Managing Attorney Disputes — Examples

Resolving attorney disputes requires communication, transparency, and a careful consideration of various concerns: the interest in avoiding duplicative discovery, counsel’s need to engage in discovery, and the contributions of various state and federal attorneys to advancing the litigation as a whole.

Example: federal discovery started earlier

A defendant may object to discovery requests or depositions in state court because it has already produced the requested discovery or presented the same witness in the federal MDL proceeding. But in order for the state attorneys to use that material, the federal order requires them to contribute to the common benefit fund in the event of a settlement. Most state-court plaintiff attorneys do not want to pay 4–8% of their settlements to the federal PSC attorneys. The state court may then allow the state litigants to conduct their own discovery, resulting in duplicate document production and duplicate depositions.

In some instances, the federal PSC may have expended resources significantly organizing, culling, or otherwise processing the discovery materials to make it more valuable.  In those circumstances, the argument is strong for requiring those who want the material to pay for it.

In some litigations, state attorneys and the PSC have been able to reach agreement themselves on a price for the discovery materials.

Example: state discovery started earlier

In some instances, depositions and document production may have been substantially completed in state court before a federal MDL is even created.  In the Vioxx litigation, where the bulk of discovery was completed by state attorneys before MDL proceedings began, a global settlement led to state and federal coordinated orders entitling state attorneys to share in common benefit fees.

Vioxx common benefit fund:

  • Vioxx Master Settlement Agreement: Section 9.2.4 provides that common benefit fee allocation “shall take into consideration the common benefit work of counsel in the MDL, and the work of counsel in the state litigations in Texas, California and New Jersey.”  Allocation shall be “subject to the approval of the Honorable Eldon E. Fallon in consultation with the Honorable Victoria G. Chaney, the Honorable Carol E. Higbee, and the Honorable Randy Wilson.”  
  • Order establishing fee allocation procedure; fee allocation order (federal MDL).
  • Vioxx PTO57 (federal MDL): Details fee allocation for third party payor claims.
  • Vioxx fee limitation: MDL order limiting contingency fee to 32%; New Jersey order further limiting such fees under state law.

When the actual contribution of the federal PSC to the value of the discovery materials is minimal, it may be fair to allow state litigants to obtain the MDL discovery for the cost of reproducing the material.

Example: no significant discovery begun

Allowing and encouraging attorneys to cross-notice depositions can be an invaluable tool in reducing duplicative work.  It is also crucial to allow both state and federal attorneys to ask questions.

Federal judges should involve state attorneys in the MDL by giving them the opportunity to take some of the depositions and share in the common benefit fund. There will likely need to be explicit direction on what kind of records the attorneys must keep.

Baycol Common Benefit Fund:

  • Baycol PTO25: Defendants must put 6% of any claim payment (4% from attorney’s fee, 2% from plaintiff) into Fee and Cost Accounts; includes state plaintiffs if the state judge so chooses. Order also allows cross-noticing depositions.
  • Baycol PTO28: Provides that cross-noticing depositions does not subject attorneys to MDL fees or assessments.

Heparin PTO6. Establishing common benefit fund for MDL and related state cases. Order issued by MDL court and effective upon adoption by state court.

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