Madison - St. Clair Record

Monday, September 16, 2019

MDL common benefit fund to pay state court funds for Bayer litigation

By Sara McCleary | Apr 19, 2017

EAST ST. LOUIS — A Southern District of Illinois judge recently adopted a recommendation that requires a pay-out from the multidistrict litigation (MDL) common benefit fund for now-settled birth control product liability litigation against Bayer.

In February, special master Daniel J. Stack submitted his recommendation that the court withdraw from the case’s MDL common benefit fund to pay $358,032.14 to the Pennsylvania/New Jersey state court fund.

As part of the MDL lawsuit against Bayer for claims against its Yasmin and Yaz birth control products, which had been filed in Illinois, New Jersey, Pennsylvania and California, the court established “a common benefit fee and expense fund to provide ‘for the fair and equitable sharing among plaintiffs, and their counsel, of the burden of services performed and expenses incurred by attorneys acting for the common benefit of all plaintiffs in this complex litigation,’” Judge David Herndon wrote, quoting Stacks' report.

The Pennsylvania and New Jersey counsels requested reimbursement from the fund “for expenses incurred in their companion state court litigations (e.g. for deposition and court transcript expenses, state court document depository costs, etc.),” court documents said. 

Their request hinged on two points. First, they argued that the work they had done that incurred the expenses had helped to advance the case, and second, they argued that the costs had been incurred primarily because another law firm working on the case—Lopez McHugh—had failed to execute a participation agreement. Therefore, they had been required to spend the funds “to provide Lopez McHugh with the materials needed to litigate, that would otherwise have been available to the firm had the Participation Agreement been signed.”

Stack’s recommendation determined that the work had not, in fact, benefited the litigation as a whole, but he recommended that the court reimburse the state court fund anyway “because the firms who timely signed the Participation Agreement ‘should not pay the price for the actions of one firm,’” Herndon wrote. Stack’s report also recommended to the court that Lopez McHugh’s $25,000 contribution to the state court fund not be reimbursed to the firm.

In response to Stack’s report, Lopez McHugh filed an objection, though not to argue for its reimbursement of its $25,000 contribution nor to suggest that the state court should not receive anything from the MDL common benefit fund. Rather, the law firm “is simply unhappy with how the Special Master reasoned his way to those conclusions and his characterization of the firm’s action as ‘gaming’ the system,” Herndon wrote. 

The judge, however, felt that Stack’s was a “reasonable conclusion” and easily dismissed Lopez McHugh’s arguments and explanations otherwise. On April 8, Herndon adopted Stack’s report and recommendation over Lopez McHugh’s objections.

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U.S. District Court for the Southern District of Illinois East St. Louis