Galinis et al v. Bayer Corporation et al, No. 3:2009cv04980 - Document 192 (N.D. Cal. 2020)
Court Description: ORDER GRANTING IN PART AND DENYING IN PART MOTION RE COMMON BENEFIT ASSESSMENT 174 179 186 . (Illston, Susan) (Filed on 1/22/2020)
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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 SUSAN GALINIS, et al., Plaintiffs, 8 v. 9 10 BAYER CORPORATION, et al., Defendants. 11 United States District Court Northern District of California Case No. 09-cv-04980-SI ORDER GRANTING IN PART AND DENYING IN PART MOTION RE COMMON BENEFIT ASSESSMENT Re: Dkt. Nos. 174, 179, 186 12 13 This action is before the Court upon remand from the Southern District of Illinois, where the 14 Honorable David R. Herndon oversaw the multi-district litigation (“MDL”) In re: Yasmin and Yaz 15 (Drospirenone) Marketing, Sales Practices and Products Liability Litigation, No. 09-md-02100- 16 DRH-PMF. Because this case was an outlier in many respects, Judge Herndon recommended 17 remand to this Court on October 1, 2018; the JPML agreed, and on December 28, 2018 this case 18 was remanded to this District. Dkt. No. 75, 79. In October 2019, after being sent back to this Court, 19 plaintiffs Susan Galinis and Richard Galinis1 and defendant Bayer HealthCare Pharmaceuticals Inc. 20 (“Bayer”) reached an agreement in principle resolving all matters in controversy. Dkt. No. 169 21 (Statement of Settlement). 22 Presently at issue is plaintiffs’ motion for an order regarding the application of a common 23 benefit assessment to their case (“Motion”). Dkt. No. 172-3. The motion came on for hearing on 24 December 20, 2019. Having carefully considered the papers filed and the arguments made, the 25 Court hereby rules as follows. 26 27 28 Unless otherwise specified, references in this Order to “plaintiff” are to Susan Galinis alone, and references to “plaintiffs” are to Susan and Richard Galinis. For clarity, at times this Order refers to plaintiff Susan Galinis by her first name. 1 BACKGROUND United States District Court Northern District of California 1 2 This Court’s June 28, 2019 order denying defendant’s Daubert motions and denying in part 3 and granting in part defendant’s motion for summary judgment recites the factual and procedural 4 background of this decade-old case in detail. See Dkt. No. 138. Below are the facts relevant to the 5 instant motion. 6 Plaintiffs filed this lawsuit in the Northern District of California on October 19, 2009. Dkt. 7 No. 1 (“Complaint”). In November 2009, finding it related to then-pending MDL litigation, the 8 Judicial Panel on Multidistrict Litigation (“the Panel”) conditionally transferred plaintiffs’ case to 9 the Southern District of Illinois for coordinated or consolidated pretrial proceedings. Dkt. No. 5 The consolidated proceedings related to Bayer’s 10 (Conditional Transfer Order (CTO-4)). 11 drospirenone-containing oral contraceptives (either Yaz or Yasmin) and claims for personal injuries 12 or wrongful death stemming from their use. MDL No. 2100, Dkt. No. 27. The vast majority of 13 plaintiffs in the MDL proceedings alleged one of three types of injuries: (1) venous thromboembolic 14 events (“VTE”), which include blood clots in a vein, such as deep vein thrombosis and pulmonary 15 embolism; (2) arterial thrombotic events (“ATE”), or blood clots that develop in an artery, which 16 may lead to stroke or heart attack; and (3) gallbladder injuries. Dkt. No. 76 at 4 (Memo. To 17 Transferor Court from the Transferee Court). Plaintiff Susan Galinis suffered from an ATE. Dkt. 18 No. 138 at 7. Initial efforts in the MDL focused on cases involving VTE and gallbladder related 19 injuries and the initial bellwether trial pool consisted only of those cases. Dkt. No. 76 at 22 (Memo. 20 To Transferor Court from the Transferee Court). 