MARTINO v. MAZIE et al
Filing
26
OPINION/ORDER granting Defendants' 7 Motion to Dismiss with prejudice; Plaintiff's 15 Cross Motion for Partial Summary Judgment is dismissed as moot by this opinion, etc ***CIVIL CASE TERMINATED. Signed by Judge Robert B. Kugler on 5/6/2022. (dmr)
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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
CAMDEN VICINAGE
__________________________________________ :
Anthony Martino,
:
Plaintiff,
:
v.
:
:
David Mazie, Esq., Adam Slater, Esq.
:
and Mazie Slater Katz & Freeman LLC,
:
Defendants. :
___________________________________________ :
21‐cv‐20056 (RBK‐MJS)
OPINION/ORDER
KUGLER, United States District Judge:
Before the Court in this Action are defendants’ [“Mazie”] motion to dismiss [“MTD”]
(Doc. No. 7) the complaint (Doc. No. 1‐1) under Fed.R.Civ.P. [“FRCP”] 12(b) (6) and plaintiff’s
[“Martino”] cross‐motion for partial summary judgment (Doc. No. 15) under FRCP 56.
The complaint alleges Mazie’s violation of New Jersey State Court Rules, in particular,
1:21‐7(i) [“the Rule”], because of Mazie’s receipt of continency fees gotten from the
Olmesartan Multidistrict Litigation [“MDL”] settlement program, which Martino alleges were
greater than allowed by the Rule. The MTD seeks dismissal with prejudice of all three claims
of the complaint, each of which depends on violation of the Rule: 1) the over‐compensation of
a contingency fee; 2) because of the over‐compensation, the alleged conversion by Mazie of
Olmesartan MDL settlement amounts that should have gone to New Jersey litigants; and 3)
consequently, an alleged unjust enrichment to Mazie. If there is no violation of the
contingency fee Rule, then Mazie alleges that the complaint cannot state a claim for which
relief can be granted.
The COURT HAVING REVIEWED the parties’ submissions without a hearing in
accordance with Rule 78.1 (b) and for the reasons stated below, and for good cause shown:
The Court GRANTS defendants’ motions to dismiss with prejudice all claims in the
Complaint; and
The Court ORDERS plaintiffs’ cross‐motion has been made moot by this opinion and
directs the Clerk to close the Action.
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1.0
2
Facts and Procedural Background
In April 2015, the Judicial Panel on Multi‐District Litigation [“JPML”] consolidated
multiple cases filed in various state and federal courts into the Olmesartan Multi‐District
Litigation [“MDL”]. These cases concerned whether ingestion of the hypertensive Olmesartan
caused gastro‐intestinal injury that mimicked celiac disease. Daichii Sankyo Ltd., a Japanese
corporation, manufactured Olmesartan, which is the generic of the patented drug Benicar®,
and used certain U.S. distributors to market and sell it in the United States. There were
approximately 1700 plaintiffs in the MDL at the time of settlement.
As the transferee Court for the Olmesartan MDL, the Court takes judicial notice of
some facts and procedural background from its own knowledge and experience. After two
years of extensive discovery, which included much document production, expert reports,
bellwether selection, etc., in April 2017 the parties negotiated in the MDL a settlement having
a first settlement aggregate amount of $350,000,000.00. The Brown Greer [“BG”] law firm
was the MDL’s administrator of the Olmesartan settlement program; BG orchestrated the
announcement of the settlement and managed the thousands of subsequent claimants who
signed onto the program.
During the three week settlement sign‐up period, over 10,800 claimants applied to the
program. When the dust settled and all viable claims were accounted for in the Olmesartan
settlement program, the total number of actual registrants, that is, those eligible to receive a
payout for their injuries, eventually reduced to about 8500. As this number of registrants was
about 3 times larger than expected, the original settlement amount was increased.
