Galinis v. Bayer Corporation
- Susan Illston
- 3:09-cv-04980
- U.S. District Court · Northern District of California
- 6
In Galinis v. Bayer, Judge Illston granted in part and denied in part plaintiffs’ common-benefit assessment motion and granted Bayer’s sealing motions.
Susan and Richard Galinis, their attorneys, Bayer, and counsel for the plaintiffs’ steering committee were affected. The ruling set the common-benefit assessment for this case at 4% for attorneys’ fees and 2% for costs, and granted Bayer’s related sealing motions.
What happened
In Galinis v. Bayer Corporation, Susan and Richard Galinis had reached an agreement in principle resolving their claims after the case returned from multidistrict litigation. The dispute concerned how much of their settlement should be assessed for work benefiting other plaintiffs.
The multidistrict litigation’s order set a 9% attorneys’ fee assessment and a 2% costs assessment for arterial blood-clot injury cases. Plaintiffs argued that applying those rates would give the plaintiffs’ steering committee an unfair windfall because their own attorneys had done substantial case-specific work after Susan Galinis rejected a voluntary settlement. Bayer and the committee argued that the court lacked authority to change the assessment.
Judge Susan Illston ruled that the court could modify the earlier assessment because exceptional circumstances existed. She granted in part and denied in part plaintiffs’ motion, setting the assessment at 4% for common-benefit attorneys’ fees and 2% for costs; she also granted Bayer’s related motions to seal.
The detailed version
- Galinis v. Bayer Corporation · No. 3:09-cv-04980
- Susan Illston
- Jan. 22, 2020
Background
This case returned to the Northern District of California after coordinated pretrial proceedings in multidistrict litigation concerning Bayer’s Yaz and Yasmin oral contraceptives. Susan Galinis alleged an arterial thrombotic event, meaning a blood clot that develops in an artery. In October 2019, Susan and Richard Galinis and Bayer HealthCare Pharmaceuticals Inc. reached an agreement in principle resolving the matters in controversy.
In 2010, the multidistrict court created a common-benefit fund to share the costs of work performed for the benefit of plaintiffs in the coordinated litigation. The order subjected monetary recoveries in qualifying cases to an assessment based on the gross recovery amount. After a 2014 amendment, the assessment for arterial thrombotic event cases was 9% for common-benefit attorneys’ fees and 2% for common-benefit costs. Plaintiffs’ counsel had signed the participation agreement and qualified as participating counsel.
Susan Galinis did not join the voluntary settlement negotiated for other arterial-thrombotic-event cases. The opinion states that she would have been eligible for approximately $175,000 had she joined it. After she rejected that settlement, her attorneys assumed control of the Galinis family’s claims and, according to the motion, spent four years developing the case. They consulted 23 experts, served 14 expert reports, took or defended 25 depositions, and handled pretrial motions. They later negotiated a settlement that the opinion describes as far larger than the voluntary settlement amount.
Arguments and legal standard
Plaintiffs asked the court to use its equitable powers to set a fair assessment on their settlement proceeds. They argued that applying the existing Common Benefit Order would create a windfall for the plaintiffs’ steering committee because their attorneys had performed substantial work and assumed the risk of obtaining no recovery. Bayer and the committee argued that the court lacked jurisdiction.
The court relied on the rule that one district judge may modify another judge’s interlocutory order in the same case for compelling reasons or exceptional circumstances. It also discussed the common-fund doctrine, under which attorneys who create a fund benefiting others may receive a reasonable fee from that fund.
Ruling
Judge Susan Illston disagreed with the jurisdictional objection and held that the court could modify the multidistrict court’s order because compelling reasons or exceptional circumstances existed. The court found that exceptional circumstances were present, citing the extensive work and risk undertaken by plaintiffs’ attorneys as the multidistrict proceedings ended and other settlements were reached.
The court found this case comparable to cases subject to a 4% fee assessment. It therefore granted in part and denied in part plaintiffs’ motion and assessed 4% of the gross recovery amount for common-benefit attorneys’ fees and 2% for common-benefit costs. Counsel for the plaintiffs’ steering committee could pursue any additional assessment separately from this action. The court also granted Bayer’s corresponding motions to seal.
Read the full 6-page opinion on CourtListener, the free public archive maintained by the Free Law Project.