In re: Just for Men Mass Tort Litigation

Filing 13

Case Management Order #5 - Establishing Common Benefit Fee and Expense Fund. Signed by Judge David R. Herndon on 3/9/2017. (Attachments: # 1 Exhibit A)(ceh)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF ILLINOIS
IN RE JUST FOR MEN® MASS TORT

3:16-cv-00638-DRH
Master Docket
Hon. David R. Herndon

LITIGATION

This Document Applies To All Actions

CASE MANAGEMENT ORDER NO. 5
(ESTABLISHING COMMON BENEFIT FEE AND EXPENSE FUND)
I.

SCOPE OF ORDER
This Order is entered to provide for the fair and equitable sharing among

plaintiffs, and their counsel, of the burden of services performed and expenses
incurred by attorneys acting for the common benefit of all plaintiffs in this
complex litigation.
A.

Governing Principles--The Common Benefit Doctrine.

The governing principles are derived from the United States Supreme
Court’s common benefit doctrine, as established in Trustees v. Greenough, 105
U.S. 527 (1881); refined in, inter alia, Central Railroad & Banking Co. v. Pettus,
113 U.S. 116 (1884); Sprague v. Ticonic National Bank, 307 U.S. 161 (1939);

Mills v. Electric Auto-Lite Co., 396 U.S. 375 (1970); Boeing Co. v. Van Gemert,
444 U.S. 472 (1980); and approved and implemented in the MDL context, in inter

alia, In re MGM Grand Hotel Fire Litigation, 660 F.Supp. 522, 525-29 (D. Nev.
1987); and In re Air Crash Disaster at Florida Everglades on December 29, 1972,
549 F.2d 1006, 1019-21 (5th Cir. 1977). Given that these actions constitute a
Mass Tort Litigation, the Court finds the foregoing principles to be instructive.

1

B.

Application.

This Order applies to all cases now pending, or later filed in, transferred to,
or removed to, this Court and treated as part of the coordinated proceeding
known as In re: Just For Men® Mass Tort Litigation, Master Docket 3:16-cv00638-DRH. This Order further applies to all plaintiffs’ attorneys who sign the
“Participation Agreement” attached hereto as Exhibit A.
C.

Participation Agreement (Exhibit A).

Exhibit A, attached hereto and incorporated herein, is a voluntary
Participation Agreement between plaintiffs’ attorneys who have cases pending in
some other federal court and/or in state court. The Participation Agreement is a
private and cooperative agreement between plaintiffs’ attorneys only (Participating
Counsel); and not Defendants. Participating Counsel include all members of the
Plaintiffs’ Steering Committee (PSC) (as designated in Order No. 2) and any other
plaintiffs’ attorneys who execute the Participation Agreement within twenty (20)
days of their first case they have docketed in this Mass Tort Litigation. 1
Participating Counsel are entitled to receive the “Common Benefit Work Product.”
Counsel who choose not to execute the Participation Agreement, are not entitled to
receive Common Benefit Work Product, however if non-participating counsel
receives Common Benefit Work Product, any other work product created
pursuant to this Order, or otherwise benefit by the work performed by the PSC in
the Just For Men Mass Tort Litigation, those cases will be subject to an

All PSC members (and their respective firms) are deemed to have executed the Participation
Agreement as of the date of this Order.
1

2

assessment to be determined by this Court and those counsel shall be responsible
for payment of the assessments set forth in this Order into the Common Benefit
Fund.
II.

PLAINTIFFS’ LITIGATION FEE AND EXPENSE FUNDS
A.

Establishing the Fee and Expense Funds.

At an appropriate time, Plaintiffs’ Liaison Counsel (“PLC”) will be directed
to establish two interest-bearing accounts to receive and disburse funds as
provided in this Order (the “Funds”). The first fund shall be designated the “Just

for Men® Fee Fund” and the second fund shall be designated the “Just for Men®
Expense Fund.” These funds will be held subject to the direction of this Court. No
party or attorney has any individual right to any of these funds except to the
extent of amounts directed to be disbursed to such person by order of the Court.
These funds do not constitute the separate property of any party or attorney and
are not subject to garnishment or attachment for the debts of any party or
attorney except when and as directed to be disbursed as provided by court order
to a specific person.
By subsequent Order, the Court will appoint an individual to serve as
Escrow Agent to manage the Funds. The Escrow Agent shall keep detailed records
of all deposits and withdrawals and will be directed to prepare tax returns and
other tax filings in connection with the Funds. The Escrow Agent will turn in time
records on a monthly basis to Liaison Counsel reflecting the time spent in
managing the Funds. Upon approval by the Court, the foregoing time shall be paid

