The Phipps Group v. Don Downing & Adam Levitt, etc., No. 12-3958 (8th Cir. 2014)
Annotate this CaseThis case stemmed from litigation involving long grain rice producers' allegations that Bayer contaminated the United States rice supply. After plaintiffs settled, the district court awarded common benefit fees from a common benefit trust fund to leadership counsel and denied Phipps' request for a common benefit award. Phipps and Phipps' clients raise various challenges to the establishment of the fund and the award of fees, and lead counsel cross-appealed. The court concluded that the Settlement Agreement, by which Phipps agreed to be bound, resolved that a percentage of payments due to clients of Phipps would be allocated to the Fund in accordance with the 2010 Order. Therefore, Phipps waived its challenge to the creation of the Fund and to the order that Phipps and its clients must contribute to the Fund. The court also concluded that the district court did not abuse its discretion by denying Phipps' request for additional procedures before the Fund monies were disbursed; the procedures employed by the district court were not an abuse of discretion; the district court did not abuse its discretion by approving the requested award as substantively reasonable; the district court's rationale for approving the fee request was reasonable when it adopted the Special Master's analysis; and the district court did not abuse its discretion in denying Phipps' request for a benefit award. In regards to the cross-appeal, the court concluded that lead counsel had standing to pursue the cross-appeal but that the district court did not have jurisdiction to order holdbacks from state-court plaintiffs' recoveries. Accordingly, the court affirmed the judgment of the district court.
Court Description: Civil case - Common Benefit Trust Fund in MDL cases. The settlement agreement in the Genetically Modified Rice Litigation, by which the Phipps Group agreed to be bound, resolved that a percentage of payments due to clients of Phipps would be allocated to the Common Benefit Trust Fund in accordance with the district court's 2010 order in the case, and Phipps waived its challenge to the creation of the Fund and to the order that Phipps and its clients must contribute to the Fund; the procedures the court used in making its fee awards were sufficiently thorough and Phipps's challenge to the procedures and the court's use of summaries and affidavits prepared by Lead Counsel and other common benefit attorneys is rejected; court's award of fees was substantively reasonable; by adopting the Special Master's analysis, the court fulfilled its responsibility to provide a concise but clear explanation of its rationale for the award; the district court did not abuse its discretion by denying Phipps's request for a benefit award; on Lead Counsel's cross-appeal, the district court did not err in determining that it lacked jurisdiction to order holdbacks from state plaintiffs' recoveries since the state court plaintiffs neither agreed to be part of the federal MDL nor participated in the MDL settlement agreement.
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