The Eastern District of Missouri certified an unusual class of lawyers and their clients who undertook a collective effort to litigate claims against Bayer related to the purported “contamination” of the U.S. rice supply by Bayer’s genetically modified rice. The defendants are law firms that allegedly benefitted from the work performed by the class in state and federal cases against Bayer.
Bayer’s introduction of genetically modified rice into the U.S. domestic rice supply allegedly caused the price of rice to plummet. Thousands of rice farmers and other producers filed lawsuits against Bayer, and the federal court actions were consolidated into an MDL in the Eastern District of Missouri.
The MDL court appointed co-lead counsel for the plaintiffs, who in turn directed over 30 law firms and other professionals. A common-benefit trust fund (“the CBF Trust”) was established to compensate the attorneys for services rendered for all of the plaintiffs. The court’s order provided that a certain percentage of any recovery in the MDL cases would be set aside to cover attorney’s fees and costs.
Defendant law firms opposed the creation of the CBF Trust and alternatively sought recovery of millions of dollars in fees that they claimed as reimbursement for their own common-benefit fees. The MDL court ordered that $72 million be paid in attorneys’ fees. The CBF Trust recovered only $56.5 million of this amount. The named plaintiffs, three firms that incurred legal fees and advanced expenses, brought claims for unjust enrichment and quantum meruit against the defendant law firms. In an ironic twist given their usual role in asserting that classes should be certified, the defendants opposed class certification.
Defendants argued that there were insufficient class members to satisfy the numerosity requirement under Rule 23(a)(1) because they formed a single joint venture to undertake the collective representation of the rice producers. The court rejected this argument because the defendants litigated their multiple claims as a class and not as a single joint venture, and under Missouri law, there was no equal right of control of the litigation among the different law firms.
The court also rejected the defendants’ argument that Rule 23(b)(3) predominance was not satisfied. It held that individualized fact-finding would not be required because the class plaintiffs pooled resources to achieve the prosecution and ultimate settlement of the MDL claims. As such, the class plaintiffs would not need to show that each individual class member provided or paid for specific things. Rather, the class members could show that they jointly incurred the expenses that conferred a benefit on the defendants.
Finally, the court concluded that class resolution was superior to other available methods for the fair and efficient adjudication of the case because the class members lack any interest in individually prosecuting separate actions. Accordingly, the defendants were hoisted on their own petard.