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In re Yasmin and Yaz Drospirenone Marketing, Sales Practices and Products Liability Litigation

United States District Court, S.D. Illinois

April 8, 2017

IN RE YASMIN AND YAZ DROSPIRENONE MARKETING, SALES PRACTICES AND PRODUCTS LIABILITY LITIGATION This Document Relates To All Actions

          MEMORANDUM AND ORDER

          David R. Herndon, Judge

         I. Introduction

         This matter is before the Court on the Report and Recommendation of Special Master Daniel J. Stack (Doc. 4059). Special Master Stack recommends that $358, 032.14 be paid to the Pennsylvania/New Jersey state court fund from the MDL common benefit fund, and that the law firm of Lopez McHugh be denied its $25, 000 contribution to the state court fund due to the firm's purposeful delay of signing the Participation Agreement, which established involvement with, and entitlement to, common benefit work product. The Report and Recommendation was entered on February 3, 2017. Lopez McHugh filed its objection to the Report and Recommendation on February 17, 2017 (Doc. 4065). Based on the following, the Court ADOPTS the Report and Recommendation in its entirety.

         II. Background

         The Court need not recite the background of this case, as the parties are fully aware of the facts after years of litigation. Instead, the Court briefly recites the relevant facts surrounding Lopez McHugh's objections to the Special Master's Third Report and Recommendation (“R&R”) regarding the allocation and distribution of common benefit fund expenses for the Pennsylvania/New Jersey state court fund.

         Due to the nature of this large litigation, the Court entered CMO 14 (doc. 1042) establishing a common benefit fee and expense fund to provide “for the fair and equitable sharing among plaintiffs, and their counsel, of the burden of services performed and expenses incurred by attorneys acting for the common benefit of all plaintiffs in this complex litigation.” Id. at 1 (emphasis added). One aim of CMO 14 is to encourage sharing of work product valuable to the litigation as a whole and avoid duplicative work. To be entitled to the benefits and perks of the common benefit fund, firms must sign a Participation Agreement and be subject to an assessment fee based upon timing of participation. See id., Exhibit A. “Common Benefit Work Product” would then be available to all participating law firms.

         Special Master Stack issued his third R&R in response to a request from Pennsylvania and New Jersey state court counsel, asking for reimbursement from the MDL common benefit fund for expenses incurred in their companion state court litigations (e.g. for deposition and court transcript expenses, state court document depository costs, etc.). Counsel advised that the expenses incurred in the state court litigation helped to advance the litigation as a whole, hence entitling them to reimbursement from the common benefit fund. State court counsel also advised that the extra expenses sustained by the state court fund is largely due to Lopez McHugh declining to execute the Participation Agreement, resulting in additional fees expended to provide Lopez McHugh with the materials needed to litigate, that would otherwise have been available to the firm had the Participation Agreement been signed.

         In issuing his R&R, Special Master Stack determined that the state court fund should be reimbursed despite finding no common benefit by the companion litigations' work, because the firms who timely signed the Participation Agreement “should not pay the price for the actions of one firm.” Doc. 4059, at 3. Objecting to the Special Master's recommendation, Lopez McHugh seeks a “correction of the record” to demonstrate why and how the additional expenses were incurred.

         III. Standard of Review

         The Court's review of the R&R is governed by 28 U.S.C. § 636(b)(1)(C), which provides in part:

A judge of the court shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made. A judge of the court may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge. The judge may also receive further evidence or recommit the matter to the magistrate judge with instructions.

Fed. R. Civ. P. 72(b) also directs that the Court make a de novo determination of those portions of the report and recommendation to which specific written objections have been made. Johnson v. Zema Sys. Corp., 170 F.3d 734, 739 (7th Cir. 1999); 28 U.S.C. § 636(b)(1)(B), (C); Fed.R.Civ.P. 72(b). In making this determination, the Court must look at all the evidence contained in the record and give fresh consideration to those issues for which specific objection has been made. Id. However, the Court need not conduct a de novo review of the findings of the R&R for which no objections have been made. Thomas v. Arn, 474 U.S. 140, 149-52 (1985).

         IV. Analysis

         Special Master Stack's R&R, which was well-reasoned and thorough, recommended that the balance of the expenses submitted by the state court lawyers litigating in Pennsylvania and New Jersey should be reimbursed to their state court fund, even though the expenses were not valuable to the whole as stated in CMO 14. This is because the expenses were created due to duplicative efforts for deposition transcripts and depository to benefit the firm of Lopez McHugh, who denied signing the Participation Agreement entitling it to common work product. As such, ...


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