A leading mesh plaintiffs’ law firm is asking Judge Joseph Goodwin to deny paying pelvic mesh lawyers involved in multidistrict litigation (MDL) hundreds of millions of dollars in fees which it calls “excessive and unreasonable given the outcome of this litigation…”
When 104-thousand pelvic mesh defective product cases were consolidated in Charleston, West Virginia, jury verdicts and /or settlements were assessed a 5% fee to be set aside in a Common Benefit Fund.
That fund is supposed to compensate lawyers for their costs and expenses of uncovering evidence working up a case with the discovery to be shared by firms and used at trial.
Lawyers must travel at their own expense, pay for expert witnesses, and in general put out millions of dollars and thousands of hours to get cases ready for trial. The fund is intended to reimburse their expenditure and their hours.
At the present time the Common Benefit Fund has $366 million to be distributed among 94 law firms on a sliding scale depending on hours contributed and the hourly rate. It could swell to an estimated $550 million.
A lawyer for Kline & Specter says return half of it to plaintiffs!
Lee Balefsky says the Plaintiffs’ Steering Committee (PSC) has failed in its job for plaintiffs.
First it failed to achieve a Global Settlement of the litigation therefore “should not be generously rewarded for its failure," he says in a November 26 filing in the Neomedic MDL.
Thousands of cases remain unresolved. In some cases settlement dollars are less than $40,000 before any 40% in legal fees are taken out and any medical liens or repayment of Medicare and Medicaid. Those settlements should not be rewarded, he writes.
The 5% common benefit fee is too high, writes Balefsky and some firms are being “significantly overcompensated.”
He points out that “a few firms are seeking to grab two-thirds of the fund. Instead they should remit their proportionate share of these saved funds to the injured women. Thus, the proposed allocation is directly relevant to the proposed assessment – and both are wrong.”
Meanwhile the average trial award has been just under $10 million.
A lodestar crosscheck method of calculating attorney fees is typically considered in compensation. The courts multiply the hours of work by the attorneys’ hourly rate resulting in the lodestar. It can be adjusted upward or downward accordingly.
The Common Benefit Fees and Cost Committee (FCC), made up of eight law firms, is headed by Henry Garrard of Blasingame, Burch Garrard & Ashley of Athens, Georgia, which seeks the largest amount of compensation, based on the greatest number of hours contributed to the discovery process.
Those eight have awarded themselves $249 million of or two-thirds of the $374 to be distributed. This averages nearly $29 million per FCC firm, or $739 an hour.
Meanwhile Kline & Specter falls at the other end of the range and is scheduled to collect at an hourly rate of $116, says the motion. The Philadelphia-based law firm has submitted thousands of hours of work done for state litigation in Pennsylvania, which it says are not being considered.
The hourly work should be compensated at the same rate as the FCC law firms, something Garrard had promised to Balefsky as is submitted in an accompanying exhibit e-mail.
Kline & Specter has obtained a number of favorable jury verdicts that contributes to “the overall success of the transvaginal mesh litigation.” It’s cases heard in the Philadelphia Court of Common Pleas have amounted to five verdicts over more than $105 million.
Because of the sheer number of cases in this product liability litigation MDL, many law firms took thousands of cases, too many cases to deal with them individually or adequately, the motion indicates.
As a result, MDL attorneys disadvantaged litigants by settling their inventories way too cheaply, writes Balefsky,
“making it difficult for other attorneys to settle their cases reasonably. They did this despite the huge verdicts in the vast majority of mesh trials. These discounted settlements were driven by the sheer enormity of the number of claims and the inability of lawyers to discover and try hundreds of thousands of cases in their inventory.”
Also to be considered- some mesh makers settled case early with no trials scheduled and no discovery required. American Medical Systems (AMS) closed its mesh division and sold to Endo International. No AMS trials were conducted.
Coloplast and Covidien entered into an early settlement program and no discovery was every conducted in those MDLs. There should be no 5% common benefit fee because there was no common benefit work, Balefsky writes.
He points to Riley Burnett’s law firm which submitted $10 million in expenses and 1,662 hours for compensation in the Coloplast MDL where no true discovery took place.
“This is fundamentally wrong and any proposed distribution of funds regarding Covidien and Coloplast should be returned in full to the clients and the firms who negotiated the settlements.”
Transparency is needed, Balefsky writes.
The FCC will not provide requested documents so others can review the methodology used in determining fees.
Lawyers are not being told the total number of cases settled per manufacturer, the average settlement and/or the hourly rates.
“Discovery on these issues is needed.”
In a response filed December 3, Monday, Henry Garrard, joined by seven other lawyers on the FCC committee, objects to Kline & Specter’s letter. The firm is the only one objecting and those are “self-serving and unfounded.”
Kline Specter (KS) has benefited from the MDL, including tens of thousands of hours of work product, Garrard says.
“KS was predominantly a consumer rather than a contributor to the common benefit.”
He also objects to the premise that firms took on too many cases that resulted in settlements instead of trials.
KS has 3,000 cases and has only tried a few.
“This after-the-fact claim that any firm’s settlement values were negatively affected by the number of clients represented by that firm is factually groundless and patently unreasonable.” ###