A recent Law 360 story by Chart Riggall, “Flint Class Firms Say Atty Fee Dispute Already Decided”, reports that two law firms that helped negotiate a $626 million settlement over the Flint, Michigan, water crisis urged a Michigan federal judge to dismiss a suit from their former co-counsel claiming the firm had its rightful proceeds from the litigation arbitrarily slashed.  Cohen Milstein Sellers & Toll PLLC and Pitt McGehee Palmer Bonanni & Rivers PC told the court that their former ally in McAlpine PC had ample opportunities to take issue with the fee split, but the firm instead "sat on its hands for years" before bringing a claim.

"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, arguing McAlpine's claims are barred under the doctrine of collateral estoppel.  A construction firm based in suburban Detroit, McAlpine filed suit — initially in state court — earlier this month claiming it had been paid a paltry sum for its contributions to the litigation.

The class action itself was settled in 2021 when U.S. District Judge Judith Levy gave final approval to a $626 million settlement, a deal expected to provide payments to more than 100,000 people affected by water contaminated by lead.  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.

McAlpine argued its work was instrumental to the litigation, 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.

The defendant firms, however, said McAlpine should have raised any issues with the fee split first during the negotiations before Judge Levy, which entailed "extensive additional briefing and argument" for nearly a year.  McAlpine could have also raised the issue when a group of objectors appealed Judge Levy's fee order to the Sixth Circuit, where it was later upheld, but failed to do so.

"McAlpine is precluded from asserting this separate action for increased attorneys fees for its work in the federal Flint class action," the firms said.  "McAlpine's [complaint] is, in essence, a collateral attack on the federal Flint class action's fee award order."