3

from the Just For Men® Mass Tort Litigation Common Benefit Expense Fund and
shall be considered a shared cost in accordance with § III. B.1., below. The PLC
shall provide a copy of this Order to the Escrow Agent and the Plaintiffs’ Co-Lead
Counsel.
B.

Payments into the Fee and Expense Funds: The Assessment.

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 Just For Men® claims
are subject to an assessment of the “gross monetary recovery,” as provided
herein.
1.

Gross monetary recovery.

Gross monetary recovery includes any and all amounts paid to plaintiffs’
counsel by Defendants through a settlement or pursuant to a judgment. In
measuring the “gross monetary recovery,” the parties are to (a) exclude court
costs that are to be paid by the defendant; (b) include any payments to be made
by the defendant on an intervention asserted by third-parties, such as to
physicians, hospitals, and other healthcare providers in subrogation related to
treatment

of

plaintiff

and

any

governmental

liens

or

obligations

(e.g.,

Medicare/Medicaid); and (c) include the present value of any fixed and certain
payments to be made in the future. The assessment shall apply to all of the cases

4

of the Plaintiff’s attorneys who are subject to this Order that are pending in the
Mass Tort Litigation or, to the extent the Plaintiff’s attorneys have signed the
Participation Agreement, to any state court action in which they have entered their
appearance as counsel of record, as well as any unfiled or tolled cases of such
attorneys in which they are counsel or co-counsel and have entered into a tolling
agreement with Defendants.
2.

Assessment Amount.
(a)

Early Participation – The assessment amount shall be eight (8)

percent (four (4) percent for common benefit attorneys’ fees and four (4) percent
for costs) for Early Participation Counsel;
(b)

Late Participation – The assessment amount shall be ten (10)

percent (six (6) percent for common benefit attorneys’ fees and four (4) percent
for costs) for Late Participation Counsel.
3.

Defendants’ Obligations.

Defendants and their counsel shall not distribute any settlement proceeds
to plaintiff’s counsel (or directly to a plaintiff) for a case pending in the Mass Tort
Litigation or for a case pending in another jurisdiction in which plaintiff’s counsel
is counsel of record in the case and defendant has been advised in writing that
plaintiff’s counsel has signed the Participation Agreement until after defendants’
counsel notifies PLC in writing of the existence of a settlement and the name of the
individual plaintiff’s attorney. The PLC shall have 10 days to notify defendants’
counsel in writing as to whether or not they believe the individual plaintiff’s

5

attorney’s cases are subject to an assessment and the amount (stated as a
percentage of the recovery) of the assessment pursuant to this Order.

To the

extent there is a disagreement as to whether the plaintiff’s attorney’s cases are
subject to the assessment, the PLC, Defendants, and plaintiff’s counsel whose case
is at issue shall meet and confer and, to the extent necessary, bring the matter to
the Court’s attention for adjudication as to whether the cases are subject to an
assessment.

For cases subject to an assessment, defendants are directed to

withhold an assessment from any and all amounts paid to plaintiffs and their
counsel and to pay the common benefit expense and fee assessments directly into
the Funds as a credit against the settlement or judgment. No orders of dismissal
of any plaintiff’s claim, subject to this Order, shall be entered unless accompanied
by a certificate of plaintiff’s and defendant’s counsel that the assessment, where
applicable, will be withheld and will be deposited into the Funds at the same time
the settlement proceeds are paid to settling counsel. If for any reason the
assessment is not or has not been so withheld, the plaintiff and his counsel are
jointly responsible for paying the assessment into the Fund promptly.
III.

COMMON BENEFIT EXPENSES
A.

Qualified Expenses Eligible for Reimbursement.

