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Roundup MDL judge: plaintiffs’ attys’ free-rider ‘obsession’ is ‘out of control’

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Monsanto Co's Roundup is shown for sale in Encinitas, California. REUTERS/Mike Blake

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  • Judge calls for new rule for MDL compensation system
  • Common benefit hold-backs will be limited to only MDL plaintiffs

(Reuters) - The federal judge overseeing multidistrict litigation over Bayer AG’s Roundup weedkiller has put narrow limits on a fund for common-benefit legal work, calling the lead plaintiffs’ lawyers request to hold back 8.25% of Roundup-related recoveries around the country regardless of their connection to the MDL “breathtaking.”

U.S. District Judge Vince Chhabria in San Francisco on Monday ordered a hold-back of 8% of recoveries by MDL plaintiffs only, adding that the federal court systems' Civil Rules Advisory Committee "should consider crafting a rule that brings some semblance of order and predictability to an MDL attorney compensation system that seems to have gotten totally out of control."

Lead plaintiffs' lawyers Robin Greenwald of Weitz & Luxenberg, Michael Miller of the Miller Firm and Aimee Wagstaff of Andrus Wagstaff did not immediately respond to requests for comment. Nor did Bayer's attorney William Hoffman of Arnold Porter Kaye Scholer. A spokesperson for Bayer declined to comment.

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Bayer, which acquired Roundup with its $63 billion purchase of Monsanto Co in 2018, has agreed to pay close to $10 billion to settle claims that the product causes cancer. Chhabria recently rejected a $2 billion proposed settlement to resolve future claims.

The fee dispute arose from lead counsel's motion in January seeking to set aside 8.25% of Roundup-related recoveries – including by state court plaintiffs with no direct connection to the MDL – for a common-benefit fund, to be distributed to lawyers whose work benefited all Roundup plaintiffs. The motion drew objections from a slew of other plaintiffs' firms.

Common-benefit funds are intended to avoid the so-called "free rider problem" of plaintiffs' attorneys benefiting from lead counsel's work.

Chhabria, however, said that lead attorneys already enjoyed an advantage in negotiating power that helped them secure larger recoveries, and that favorable state court verdicts, not just the MDL, had played a major role in opening the "floodgates" for Roundup plaintiffs.

"What began as a healthy concern about the free rider problem seems to have evolved into an obsession," he wrote. "From reading lead counsel's papers, you begin to get the feeling that any lawyer who secures for their client a quick settlement from Monsanto has committed some great injustice that must be rectified at all costs. Poor lead counsel does all the hard work killing the prey, only to see the 'TV lawyers' and other vultures swoop in and pick at the remains.

"But there is nothing inherently wrong with lawyers (and by extension their clients) benefitting from the work of other lawyers without paying them," Chhabria wrote.

Chhabria found he lacked authority to order a hold-back for most non-MDL plaintiffs, and so limited the fund to recoveries by MDL plaintiffs.

The judge also said that the actual payout of common-benefit funds, to lead counsel or any other lawyers who did common-benefit work, would be reviewed by mediator Ken Feinberg, who has overseen settlement talks. He said it "would not be surprising" if some or all of the held-back funds ultimately returned to the plaintiffs.

The case is In re Roundup Products Liability Litigation, No. 3:16-md-02741, U.S. District Court, Northern District of California.

For plaintiffs: Robin Greenwald of Weitz & Luxenberg; Michael Miller of the Miller Firm; and Aimee Wagstaff of Andrus Wagstaff

For Bayer: William Hoffman of Arnold Porter Kaye Scholer; Jeffrey Wintner of Wachtell, Lipton, Rosen & Katz

Read more: $800 million common fund dispute in Roundup highlights 'settlement premium' issue

Bayer to rethink Roundup in U.S. residential market after judge nixes $2 bln settlement

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Brendan Pierson reports on product liability litigation and on all areas of health care law. He can be reached at brendan.pierson@thomsonreuters.com.

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