21 Soon after the MDL’s formation, Judge Herndon, the coordinating MDL Court, appointed 22 attorneys to a Plaintiffs’ Steering Committee (“PSC”). In re Yasmin and Yaz (Drospirenone) 23 Marketing, Sales Practices, and Products Liability Litigation, Case No. 3:09-md-02100-DRH-PMF 24 (“Transferee Court” or “MDL Court”) (Dkt. No. 108). On March 25, 2010, the MDL Court 25 established a common benefit fee and expense fund “for the fair and equitable sharing among 26 plaintiffs, and their counsel, of the burden of services performed and expenses incurred by attorneys 27 acting for the common benefit of all plaintiffs in this complex litigation.” Dkt. No. 180-2 at 1 28 (Response Ex. 2 – Common Benefit Order). The Common Benefit Order “applie[d] to all cases 2 1 now pending, or later filed in, transferred to, or removed to, this Court and treated as part of the 2 coordinated proceeding.” Id. at 2. Participating Counsel, defined to include all members of the 3 Plaintiffs’ Steering Committee (“PSC”), “are entitled to receive the ‘Common Benefit Work 4 Product.’” Id. Participating Counsel are also “eligible for reimbursement for time and efforts 5 expended for the common benefit.” Id. at 11. The Common Benefit Order also provides: 6 7 8 United States District Court Northern District of California 9 All Plaintiffs and their attorneys who are subject to this Order and who, either agree or have agreed — for a monetary consideration — to settle, compromise, dismiss, or reduce the amount of a claim or, with or without trial, recover a judgment for monetary damages or other monetary relief, including such compensatory and punitive damages, with respect to Yasmin/Yaz/Ocella claims are subject to an assessment of the “gross monetary recovery.” 10 Id. at 5. “Gross monetary recovery includes any and all amounts paid to plaintiffs’ counsel by 11 Defendants through a settlement or pursuant to a judgment.” Id. Amended on June 23, 2014, the 12 common benefit fee assessment for ATE cases is 9% for common benefit attorneys’ fees on the 13 Gross Recovery Amount and 2% for costs. Dkt. No. 180-3 (Response Ex. 3 – Supplement to Order 14 Establishing Common Benefit Fund). 15 Plaintiffs’ counsel signed the Common Benefit Participation Agreement on March 29, 2010 16 and thus qualify as “Participating Counsel.” Dkt. No. 180-1 (Response Ex. B to Ex. 1). For any 17 cases subject to a common benefit assessment, Bayer must withhold the assessment amount from 18 any and all sums paid to plaintiffs and their counsel. Common Benefit Order at 6-7. 19 In the VTE bellwether cases, discovery began in November 2010 and trial was scheduled to 20 begin in the first case on January 9, 2012. Dkt. No. 76 at 22 (Memo. To Transferor Court from the 21 Transferee Court). Two weeks before this first bellwether trial, the parties announced a resolution 22 process for the VTE cases. Id. at 4. Prior to resolution, the parties deposed nearly every relevant 23 corporate witness, completed expert discovery, and prepared selected cases for trial, including by 24 filing and resolving pre-trial, Daubert, and summary judgment motions. Id. Specifically, more than 25 50 defendant corporate witness depositions were taken in four countries on three continents. Id. at 26 5-9 (listing deponents). In addition, all pre-trial work, including Daubert motions, briefing on 95 27 motions in limine, deposition designations, exhibit lists, and more were concluded in the 28 approximately two months before the January 9, 2012 bellwether trial date. Id. at 9. 3 United States District Court Northern District of California 1 In late August 2014, the MDL Court ordered the parties to work up the ATE cases for trial 2 and pursue case-specific discovery in 40 cases. Dkt. No. 76 at 22 (Memo. To Transferor Court from 3 the Transferee Court). On December 5, 2014, the MDL Court set the first ATE case for trial on 4 June 15, 2015. Id. Prior to this trial, a committee of MDL court-appointed plaintiffs’ counsel 5 negotiated a settlement to resolve the remaining ATE cases. Motion at 4. The ATE settlement 6 implementation involved a voluntary opt-in procedure. Id. at 4-5. 7 Some three years later, on October 15, 2018, with various Daubert and summary judgment 8 motions pending, the Judicial Panel on Multidistrict Litigation remanded plaintiffs’ case to this 9 Court. Dkt. 77 (Conditional Remand Order). Soon after remand, Judge Herndon recommended that 10 the MDL be terminated. Dkt. No. 180-4 (Response Ex. 4 – Order Disbanding the PSC). On January 11 4, 2019, the Panel closed the MDL. Dkt. No. 182 at 3 (Reply). Judge Herndon then retired. Id. 12 Plaintiff Susan Galinis did not opt-in to the voluntary ATE settlement agreement negotiated 13 by the PSC. Motion at 4-5. Had she done so, Susan would have been eligible to receive 14 approximately $175,000. Id. The PSC urged plaintiffs and their counsel to accept, stating it was 15 “the best result that an ATE plaintiff could hope to achieve.” Id. at 4. Following Susan’s rejection 16 of the voluntary settlement, plaintiffs’ attorneys in this case assumed full control prosecuting the 17 Galinis family’s claims. Id. at 6. Plaintiffs’ attorneys developed her case on their own and spent 18 four years working it up. Id. In that time, plaintiffs’ attorneys consulted with 23 experts, served 14 19 expert reports, took or defended 25 depositions, and handled pre-trial motions including summary 20 judgment and Daubert. Id. at 7. Shortly before trial, plaintiffs’ attorneys negotiated a settlement 21 that is orders of magnitude larger than what Susan would have received under the voluntary 22 settlement. Id. at 7-8. 