The MDL administrator, BG, was responsible for calculating the amount of damages
owed to the thousands of MDL registrants. BG, along with the parties, established six general
categories of injury, each of which represented a minimum payout amount. BG and the
parties also developed an accompanying points systems by which to account for aggravating
health events, like hospitalization, or extreme weight loss, and which thereby allowed an
increase in the calculated payout amount upon documentation of these experiences.
In registering for the Olmesartan settlement program, registrants, whether advised by
their law firms (or, if pro se, by a designated Pro Bono law firm), agreed to abide by certain
requirements, the most important of which was the relinquishment of the right to initiate a
lawsuit in court for the same injuries. In order to receive a payout, registrants also had to
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provide within a required period sufficient evidence that demonstrated the alleged injury, else
they were dropped from the settlement without opportunity to rejoin. Importantly, meeting
this data requirement within the designated period sometimes meant a registrant’s attorney
had to corral its clients and their medical providers to get proper proof of Olmesartan ingestion
and related injury. The Olmesartan settlement program gave registrants the right to appeal
their initial payout determination, and typically it was registrants’ attorneys who initiated and
executed these appeals. After BG’s initial award determination, there were two levels of
appeals. The first was to seek a review by BG of its own award determination in light of all the
evidence and argument provided by plaintiffs. The second was to have an appointed
Magistrate Judge review BG’s award determination against the registrant’s accompanying
submissions.
At first, Daiichi required the Olmesartan settlement program to register at least 95
percent of all possible litigants and claimants; later, it increased the required percentage to 99
percent. In so doing, Daiichi was seeking assurance of a virtual end to Olmesartan litigation.
As it turned out, this requirement fostered Daiichi’s success in getting the MDL terminated as
no individual litigants remained after the administration of the Olmesartan settlement
program and the damage award payouts.
Plaintiffs’ counsel had their own aims in the settlement. These depended on the extent
of their legal efforts to receive compensation, which was based on a contingency fee
agreement between the attorney and the registrant. This meant the attorney received a
contracted‐for percentage of the individual client’s damage award. It may be that some
plaintiffs’ counsel exerted minimal effort to get their clients registered in the Olmesartan
settlement program by using paralegals or junior associates to help clients fill out the
registration forms, obtain the needed medical records, and answer clients’ queries as to how
long payout would take. And, for most plaintiffs’ counsel, the contingency fee agreement the
client signed typically gave counsel a minimum of one third of the client’s damage award.
However, there were some plaintiffs’ counsel who were responsible for developing the
litigation record: managing the litigation, arguing discovery motions, obtaining and paying for
experts, conducting discovery, creating a record, taking depositions, etc. Throughout the
litigation and the settlement period, Adam Slater, Esq., served as plaintiffs’ lead counsel and
headed the plaintiffs’ executive committee, supported by his law firm of Mazie Slater Katz and
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Freeman, defendant herein. Not only were Mr. Slater’s tasks many and varied, but he steered
the plaintiffs’ litigation efforts to ensure the incentivization of Daiichi to settle.
Since products liability cases consolidated in a federal district court, as in the
Olmesartan MDL, are actionable only under state law, plaintiffs residing in New Jersey were
not eligible to be consolidated into the Olmesartan MDL. That is, a New Jersey litigant could
enter their state law action into the District of New Jersey MDL action, but only in a New Jersey
state court. To be clear, plaintiff Martino and the putative class he allegedly represents, as
residents of New Jersey, were not litigants in the Olmesartan MDL but rather were litigants in
an Olmesartan Multicounty Litigation [“MCL”] in New Jersey , docket number ATL‐L‐00 ‐15.
Like the national Olmesartan MDL, the Olmesartan MCL was a consolidated action. But, the
MCL comprised only cases of New Jersey residents who had ingested Olmesartan and had
experienced injury, whereas the MDL comprised cases filed by residents of all other states.
Moreover, like all other Olmesartan claimants, the MCL litigants were eligible to register into
the Olmesartan settlement program upon its commencement on 1 August 2017.