In order to be eligible for reimbursement of common benefit expenses, said
expenses must meet the requirements of this section and the limitations set forth
in the Participation Agreement. Specifically, said expenses must be (a) for the
common benefit, (b) appropriately authorized by Co-Lead Counsel or Liaison

6

Counsel, (c) timely submitted, within the defined limitations set forth in this
Order, and (d) properly verified.
B.

Shared and Held Common Benefit Expenses.
1.

Shared Costs.

Shared Costs are costs incurred for the common benefit of the Mass Tort
Litigation as an account that has already been established by PLC and to be
funded by all members of the PSC and others as determined by the PSC and its
designated subcommittees. All Shared Costs must be approved by Plaintiffs’ CoLead or Liaison Counsel prior to payment. Shared Costs include: (a) Certain
Court, filing and service costs; (b) Deposition and court reporter costs for noncase specific depositions; (c) Document Depository:

creation,

operation,

equipment and administration; (d) Plaintiffs’ Co-Lead and Liaison Counsel
administrative matters (e.g., expenses for equipment, technology, courier services,
long

distance,

telecopier,

electronic

service,

photocopy

and

printing,

secretarial/temporary staff, etc.); (e) PSC group administration matters such as
meetings and conference calls; (f) Legal and accountant fees; (g) Generic expert
witness and consultant fees and expenses; (h) Printing, copying, coding, scanning
(out of house or extraordinary firm cost) (i) Research by outside third party
vendors/consultants/ attorneys; (j) Common witness expenses including travel; (k)
Translation costs; (l) Bank or financial institution charges; and (m) Investigative
services.

7

2.

Held Costs.

Held Costs are those that will be carried by each Participating Counsel in
the Mass Tort Litigation or state court and reimbursed as and when approved by
this Court. Held costs can also include unreimbursed and authorized shared
costs. Held Costs are costs incurred for the global benefit of the litigation. Held
Costs are those that do not fall into the above Shared Costs categories but are
incurred for the benefit of all plaintiffs in general. All costs of a substantial nature
that meet these requirements and fall under the following categories shall be
considered Held Costs and qualify to be submitted for consideration by the Court
for future reimbursement from the Just For Men® Expense Fund.
C.

Authorization and Submission.

The Participation Agreement sets forth the guidelines for authorizing and
submitting expenses for the common benefit.
D.

Expenses Limitations.
1.

Travel Limitations.

Except in extraordinary circumstances approved by Plaintiffs Co-Lead or
Liaison Counsel, all travel reimbursements are subject to the following
limitations:
(i)
Airfare. Only the price of a coach seat for a reasonable
itinerary will be reimbursed. Business/First Class Airfare will not be
fully reimbursed, except for international flights, which requires
prior approval by Plaintiffs Co-Lead or Liaison Counsel in order to be
considered for reimbursement. If Business/First Class Airfare is used
on domestic flights then the difference between the Business/First
Class Airfare must be shown on the travel reimbursement form, and
only the coach fare will be will be reimbursed.

8

(ii)
Hotel. Hotel room charges for the average available room rate
of a business hotel, including the Hyatt, Westin, and Marriott hotels,
in the city in which the stay occurred will be reimbursed. Luxury
hotels will not be fully reimbursed but will be reimbursed at the
average available rate of a business hotel.
(iii)

Meals. Meal expenses must be reasonable.

(iv)
Cash Expenses. Miscellaneous cash expenses for which
receipts generally are not available (tips, luggage handling, pay
telephone, etc.) will be reimbursed up to $50.00 per trip, as long as
the expenses are properly itemized.
(v)
Rental Automobiles.
Luxury automobile rentals will not be
fully reimbursed, unless only luxury automobiles were available. If
luxury automobiles are selected when non-luxury vehicles are
available, then the difference between the luxury and non-luxury
vehicle rates must be shown on the travel reimbursement form, and
only the non-luxury rate may be claimed, unless such larger sized
vehicle is needed to accommodate several counsel.
(vi)
Mileage. Mileage claims must be documented by stating
origination point, destination, total actual miles for each trip, and the
rate per mile paid by the member’s firm. The maximum allowable
rate will be the maximum rate allowed by the IRS (currently 50.5
cents per mile).
2.

