In the podcast called Know Your Enemy, political progressives take a probing look at the history of American conservative political thought. The podcast is somewhat unusual because it takes opponents’ opinions seriously. There is much more analysis than name-calling. The podcast considers the views of intelligent conservative theorists and writers (e.g., Leo Strauss, Garry Wills, Joan Didion(!)) and not mere performative chuckleheads. Straw men need not apply.
We wouldn’t call too many plaintiff lawyers “enemies.” After attaining a certain age, we finally figured out that visceral dislike was bad for our viscera. But we’d rather beat plaintiff lawyers than lose to them, so if knowing a little something about their world views will help us, then so much the better. It certainly helps to know about the thorny issues plaintiffs face in settling inventories, securing consents, and dealing with their learned cocounsel. That last category more often than not involves money – filthy-stinking lucre. For example, we are dealing with a plaintiff lawyer who wants to find a separate peace – a settlement that has nothing to do with the MDL. You, see, he doesn’t want to have to pay any money into a common benefit fund. We get that. Any such payment comes right off of profits.
Common benefit funds are, well, common in MDLs. There might not be a firm statutory basis for the practice, but it is a pragmatic way to prevent the problem of free riders. A common benefit fund is designed to ensure that attorneys who performed work benefitting all plaintiffs and their counsel would be reasonably compensated. That seems reasonable, doesn’t it? Who could possibly stir up trouble about such a fair-minded process? You’d be surprised. Or maybe you wouldn’t.
Consider the case of In re Bard IVC Filters Prods. Liab. Litig., 2022 U.S. Dist. LEXIS 91273 (D. Az. May 20, 2022), where some plaintiff lawyers in an MDL filed a motion to reduce and exempt their clients’ recoveries from common benefit and expense assessments. More specifically, the plaintiff lawyers argued that no assessment should be paid by clients whose cases were filed in federal court after the MDL closed, were filed in state court, or were never filed in any court. They also asked for some other reductions in assessments. The common benefit fund assessment in IVC Filters was originally 8% (6% attorney fees and 2% expenses) and later increased to 10%. It is not nothing.
The plaintiff lawyers relied upon a decision in the Roundup MDL, which carved out state court and post-MDL federal cases from common benefit fund assessments. The IVC Filters court considered Roundup to be an entirely different kettle of fish. In IVC Filters, the complaining plaintiff lawyers signed on to a participation agreement near the outset of the case, actually were part of the Plaintiffs’ Steering Committee (PSC), and benefited from massive work that mostly, unlike in Roundup, was not available on the public docket. That work included depositions, expert motions, summary judgment motions, and even a trial package. Further, the Roundup court set up a common benefit fund not nearly as early as in IVC Filters. The Roundup court also doubted that the common benefit work did much to advance the ball for the complaining plaintiff lawyers. By contrast, the IVC Filters court harbored no such doubts. The complaining attorneys in IVC Filters “enjoyed access to the MDL work product — whether online or by downloading it — only because [those attorneys] entered into the Participation Agreement and agreed to pay common benefit assessments.”
Plaintiff lawyers are often very good at coming up with winning themes. The winning theme in IVC Filters seems to be “a deal is a deal.”
Moreover, in Roundup the plaintiff lawyers had secured stratospheric verdicts, and the court believed the lead lawyers were not hurting for additional compensation. In addition, much of the settlement leverage in Roundup came from the state court, not MDL, proceedings.
The IVC Filters court also discussed its inherent authority to impose common benefit assessments. And here we enter the world of MDL folklore and mythology, where the absence of statutory authority inevitably yields to the practical demands of an inherently impractical structure. The IVC Filters court acknowledges that the “MDL statute is procedural in nature and does not clearly confer on federal courts the power to create a common benefit fund or make assessments for that fund.” That being said, an “MDL court’s ability to perform the task assigned to it by the MDL statute necessarily requires the power to assure reasonable compensation for the efforts of lead counsel.” Or — and hear us out on this – maybe some MDL courts have an inflated sense of the “task assigned to it by the MDL statute.” If the statute itself does not provide for common benefit funds, maybe you’re doing it wrong.
But who needs statutes when you’ve got a court’s inherent power? The IVC Filters court observed that “a district court’s inherent managerial power is particularly important in a large MDL like this one.” The court admits that such inherent power is not “limitless,” though the outer boundaries have not yet been “precisely delineated.” But the common benefit fund here was pretty standard, the plaintiff lawyers signed onto the Participation Agreement so, again, a deal’s a deal. The plaintiff lawyers were attempting to breach the Participation Agreement (which had been incorporated into a court order), so the IVC Filters court could prevent the breach.
The IVC Filters court also found support in the common fund doctrine. That doctrine cuts against the usual “American Rule” of each side bearing its own legal costs, and has been applied in class actions. The IVC Filters case did not conclude, as the Roundup court did, “that the common fund doctrine is limited solely to cases where a lawyer’s work creates a res that resides in the court and from which others seek to recover.” The IVC Filters court also considered the reliance interests of the PSC in being reasonably compensated for work they did on behalf of all plaintiffs.
The complaining plaintiff counsel argued that their work, not the common benefit work, had upped the settlement value of late-settled cases, and that, therefore, the common benefit assessment should be reduced. But, again, a deal is a deal. The complaining plaintiff lawyers had signed on for a fixed percentage; there was no room for post hoc revisionism. The court was in no position “to parse the value between the common benefit work” and the work done by the complaining plaintiff lawyers.
When it comes to common benefit fund disputes, we are much happier being spectators than participants.