3.0
LEGAL STANDARD
Rule 12(b)(6) governs a court’s review of a motion to dismiss for failure to state a claim
upon which relief can be granted. In evaluating such a motion, “courts accept all factual
allegations as true, construe the complaint in the light most favorable to the plaintiff, and
determine whether, under any reasonable reading of the complaint, the plaintiff may be
entitled to relief.” Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir.2009) (quoting Phillips v.
Cnty. of Allegheny, 515 F.3d 224, 233 (3d Cir.2008)). That is, a complaint must “state a claim to
relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173
L.Ed.2d 868 (2009); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167
L.Ed.2d 929 (2007).
The general inquiry as to the plausibility of a claim on its face is “whether [movants]
should be afforded an opportunity to offer evidence in support of their claims” not whether the
movant will succeed on the merits. In re Rockefeller Ctr. Prop., Inc., 311 F.3d 198, 215 (3d
Cir.2002). The specific inquiry involves a three‐part analysis (Santiago v. Warminster Twp., 629
F.3d 121, 130 (3d Cir.2010)) in which a court: 1) states “the elements a plaintiff must plead to
state a claim.” Id. (quoting Iqbal, 556 U.S. at 675); 2) identifies those allegations which,
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“because they are no more than conclusions, are not entitled to the assumption of truth.” Id. at
131 (quoting Iqbal, 556 U.S. at 680); and 3) assuming the veracity of well‐pleaded factual
allegations, “determine[s] whether they plausibly give rise to an entitlement for relief.” Ibid.
Practically speaking, this plausibility analysis is a “context‐specific task requiring the
reviewing court to draw on its judicial experience and common sense.” Iqbal, 556 U.S. at 679. A
claim fails when a court can infer only that it is merely possible rather than plausible. Id.
Plausibility cannot lie upon legal conclusions or “[t]hreadbare recitals of the elements of a cause
of action, supported by mere conclusory statements”. Id. at 678.
In deciding a motion to dismiss, a court reviews the allegations in the complaint and
exhibits attached to it and may look beyond the complaint to matters of public record without
converting the motion to a summary judgement motion. Pension Ben. Guar. Corp. v. White
Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir.1993); see also Sands v. McCormick, 502 F.3d 263,
268 (3d Cir. 2007). However, the Court, however, need not accept as true allegations
contradicted by judicially noticeable facts, see Shwarz v. United States, 234 F.3d 428, 435 (9th
Cir. 2000).
The Federal Rules of Evidence provide that courts may take judicial notice of those
adjudicative facts that are outside the trial record and “not subject to reasonable dispute.”
Fed.R.Evid. 201(b). A judicially noticed fact must either be generally known within the
jurisdiction of the trial court, or capable of accurate and ready determination by resort to
sources whose accuracy cannot reasonably be questioned. See id., especially at Fed.R.Evid
201(c); Werner v. Werner, 267 F.3d 288, 295 (3rd Cir.2001); see also In re Warfarin Sodium
Antitrust Litig., 214 F.3d 395, 398 (3rd Cir.2000); Kramer v. Time Warner, Inc., 937 F.2d 767, 774
(2nd Cir.1991).
4.0
DISCUSSION
The parties note the resolution of this MTD depends on the proper interpretation of
certain language in New Jersey Court Rule 1:21‐7(i). As the parties dispute which paragraph of
Rule 1:21‐7 applies, the entire Rule is provided in the footnote.1 The issue is whether each
1 Rule 1:21‐7. Contingent Fees
(a) As used in this rule the term “contingent fee arrangement” means an agreement for legal services of an attorney or
attorneys, including any associated or forwarding counsel, under which compensation, contingent in whole or in part upon the
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successful accomplishment or disposition of the subject matter of the agreement, is to be in an amount which either is fixed or
is to be determined under a formula.
(b) An attorney shall not enter into a contingent fee arrangement without first having advised the client of the right and
afforded the client an opportunity to retain the attorney under an arrangement for compensation on the basis of the
reasonable value of the services.
