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Downing v. Goldman Phipps PLLC

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

March 20, 2017

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

          MEMORANDUM AND ORDER SUMMARY JUDGMENT AND OTHER MOTIONS

          CATHERINE D. PERRY UNITED STATES DISTRICT JUDGE.

         This order rules a number of motions filed by the parties. The parties' motions and briefs, including exhibits, were in excess of 25, 000 pages. I have carefully reviewed the materials filed, but find extended discussion of each motion unnecessary. As set out below, I am denying most, but not all, of the motions.

         This case remains set as the first case to be reached for jury trial beginning on May 1, 2017, at 8:30 a.m. and the final pretrial hearing remains set for Wednesday, April 26, 2017 at 10:00 a.m.

         Background

         This dispute about attorneys' fees arising out of the In re Genetically Modified Rice Litigation, 4:06MD1811CDP (the Rice MDL), is finally nearing trial. The plaintiffs, who are lawyers and farmers who provided services and paid expenses in the Rice MDL, bring claims of unjust enrichment and quantum meruit against a group of attorneys who represented plaintiffs in related state-court cases but who did not contribute to the Common Benefit Fund (CBF) established in the Rice MDL.

         The Rice MDL and the related state-court cases, which together included claims of thousands of farmers and others against Bayer Cropscience and related entities, were settled for approximately $750 million after a lengthy litigation process that included several federal and state trials. Two settlement agreements were entered. The settlement agreement referred to as the “Goldman Murray Banks” or “GMB” settlement is at issue here. Plaintiffs in this case are seeking contributions from defendant-lawyers whose clients participated in the GMB settlement.

         The parties to the federal MDL cases were required to contribute 11% of their settlements and verdicts to a Common Benefit Fund, but the parties to the state-court cases were not so required. Despite not being required to contribute to the CBF, the lawyers to the state-court cases were allowed to access and use the discovery and other litigation materials generated in the MDL case. Some state-court lawyers voluntarily contributed to the CBF; those who are defendants in this case did not.

         As part of the MDL process, leadership counsel were appointed and conducted or directed most of the discovery and other pre-trial preparation, for which they and those working under their direction were later compensated by distributions from the CBF. Some of the plaintiffs in this case were appointed as leadership counsel in the MDL. Some of the defendants in this case unsuccessfully sought to be appointed to MDL leadership positions. Some of the defendants here also unsuccessfully sought to obtain an award of fees from the CBF, for work they claimed had benefitted the MDL cases.

         Defendants remaining in this case are Goldman Phipps PLLC, Goldman Pennebaker & Phipps PC, Martin J. Phipps, Keller Stolarczyk PLLC (referred to collectively as the Phipps defendants) and Stephen B. Murray, Sr. and the Murray Law Firm (referred to collectively as the Murray Law Firm).

         Motion # 369: Plaintiffs' Motion for Summary Judgment based on Issue Preclusion

         Plaintiffs argue, as they have argued repeatedly in this lawsuit, that I already decided many of the issues in this case when I established the MDL Common Benefit Fund and made rulings in that case related to it. Plaintiffs argue that several of my orders in the MDL case made findings of fact that are binding on the parties here. I disagree.

         Issue preclusion, formerly referred to as collateral estoppel, precludes relitigation of the same issue by the same parties. See, e.g., B&B Hardware, Inc. v. Hargis Indus., Inc., 135 S.Ct. 1293 (2015); Simmons v. O'Brien, 77 F.3d 1093 (8th Cir. 1996). But the issues must be the same, and “central to the fair administration of preclusion doctrine is the notion that a party will be bound only if it had an adequate opportunity or incentive to obtain a full and fair adjudication in the first proceeding.” Simmons, 77 F.3d at 1095 (quotation marks omitted).

         The issues in this case are not the same as the issues considered in the MDL case, and the parties did not have the same opportunity or reason to litigate them. The crucial issue involved in the dispute over the Common Benefit Order, which was affirmed on appeal, is whether the federal MDL court had jurisdiction to require non-MDL parties - those who were parties to the related state-court suits - to contribute to the Common Benefit Fund. See In re Genetically Modified Rice Litigation, 764 F.3d 864 (8th Cir. 2014). Although I did state, in ruling on various motions, that defendants here had benefited from the work done by the leadership group, those statements were made in the context of determining that specific issue, and, as I have told the parties before, I was using the phrase “unjustly enriched” in its generic sense and was not making any finding of future liability.

         The parties in the MDL case did not have the same full and fair opportunity to litigate the issues as they have here. They did not litigate, and I did not decide, whether the plaintiff class here had conferred any particular benefit on the defendants named in this suit, or the number of hours reasonably expended to confer such a benefit, or any of the other issues raised in plaintiffs' motion. My statements were not made after the full discovery and litigation, including presentation of trial evidence, that we will have in this case. The issues before the court were different, and my statements did not constitute findings of fact that should be binding on the parties here. I will deny the motion for summary judgment based on issue preclusion.

         Motion # 299: Motion of Goldman Phipps PLLC et al. to Disqualify Class Representatives

         Defendants seek to disqualify two of the three law firms who serve as class representatives in this case. Defendants hired as an expert witness a legal bill auditor, who opined that there were inaccuracies in the MDL leadership group's requests for reimbursement from the MDL Common Benefit Fund. Defendants argue that these alleged inaccuracies show that the two law firms cannot be adequate representatives, because their credibility will be at issue and because they have conflicts with the remainder of the class.

         I will deny this motion. First, any credibility challenges will be to the credibility of the individual lawyers who signed the affidavits, and not to the law firms who are the named class representatives. One of the lawyers whose credibility the defendants attack is no longer a member of the law firm who is the class representative, so attacks on his credibility do not mean the law firm cannot be an adequate representative. Second, this case is about legal fees, and there is plenty of room on all sides to argue about the propriety of all the lawyers' fees. Third, the defendants' expert witness made certain assumptions that call the validity of his opinions into question, and I am sure this will be an issue at trial. Additionally, the motion does not seek disqualification of the third class representative law firm, and so, as a practical matter, disqualifying two of the three class representatives is unlikely to have much practical effect. Finally, to the extent defendants argue that the class representatives have some form of conflict with other members of the class, that is not a conflict that could affect the trial - as far as the trial is concerned, all the plaintiffs share the same goal of obtaining as large a verdict as possible. If conflicts arise later as to the division of any award, that is something that can be dealt with at that time.

         Motions # 371, 374, 384: Phipps Defendants' Motion for Partial Summary Judgment with Respect to Plaintiffs' Common Benefit Services Claims Relating to Public Records and Court Proceedings, with Respect to Plaintiffs' Claims for Quantum Meruit, and with Respect to Plaintiffs' Claims for Unjust Enrichment

         Motion # 388: Plaintiffs' Motion for Partial Summary Judgment against the Phipps ...


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