Column: Opioid plaintiffs' committee urges US appeals court to toss fee bid by shut-out law firms
The opinions expressed here are those of the author, a columnist for Reuters.
By Alison Frankel
Sept 9 (Reuters) -When it comes to calling dibs on $2.1 billion set aside for lawyers who contributed to settlements with nine major opioids defendants, the plaintiffs' lawyers in charge of the sweeping nationwide case are not kidding around.
On Friday, the plaintiffs' executive committee — which includes Motley Rice, Simmons Hanly Conroy and Lieff Cabraser Heimann & Bernstein — moved to dismiss an appeal at the 6th U.S. Circuit Court of Appeals by two firms that were shut out of so-called common benefit fees, arguing that the firms waived their right to ask for review by the federal circuit when they agreed to participate in the elaborate fee allocation process in the opioids multidistrict litigation.
The firms that filed the appeal — Goldstein, Russell & Woofter and Kelley & Ferraro — represented six Ohio cities that objected a few years back to a proposal by about 50 other cities and counties to certify a first-of-its-kind “negotiating class” to provide structure for settlement talks with the drug companies, distributors and pharmacies sued for fueling a nationwide epidemic of opioids abuse.
Goldstein name partner Kevin Russell, who presented oral argument for the objecting Ohio cities at the 6th Circuit, helped persuade the appeals court to overturn certification of the negotiation class in a 2020 decision that said the novel device might compromise class members’ opt-out rights.
The Goldstein and Kelley firms contend that their work on behalf of the objectors entitles them to a fee from a $2.1 billion fund set aside from settlements with nine defendants, including Janssen, McKesson MCK.N, Teva TEVA.TA, CVS CVS.N and Walmart WMT.N. (Common benefit funds, which are meant to compensate lead plaintiffs' lawyers for work that benefits everyone in the case, are quite common in multidistrict litigation.)
Unfortunately, most of the records surrounding the Goldstein and Kelley request are not public, so we don’t know the full extent of their arguments for a share of the common benefit fund. All we know, based on their Sept. 4 filing at the 6th Circuit, is that they cited their work for objectors and requested an award of .08% of the $2.1 billion fund, or about $1.7 million.
The opioids settlement agreements with Janssen, McKesson and the other seven defendants that contributed to the common benefit fund contained special protocols for allocating common benefit fees. The protocols called on U.S. District Judge Dan Polster of Cleveland to appoint three members of a “fee panel,” which would accept and review extensive submissions from plaintiffs' firms that believed they deserved a share of the money.
Firms that participated in the process would have only “limited appeal rights”: If they were unhappy with the panel’s decision, the protocol allowed them to seek review from Polster, who could overturn panel rulings only if he determined the panel abused its discretion.
Polster’s April 2022 order implementing the fee-award protocols from the settlement agreement was more definitive: The judge said he would make “the final determination” and would enter a “final non-appealable award” on how to distribute money from the common benefit fund.
The panel appointed by Polster — retired federal judge David Herndon, opioids special master David Cohen and mediator Randi Ellis — determined that Goldstein Russell was not entitled to any award from the common benefit fund. Goldstein Russell was not alone: The panel wholly rejected fee requests from 20 other firms as well.
Of the 97 firms that submitted fee applications, only seven asked Polster to review their awards. Not all of the firms that sought review were shut out of fees. As my Reuters colleague Brendan Pierson reported in June, Motley Rice appealed its award of $396 million, even though it received a bigger share of the common benefit fund than any other firm in the litigation.
The Goldstein firm’s submission to Polster, like those of all the firms that asked the judge to review their awards, was filed directly to the special master and not publicly docketed. All we know is that when Polster issued his final fee order in July, he did not even discuss Goldstein or Kelley. The judge boosted the award to Spangenberg, Shibley, & Liber but otherwise did not tinker with the fee panel’s determinations.
Goldstein and Kelley told the 6th Circuit in a Sept. 4 notice that they intend to appeal not just their award but also the fee-setting procedures Polster established.
The plaintiffs' executive committee promptly moved to toss the appeal two days later.
The committee’s motion contends that the settlement agreements signed by Goldstein clients plainly established that plaintiffs' lawyers would have only “limited” rights to appeal fee awards to Polster. Goldstein and Kelley, moreover, had to acknowledge those limits when they submitted a request to the fee panel, the motion argued.
And if there was any ambiguity about restrictions on the right to review fee awards, the filing said, Polster’s April 2023 order, which specified that he would have the final say on the distribution of fees from the common benefit fund, should have been made clear to Goldstein and Kelley that they are not entitled to 6th Circuit review.
“Appellants knowingly and voluntarily agreed that the district court’s order would be ‘non-appealable’ and thus waived their right to appeal to this court,” the motion said.
I emailed Kevin Russell and Daniel Woofter of Goldstein Russell and James Ferraro of Kelley & Ferraro but did not hear back.
Peter Weinberger of Spangenberg Shibley, who signed the dismissal motion from the plaintiffs' executive committee, declined to comment.
As of Monday afternoon, the 6th Circuit hasn’t asked for a response to the motion.
Read more:
US law firm Motley Rice appeals $396 mln opioid fee award
Top law firms in US opioid lawsuits to get hundreds of millions in fees
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