(c) In any matter where a client's claim for damages is based upon the alleged tortious conduct of another, including products
liability claims and claims among family members that are subject to Part V of these Rules but excluding statutorily based
discrimination and employment claims, and the client is not a subrogee, an attorney shall not contract for, charge, or collect a
contingent fee in excess of the following limits:
(1) 33 1/3 % on the first $750,000 recovered;
(2) 30% on the next $750,000 recovered;
(3) 25% on the next $750,000 recovered;
(4) 20% on the next $750,000 recovered; and
(5) on all amounts recovered in excess of the above by application for reasonable fee in accordance with the provisions of
paragraph (f) hereof; and
(6) where the amount recovered is for the benefit of a client who was a minor or mentally incapacitated when the contingent
fee arrangement was made, the foregoing limits shall apply, except that the fee on any amount recovered by settlement
before empaneling of the jury or, in a bench trial, the earlier to occur of plaintiff's opening statement or the commencement of
testimony of the first witness, shall not exceed 25%.
(d) The permissible fee provided for in paragraph (c) shall be computed on the net sum recovered after deducting
disbursements in connection with the institution and prosecution of the claim, whether advanced by the attorney or by the
client, including investigation expenses, expenses for expert or other testimony or evidence, the cost of briefs and transcripts
on appeal, and any interest included in a judgment pursuant to R. 4:42‐11(b); but no deduction need be made for post‐
judgment interest or for liens, assignments or claims in favor of hospitals or for medical care and treatment by doctors and
nurses, or similar items. The permissible fee shall include legal services rendered on any appeal or review proceeding or on any
retrial, but this shall not be deemed to require an attorney to take an appeal. When joint representation is undertaken in both
the direct and derivative action, or when a claim for wrongful death is joined with a claim on behalf of a decedent, the
contingent fee shall be calculated on the aggregate sum of the recovery.
(e) Paragraph (c) of this rule is intended to fix maximum permissible fees and does not preclude an attorney from entering into
a contingent fee arrangement providing for, or from charging or collecting a contingent fee below such limits. In all cases
contingent fees charged or collected must conform to RPC 1.5(a).
(f) If at the conclusion of a matter an attorney considers the fee permitted by paragraph (c) to be inadequate, an application on
written notice to the client may be made to the Assignment Judge or the designee of the Assignment Judge for the hearing
and determining of a reasonable fee in light of all the circumstances. This rule shall not preclude the exercise of a client's
existing right to a court review of the reasonableness of an attorney's fee.
(g) Where the amount of the contingent fee is limited by the provisions of paragraph (c) of this rule, the contingent fee
arrangement shall be in writing, signed both by the attorney and the client, and a signed duplicate shall be given to the client.
Upon conclusion of the matter resulting in a recovery, the attorney shall prepare and furnish the client with a signed closing
statement.
(h) Calculation of Fee in Structured Settlements. As used herein the term “structured settlement” refers to the payment of
any settlement between the parties or judgment entered pursuant to a proceeding approved by the Court, the terms of which
provide for the payment of the funds to be received by the plaintiff on an installment basis. For purposes of paragraph (c), the
basis for calculation of a contingent fee shall be the value of the structured settlement as herein defined. Value shall consist of
any cash payment made upon consummation of the settlement plus the actual cost to the party making the settlement of the
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claim of injury of each New Jersey plaintiff in the Olmesartan MCL, arising from ingestion of
Olmesartan, is sufficiently similar to fall within the language of Rule 1:21‐7. That is, the issue is
whether the claims of each New Jersey plaintiff in the MCL arose “out of the same transaction
or set of facts or involve substantially identical liability issues”. Since clearly different New
Jersey plaintiffs bought and ingested Olmesartan in different transactions and at different
times, the dispute practically devolves to whether all claims in the MCL “involve substantially
identical liability issues”.