23 24 LEGAL STANDARD 25 In the Ninth Circuit, “[i]t is well established . . . that one district judge in a multi-judge court 26 may modify or overrule the interlocutory order of another judge sitting in the same case for ‘cogent 27 reasons’ or where ‘exceptional circumstances’ are presented.” In re Airport Car Rental Antitrust 28 Litig., 521 F. Supp. 568, 572 (N.D. Cal. 1981), aff'd, 693 F.2d 84 (9th Cir. 1982) (citing Greyhound 4 1 Computer Corp. v. Int'l Bus. Machines Corp., 559 F.2d 488, 508 (9th Cir. 1977)). Whether to 2 reconsider a question previously decided is left to the district judge’s sound discretion. Id. 3 “Under the ‘common fund’ doctrine, ‘a litigant or a lawyer who recovers a common fund 4 for the benefit of persons other than himself or his client is entitled to a reasonable attorney’s fee 5 from the fund as a whole.’” Staton v. Boeing Co., 327 F.3d 938, 967 (9th Cir. 2003) (quoting Boeing 6 Co. v. Van Gemert, 444 U.S. 472, 478 (1980)). The common fund doctrine “ensures that each 7 member of the winning party contributes proportionately to the payment of attorneys’ fees,” and 8 “permits the court to award attorneys’ fees from monetary payments that the prevailing party 9 recovered in the lawsuit.” Staton, 327 F.3d at 967. 10 United States District Court Northern District of California 11 DISCUSSION 12 Here, plaintiffs argue this Court should use its equitable powers to assess a fair and just 13 amount to be levied on their settlement proceeds for the common benefit fund. Motion at 8-10. 14 Bayer and the PSC argue that this Court lacks jurisdiction. Dkt. Nos. 180, 185. The Court disagrees 15 and finds that it may modify an order of the MDL Court for cogent reasons or where exceptional 16 circumstances exist. In re Airport Car Rental Antitrust Litig., 521 F. Supp. at 572 (citations 17 omitted). Considering the work performed by the PSC in comparison to the work and risks assumed 18 by plaintiffs’ attorneys, plaintiffs argue applying the Common Benefit Order (as amended) would 19 result in a windfall for the PSC. Id. at 11. The Court agrees. 20 Indeed, “exceptional circumstances” are presented here. Plaintiffs’ attorneys conducted 21 copious amounts of work as the MDL proceedings wound down and settlements were reached in 22 other ATE cases. In so doing, plaintiffs’ attorneys assumed the risk that their clients would not be 23 awarded any relief at any stage of the case. Contrary to the PSC’s prediction, plaintiffs’ attorneys 24 negotiated a favorable settlement amount for Susan Galinis and her family. Indeed, the settlement 25 is far more than the voluntary settlement Susan would have been eligible to receive. Motion at 8. 26 Having reviewed the parties’ submissions following the December 20, 2019 hearing, the Court finds 27 the instant case comparable to cases subject to a 4% fees assessment. The Court acknowledges the 28 work conducted by the PSC, for the benefit of all plaintiffs, regardless of the type of injury, and later 5 1 relied upon in part by plaintiffs’ attorneys. As such, this Court finds a common benefit assessment 2 of 4% for common benefit attorneys’ fees and 2% for common benefit costs appropriate. 3 CONCLUSION 4 5 For the foregoing reasons and for good cause shown, the Court hereby GRANTS plaintiffs’ 6 Motion in part and assesses the common benefit award for this case to be 4% for common benefit 7 attorneys’ fees on the Gross Recovery Amount (as defined by the Common Benefit Order) and 2% 8 for costs. Counsel for the PSC can pursue any additional assessment it believes it is owed on the 9 Gross Recovery Amount separately from this action. 10 United States District Court Northern District of California 11 IT IS SO ORDERED.2 12 13 Dated: January 22, 2020 14 ______________________________________ SUSAN ILLSTON United States District Judge 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 The Court GRANTS Bayer’s corresponding motions to seal. Dkt. Nos. 179, 186. 6
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