Our immediate reaction to In re Bard IVC Filters Products Liability Litigation, ___ F.4th ___, 2023 WL 5441793 (9th Cir. Aug. 24, 2023) (hereafter, “Jones” (the plaintiff’s name)), was “popcorn time” – pull up a chair and watch the other side fight like drunken pirates over the MDL spoils.  But there’s more to Jones than that.  The MDL-related “participation agreements” that Jones enforced are something like third-party litigation funding, in that they introduce another party to the settlement mix, even in non-MDL cases.  Defendants thus have a need to know about those agreements when settlement is raised in those cases.

Jones involved the interesting topic of “common-benefit” holdbacks, which are how the other side assesses its various members for the fees and costs of MDL litigation.  P-side attorneys with cases in the MDL enter into these contracts to pay some percentage of any recovery (chiefly settlements, as was the case in Jones) to cover MDL-wide litigation costs.  These assessments are called “common benefit” because (at least in theory) they pay for activities that benefit all plaintiffs in the MDL.  2023 WL 5441793, at *6 (discussing this concept). Usually, without signing a “participation agreement,” lawyers on the other side typically can’t get access to MDL discovery and trial preparation materials.

But since time immemorial, lawyers on the other side also “park” cases in state courts that are not part of the MDL.  They do this for a number of reasons, but one of them is to avoid having to pay MDL assessments on recoveries in those cases.  P-side MDL leadership takes a dim view of these state-court holdouts, which is what Jones is about.  We remember, back in the Bone Screw litigation that the plaintiff’s legal committee – rather than try chasing their brethren in state court litigation – attempted to force the MDL defendants to do their dirty work.  Cf. In re Orthopedic Bone Screw Products Liability Litigation, 1996 WL 900349, at *3 (E.D. Pa. June 17, 1996) (imposing assessment collection obligation on defendants in MDL cases).  That failed, but we’ve been wary of possible impacts of “common benefit” assessments on MDL defendants ever since, particularly in non-MDL litigation.

Jones is the first precedential appellate opinion to decide whether an MDL judge has “authority to order common benefit fund assessments from plaintiffs’ recoveries in non-MDL cases” where their lawyers (often without their clients’ knowledge) have entered into MDL “participation agreements.”  2023 WL 5441793, at *6.  Whether an MDL judge can order such assessments in MDL cases has been settled for some time.  Id.  On the other hand, significant appellate precedent precludes imposition of MDL assessments on plaintiffs (or counsel) who are “strangers” to the MDL and never entered into any contract concerning common benefit assessments.  Id. at *8-9 (discussing In re Genetically Modified Rice Litigation, 764 F.3d 864, 873-74 (8th Cir. 2014); Vincent v. Hughes Air West, Inc., 557 F.2d 759, 766-67 (9th Cir. 1977); Hartland v. Alaska Airlines, 544 F.2d 992, 1001-02 (9th Cir. 1976)).  The only appellate decision addressing similar facts, which affirmed an assessment, was non precedential.  Id. at *7 (discussing In re Avandia Marketing, Sales Practices & Products Liability Litigation, 617 F. Appx. 136, 141-44 (3d Cir. 2015)).

The Ninth Circuit in Jones essentially held plaintiffs’ counsel to the terms of their contract with the plaintiffs’ steering committee.  The law firm seeking to avoid the MDL common fund assessment had “voluntarily entered into a participation agreement.”  2023 WL 5441793, at *7.  That agreement authorized “assessments against its clients’ recoveries in non-MDL cases in exchange for access to MDL common benefit work product,” of which the firm “took advantage.”  Id. (footnote omitted).  The agreement “was explicitly incorporated into a district court order.”  Id.  Thus, the attorneys who were seeking to avoid a common benefit assessment were hardly the kinds of “strangers” to the litigation as the successful attorneys in Genetically Modified Rice, Vincent, and Hartland.

Under an appropriate set of facts, Jones holds that a state-court plaintiff whose counsel had other cases in the MDL and signed a participation agreement, could find himself or herself involuntarily assessed for MDL common fund payments.  We think that goes a bit too far, since it visits on the plaintiff/client the unrelated sins of the plaintiff’s counsel.  Rather, consistent with most contingent fee agreements that we’ve read, we think that the only person who should be subject to assessment should be the lawyers, not the clients.  We doubt that a plaintiff, having already given up the percentage specified by his or her contingent fee contract, can be forced to pay still more to satisfy a common benefit fund assessment about which the plaintiff did not know and to which the plaintiff (as opposed to his or her counsel) never agreed.

But if some MDL plaintiffs’ counsel wants to try, we’ll order up some more popcorn and enjoy the show.