Plaintiff Martino argues that all liability claims of the former MCL plaintiffs do indeed
fall within that substantially identical description and that the Rule therefore applies. If, as
Martino argues, all MCL claims do have “substantially identical liability issues”, then the
contingency fees Mazie received and which arise from the Olmesartan settlement awards of
the former MCL plaintiffs must be limited to those stated in Rule 1:21‐7(i). Martino, and the
putative plaintiff class he seeks to represent, therefore demand a recalculation of the
Olmesartan settlement contingency fees according to the Rule and a refund of the excess fees
paid to Mazie.
Mazie argues that all claims of the former MCL plaintiffs do not arise from either the
same transaction or the same facts nor involve a substantially identical liability. Further, Mazie
argues, Rule 1:21‐7(i) cannot apply to Mazie’s contingency fees obtained in the Olmesartan
settlement program because of the disparity in specific liability issues from registrant to
registrant. Mazie deduces that, if Rule 1:21‐7(i) does not apply to its Olmesartan settlement
contingency fees, then Martino’s complaint cannot state a claim upon which relief may be
granted since all three counts in the Martino complaint require violation of Rule 1:21‐7(i).
To zero in on the issue, the Court confirms that resolution of the MTD requires
interpretation of whether the claims brought by MCL plaintiffs to the Olmesartan settlement
deferred payment aspects thereof. In the event that the party paying the settlement does not purchase the deferred payment
component, the actual cost thereof shall be the actual cost assigned by that party to that component. For further purposes of
this rule, the party making the settlement offer shall, at the time the offer is made, disclose to the party receiving the
settlement offer its actual cost and, if it does not purchase the deferred payment aspect of the settlement, the factors and
assumptions used by it in assigning actual cost.
(i) Calculation of Fee in Settlement of Class or Multiple Party Actions. When representation is undertaken on behalf of
several persons whose respective claims, whether or not joined in one action, arise out of the same transaction or set of facts
or involve substantially identical liability issues, the contingent fee shall be calculated on the basis of the aggregate sum of all
recoveries, whether by judgment, settlement or both, and shall be charged to the clients in proportion to the recovery of each.
Counsel may, however, make application for modification of the fee pursuant to paragraph (f) of this rule in appropriate cases.
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program involved “substantially identical liability issues” to all other claims in the MCL and/or
in the Olmesartan settlement program. It is critical to appreciate that the only way an
Olmesartan registrant—regardless of whether an MCL litigant or an MDL litigant or a non‐
litigant—could receive a damage award from the Olmesartan settlement program was to
timely register into the settlement program, and execute a contingency fee agreement with an
attorney2 who oversaw and directed the registration process. The Court therefore takes the
view that THE SUM TOTAL OF all claims of all registrants in the Olmesartan settlement
program EITHER involved substantially identical liability issues OR they did not. Put
differently, there can be no rational, medical, logical, or legal justification why the claims of a
subset of Olmesartan registrants could be interpreted as having substantially identical liability
based merely on the fact they arose in the MCL. Either all MCL claims involve substantially
identical liability issues in the same way that all MDL claims do, or NO claims of any
Olmesartan registrant have “substantially identical” liability as any other such claim.
It is also critical not to lose sight that Martino as well as the putative class plaintiffs who
were litigants in the Olmesartan MCL had to have registered into the Olmesartan settlement
program in order to receive their award. This means that all MCL litigants who were
represented by Mazie, signed a Mazie contingency fee award, registered in the Olmesartan
settlement program, AND received a damages award UNDER THE SETTLEMENT
PROGRAM, NOT UNDER THE MCL. To bring the point home, Martino, and all other putative
plaintiffs here, received an Olmesartan settlement award only because of the common benefit
efforts of Adam Slater and his firm Mazie, which worked to bring Daiichi to the settlement
table and drove the Olmesartan settlement program to completion.
