A recent Law 360 story by Emily Field, “High Court Won’t Review Chinese Drywall Atty Fee Award,” reports that the U.S. Supreme Court declined to review an Eleventh Circuit decision that upheld a fee award of $5.8 million to class counsel in the defective Chinese drywall multidistrict litigation from MDL attorney fees from past work on the case.

As is custom, the high court did not explain why it chose not to hear the November petition from lawyers who represented 497 individual plaintiffs in suits stemming from the MDL.  In their petition, the attorneys had argued that the MDL compensation system is out of control, and the award conflicts with the so-called American Rule, under which litigants generally pay their own attorney fees.  "Multidistrict litigation has revolutionized civil procedure, leaving courts and scholars puzzled by an assortment of issues, including the high-stakes attorney fee compensation system at issue here," the lawyers said.

The Eleventh Circuit said in June that the court-appointed class counsel could receive 45% of the total fees paid to attorneys who negotiated settlements for the 497 Florida plaintiffs, because their work on the common case helped lead to the individual recoveries.  The appeals court said U.S. District Judge Marcia G. Cooke did not abuse her discretion when she awarded class counsel $5.8 million of the more than $40 million paid by Taishan Gypsum Co. Ltd. to end claims over shoddy drywall imported from China.  In affirming the decision, the appellate panel said the attorneys' work for the 497 plaintiffs "did not exist in a vacuum."  The 497 plaintiffs were part of 1,734 Florida cases remanded in 2018 from the MDL in Louisiana to Judge Cooke in the Southern District of Florida.

"The Eleventh Circuit's decision was well-reasoned.  I'm not surprised that the Supreme Court denied review.  The Supreme Court's decision not to accept review is further vindication for the team of lawyers that obtained this historic result after over 10 years of hard fought litigation," Patrick Montoya, who represents the class counsel, told Law360.  "This case was unique for so many reasons, but chief among them was receiving compensation from Chinese companies for the U.S. victims of Chinese drywall."