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Downing v. Riceland Foods, Inc.

United States District Court, E.D. Missouri, Eastern Division

March 19, 2015

DON M. DOWNING, et al., Plaintiffs,


CATHERINE D. PERRY, District Judge.

This case comes before me on plaintiffs' motion for class certification under Rules 23(a) and 23(b)(3) of the Federal Rules of Civil Procedure. The proposed class members are lawyers and their clients who undertook a collective effort to litigate their claims against Bayer related to contamination of the United States rice supply by Bayer's genetically modified rice. Plaintiffs allege that defendant Riceland Foods used some of their litigation work product in prosecuting its own claim against Bayer. The plaintiffs seek to certify a class of all "persons and entities that provided or paid for common-benefit services, materials, and/or related expense items (except Defendant)." They assert claims for unjust enrichment and quantum meruit.

I conclude that Missouri law governs this case: Missouri has the most significant relationship to both claims. The proposed class satisfies Rule 23(a) and plaintiffs have shown that a Rule 23(b)(3) class is appropriate because common issues predominate over individual issues. The central common issue in this case is whether and to what extent Riceland was unjustly enriched, and because of the way the class plaintiffs arranged their collective litigation efforts in the underlying rice litigation, that common question predominates over any questions specific to individual class members. This action is uniquely suitable for class certification, and that form of litigation is superior to any other form. I will grant the motion for class certification.

I. Background[1]

This dispute has its origin in the continuing multi-district litigation (MDL) that began after the introduction of Bayer's genetically modified rice into the United States domestic rice supply.[2] Thousands of Arkansas, Louisiana, Mississippi, Missouri and Texas rice farmers (referred to as "producers") and others involved in the rice business (referred to as "non-producers") filed suit against various Bayer entities in federal and state court. Riceland Foods was named as a defendant along with Bayer in more than 200 federal and state cases. Riceland was also a plaintiff, in that it filed cross-claims and at least one separate federal suit against Bayer. Riceland won a multi-million dollar verdict against Bayer in an Arkansas state court case. Bayer and Riceland ultimately settled the case for $92 million, and it is part of that recovery that plaintiffs seek in this case.

To make the MDL more manageable for the plaintiffs, this court appointed Don Downing and Adam Levitt as Co-Lead Counsel of a leadership group of attorneys. A common-benefit trust fund (the Trust) was ordered established to compensate attorneys for services rendered on behalf of all the plaintiffs; Downing and Levitt were named as Co-Trustees of the Trust. That order required that a portion of any recovery obtained by plaintiffs in federal court cases be set aside and contributed to the Trust. Non-producer plaintiffs, like Riceland, were to contribute seven percent of any gross recovery for common-benefit attorney's fees and an additional three percent for common-benefit costs.[3] The order allowed contributions to the Trust to be made from recoveries in state court cases only if ordered by the state court or if plaintiffs in those cases consented.

The Co-Lead Counsel and additional attorneys at their request (collectively, the common-benefit attorneys) were directed to manage pretrial proceedings on behalf of all MDL plaintiffs. Over the course of five years, the common-benefit attorneys performed a variety of work, including, among other things, drafting a master consolidated complaint against Bayer under the laws of five states; successfully opposing Bayer's dispositive motions, reviewing, coding, and managing more than 2.8 million pages of documents; and taking or defending 167 depositions across the United States and internationally. They also conducted three bellwether trials in this court; the trials resulted in plaintiffs' verdicts under the laws of Missouri, Arkansas, Mississippi, and Louisiana.

Riceland did not oppose establishment of the Trust. Initially the commonbenefit attorneys asked that I require state court plaintiffs to contribute to it, and some parties - but not Riceland - filed briefs opposing that. I ultimately decided that I lacked jurisdiction to order the state-court parties to contribute to the fund. At one point, Riceland negotiated to obtain some of the common-benefit attorneys' work product for use in its state cases in exchange for a share of its recovery against Bayer. The negotiations over this "Joint Prosecution Agreement" occurred between Riceland's counsel and the MDL leadership group in St. Louis, Missouri, as well as via email and telephone; the negotiations ultimately ended without execution of a final agreement.

On December 6, 2012, this court ordered that the common-benefit attorneys' expenses be paid from the Trust. Those expenses totaled less than the amount collected by the fund's three-percent cost assessment, and the Co-Lead Counsel have proposed distributing the surplus on a pro-rata basis to the contributing parties.[4] On the same date as the expenses order, this court also awarded up to $72 million in attorneys' fees. However, only approximately $56.5 million of that potential award has been obtained by the Trust.

