Mazie Slater Katz & Freeman, LLC v. Common Benefit Fee and Cost Committee

A personal injury multi-district litigation (“MDL”) in federal court generated an estimated $550 million for a “common-benefit fund” to pay plaintiff attorneys’ fees and expenses, in addition to the fees already earned on their own cases. Some 94 plaintiff law firms filed applications seeking an equitable apportionment of the fund. The District Court ordered all appellate rights waived, and the allocation decisions were made by the Common Benefit Fee and Cost Committee (“FCC”), composed of eight attorney representatives of the applicant law firms and a retired state-court judge, all appointed by the District Court with no notice. Predictably, the FCC’s members awarded themselves nearly twothirds of the fund, while refusing to disclose to nonmember firms the time entries and expense documentation purportedly justifying the extraordinary allocation. The District Court permitted no discovery, held no evidentiary hearing, and in a conclusory six-page opinion approved the FCC’s admitted self-dealing while summarily rejecting the objections with no fact finding or analysis. The Fourth Circuit dismissed Petitioner’s appeal in a single-sentence decision with no explanation. The question presented is: Whether federal courts must implement a process that comports with due process to determine the fee and expense allocation of common-benefit funds in multidistrict litigation and other mass actions, to ensure that the decisions are transparent, legally valid, and fair and reasonable, particularly when they are based upon recommendations made by court-appointed fee committees composed of self-interested plaintiffs’