Opinion
22md3043 (DLC) 22mc3043 (DLC)
12-13-2022
IN RE Acetaminophen - ASD-ADHD Products Liability Litigation
DRAFT ORDER OF DECEMBER 13, 2022: COMMON BENEFIT FUND
DENISE COTE UNITED STATES DISTRICT JUDGE
This MDL litigation is comprised of many individual actions. Some of the work performed by certain plaintiffs' lawyers will accrue to the benefit of all or most plaintiffs in the MDL. Accordingly, a common benefit fund (“CB Fund”) will be created. See Goldberger v. Integrated Res., Inc., 209 F.3d 43, 47 (2d Cir. 2000).
I. SPECIAL MASTER
1. Pursuant to Federal Rule of Civil Procedure 53(a), the Court appoints Amy Gernon as a Special Master for the CB Fund to manage and administer the CB Fund. Plaintiffs' counsel are responsible for the payment of the fees and expenses of the Special Master. The Special Master's fees and expenses will be paid monthly.
2. The Special Master will provide reports to the Court regarding the work performed for the common benefit of the plaintiffs and regarding the administration of the CB Fund. Co Lead Counsel for the plaintiffs (“Co-Lead Counsel”) may also request reports.
II. SCOPE OF ORDER
3. This Order applies to all plaintiffs' counsel in all cases in the MDL, including any cases after the date of this Order that are filed in, transferred to, or removed to this Court and not remanded. This Order applies as well to any plaintiffs' attorneys who have filed cases in a state court who obtain access to or receive the common benefit of work performed by plaintiffs' counsel in this MDL.
4. This Order will define common benefit work and describe the procedures that plaintiffs' attorneys who perform common benefit work (“Participating Counsel”) must follow to receive payments from the CB Fund for their expenses and their services in connection with such work. In general, to receive payments from the CB Fund, plaintiffs' counsel must be approved by the Court to be Participating Counsel, and their common benefit work and expenses must have been approved in advance.
III. COMMON BENEFIT WORK GENERALLY
5. Common benefit work is work performed for the benefit of all or most plaintiffs. Common benefit work includes motion practice, work on discovery, trial preparation, and settlement negotiation. Common benefit work does not include time spent on developing or processing individual issues in any case.
6. Only work or expenses authorized by Co-Lead Counsel before the work is performed or the expense is incurred is eligible for consideration as common benefit work. The Special Master may at any time request verification of that prior authorization. Moreover, only time and expense entries that are determined by the Special Master, in consultation with Co-Lead Counsel or their designee, to be reasonable and appropriate will be eligible for common benefit reimbursement.
IV. PARTICIPATING COUNSEL
7. Only Participating Counsel may recover attorneys' fees or be reimbursed for expenses from the CB Fund. The recovery of common benefit attorneys' fees and cost reimbursements from the CB Fund will be limited to those fees and costs incurred after the Court has approved an attorney as Participating Counsel, and only for the period that such approval exists. Participating Counsel are prohibited from sharing any common benefit work product with counsel who are not Participating Counsel.
8. All Participating Counsel must agree to the terms and conditions of this Order and any amendments to this Order, must agree to submit to this Court's jurisdiction, and must agree that this Court has plenary authority regarding the award and allocation of common benefit attorneys' fees and reimbursements for costs and expenses. Participating Counsel waive any right to appeal the decisions of this Court regarding those matters and waive the right to challenge this Order on any ground.
9. Subject to such agreement, attorneys filling the roles in plaintiffs' leadership structure (“Structure”), as defined in the Order: Plaintiffs' Leadership of December 2, 2022 or in amendments to that Order, are automatically Participating Counsel from the date the Court approved their appointment to a position or a committee within the Structure and for the period of time of that appointment. Participating Counsel may also include a plaintiff's attorney who is not a member of a committee within the Structure if that attorney's application to be a Participating Counsel has been approved by Co-Lead Counsel and by the Court.
V. ASSESSMENTS
10. When necessary to fund common benefit activity, Co-Lead Counsel, in consultation with the Special Master, may impose assessments for the CB Fund, which will receive and hold assessed funds. Assessments must be paid on the basis of all filed cases in state or federal court in which the assessed attorney shares a fee interest, regardless of whether any defendant in a case to which this Order applies later commences a case under either chapter 7 or chapter 11 of title 11 of the United States Code.
11. An assessed firm will have twenty-eight (28) days to deposit its assessment into the account holding the CB Fund. If a firm has not deposited its assessment within twenty-eight (28) days, any work performed while the firm is in arrears will not be eligible for compensation from the CB Fund then or in the future. Failure to deposit assessments on a timely basis will be considered during the Court's annual leadership reappointment process.
12. The assessed funds will be held in an interest-bearing account at a federally-insured banking institution as designated and approved by Co-Lead Counsel and the Special Master. Any funds to be paid out of such account(s) may be paid only at the direction of the Special Master or a person otherwise appointed by the Court. To the extent not already completed, the Special Master must apply for a Federal Tax ID number for the CB Fund.
