Fee Dispute Hotline
(312) 907-7275

Assisting with High-Stakes Attorney Fee Disputes


News Blog

Category: Fee Allocation / Fee Apportionment

Roundup MDL Lead Counsel Defend Fee Allocations

February 19, 2024

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.”

Flint Water Crisis Law Firms Agree to End Fee Dispute

February 13, 2024

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."

$28.4M in Attorney Fees to Pennsylvania Opioid Counsel

December 21, 2023

A recent Law.com story by Aleeza Furman, “Judge Greenlights $28.4M in Contingency Fees to Firms Representing Pa. Opioid Plaintiffs”, reports that lawyers for Pennsylvania plaintiffs who signed onto a major 2022 opioid settlement are set to receive a cumulative $28.4 million in contingency fees from the deal.  Judge Barry Dozor of the Delaware County Court of Common Pleas, who oversees Pennsylvania’s coordinated opioid litigation, approved the fee awards Dec. 14.  The fees are slated to be paid out of the Pennsylvania Opioid Fee Fund—a chunk of money allotted for lawyers from Pennsylvania’s $1.07 billion share of the $26 billion global settlement between state and local governments and Johnson & Johnson, Cardinal Health, McKesson and AmerisourceBergen.

Dozor’s Dec. 14 order greenlit recommendations from retired Judge Joel Schneider, a special master charged with overseeing the allocation of the Pennsylvania Opioid Fee Fund.  Schneider divided $28.4 million in contingency fees among 11 law firms to be paid in annual increments over the course of five years.  The awards range from around $4,000 (to Philadelphia-area Levy Baldante Finney & Rubenstein) to $10.7 million (to Pensacola, Florida-based Levin Papantonio Rafferty).

The 11 firms Schneider listed are designated payees, which will go on to distribute portions of their respective awards among the host of other plaintiffs firms with clients involved in the settlement, according to one attorney involved in the litigation.

Saltz Mongeluzzi Bendesky partner Patrick Howard, who represents plaintiff Delaware County,  said Dozor’s order marks the first of two determinations regarding fees from the opioid fee fund.

Howard said the fund includes one portion for contingency fees—what Dozor just approved—and one portion for common benefit fees to be determined in 2024.  Howard said the second portion of fees would be awarded to a smaller group of lawyers who were actively involved in the litigation.  Dozor also already approved a $16.65 million payout from the fund in December 2022 reimbursing costs and expenses firms incurred in the litigation.

According to Howard, the fee determinations are part of a broader winding down of Pennsylvania’s long-running opioid litigation.  He said attorneys are currently hammering out the allocation details of a second wave of multibillion-dollar settlements with pharmacies and other drug companies, and most parties’ claims are resolved.  “As far as litigating against defendants,” Howard said, “I would say 95% of the commonwealth’s litigation is over.”

Judge Settles $21M Attorney Fee Allocation Dispute

December 20, 2023

A recent Law 360 story by Micah Danney, “Judge Divvies Up Atty Fees From $785M FCA Deal”, reports that a Massachusetts federal judge issued a more than 70-page finding of facts settling an attorney fee dispute over $21 million from a seven-year-old judgment, saying two firms earned portions of what they sought for their early work on the case.  U.S. District Judge Douglas P. Woodlock held that Sakla Law Firm in New Orleans gets 55% while the two firms, Vezina & Gattuso of Louisiana and Boone & Stone of Georgia, pushed out before a Pfizer subsidiary's $785 settlement, get 30% and 15% respectively. 

While Sakla had argued the firms were absent from eight years of litigation that followed their exit, the judge determined their efforts contributed to the federal government's intervention on behalf of one of the qui tam case's relators.  "In this respect, the work performed here to get the government to intervene, particularly after an initial declination when the original complaint was filed, was a significant and important development to the overall success of the case," Judge Woodlock said.

The judge cited U.S. Department of Justice statistics showing a 90% success rate for cases where the government intervenes, taking primary responsibility for the litigation, compared to a success rate of 25-30% without its intervention.  Vezina & Gattuso and Boone & Stone had accused Sakla of trying to take credit for the initial research and legal foundation they provided, saying they were promised a three-way fee split in a contract that was still enforceable.

Sakla had countered that it was solely responsible for convincing Wyeth Pharmaceuticals Inc. of its exposure, and said it "pinned down" witnesses, argued and won motions in court, and calculated damages in a tedious endeavor that required hospital invoices to be individually analyzed.  Relator William St. John LaCorte, a hospital physician, fired Vezina & Gattuso and Boone & Stone in 2008.

LaCorte had claimed that Wyeth overbilled Medicare and Medicaid from 2001 to 2006 in violation of the government's "best price" provisions.  Pfizer acquired Wyeth in 2009 and took over its defense and settlement.  The companies argued that Wyeth reasonably interpreted the law and believed that its rebate program was legal.

