Disputes among attorneys across jurisdictional lines may take many forms, but the underlying cause of many, if not most, disputes will be money. Perhaps the thorniest problem stems from a practice common in federal MDL proceedings but not in state court: the common benefit fund. Many state judges may not even be aware of this practice, and some states may not allow such a fund. Many federal judges may not be aware that the common benefit approach can create conflict with state practices. As with most case management matters, successful resolution is more likely the earlier any state-federal differences are addressed.
Under a common benefit approach, an MDL transferee judge issues an order directing that a fixed percentage (typically, though not always, 4% to 8%) of any settlement be held in a general fund to cover fees for national counsel, usually members of the plaintiff steering committee (PSC), for the additional work that they have done for the common benefit of parties, usually plaintiffs. Unused funds can be returned. Imposition of common benefit fees, the size of the fees, and their jurisdictional bases remain controversial but, in any case, contributions cannot be imposed by a transferee judge on attorneys who have no cases in the MDL and who do not use federal discovery material. The linkage of fees with access to discovery material is the subject of many disputes.
Disputes over common benefit fees, however difficult, have been successfully resolved by state and federal judges through communication and cooperation. There is no consensus as to the right or wrong approach to resolving these issues, but successful resolution can be achieved. Again, the importance of addressing these matters early can not be overemphasized. It is far better to have attorneys cross-notice depositions than to have attorneys fighting over access to deposition recordings or seeking duplicative depositions. These issues should be aired in the first phone call with other judges if possible.
Attorney disputes can be difficult to address effectively, and there is no “one size fits all” approach—except, that is, for early and ongoing judicial attention to potential disputes. Proactive case management may not prevent disputes, but it may help to prevent inevitable disputes from disrupting the entire litigation. A good place to start is a joint conference call with state and federal judges and lead counsel. In the Yaz litigation, for example, this approach successfully resolved discovery disputes.
It is especially important for judges presiding over MDL proceedings to open and maintain communication with state judges presiding over related cases. It is also helpful to appoint state-court liaison counsel—from among the attorneys with cases in both jurisdictions—to assist in communicating with state-court counsel.
Next section: Coordinating Discovery
Federal Judicial Center, Manual for Complex Litigation, Fourth (2004), § 14.12.
Barbara J. Rothstein & Catherine R. Borden, Managing Multidistrict Litigation in Products Liability Cases: A Pocket Guide for Transferee Judges (Federal Judicial Center & Judicial Panel on Multidistrict Litigation, 2011), pp. 14-16.