Since all Olmesartan MDL litigants AND all Olmesartan MCL litigants AND all other
claimants had to register into the Olmesartan settlement program to receive a damages
award, the Court must construe whether the Rules of Consolidation for the MDL or the MCL
automatically deemed all consolidated plaintiffs to have experienced substantially identical
liability. In construing the meaning of a statute, a Court looks to the words within that statute
and to construction guidance in other statutes. New Jersey Statute § 1:1‐1 states that words
and phrases are construed together with their context and given their generally accepted
meaning.3
2 There were only a handful of pro se registrants in the Olmesartan settlement program.
3 N.J.S. § 1:1‐1 General rules of construction
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In addition to examining the intrinsic language and context of the statute, the Court
researched extrinsic guidance by conducting several, different search queries for cases, court
orders, and MDL actions to see how other states have interpreted “arise out of the same
transaction or set of facts or involve substantially identical liability issues”. The Court came up
short and found no court cases or jurisprudence that equates a plaintiff’s single, product
liability claim in an MDL or MCL to other such claims in the same MDL or MCL. The very
absence of relevant case law as to whether New Jersey (or any other state) Court Rules govern
the contingency fee award of MDL or MCL plaintiffs militates against the applicability of Rule
1:21‐7(i) here.
To examine whether the language of Rule1:21‐7(i) itself applies to a Multidistrict or
MultiCounty Litigation, the Court turns to the consolidation Rules for an MDL and for a New
Jersey MCL.
Multidistrict Litigation Consolidation Statute
28 U.S.C § 1407 authorizes the creation of a multidistrict litigation:
(a) When civil actions involving one or more common questions of fact are pending
in different districts, such actions may be transferred to any district for coordinated
or consolidated pretrial proceedings. [emphasis added].
In consolidating a Multidistrict Litigation, the Judicial Panel on Multidistrict Litigation
[“JPML”] focuses on judicial economy and the prevention of unnecessary congestion in court
rooms across the country of cases having common facts. An MDL plaintiff’s claim need not be
identical in fact nor substantially identical in liability as all other plaintiffs’ claims to gain entry
into an MDL.
For example, to have the JPML transfer a case into the Olmesartan MDL, two common
facts were required: the plaintiff 1) ingested Olmesartan for high blood pressure within a
certain time period, and 2) experienced one or more of a variety of symptoms that resembled
celiac disease, such as persistent vomiting or weight loss or hospitalization or stomach upset
In the construction of the laws and statutes of this state, both civil and criminal, words and phrases shall be read and
construed with their context, and shall, unless inconsistent with the manifest intent of the legislature or unless another or
different meaning is expressly indicated, be given their generally accepted meaning, according to the approved usage of the
language. Technical words and phrases, and words and phrases having a special or accepted meaning in the law, shall be
construed in accordance with such technical or special and accepted meaning.
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or diarrhea or cramping or other digestive disorder, etc. No plaintiff had to experience all of
these symptoms or even any particular one of these. Moreover, any combination of these
symptoms qualified as an entry fact. Since a plaintiff’s particular experience of injury
depended on the nature, extent, number, and severity of the symptoms, the Daiichi
defendants’ liability to that plaintiff was unique.
The common fact standard is not at all the same standard for certifying a class of
plaintiffs, which because of the substantial similarity of facts, liability, etc. across the class can
be embodied and exemplified by a class representative’s allegations of fact and liability. The
common fact standard is a more relaxed, much less stringent definition of the commonality of
claims across a group of plaintiffs.
Multicounty Litigation Rule and Guidelines
Consolidation of cases across New Jersey counties is authorized by New Jersey Court
Rule 4:38A:
The Supreme Court may designate a case or category of cases as Multicounty
Litigation to receive centralized management in accordance with criteria and
procedures promulgated by the Administrative Director of the Courts upon
approval by the Court. Promulgation of the criteria and procedures will include
posting in the Multicounty Litigation Information Center on the Judiciary's Internet
website (http://www.njcourts.com).
