CLEVELAND (Legal Newsline) - The judge overseeing multidistrict litigation against the opioid industry ordered plaintiffs’ attorneys to keep monthly records of the time they spend on their cases down to a tenth of an hour and imposed strict rules on who can collect fees, in an effort to prevent the excesses that have drawn criticism in other class actions and mass tort cases.
Fees and expenses in the opioid litigation are to be paid only to “participating counsel” who belong to the Plaintiffs’ Executive Committee or who have been authorized in writing to perform work “that may be considered of value to the MDL.” The order attempts to control plaintiff expenses in other ways, including prohibiting markups on often low-paid contract attorneys and restricting reimbursements to coach airfare on flights less than four hours.
"The order is extraordinary," said Jerome Studer, an attorney with Cozen O'Connor and Legal Fee Solutions who analyzes fees for corporate clients. "The scrutiny being placed on class counsel fees is changing."
The 15-page order could reflect U.S. District Judge Dan Aaron Polster’s concern that the opioid litigation he oversees could otherwise draw the sort of fierce criticism that has come in the wake of other cases in which plaintiff lawyers padded their bills by overstaffing depositions with partners, marking up $50-an-hour contract attorneys to hundreds of dollars an hour, and giving friends and competitors a piece of the fees.
In one high-profile example, U.S. District Judge Lucy Koh excoriated plaintiff lawyers for including 53 firms in the fee request for a settlement of a data breach case against Anthem, including law firms Koh specifically excluded. In another example, a federal judge in Boston ordered a special master to investigate a settlement involving State Street Bank & Trust after the Boston Globe revealed a lawyer had steered $200,000 in fees to his brother, a $50-an-hour public defender, at $500 an hour.
Polster appears to be trying to keep a lid on such practices by ordering all the lawyers on the plaintiff side to consent to his order and keep detailed records of the work performed and who does it. “Participating counsel shall be eligible to receive attorneys’ fees and reimbursement of expenses” only if the time and expenses are reasonable and non-duplicative, Polster wrote.
He ordered the lawyers to assemble a Fee Committee to review expense reports and make sure they comply with the court’s rules. If they are unsure whether work will comply with the rules, they must get advance written authority or it can’t be billed to the plaintiffs, the judge said.
He also ordered the lawyers to consent to his jurisdiction and agree “the Court has plenary authority regarding the award of attorneys’ fees.” In theory, the MDL judge is only in charge of coordinating the initial stages of the litigation, including conducting bellwether trials, after which the hundreds of individual lawsuits are remanded to the courts they originated in. But in practice, most MDLs are settled without remands, and Judge Polster has strongly urged both sides to settle this case in his court.
The judge also gave detailed instructions on which lawyers can bill for attending depositions, writing briefs and even reading emails. In general, any work must be approved in advance by the lead counsel and reviewed by the Fee Committee, the judge said, and lawyers who try to bill for unauthorized services won’t be compensated.
“It is not the intent of the Court to micro-manage the work of counsel,” the judge wrote. “However, these examples, amongst other areas not specifically set forth, can be fertile grounds for unnecessary and duplicative work.”
The judge attached proposed billing records which break out 20 billing categories for such as time spent on research, attorney meetings, legal research, court appearances and communications with other attorneys and clients. He includes two tiers of document review, urging the lawyers to use “less senior attorneys” and technology assisted review where possible.
Contract attorneys “shall be billed at the actual cost of those services,” the judge said, adopting the practice of a growing number of judges amid criticism of high markups of these low-paid lawyers.
Fees are to be “current rates,” the judge said, but the lawyers may not be paid what they bill. The lawyers cannot charge for office overhead and only travel expenses authorized by co-lead counsel will be reimbursed at the conclusion of the litigation.
Those travel expenses can’t exceed “refundable, changeable, and convenient coach-class airfare” for domestic flights of four hours or less and “reasonable business class fares” at the discretion of co-lead counsel for longer and international flights. Hotel rooms aren’t to exceed $450 a night and the lawyers are limited to reimbursement for $140 a day in per diem meal expenses.