The federal government and 36 states intervened in LaCorte's suit as well as a similar claim from a hospital sales representative, Lauren Kieff. Their claims ended in the 2016 settlement, of which nearly $120 million went to the whistleblowers and about $24 million has already been paid to attorneys.  The government had initially declined to intervene in support of LaCorte's allegations but was always on board with Kieff's claims, Judge Woodland said. He also noted that the complaints were "not fighting in the same weight class."

"Nevertheless, I find Dr. LaCorte's team, including V&G and B&S, was eventually able to capture the government's attention and sufficiently present the merits of the case so that the government intervened largely because of their efforts," the judge said.

Juul Settlements Could Yield $150M in Attorney Fees

December 19, 2023

A recent Law.com story by Amanda Bronstad, Juul Settlements Could Generate $150M in Fees: ‘Everyone Undoubtedly Wishes the Pool Were Larger’”, reports that lawyers plan to ask a federal judge to approve as much as $150 million in fees tied to settlements with Juul Labs Inc. over the vaping epidemic.  The fee award, according to a partially redacted filing from a fee committee, is more than $50 million short of the compensation from nearly 368,000 billable hours incurred in the litigation, which began three years ago, and a rough estimate given that the total value of the Juul settlements remains unknown.

The motion attached an exhibit of allocations, expressed in percentages rather than dollar figures, to some of the 57 firms set to receive fees, including the four in the multidistrict litigation serving on the committee, who are among the top recipients.

At least one lawyer has objected to his own fee allocation.  Esfand Nafisi, who served on numerous committees in the Juul multidistrict litigation, said his firm, the Law Offices of Esfand Nafisi, based in San Anselmo, California, spent more than 10,000 hours on the cases.  “Though a smaller firm, Nafisi law was able to play a key role in this litigation by maintaining a singular focus,” he wrote in a Nov. 27 opposition to the fee motion.

In a Dec. 4 response, the committee said Nafisi’s opposition lacked specifics.  “Reality is that, while everyone undoubtedly wishes the pool were larger, all firms—save one—have abided by the order to which they all agreed three and a half years ago, and under which they all litigated this matter together,” the committee wrote.  “While Mr. Nafisi did provide some common benefit—which is why he was allocated common benefit fees—his contributions do not merit any greater allocation than what the fee committee recommended.”

The fee committee lawyers did not respond to a request for comment.  They are: Sarah London, of San Francisco’s Lieff Cabraser Heimann & Bernstein; Dean Kawamoto, of Keller Rohrback in Seattle; Ellen Relkin, of New York’s Weitz & Luxenberg; Dena Sharp, of San Francisco’s Girard Sharp; Paul Kiesel, of Kiesel Law in Beverly Hills, California; and Mark Robinson, of Robinson Calcagnie Inc. in Newport Beach, California.

Orrick is set to take up the $150 million fee motion at a hearing.  The dispute is the latest involving common benefit fees, awarded to lead plaintiffs’ attorneys appointed in multidistrict litigation for their legal efforts but funded through assessments made against settlements of cases involving other lawyers.

In 2021, U.S. District Judge Vince Chhabria of the Northern District of California raised red flags about the use of common benefit fees in the Roundup multidistrict litigation, but the U.S. Court of Appeals for the Ninth Circuit found it lacked jurisdiction to review the order.  On Aug. 25, the Ninth Circuit upheld common benefit assessments on cases outside the Bard IVC filter multidistrict litigation because the objecting lawyer had signed a participation agreement with lead counsel.

‘Not Totally Revealing’

Juul, facing its first bellwether trial over its electronic cigarettes, reached four separate settlements on Dec. 6, 2022.  The settlements resolved lawsuits brought by government entities, individuals with personal injuries, Native American tribes and consumers with economic claims.  Juul also settled the economic claims in a $255 million class action settlement.  Class counsel in that settlement asked for $76.5 million in fees, which must be approved under Federal Rule 23 of Civil Procedure. Hedley, one of eight objectors to the class settlement, called the billable hours “outrageously inflated on its face.”

On Sept. 19, Orrick granted final approval to the class action settlement but held off awarding fees until he received the fee committee’s report on the common benefit fund.  Plaintiffs’ lawyers initially sought to seal portions of their fee motion, citing “certain terms of confidential settlements,” but, after Hedley and Nafisi objected to the request, Orrick issued a Dec. 7 order to show cause why the information should remain under seal.  He granted part of the request and ordered plaintiffs’ lawyers to file their fee motion with fewer redactions.

“What they submitted un-redacted is a bit more revealing, but it’s not totally revealing in terms of what is the overall denominator that we’re talking about,” Hedley said.  “This additional information that’s come out from the fee committee is relevant to the arguments that we advanced in our initial objection.”

In their fee motion, plaintiffs’ lawyers referenced more than $24 million in common benefit costs paid in advance for the litigation by firms now set to receive fees.  The common benefit fund is paid for by a 7% holdback of fees paid to individual lawyers for their Juul settlements.  The motion excludes compensation tied to a $235 million settlement with Altria, which has a 35% stake in Juul. Altria settled earlier this year while in the midst of a trial against the San Francisco Unified School District.