VI. CB FUND PAYMENTS FOR COSTS
13. Costs that will be paid from or reimbursed by the CB Fund include:
i. Deposition and court reporter costs;
ii. Expert witness and consultant fees and expenses;
iii. Fees and costs for court-appointed Special Masters;
iv. Fees and costs for retained vendors performing work on behalf of all plaintiffs, including but not limited to an MDL claims data platform, ESI document depository and review platform, and electronic time-keeping platform; and
v. Translation services (if any).
14. In the event there is a dispute regarding whether a cost is to be paid from the CB Fund, the Special Master, in consultation with Co-Lead Counsel, will make the final determination to pay or reject the expense. An appeal to the District Court from any denial of payment must be made within fourteen (14) days of a final determination by the Special Master. No payment from the CB Fund may be made to any vendor unless the contract with the vendor has been approved by the Special Master, after consultation with Co-Lead Counsel.
VII. CB FUND PAYMENTS FOR ATTORNEYS' SERVICES
15. If prior authorization has been given by Co-Lead Counsel or their designee for the common benefit work described below, then that work may be eligible for payment from the CB Fund.
i. Depositions. The time spent by a Participating Counsel who has been designated by Co-Lead Counsel to take or defend a deposition; the time spent by one other attorney from his/her firm to assist that Participating Counsel for the deposition.
ii. Conference Calls Among Plaintiffs' Counsel. The time spent in preparing for and participating in conference calls among plaintiffs' counsel by those attorneys designated by Co-Lead Counsel to run the call or provide reports during the call.
iii. Conferences with the Court. The time spent in preparing for and participating in court conferences by attorneys designated by Co-Lead Counsel to address issues that will be raised at the conference. If Co-Lead Counsel or the Court request other counsel to also be present for the conference, then their time may also be eligible for payment.
iv. Plaintiffs' Committee Meetings or Calls. For purposes of committee meetings or conference calls, there is a presumption that the time of only one participant per firm is eligible for payment.
v. Identification of and Work with Experts. Where prior authorization has been given by the Chair of the Science & Experts Committee, the time spent identifying and working with experts.
vi. Review of Discovery. Time spent by attorneys who have been designated by Co-Lead Counsel to review and summarize discovery may be eligible for reimbursement. The authorized document review may include either review of an assigned population of documents (e.g., a specific custodian file or batch of documents) or may encompass the search and review of documents related to a specific topic. The review done in a designated attorney's office must be performed by appropriately trained individuals selected by the designated attorney. If a reviewer elects to review documents beyond the scope of the review assigned to that attorney by Co-Lead Counsel, that review is not eligible for payment. The Special Master and Liaison Counsel will receive periodic reports from the vendor(s) retained to manage the electronic production of computer billing time for depository review. Such vendor should have the capability to track actual time spent by each attorney reviewing documents. Co-Lead Counsel or their designee will review all time submissions related to document review to identify work that is duplicative and should not be compensated and so advise the Special Master. Work by attorneys who are hired as contract attorneys will not be eligible for common benefit consideration without the prior written authorization Co-Lead Counsel.
vii. Review of Pleadings and Orders. Time spent by those attorneys designated by Co-Lead Counsel to review or summarize pleadings or Orders in the MDL. Time spent by Co-Lead Counsel, Liaison Counsel, and members of the PEC in reviewing Orders of the Court relevant to their roles in leadership.
viii. Settlement Proceedings and Bellwether Trials. In the event that a case is selected for early settlement proceedings or as a bellwether trial, the work performed on the case following its selection.
ix. Paralegal Work. Work performed by paralegals is subject to the same procedures and requirements set forth in this Order.
16. Unless work has received prior approval from Co-Lead Counsel or their designee as common fund work, for example as described above, it is not eligible for reimbursement. Work that is generally ineligible for compensation from the CB Fund in the absence of prior approval includes attendance at a deposition, a plaintiffs' conference call or committee meeting, a court conference, and a seminar; reviewing court Orders and filings, discovery, and email communications; recruiting and communicating with clients; and developing experts. In the event a Participating Counsel is unsure if the action he or she is about to undertake is considered a common benefit action, the attorney must ask Co-Lead Counsel and receive authorization in advance in order to be eligible for payment.
VIII. PROFESSIONAL SERVICES INVOICES
17. To be eligible for payment from the CB Fund, all invoices for professional services, including for services rendered by plaintiffs' counsel and staff, plaintiffs' experts, and other consultants for plaintiffs, must be timely submitted to the Special Master and must conform to the following requirements:
i. reflect time worked in one-tenth (0.1) hour increments;
ii. contain a sufficiently detailed description to allow a reviewer to understand what work was performed and by whom;
iii. be accompanied by a statement from the submitting attorney that a) the attorney has reviewed the invoice; b) that the invoice reflects the work performed, adequately describes the work performed, is reasonable in light of the work performed, and conforms to the requirements of this Order; and c) the attorney and their firm consent to this Order and to the waiver of rights described in this Order;
iv. be accompanied by a certification from one of the CoLead Counsel attesting that the work or expense was for the common benefit of the plaintiffs and was preapproved by Co-Lead Counsel;
v. be submitted by the 20th day following the month in which the work was performed; and
vi. must be submitted using the centralized system authorized by the Special Master.
