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In re Syngenta Mass. Tort Actions

United States District Court, S.D. Illinois

August 19, 2019

IN RE SYNGENTA MASS TORT ACTIONS
v.
Syngenta AG et al., This Document Relates to: Tweet et al. and Poletti et al.
v.
Syngenta AG et al.,

          MEMORANDUM AND ORDER

          NANCY J. ROSENSTENGEL CHIEF U.S. DISTRICT JUDGE.

         This matter is before the Court on the Report and Recommendation of Special Master Daniel J. Stack on Allocation of Attorney's Fees (SDIL No. 15-1221, Doc. 368). For the following reasons, the Report and Recommendation is adopted, in part, and rejected, in part.

         Factual and Procedural Background

         In 2014, corn farmers around the country filed suit against Syngenta for its commercialization of genetically-modified corn seed products that contained the trait MIR 162. In re: Syngenta AG MIR162 Corn Litig., No. 14-md-02591-JWL-JPO, MDL No. 2591 (D. Kan.) (hereinafter “Kansas Case”). The Syngenta litigation consisted of multiple class actions, mass actions, and individual actions that were litigated primarily in the United States District Court for the District of Kansas, Minnesota state court, and the United States District Court for the Southern District of Illinois.

         In December 2014, the Multidistrict Litigation (“MDL”) Panel centralized the Syngenta litigation in the United States District Court for the District of Kansas (Kansas Case, Doc. 1). United States District Judge John W. Lungstrum has presided over the Syngenta MDL since its inception.

         In February 2018, after years of vigorous and complex litigation, the parties executed an agreement that provided for a global settlement of $1.5 billion (See Kansas Case, Docs. 3531 & 3532). Judge Lungstrum issued his final approval of the settlement in December 2018 and allocated one-third of the gross settlement ($503, 333, 333.33) to attorneys' fees (See Kansas Case, Doc. 3849). To facilitate distribution of the fees, and in conjunction with the settlement agreement, Judge Lungstrum created three common benefit pools to compensate lawyers whose efforts produced a common benefit to all of the plaintiffs: a Kansas MDL pool; a Minnesota state court pool; and an Illinois federal court pool (Id. at Doc. 3882) (“the Fee Allocation Order”). Judge Lungstrum assigned attorneys' fees applicants to one of the three common benefit pools based primarily on where they performed their work (Id. at Docs. 3816 & 3882). He then designated a percentage of the fees to each pool, based on the pool's contribution to the settlement (Id. at Doc. 3882). Judge Lungstrum also created an individually retained private attorneys (“IRPA”) pool.

         In sum:

IRPA Pool (12%)

$ 60, 400, 000.00

Kansas MDL Common Benefit Pool (49%)

$ 246, 633, 333.33

Minnesota State Court Common Benefit Pool (23.5%)

$ 118, 283, 333.33

Illinois Federal Court Common Benefit Pool (15.5%)

$ 78, 016, 666.67

Total Attorney Fee Award (100%)

$ 503, 333, 333.33

         Judge Lungstrum ordered the court within each pool's jurisdiction to allocate the fees, subject to the Kansas court's approval. Judge Lungstrum made “a few remarks concerning how the three courts will consider certain types of work in making that allocation, with the intent that such considerations be consistent across the three pools.” He instructed,

First, the courts will consider as common benefit work any work, either in litigating the claims or in pursuing the settlement with Syngenta, that contributed to the settlement and the ultimate recovery by the settlement class, thereby benefitting the entire settlement class. Second, as mentioned above, the courts do not consider work performed in recruiting clients to have inured to the common benefit of the settlement class. Third, work performed for particular individual clients may still be considered common benefit work if that work provided a benefit to the entire settlement class. For instance, . . . work completing a significant number of [plaintiff fact sheets (“PFSs”)] that were actually submitted to courts or Syngenta could benefit the entire settlement class. In considering such work (and other work), however, the courts will be mindful that the work would not reasonably have been undertaken at the highest attorney rate, for instance because much of the work could reasonably have been completed by lesser-experienced attorneys or even by paralegals or other staff. The same would be true, for example, for work drafting identical complaints (after drafting the first one) for multiple plaintiffs, or work submitting claims (in light of the ease of doing so). In short, although much work may qualify as common benefit work if sufficiently impactful or if on behalf of a large number of plaintiffs, not all common benefit work will be weighed equally in the allocation from the common benefit pools.

         Illinois Allocation

         In December 2018, this Court appointed the Honorable Daniel J. Stack (Ret.) as Special Master to issue a Report and Recommendation on the division of attorneys' fees from the Illinois pool (SDIL No. 15-cv-1221, Doc. 359). Special Master Stack issued his Report and Recommendation on March 26, 2019 (Id. at Doc. 368); he recommends the following allocations:

Group

Fee Allocation in Dollars

Fee Allocation as Percentage of Illinois Federal Court Pool

The Clark/Phipps Group (“Clark/Phipps”)

Clark, Love & Hutson, GP; Meyers & Flowers LLC; and Phipps Anderson Deacon LLP

$61, 633, 166.67

79.0%

Conmy Feste, Ltd. (“Conmy Feste”)

$0

0.0%

The Law Offices of A. Craig Eiland (“Eiland”)

The Law Offices of A. Craig Eiland

$3, 120, 666.67

4.0%

The Garrison Group (“Garrison”) Heninger Garrison Davis, LLC; Burke Harvey, LLC; Crumley Roberts; Hansen, Howell & Wilkie, PLLC; Merkel & Cocke; Law Offices of Wendell Hoskins; Oldfield Myers Apke & Payne; Sam C. Mitchell & Associates; and Tapella & Eberspacher, LLC

$9, 674, 066.67

12.4%

O'Hanlon, Demerath & Castillo (“Demerath”)

$1, 560, 333.33

2.0%

Onder Law, LLC (“Onder”)

$2, 028, 433.33

2.6%

         Several applicants filed objections to Special Master Stack's recommended allocation, which obligates this Court to undertake a de novo review of the Report and Recommendation. Fed.R.Civ.P. 53(f). After its review, the Court may “adopt or affirm, modify, wholly or partly reject or revere, or resubmit to the master with instructions.” Id.