The named Class Plaintiffs are three law firms who incurred legal fees and advanced expenses while performing common-benefit work.[5] They seek to represent not only other law firms but also any other persons (such as clients) who paid for common-benefit services and expenses.[6] In addition to the law firm Class Plaintiffs, the Co-Trustees of the Trust are also plaintiffs, suing on behalf of the Trust itself.

The Co-Trustees and Class Plaintiffs sued Riceland for unjust enrichment and quantum meruit.[7] They allege that Riceland benefited from the commonbenefit attorneys' work and seek restitution in the amount of ten percent of Riceland's gross recovery against Bayer. The Class Plaintiffs now ask that I certify the following class:

All persons and entities that provided or paid for common benefit services, materials, and/or related expense items (except Defendant).

Defendant contends that the class certification is not appropriate because, it argues, plaintiffs will be required to prove, on a plaintiff-by-plaintiff and item-by-item basis, "what mix of Plaintiff(s) and class member(s) originated or paid for each item of Alleged Work Product."[8]

II. Discussion

"The class action is an exception to the usual rule that litigation is conducted by and on behalf of the individual named parties only. To come within the exception, a party seeking to maintain a class action must affirmatively demonstrate his compliance with Rule 23." Comcast Corp. v. Behrend, 133 S.Ct. 1426, 1432 (2013) (citations omitted); see also Luiken v. Domino's Pizza, LLC, 705 F.3d 370, 372 (8th Cir. 2013) (citation omitted) ("[A] plaintiff has the burden of showing that the class should be certified and that the requirements of Rule 23 are met."). Rule 23 contains two subsections that must be satisfied.

Rule 23(a) sets out four threshold requirements for class certification: (1) sufficiently numerous parties, (2) common questions of law or fact, (3) typicality of claims or defenses, and (4) adequacy of representation. A class action plaintiff "must also satisfy through evidentiary proof at least one of the provisions of Rule 23(b)." Comcast Corp., 133 S.Ct. at 1432.

A. Rule 23(a) Requirements

A.1. Numerosity

Rule 23(a)(1) requires that "the class be so numerous that joinder of all members is impracticable." To be "impracticable" does not mean that joinder must be impossible, but it does require a showing that it would be extremely difficult or inconvenient to join all members of the class." Morgan v. United Parcel Serv. of Am., Inc., 169 F.R.D. 349, 355 (E.D. Mo. 1996). The Eighth Circuit has established no specific rule as to the necessary size of a class, but it has directed courts to consider several factors in determining whether joinder is feasible: the number of persons in the class, the nature of the action, the size of the individual claims, the inconvenience of trying individual suits, and any other factor relevant to the practicability of joining all the class members. Emanuel v. Marsh, 828 F.2d 438, 444 (8th Cir. 1987), vacated on other grounds, 487 U.S. 1229 (1988).

Upon consideration of these factors, I conclude that the proposed class satisfies the numerosity requirement. There are over 30 law firms that provided common-benefit legal services, and over 5000 rice producers and non-producers who had part of their settlements deposited into the Fund to pay for fees and expenses. All would be members of the class. It is clear that joining each of the putative plaintiffs individually and trying separate suits for each would be wasteful, duplicative, and time consuming. Joinder is impracticable, and so the numerosity requirement of Rule 23(a)(1) is satisfied.

A.2. Commonality

The commonality required by Rule 23(a)(2) is that "there are questions of law or fact common to the class." The mere presence of factual differences will not defeat the maintenance of a class action if there are common questions of law uniting the class members' claims. DeBoer v. Mellon Mort. Co., 64 F.3d 1171, 1174 (8th Cir. 1995); Glen v. Fairway Indep. Mortg. Corp., 265 F.R.D. 474, 478 (E.D. Mo. 2010). As the Eighth Circuit held in Paxton v. Union Nat'l. Bank, commonality "does not require that every question of law or fact be common to every member of the class... and may be satisfied, for example, where the question of law linking the class members is substantially related to the resolution of the litigation even though the individuals are not identically situated." 688 F.2d 552, 561 (8th Cir. 1982) (internal citations and quotation omitted). While plaintiffs must show that there are questions of law or fact common to the class, they need not show that all issues raised by the dispute are common. Mosley v. Gen. Motors Corp., 497 F.2d 1330, 1334 (8th Cir. 1974).

Applying these standards to plaintiffs' proposed class, the court finds that it satisfies the commonality component. Here, all plaintiffs will face a common legal question: whether an unjust enrichment or quantum meruit action may be based upon the use of an attorney's work product by a non-client. They also will face the common issue of whether collateral estoppel will attach to this court's previous statement that Riceland "received a substantial benefit" from the common-benefit work.[9] The fact issues ...

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