The approved procedures of the Administrative Director of the Courts include:
MULTICOUNTY LITIGATION GUIDELINES AND CRITERIA FOR DESIGNATION
[As Promulgated by Directive# 08‐12 Pursuant to Rule 4:38A]4
…
Criteria to be Applied in Determining Whether Designation as Multicounty Litigation is
Warranted
In determining whether designation as multicounty litigation is warranted, the
following factors, among others, will be considered:
4
Glenn A. Grant, Memorandum from the Acting Administrative Director of New Jersey Courts to Civil Presiding
Judges, Communicating Directive #08‐12, August 7, 2012 on MultiCounty Litigation Guidelines.
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whether the case(s) possess(es) the following characteristics:
•
it involves large numbers of parties;
•
it involves many claims with common, recurrent issues of law and fact that are
associated with a single product, mass disaster, or complex environmental or toxic tort;
•
there is geographical dispersement of parties;
•
there is a high degree of commonality of injury or damages among plaintiffs;
•
there is a value interdependence between different claims, that is, the perceived
strength or weakness of the causation and liability aspects of the case(s) are often
dependent upon the success or failure of similar lawsuits in other jurisdictions; and
•
there is a degree of remoteness between the court and actual decision‐ makers in the
litigation, that is, even the simplest of decisions may be required to pass through layers
of local, regional, national, general and house counsel. [emphasis added]
In comparing the language authorizing consolidation of MDL cases with that
authorizing New Jersey MCL cases, the Court notes the recurring word in both Rules of
“COMMON” or “COMMONALITY”, not “IDENTITY”. Notably, in the New Jersey
Consolidation Guidelines, there is no requirement that multicounty cases have the “same
facts” or “substantially identical liability issues”. The Court finds the Federal consolidation
statute and the New Jersey consolidation guidelines confirm that actions need have only
common, not identical, liability issues to be consolidated.
The similarity in the Federal consolidation statute and the New Jersey consolidation
rule means, regardless how a claimant represented by Mazie in a contingency fee agreement
entered the Olmesartan settlement program, all MDL and MCL Olmesartan cases were
consolidated because they had “common” issues of fact and liability, not “substantially
identical” liability, to other such cases.
In addition to the Court’s not finding relevant caselaw, neither party cited such as to the
definitive application of Rule 1:21‐7(i) to MDL or MCL contingency fee cases. Although plaintiff
cited Estate of Faheem Williams v. Division of Youth and Family Services, No. ESX‐L‐83‐05, 2006
WL 4469674 (L. Div. Mar. 30, 2006), rev’d on other grounds, In re Est. of F.W., 398 N.J. Super.
344, (App. Div. 2008), this case has nothing to do with nor logically applies to product liability
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cases in an MDL. It concerned the extreme physical abuse of brothers placed in a New Jersey
foster home; in that case, there was no question as to the substantially identical liability of the
foster family abusers or the identical facts of abuse. The identicality of those facts and liability
do not characterize the facts and liability of Olmesartan settlement registrants. The Court
finds the cited case not on point. Plaintiff also referred to the following law review article,
Lester Brickman, The Asbestos Litigation Crisis: Is There A Need for an Administrative
Alternative?, 13 CARDOZO L. REV. 1819, (1992) and to a later, very similar article by the same
author, which expounded that contingency fees awarded to attorneys in an MDL always have a
slight but persistent odor of defrauding and conversion. The Brickman article is a red herring
as it discusses a clear case of illegal behavior on the part of MDL attorneys, which is
inapplicable here.
Ultimately, the Court holds the plain language of Rule 1:21‐7(i) does not apply to cases
consolidated either in a Multicounty litigation or a Multidistrict litigation. And this
inapplicability has nothing to do with the specific, underlying legal issues, whether business
torts or products liability. This holding arises from the Court’s experience as the transferee
Court of the Olmesartan MDL to observe firsthand that the administration of the Olmesartan
settlement program concerned not only the common liability issue of injury caused by
Olmesartan ingestion but also the very different and the very specific factual details of each
such injury for each consolidated case.