Non-Travel Limitations
(i)
Long Distance and Cellular Telephone: Long distance and
cellular telephone charges must be documented. Copies of the
telephone bills must be submitted with notations as to which charges
relate to the Just For Men® Mass Tort litigation. Submissions may
be redacted to remove non-Just For Men® related calls.
(ii)
Shipping, Courier, and Delivery Charges: All claimed expenses
must be documented with bills showing the sender, origin of the
package, recipient, and destination of the package.
(iii) Postage Charges: A contemporaneous postage log or other
supporting documentation must be maintained and submitted.
Postage charges are to be reported at actual cost.
(iv)
Telefax Charges: Contemporaneous records should be
maintained and submitted showing faxes sent and received. The perfax charge shall not exceed $1.00 per page.
9

(v)
In-House Photocopy: A contemporaneous photocopy log or
other supporting documentation must be maintained and submitted.
The maximum copy charge is 20¢ per page.
(vi)
Computerized Research – Lexis/Westlaw: Claims for Lexis or
Westlaw, and other computerized legal research expenses should be
in the exact amount charged to or allocated by the firm for these
research services.
E.

Verification.

The forms detailing expenses shall be certified by a senior partner in each
firm attesting to the accuracy of the submissions. Attorneys shall keep receipts for
all expenses. Credit card receipts are an appropriate form of verification so long
as accompanied by a declaration from counsel that work was performed and paid
for the common benefit.
F.

Costs and/or Expenses in Excess of Amounts Available in the

Expenses Fund.
Any compensable costs and/or expenses that exceed the amounts available
in the Just For Men® Expense Fund may be compensable by the Just For Men®
Fee Fund upon Order of the Court.
IV.

COMMON BENEFIT WORK.
A.

Qualified Common Benefit Work Eligible for Reimbursement.

Only Participating Counsel are eligible for reimbursement for time and
efforts expended for the common benefit. Participating Counsel shall be eligible
for reimbursement for time and efforts expended for common benefit work, if
said time and efforts are (a) for the common benefit, (b) appropriately authorized

10

by Co-Lead Counsel or Liaison Counsel, (c) timely submitted, and (d) approved by
this Court.
B.

Compensable Common Benefit Work Defined.

As the litigation progresses and common benefit work product of the same
type and kind continues to be generated, the PLC and Co-Lead Counsel will assign
Participating Counsel with such common benefit work. In the Just For Men®
Mass Tort Litigation, common benefit work shall include only work specifically
assigned to Participating Counsel by the PLC and Co-Lead Counsel. Examples of
common benefit work include, but are not limited to, maintenance and working in
the depository; review and document coding; timelines; materials provided to
experts; authorized expert retention; the deposition cuts that may be used in a
case set for trial; the trial exhibit preparation; the scientific articles assembled;
certain PSC activities; discovery; legal research; drafting pleadings and briefs;
expert development; and the preparation for and taking of authorized depositions
of Defendants and third-party witnesses, and expert depositions.

11

C.

Authorization and Time Keeping.

All time must be authorized and accurately and contemporaneously
maintained. Time shall be kept according to these guidelines as set forth in the
Participation Agreement.
D.

Distributions.
1.

Procedures and Forms.

Time and Expense submissions shall be made pursuant to the procedures
established by Co-Lead Counsel or Liaison Counsel. Questions regarding the
guidelines or procedures or the completion of any form should be directed to
Plaintiffs’ Co-Lead or Liaison Counsel.
2.

Court Approval.

The amounts deposited in the Just For Men® Fee and Expense Funds shall
be available for distribution to Participating Counsel who have performed
professional services or incurred expenses for the common benefit. No amounts
will be disbursed without review and approval by the Court or such other
mechanism as the Court may order. Specifically, such sums shall be distributed
only upon Order of the Court in Just For Men® Mass Tort Litigation 3:16-cv-6380-

DRH. This Court retains jurisdiction over any common benefit award.
Any Counsel who does not sign the Participation Agreement shall not be
eligible to receive Common Benefit payments for any work performed or expenses
incurred.

12

3.

Special Master.

At the appropriate time, this Court shall appoint a Special Master to make
recommendations to this Court on the issues of how any money in the Just For

Men® Fee and Expense Funds shall be distributed among Participating Counsel.

Digitally signed by Judge
David R. Herndon
Date: 2017.03.09 12:11:44
-06'00'

IT IS SO ORDERED.
Dated: March 9, 2017

United States District Judge

13