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.