Since each case registered in the Olmesartan settlement program had a common
liability as well as specific facts that supported a unique damage award, such cases, including
Martino’s and those of the putative class of plaintiffs here, cannot ground allegations that give
rise to the applicability of Rule 1:21‐7(i).
Although not finding New Jersey (or other state) case law that applies Rule 1:21‐7(i) to
MDL or MCL litigations, the Court has also deliberated over the equitable nature of
defendants’ award as raised by Martino’s unjust enrichment claim. The Court has come across
class action cases in New Jersey where Rule 1:21‐7(i) has been suspended, especially in
business tort contexts; these include the seminal case Incollingo v. Canuso, A.2d 778 (App. Div.
1997), and the sequential case Lubitz v. DaimlerChrysler Corp., 2006 WL 3780789 (Sup. Ct.
Bergen County, 21 Dec 2006). While not concerning product liability issues as in the
Olmesartan settlement program, these cases give a glimmer of understanding as to when the
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Rule may be excepted.
Mindful that Incollingo stated expressly no exception to the Rule exists for products
liability cases, the Court nonetheless finds illustrative Judge Harris’s reasoning in Lubitz. There
Judge Harris recalculated the attorneys’ fees in a breach of warranty class action by applying
both Incollingo to keep the contingency fee outside of the Rule WHILE using Third Circuit
Gunter5 methodology. To the point, such methodology comprises “the most mature and
well‐developed analyses of attorneys' fees” of any other Circuit Court. Lubitz, 2006 WL
370789, at *20.
Judge Harris’s balancing of the Gunter factors6 and the Incollingo exception to the
contingency fee calculation exemplifies in a practical way why the Rule does not apply here.
Upon calculating that the attorney fee award under the Incollingo exception (coupled with a
lodestar calculation under Rendine v. Pantzer, 141 N.J. 292 (1995)) would have amounted to
20% of the total settlement award, Judge Harris applied the Gunter factors to reduce that
percentage to 15% of the total settlement amount, which he found more reasonable and
equitable.
The total amount of the Olmesartan settlement was approximately $380,000,000.
Besides the negotiated contingency fee agreements— which the Court was not privy to, but
estimates were generally at least 33‐1/3 % of each plaintiff’s settlement award— plaintiffs’
attorneys were compensated from a common benefit fund. This fund awarded plaintiffs’
attorneys 9.5% in fees of the total settlement award, which was apportioned among those law
firms that had evidenced common benefit work for the litigation and settlement. To the
point, the 9.5% of the total settlement award was distributed according to the efforts of
dozens of specific law firms; it was awarded based on evidence and the Court’s deliberation.
See Docket Matter No. 1:15‐md‐2606 (RBK‐JS), Docket No. 1263, dated 14 Nov 2019. In
essence, the common benefit fund award was remuneration to the Olmesartan registrants’
attorneys for their efforts to steer the MDL litigation and to bring the MDL to settlement. The
MCL litigants unwittingly benefited from these common benefit efforts, which propelled the
Olmesartan settlement program.
5
Gunter v. Ridgewood Energy Corp., 223 F.3d 190 (3d Cir.2000).
6
A. Size of Fund and Number of Persons Benefited; B. Presence or Absence of Substantial Objections; C. Skill and
Efficiency of Attorneys Involved; D. Complexity and Duration of the Litigation; E. Risk of Nonpayment; F. Amount of
Time Devoted by Counsel; G. Awards in Similar Cases
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Since the Court has found the language of the Rule inapplicable to the MCL and the
MDL plaintiffs and since the common benefit fund award is well within the reasonable and
equitable percentages of Third Circuit examples (see Lubitz, 2006 WL 370789, at *22), Mazie’s
motion to dismiss is GRANTED WITH PREJUDICE.
This decision also resolves plaintiff’s outstanding partial motion for summary judgment
since the claims do not state a cause of action for which relief can be granted. Accordingly, the
Court directs the Clerk to CLOSE THIS MATTER.
Dated: 6 May 2022
s/ Robert B. Kugler
ROBERT B. KUGLER
United States District Judge
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