18. The first reporting period will be from October 5, 2022 (the date of the transfer order for this MDL) through December 31, 2022. Time and expense submissions for that period will be due by January 20, 2023.
19. The grounds for denying the recovery of attorneys' fees or reimbursement of expenses include the following: the submission of excessive common benefit time and expense entries, the failure to timely secure authority to incur common benefit time and expenses, the failure to maintain and timely provide records of activity and expenses, and the failure to provide a sufficient description of activity. Time spent by the Special Master and any enlisted attorneys for purposes of reviewing common benefit time and expenses is eligible for common benefit reimbursement.
IX. HELD COSTS
20. Held Costs are costs incurred by Participating Counsel in connection with authorized common benefit work that are carried by each attorney until such time as Co-Lead Counsel determines that a claim for reimbursement may be submitted to the CB Fund. Only reasonable expenses, consistent with the limitations discussed herein and incurred in connection with authorized common benefit work, will be eligible for reimbursement. Compliance with the below guidelines renders Held Costs eligible for reimbursement, but does not mean that reimbursement will be made. Any requests for reimbursement must be made to the Special Master through a process that will be described by the Special Master. Any appeal to the Court from a final determination by the Special Master granting or denying reimbursement must be taken within fourteen (14) days of the determination.
21. All expense submissions for Held Costs must include (a) the date the expense was incurred, (b) the category of the expense, (c) the dollar amount of the expense, (d) the person who incurred the expense, (e) a short and clear description of the expense, and (f) a receipt verifying the dollar amount of the expense. Participating Counsel must keep receipts for all expenses. If a receipt is not available, copies of checks or credit card statements reflecting the date of the expense, nature of the expense, and amount of expense may be submitted so long as accompanied by a declaration from counsel that the expense was incurred while performing authorized work for the common benefit.
22. Except in extraordinary circumstances approved by the Special Master, all travel reimbursements are subject to the following limitations:
i. Airfare. Only the price of the lowest available, convenient coach fare seat will be reimbursed. That price is for a reservation that permits rebooking without surcharge. Airfare expense submissions must be supported by invoice or receipt for airfare that shows class of airfare purchased, name of traveler, and destination. If non-coach travel is elected, the applicant is required to document what the lowest available, convenient coach fare in effect was at that time.
ii. Hotel. Hotel room charges for the average available room rate of a business hotel (such as the Hilton, Westin, or Marriott chains) will be reimbursed. If luxury accommodation is elected, the applicant is required to document what the average available room rate of a business hotel was for the relevant dates.
iii. Meals. Meal expenses must be reasonable. Meal expense submissions must identify the attendees for that meal. Expenses for meals that significantly exceed the meal allowances for federal employees will not be approved. There will be no reimbursement for alcoholic beverages, room service, mini-bar items, or movies.
iv. Cash Expenses. Miscellaneous cash expenses for which receipts generally are not available (tips, luggage handling, etc.) will be reimbursed up to $50 per trip so long as the expenses are properly itemized.
v. Rental Automobiles. Non-luxury vehicle rates will be reimbursed. If luxury automobiles are selected, then the applicant is required to document the non-luxury vehicle rates for the relevant period and location.
vi. Mileage. Mileage claims must be documented by identification of origination point, destination, total actual miles for each trip, and the rate per mile paid by the member's firm. The maximum allowable rate will be the maximum rate allowed by the IRS as of the date of the trip.
23. Except in extraordinary circumstances approved by the Special Master, all non-travel reimbursements are subject to the following limitations:
i. Shipping, Overnight, Courier, and Delivery Charges. All claimed common benefit shipping, overnight, courier or delivery expenses must be documented with bills showing the sender, origin of the package, recipient, and destination of the package. Such charges are to be reported at actual cost.
ii. Postage Charges. A contemporaneous postage log or other supporting documentation must be maintained and submitted for common benefit postage charges. Such charges are to be reported at actual cost.
iii. Photocopying. Whether for internal or external copying services, the maximum copy charge is $0.20 per page for black and white copies and $0.35 per page for color copies. A contemporaneous photocopy log or other supporting documentation must be maintained and submitted.
iv. Computerized Research -- Lexis/Westlaw. Claims for Lexis or Westlaw, and other computerized legal research expenses, should be in the exact amount charged the firm and appropriately allocated for these research services.
24. Among the categories of expenses that are not eligible for common benefit fund reimbursement are firm overhead (including but not limited to expenses for office supplies or equipment, standard phone or internet service, maintenance of firm's website, etc.), advertising and marketing expenses, or expenses associated with client recruitment or client acquisition.
SO ORDERED.