MDL Common Benefit Fee Article.
U.S. District Judge Eldon E. Fallon (E.D. La.) has written an article, “Common Benefit Fees in Multidistrict Litigation,” published at 74 La. Law Rev. 371-389 (Winter 2014). In it, this jurist talks about the approaches adopted by MDL transferee courts in establishing procedures to compensate members of plaintiff steering committees/subcommittees for providing common benefits to the plaintiffs in MDL cases. District Judge Fallon summarized the approaches as (1) lodestar, (2) percentage of recovery, and (3) blended – percentage of recovery cross-checked by lodestar. As far as the percentage method, he observed that the percentage goes down with higher settlements; for example, 10-12% is awarded for settlements in the $190-900 million range while 32-37% is awarded for $1-2 million settlements. This article is important because some estimates are that MDL cases make up more than 15% of all civil litigation in this country. A copy of the article can be found at NALFA’s blog.
District Judge Breyer Assesses $79,315.85 In Fees Against Losing Plaintiff Under Pre-2014 Version of Labor Code Section 218.5, As Well As $86,317.60 In Costs.
In Johnson v. Hewlett-Packard Co., Case No. C-09-03596 CRB (N.D. Cal. July 24, 2014, Doc. No. 321), U.S. District Judge Charles R. Breyer granted summary judgment against four plaintiffs bringing breach of contract, equitable, and Labor Code violations claims against H-P. Defendant then moved to recoup fees against all four plaintiffs based on Labor Code section 218.5, whose pre-2014 version had a prevailing party fee-shifting provision. (Effective 2014, an amendment took away fee exposure with respect to a plaintiff.) In an earlier ruling, District Judge Breyer decided the 2014 version was not retroactive, followed by awarding fees of $79,315.85 (out of a requested $159,634.38, reduced by duplicative/excessive time) and costs of $86,317.60 (out of a requested $695,536, with no award for almost $604,000 in e-discovery expenses) against plaintiff Purvis. However, the district court denied assessing fees jointly against plaintiff’s counsel or sanctioning counsel for the defense request of $141,613.53.
Cisco Exclusively Has Used Alternative Fee Billing Arrangements re Outside Counsel.
As reported in an August/September 2014 interview of Cisco Systems, Inc.’s Associate General Counsel Neal A. Rubin in Practical Law, Cisco uses alternative fee arrangements for all maters, abandoning the billable hour more than a decade ago. Mr. Rubin indicated that nearly all of Cisco’s litigation spend is governed by predictable fixed fees where a successful outcome results in a success bonus for the litigating firm.