(CN) - Attorneys whose clients opted out of multidistrict litigation against Bayer for tainting the U.S. rice supply with unapproved GMO rice cannot collect fees from the common settlement fund, the 8th Circuit ruled.
Several thousand rice farmers sued Bayer CropScience in state and federal court after Bayer's genetically modified rice, which was not approved for human consumption, tainted the U.S. rice supply.
Most cases were consolidated into multidistrict litigation in St. Louis, and the parties settled in 2010 for $750 million, with 8 percent of the common fund reserved for attorneys' fees.
Lead counsel Don Downing of Gray, Ritter & Graham, Adam Levitt of Wolf, Haldenstein, Adler, Freeman & Herz and other common-benefit attorneys requested $51.5 million in fees for more than 107,000 hours of work, and $5.4 million in expenses. A special master ultimately found those rates "high" but substantively reasonable.
Another $1.3 million went to Hare, Wynn, Newell and Newton LLP, and the six lead firms divvied up the remaining balance of the 8 percent as a fee enhancement.
The Phipps Group, which represented some plaintiffs but was not a member of the attorney leadership group, challenged the division of fees, seeking $13 million for itself.
A federal judge ultimately adopted the special master's recommendation that Phipps' work "had been performed in the client's interest, not for the common good," because it did not coordinate its activities with lead counsel.
The 8th Circuit affirmed Friday.
"The District Court's rationale for approving the fee request was reasonable," Judge Steven Colloton wrote for the three-judge panel. "The special master noted that the MDL litigation lasted longer than five years, required international discovery, involved thousands of plaintiffs and hundreds of lawyers, included several bellwether trials, and raised novel and complex issues of law."
In addition, the court did not abuse its discretion by refusing to pay Phipps out of the common fund.
While litigating in multiple fora may be part of a strategy to pressure a defendant into settling, there is no evidence Phipps coordinated its efforts with lead counsel.
"To accept Phipps's position would reduce incentives to collaborate with leadership counsel and could frustrate the purposes of the MDL statute to promote efficiency and coordination," Colloton said.