SAN FRANCISCO (Legal Newsline) - A lawyer who signed an agreement to share in legal materials used in multidistrict litigation over Bard blood filters can’t avoid paying common-benefit fees to the lead lawyers even in cases that were never included in the MDL, the Ninth Circuit ruled.
Ben C. Martin of the Ben Martin Law Group represented some 500 claimants in the litigation over Bard’s vena cava blood clot filters, which grew to more than 8,000 cases consolidated in federal court in Arizona. Early in the litigation, the court ordered an 8% holdback on settlements, including 6% attorney fees (later increased to 8% because of “significant unanticipated common benefit work”) and 2% for expenses.
The order applied to all cases transferred to the MDL regardless of whether the attorney signed the participation agreement. It also applied to any cases managed by lawyers who signed the agreement. Such fees are intended to compensate the lead law firms that perform much of the pretrial work in multidistrict litigation that is then shared among other lawyers for their cases. The plaintiffs’ executive committee included Baron & Budd, the Branch Law Firm, Provost Umphrey and the Gallagher Law Firm.
Martin, or BCM, challenged the holdback on 264 cases that settled without ever being filed in court, arguing the MDL judge had no jurisdiction over them. In support, he cited a ruling by by U.S. District Judge Vince Chhabria in the Roundup MDL declining to impose common-benefit fees on cases in state court. The lawyers later engaged in a heated battle over fees, accusing the lead plaintiff lawyers of double-dipping.
A district court disagreed, ruling that the MDL statute, 28 U.S.C. § 1407(b), gives judged an inherent power to manage cases and BCM signed the participation order that included a common benefit assessment. The trial court acknowledged the MDL statute doesn’t explicitly confer authority on courts to create a common benefit fund or collect money for it. But the court could nevertheless impose the fees as “a reasonable response to the problems and needs confronting the court’s fair administration of justice.”
The Ninth Circuit agreed, rejecting BCM’s argument his clients with non-MDL claims were being penalized because they just “happened to hire a lawyer who represents a plaintiff within the MDL.”
“BCM reaped the benefit of this agreement by repeatedly accessing common benefit work product and using it in its non-MDL cases,” the Ninth Circuit concluded. “Therefore, after knowingly and voluntarily entering the participation agreement, BCM cannot now complain that the district court lacked authority to enforce its orders incorporating that agreement.”