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In re Syngenta AG Mir 162 Corn Litigation

United States District Court, D. Kansas

November 19, 2019

IN RE SYNGENTA AG MIR 162 CORN LITIGATION,
v.
Syngenta AG, et al., No. 14-2637 This Document Relates to All Cases Except Trans Coastal Supply Co., Inc. The Delong Co., Inc.
v.
Syngenta AG, et al., No. 17-2614 Agribase Int'l Inc.
v.
Syngenta AG, et al., No. 15-9900 Kellogg, et al.,
v.
Watts Guerra, LLP, et al., No. 18-2408

          MEMORANDUM AND ORDER

          JOHN W. LUNGSTRUM, UNITED STATES DISTRICT JUDGE

         This matter arising from multi-district litigation (MDL) comes before the Court upon the Illinois court's order concerning the further allocation of the portion of the total attorney fee award that the Court previously allocated to the Illinois federal court common benefit pool (Doc. # 4227-1). Five groups of plaintiffs' attorneys have responded to the Illinois court's allocation: The Clark/Phipps Group (“Clark”) (Doc. # 4245); O'Hanlon Demerath & Castillo and Demerath Law Office (“Demerath”) (Doc. # 4246); The Law Offices of A. Craig Eiland (“Eiland”) (Doc. # 4247); Watts Guerra LLP (“Watts”) (Doc. # 4241); and Toups/Coffman Plaintiffs' Counsel (“Toups”) (Doc. # 4259). The Court concludes that there is no basis to disturb the Illinois court's allocation among the attorneys assigned to the Illinois attorney fee pool who applied for an award of common benefit fees, and the Court therefore awards attorney fees from the Illinois federal court common benefit pool to particular attorney groups as set forth herein. Accordingly, the Court overrules the objections and denies the motions for reconsideration filed by the respondents listed above.

         I. Background

         By Memorandum and Order of December 7, 2018, the Court granted final approval of a settlement agreement resolving claims against Syngenta[1] and certified a settlement class. See In re Syngenta AG MIR 162 Corn Litig., 2018 WL 6436074 (D. Kan. Dec. 7, 2018) (Lungstrum, J.). At that time, the Court also awarded total attorney fees in the amount of one third of the settlement fund, or $503, 333, 333.33, see Id. at *11-16, which fees compensated for work for the benefit for the settlement class and which also were “intended to account for all contingent fee recoveries from payments to class members from the settlement fund, ” see Id. at *11, 15.

         By Memorandum and Order of December 31, 2018, the Court ruled on objections and adopted in large part a report and recommendation by the special master concerning the initial allocation of attorney fees. See In re Syngenta AG MIR 162 Corn Litig., 2018 WL 6839380 (D. Kan. Dec. 31, 2018) (Lungstrum, J.). The Court used a framework for allocating the total fee award to all attorneys whose efforts contributed to the settlement class's ultimate recovery, recommended by the special master, as follows:

All attorneys who have filed fee applications are assigned to one of three common benefit pools - Kansas MDL, Minnesota state court, and Illinois federal court - based primarily on where they performed their common benefit work. Specified percentages of the total fee award are then allocated to those three pools, reflecting the relative contributions to the settlement class recovery by the attorneys in those pools (with further allocation within those three pools to be made in a subsequent procedure by the three courts separately).

See Id. at *2. The Court also allocated a portion of the total fee award to a pool for individually-retained private attorneys (IRPAs), who would share that portion pro rata based on the ultimate recoveries by their claimant clients. See Id. The Court adopted the master's recommendations concerning which attorneys were assigned to which common-benefit pools, see Id. at *12, and it proceeded to allocate the total fee award among the four pools as follows: $246, 633, 333.33 (49 percent) to the Kansas MDL common benefit pool; $118, 283, 333.33 (23.5 percent) to the Minnesota state court common benefit pool; $78, 016, 666.67 (15.5 percent) to the Illinois federal court common benefit pool; and $60, 400, 000.00 (12 percent) to the IRPA pool. See Id. at *13. Finally, the Court adopted the master's recommendation that each of the three courts be responsible for the further allocation among attorneys of the portion of the fee award allocated to its common benefit pool (with this Court, in consultation with the other courts, responsible for the administration of awards from the IRPA pool). See Id. at *11, 15. The Court consulted with the judges overseeing the related litigation in Minnesota and Illinois, and all three judges expressly approved of this framework and initial allocation of fees and all other rulings contained in the Memorandum and Order. See Id. at *1.