         Common Benefit Principles

         Under what has been coined the “American rule, ” each litigant generally pays his or her own attorney's fees. Baker Botts L.L.P. v. ASARCO LLC, 135 S.Ct. 2158, 2164 (2015). But in certain circumstances, the American rule results in unjust enrichment because individuals may benefit from a successful party without bearing a fair share of the burden of litigation. Boeing Co. v. Van Gemert, 444 U.S. 472, 478 (1980). To remedy this problem, courts recognize several judicially-created equitable doctrines, such as the common benefit doctrine, which is appropriately applied when “the plaintiff's successful litigation confers ‘a substantial benefit on the members of an ascertainable class, and where the court's jurisdiction over the subject matter of the suit makes possible an award that will operate to spread the costs proportionately among them.'” Hall v. Cole, 412 U.S. 1, 5 (1973) (quoting Mills v. Electric Auto-Lite, 396 U.S. 375, 393-94).

         Courts generally use one of two methods in determining fee awards in common benefit cases: (1) the percentage method, which awards a fee relative to the benefit that counsel achieved for the class, and (2) the lodestar method, which awards a fee relative to the hours and hourly billing rates. 5 Newberg on Class Actions § 15:66 (5th ed.). The Tenth Circuit, under whose law the Fee Allocation Order falls, has explicitly held that courts have discretion as to whether they use the percentage or lodestar approach. Id. (citing Brown v. Phillips Petroleum Co., 838 F.2d 451, 454 (10th Cir. 1988) (“We hold . . . that the award of attorneys' fees on a percentage basis in a common fund case is not per se an abuse of discretion.”)).

         Special Master Stack's Methodology

         Special Master Stack employed a percentage method as opposed to a lodestar method and conducted both a quantitative and subjective analysis. He stated his subjective analysis was based on his personal experience and observations of the litigation. He also cited the Johnson factors, which are routinely applied to common benefit cases. They are: (1) the time and labor required; (2) the novelty and difficulty of the questions; (3) the skill requisite to perform the legal service properly; (4) the preclusion of other employment by the attorney due to acceptance of the case; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) the undesirability of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases. Johnson v. Georgia Hwy. Expr., Inc., 488 F.2d 714, 718-19 (5th Cir. 1974).

         Quantitative Analysis

         Special Master Stack's quantitative analysis centered on four categories: (1) common benefit hours; (2) common benefit expenses; (3) claimant data; and (4) client acquisition expenses. He constructed a quantitative chart for each category that listed the number of hours, common benefit expenses, claimants, or acquisition expenses each applicant submitted, and assessed that number against the total submissions from the applicants to arrive at a percentage. Then, Special Master Stack averaged the percentages for each applicant group across the categories, and assigned each group a final percentage.

         Based on Special Master Stack's calculations, Clark/Phipps submitted 110, 337 non-attorney common benefit hours and 31, 326 attorney common benefit hours, for a total of 141, 663 common benefit hours; Conmy Feste submitted 38 non-attorney hours and 173 attorney hours, for a total of 211 hours; Eiland submitted 5, 986 non-attorney hours and 7, 268 attorney hours, for a total of 13, 254 hours; Garrison submitted 9, 593 non-attorney hours and 10, 024 attorney hours, for a total of 19, 616 hours; Onder submitted 3, 274 non-attorney hours and 3, 911 attorney hours, for a total of 7, 186 hours; and Demerath submitted 3, 446 non-attorney hours and 6, 060 attorney hours, for a total of 9, 506 hours. In sum, when considering the non-attorney and attorney hours combined, Clark/Phipps is responsible for 74% of all hours the Illinois applicants submitted; Conmy Feste is responsible for 0.1%; Eiland is responsible for 6.9%; Garrison is responsible for 10.2%; Onder is responsible for 3.8%; and Demerath is responsible for 5.0%.

         Special Master Stack also determined that Clark/Phipps' expenses account for 87.8% of all expenses the Illinois applicants submitted; Eiland's expenses account for 0.6% of all expenses; Garrison's expenses account for 10.1% of all expenses; Onder's expenses account for 0.5% of all expenses; and Demerath's expenses account for 0.9% of all expenses.[1]

         Further, Clark/Phipps' claimants make up roughly 85.3% of the claimants represented by the Illinois applicants; the Eiland Group's claimants make up 5.1% of the claimants; Garrison's claimants make up 5.1% of the claimants; and Onder's claimants make up 5.8% of the claimants.[2]

         Finally, Special Master Stack calculated that Clark/Phipps' client acquisition expenses are 89.4% of all client acquisition expenses the Illinois applicants reported; Eiland's expenses are 2.3% of all expenses; Garrison's expenses are 1.1% of all expenses; Onder's expenses ...


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