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Downing v. Goldman Phipps PLLC

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

July 14, 2015

DON M. DOWNING, et al., Plaintiffs,
v.
GOLDMAN PHIPPS PLLC, et al., Defendants.

MEMORANDUM AND ORDER

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 the defendant law firms used some of their own litigation work product when representing different clients in state-court cases 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 also seek to certify a subclass limited to those who "provided common-benefit services."

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 the defendants were 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]

A. Multi-District Litigation

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] The spread of Bayer's rice caused the price for U.S. rice to plummet. 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 courts.

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 CBF 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 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 CBF 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.

The Phipps legal team[4] opposed the creation of the CBF Trust, including the requested allocation of legal fees by the leadership counsel; the Phipps legal team sought, in the alternative, over $13 million that it claimed as reimbursement for its own common-benefit fees. Downing Decl. Ex. L, ECF No. 170-14. Stephen B. Murray, Sr., the Murray Law Firm, Charles A. Banks, and the Banks Law Firm, PLLC, objected to the creation of the CBF Trust but did not object to the Special Master's Report and Recommendation regarding payment of common-benefit attorney's fees from the CBF Trust. Downing Decl. ¶ 16, ECF No. 170-1.

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 CBF Trust 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.[5] 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.

B. This Case

The named Class Plaintiffs are three law firms who incurred legal fees and advanced expenses while performing common-benefit work.[6] 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. 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 Class Plaintiffs bring unjust enrichment and quantum meruit claims on their own behalf and on behalf of a class and subclass against two groups of defendants: the Phipps Group[7] and the Murray Group.[8] The class is defined as "all persons and entities that provided or paid for common-benefit services, materials, and/or related expense items...." 2d Am. Compl. ¶ 59-60, ECF No. 128. The subclass is limited to those who provided the common-benefit services. Id. Both Class and Subclass exclude the defendants in this action. Counts I and III assert unjust enrichment and quantum meruit claims, respectively, by the class against the Phipps Group Defendants. Counts II and IV assert unjust enrichment and quantum meruit claims, respectively, by the subclass against the Murray Group.

II. Discussion[9]

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 ...


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