         Finally, the three judges agreed that the three common benefit pools would be allocated among particular attorneys based on any work that benefitted the settlement class, whether or not such work was performed pursuant to any common benefit order issued by a court. See Id. at *14. The judges agreed on certain guidelines concerning the final allocation of fees from the common benefit pools, as follows:

[A]lthough allocation from the three common benefit pools will take place in the next phase, the Court deems it appropriate to make 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. 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, many objectors have argued that work to complete and submit plaintiff fact sheets (PFSs) pursuant to court orders should be considered common benefit work for purposes of allocation from the common benefit pools. The courts agree that work completing a significant number of 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.

See id.

         Thus, the Hon. David Herndon, of the United States District Court for the Southern District of Illinois, who presided over the related Illinois federal-court litigation, was initially responsible for allocating attorney fees from the Illinois federal court common benefit pool to attorneys assigned to that pool. Judge Herndon had already appointed the Hon. Daniel Stack (a retired judge who had served as a special master for settlement purposes) as a special master pursuant to Fed.R.Civ.P. 53(c) to make a recommendation concerning any allocation of attorney fees by that court. In January 2019, however, Judge Herndon retired, and on January 9, 2019, the Illinois federal cases were reassigned to the Hon. Nancy J. Rosenstengel - who thus assumed the responsibility for making the allocation of fees from the Illinois federal court common benefit pool.

         On March 26, 2019, Judge Stack issued his report and recommendation (“R&R”) concerning the allocation from the Illinois pool. In addition to performing a subjective analysis of the relative contributions of the Illinois pool applicants to the common benefit of the settlement class, Judge Stack also performed a quantitative analysis, in which he considered the applicants' relative common-benefit hours claimed, expenses, client acquisition costs, and number of claimants. Judge Stack recommended the following allocations by percentage of the Illinois pool: Clark - 79 percent; Conmy Feste - 0 percent (denial of application for common benefit fees); Eiland - 4 percent; Heninger Garrison Davis Group - 12.4 percent; Demerath - 2 percent; and Onder - 2.6 percent. The Heninger Garrison Davis Group (“Garrison”) and Onder filed objections to the R&R, and responses were filed by Clark, Eiland, and Demerath, as well as by Judge Stack (whose response included a declaration by Judge Herndon). On August 19, 2019, the Illinois court (Judge Rosenstengel) issued a memorandum and order (“the Illinois Order”), in which it conducted a de novo review of the allocation of the Illinois pool. The court criticized portions of Judge Stack's analysis, performed its own analysis of the relative contributions of the applicants, and allocated fees as follows: Clark - 49 percent; Conmy Feste - 0 percent (denial of application for common benefit fees); Eiland - 3 percent; Garrison - 43.4 percent; Demerath - 1 percent; and Onder - 3.6 percent.

         By Memorandum and Order of April 2, 2019 (Doc. # 4134), this Court granted in part a motion by certain plaintiffs' counsel (including Clayton Clark on behalf of the firm of Clark, Love & Hutson, lead counsel in one of the Illinois federal cases) for a determination that all final fee allocations would ultimately emanate from this Court. See In re Syngenta AG MIR 162 Corn Litig., 2019 WL 1454012 (D. Kan. Apr. 2, 2019) (Lungstrum, J.). The Court ruled that the class settlement agreement in this litigation gave the Court exclusive jurisdiction over the settlement fund and the allocation and distribution of attorney fees from that fund (with exceptions not relevant here). See Id. at *2. Thus, the Court ruled that the allocation rulings by the Minnesota and Illinois courts should be filed in this Court, and that the Court would then issue final allocation orders and authorize the disbursement of funds to attorneys. See Id. at *3. The Court also ruled that attorneys would have an opportunity to litigate whether this Court should adopt the other courts' allocations without alteration. See Id. at *3-4. The Court proceeded to circumscribe the scope of its review as follows:

The Court does intend, however, to defer to the reasoning of the other courts in making their allocations of the Minnesota and Illinois pools. As stated in the initial allocation order, those courts were tasked with the responsibility of making those allocations because they are in the best position to understand the relative contributions of the attorneys assigned to those pools to the ultimate outcome of the litigation against Syngenta. Thus, this Court will not entertain objections to specific allocations based on the judgment of those courts. Rather, attorneys will only be permitted to raise structural or procedural issues that are not dependent on any understanding or judgment of the relative contributions of the attorneys in that pool.

See Id. at * 4. The Court elaborated further in a footnote:

Thus, to state the most extreme example, an attorney could object to this Court on the basis of a fraud in the proceedings in the other court. The possibility of such an objection, however unlikely, requires that this Court at least provide a mechanism by which it could be raised. On the other hand, the Court would not entertain an objection based on the argument ...

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