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$503M Syngenta Attorney Fee Dispute Moves to Tenth Circuit

March 12, 2021 | Posted in : Fee Allocation / Fee Apportionment, Fee Award, Fee Dispute, Fee Expert / Member, Fee Issues on Appeal, Fee Proposal / Bid, Fee Recommendation, Fee Request, Fees & Judicial Discretion, Hourly Rates, Hours Billled, Lodestar, Practice Area: Class Action / Mass Tort / MDL, Settlement Data / Terms

A recent Law 360 story by Cara Salvatore, “10th Circ. Wary of Moving $503M Syngenta Fee Brawl, reports that law firms vying for slices of a $503 million fee award from a Syngenta megasettlement over a GMO seed launch told the Tenth Circuit they're being stiffed while other plaintiffs' firms overpay themselves, but the panel questioned whether the tangled issue is even ripe for appeal.  The panel heard more than three hours of arguments on the long-ago-predicted war among lawyers for farmers who sued Syngenta over its premature introduction of modified seeds that led to China slamming its doors to all U.S. corn, affecting even farmers who never used the seeds.

The $1.5 billion settlement resolved cases in federal and state courts, but there are now sub-battles between plaintiffs' counsel that have been placed into a Kansas bucket, an Illinois bucket, a Minnesota bucket, and an IRPA bucket — for independently retained attorneys, as distinct from class counsel.  But lawyers representing these independent plaintiffs say their thousands of cases helped drive Syngenta to settle, and they've appealed their allotment to the 10th Circuit.

In the Kansas bucket, two groups called the Toups/Coffman lawyers and the Hossley-Embry lawyers say they put in work reasonably worth $25.17 million, but have been allocated the equivalent of pennies.  Eric Alan Isaacson, a lawyer representing Toups/Coffman and Hossley-Embry, told the panel, "Mitch Toups' law firm put 20,000 hours into the case, and Richard Coffman's law firm put 13,000 hours into the case. ... Divide those 33,000 total hours by 9,000 clients, you've got less than four hours apiece. That is a reasonable amount."

But those firms were neither class counsel nor lead counsel for a bellwether federal trial or uncompleted state court trials in Minnesota, said U.S. Circuit Judge Robert Bacharach.  They also weren't coordinating as class members do; they "were litigating individual cases," he said.  "They were spending these thousands of hours in a very inefficient way, that's my point," the judge said.  Isaacson pushed back. "Having individual actions was an important part of the pressure that was put on Syngenta.  Special Master [Ellen] Reisman found it was an important part of effecting the settlement," he said. "You need to pay the lawyers at least their lodestar."

In March 2019, a judge adopted five lead firms' recommendation on how to allocate $247 million of the money, including their recommendation that $214 million go to them.  U.S. District Judge John Lungstrum agreed to a six-tier structure proposed by those firms, under which the remaining $33 million would be split among 59 other firms.  The top-tier firms are multiplying their own lodestars by three, a grossly excessive self-payment, Isaacson told the panel.

Judge Lungstrum gave 49% of the fee payout to the Kansas bucket because that money was "going to be covering the allocations to lawyers like Toups/Coffman, who had thousands of clients in Illinois state court.  And then [the other plaintiffs' lawyers] turn around and take the time and the hours they've been talking about and give themselves the money," Isaacson said.  But all three members of the panel saw a fly in the ointment, first noticed by U.S. Circuit Judges Carolyn McHugh and Jerome Holmes.

"We don't know yet what the sum certain is for any of the attorneys in this case, because we don't know what the allocation is yet for the IRPA pool," said U.S. Circuit Judge Carolyn McHugh.  "That raises the issue of whether we have jurisdiction over these appeals," U.S. Circuit Judge Jerome Holmes chimed in a minute later.  "There's been a lot of ink spilled; there's been a lot of hours from talented counsel spent on this appeal.  If we determine that we don't have appellate jurisdiction over this, what is our option?"  "One option — it may be the draconian one, but it may be the necessary one — is to dismiss these appeals," Judge Holmes continued. "What are we to do?"  Isaacson said they could simple abate the appeal — that is, put it on ice.

Bradley Wilders of Stueve Siegel Hanson LLP, representing a group of plaintiffs' firms that favor the current fee allocations, said the $60.4 million IRPA bucket payouts are basically a clerical problem done according to formula.  "There is a sum certain as to the three jurisdictional pools; there's no argument on that," he said.  But regardless, he said a minute later, "I do think you have the authority to abate" the appeal.  Whatever happens, the status quo shouldn't be reversed, Wilders said.

"No one was better equipped than the special master who oversaw the settlement negotiations and the three trial judges ....in three jurisdictions to make these particular findings," he said.  Wilders also cast doubt on Isaacson's group's lodestar.  "They only served 870 plaintiff fact sheets ... out of their 9,000 clients, yet they report 22,000 hours on plaintiff fact sheet work," he said.  "They reported $687 an hour for the task of file management."