CLEVELAND (Legal Newsline) - Saying it is almost inevitable they will negotiate their own slice of a multibillion-dollar settlement before it is done, the judge overseeing federal multidistrict opioid litigation refused to order the parties to set aside a set percentage to pay the fees of plaintiff lawyers leading the MDL.
Numerous parties including state attorneys general had objected to the request from the plaintiffs executive committee for a “common benefit fee fund” amounting to as much as 7% of any settlement.
The opioid industry is reportedly working on a settlement in the $50 billion range, meaning the private lawyers representing states, cities, counties and other public entities are likely to reap as much as $15 billion in fees under contingency-fee contracts giving them 20-30% of any winnings.
The common benefit fee fund would have rewarded the lawyers leading the litigation by providing a court-ordered piece of those fees to be routed to the lawyers who did most of the heavy lifting in the litigation. Many of the hundreds of lawyers representing thousands of cities and counties got their jobs through local connections and handed off the work of actually devising trial strategy, deposing witnesses and analyzing documents to law firms on the PEC.
The PEC members urged U.S. District Judge Dan Aaron Polster to enter an order guaranteeing they could collect their share.
In a July 27 order, Judge Polster said there was no need to enter a court order guaranteeing the payment of fees to the PEC because the lawyers are likely to negotiate a fee agreement in any settlement.
“The time is not ripe because plaintiffs and defendants state uniformly that, given current settlement negotiations, they anticipate a global settlement will probably moot the need for a common benefit order,” he wrote. If that doesn’t happen, he added, he can always order the plaintiffs to steer a share of the money to lawyers on the PEC.
Earlier this year, AGs from 37 states asked U.S. District Judge Dan Aaron Polster, who is overseeing the federal MDL, to reject the fee request because it might endanger their own negotiations and siphon away money that should be used to address the opioid epidemic. In his latest order, Judge Polster cited the “inordinate complexity” of the MDL and unanswered questions about the actual contribution of private lawyers versus their counterparts in state AGs offices as well as his inability, as a federal judge, to issue orders involving state litigation not before his court.
Earlier this year the judge hired William B. Rubenstein, a Harvard Law School professor and expert on class actions, to study the fee question. Rubenstein concluded a 7% request for fees and costs was above the median of 6%, which itself didn’t reflect the fact common-benefit fees tend to fall as a percentage of settlement as the size of the settlement grows.