fees / POF, Fee Allocation / Splitting, Fee Award, Fee Dispute, Fee Expert / Member

A recent Law 360 story by Celeste Bott, “Special Master Defends Fee Divvy in $1.5B GMO Corn Deal,” reports that Heninger Garrison Davis LLC "ignored established law" when it asked for $50 million to $60 million in fees for its work on a $1.51 billion settlement over Syngenta's genetically modified corn, a special master tasked with divvying up the attorney fees told a Kansas federal court.  Special Master Daniel J. Stack, a retired Illinois judge, said the firm mischaracterized and misapplied a district court ruling on the $500 million attorney fee award when it objected to his recommendation it be paid $9.7 million.

The firm had argued it deserved a far bigger slice of the fees — between 65% and 85%of a pool of fees designated for Illinois attorneys, or between $50.7 million and $62.4 million.  An award that high would work out to an hourly rate of roughly $2,500 to $3,200 for Heninger Garrison’s work, Stack said.  “In a comparison that I am privy to from other work on common benefit fees, it is my recollection that the highest hourly rates for the very top leading attorneys is not more than $1,200 per hour,” Stack said.

Stack said that while Heninger Garrison focused its objection largely on litigation and in-court hours, U.S. District Judge John Watson Lungstrum made clear in a fee allocation order that compensable work includes other types of work that contributed to the eventual settlement.  “I did not simply give credit for all hours and weigh them equally, but considered whether they in fact truly contributed to the benefit of the class,” Stack said.  “Consistent with the allocation order, I discounted certain hours and recognized that other hours contributed enormously to achieving the settlement.”

Heninger Garrison objected to Stack’s fee recommendation in March, calling it “fundamentally flawed.”  The firm criticized his decision to award Clark Love & Hutson GP, Meyers & Flowers LLC and Phipps Anderson Deacon LLP — referred to in the report as “the Clark/Phipps group” — 80% of the Illinois portion of the fee pool, arguing that Heninger Garrison and several affiliates did the legwork in the case, including taking depositions, completing plaintiff fact sheets and voluminous discovery.  In addition, Heninger Garrison told the court that the Clark/Phipps group never submitted time entries, only summaries, making it impossible to verify the group’s claims for hours worked.

But that ignores established law that permits a court to rely on time summaries and affidavits submitted under penalty of perjury, Stack said. In this case, it was the “reasonable and efficient” approach, he said.  The firm’s argument that courts in Kansas and Minnesota awarded their attorneys fees differently was “beside the point,” Stack said, adding that the litigation was more advanced in those states and that a benefit determination in Illinois couldn’t build on a pre-existing common benefit process.

In April last year, Judge Lungstrum granted preliminary approval of a mediated $1.51 billion settlement agreement hashed out by farmers in all but four cases involved in the MDL.  The deal came after years of litigation over allegations that Syngenta should have delayed launching the seeds until Chinese authorities — controlling a major corn market for U.S. growers — approved importing the GMO corn.