Petition for Writ of Certiorari — Anderson Law Offices, et al., Petitioners v. Common Benefit Fee and Cost Committee

Supreme Court briefJan 6, 2020

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No. 19-791

IN THE

SUPREME COURT OF THE UNITED STATES

_______________________________

ANDERSON LAW OFFICES, BENJAMIN H. ANDERSON, PETITIONERS

COMMON BENEFIT FEE AND COST COMMITTEE, RESPONDENT

ON APPLICATION TO STAY THE ORDER OF THE UNITED STATES DISTRICT COURT FOR THE

SOUTHERN DISTRICT OF WEST VIRGINIA

APPLICATION FOR A STAY PENDING THE DISPOSITION OF

A PETITION FOR A WRIT OF CERTIORARI

Paul W. Flowers, Esq.

Counsel of Record

Louis E. Grube, Esq.

PAUL W. FLOWERS CO., L.P.A.

50 Public Square

Suite 1910

Cleveland, Ohio 44113

(216) 344-9393

pwf@pwfco.com

leg@pwfco.com

Attorneys for Petitioners

TABLE OF CONTENTS

TABLE OF CONTENTS.................................................................................................ii

TABLE OF AUTHORITIES ......................................................................................... iii

OPINIONS BELOW........................................................................................................ 3

STATEMENT OF JURISDICTION .............................................................................. 4

STATEMENT OF THE CASE ....................................................................................... 5

REASONS FOR GRANTING THE STAY .................................................................. 15

A REASONABLE PROBABILITY THAT CERTIORARI WILL BE

GRANTED AND THE PROSPECTS FOR REVERSAL .............................. 15

THE LIKELIHOOD OF IRREPARABLE HARM ........................................ 18

NO BOND NECESSARY................................................................................ 21

CONCLUSION .............................................................................................................. 23

APPENDIX ......................................................................................................................

Order of the United States Court of Appeals for the Fourth Circuit

dated July 25, 2019 ......................................................................................... 0001-5

Order of the United States District Court for the Southern District of West Virginia

dated August 2, 2019 ....................................................................................... 0006-8

Order of the United States District Court for the Southern District of West Virginia

dated July 25, 2019 ....................................................................................... 0009-14

TABLE OF AUTHORITIES

Federal Cases

Alexander v. Chesapeake, Potomac, and Tidewater Books, Inc.,

190 F.R.D. 190 (E.D. Va. 1999) .................................................................................. 22

Barnes v. E-Sys., Inc. Group Hosp. Med. & Surgical Ins. Plan,

501 U.S. 1301 (1991) ....................................................................................... 15, 18, 21

Boeing Co. v. Van Gemert,

444 U.S. 472 (1980) ........................................................................................... 7, 19, 21

Cayuga Indian Nation of New York v. Pataki,

188 F. Supp. 2d 223 (N.D.N.Y. 2002) ........................................................................ 21

Grand Entertainment Group, Ltd. v. Star Media Sales, Inc.,

No. 86-5763, 1992 WL 114953 (E.D.P.A. May 18, 1992) ......................................... 22

HCB Contractors v. Rouse & Assocs.,

168 F.R.D. 508 (E.D. Pa. 1995) .................................................................................. 21

Holland v. Law,

35 F. Supp. 2d 505 (S.D.W. Va. 1999) ....................................................................... 22

In re Avandia Mktg., Sales Practices & Prod. Liab. Litig.,

617 F. App'x 136 (3d Cir. 2015) .................................................................................... 7

In re Cook Med., Inc., Pelvic Repair Sys. Prod. Liab. Litig.,

365 F. Supp. 3d 685 (S.D.W. Va. 2019) ......................................................... 11, 12, 13

In re Diet Drugs,

582 F.3d 524 (3d Cir. 2009) .................................................................................. 20, 21

In re Fine Paper Antitrust Litig.,

751 F.2d 562 (3d Cir. 1984) ...................................................................................... 2, 5

In re Genetically Modified Rice Litig.,

835 F.3d 822 (8th Cir. 2016)......................................................................................... 7

In re High Sulfur Content Gasoline Prods. Liability Litig.,

517 F.3d 220 (5th Cir. 2008)............................................................................... 2, 8, 19

In re Syngenta Mass Tort Actions,

No. 3:15-CV-01221-NJR, 2019 WL 3887515 (S.D. Ill. Aug. 19, 2019) .......... 9, 11, 12

iii

In re Vioxx Prod. Liab. Litig.,

760 F. Supp. 2d 640 (E.D. La. 2010) .......................................................................... 12

Lucas v. Townsend,

486 U.S. 1301 (1988) ................................................................................................... 15

Mills v. Elec. Auto-Lite Co.,

396 U.S. 375 (1970) ........................................................................................... 7, 19, 21

Mori v. Internat’l Brotherhood of Boilermakers,

454 U.S. 1301 (1981) ................................................................................................... 19

Olympia Equip. Leasing Co. v. W. Union Tel. Co.,

786 F.2d 794 (7th Cir. 1986)....................................................................................... 22

Pennsylvania v. Delaware Valley Citizens' Council for Clean Air,

478 U.S. 546 (1986) ..................................................................................................... 11

Philip Morris USA Inc. v. Scott,

561 U.S. 1301 (2010) ............................................................................................. 16, 19

Schreiber v. Kellogg,

839 F. Supp. 1157 (E.D. Pa. 1993) ............................................................................. 21

State Cases

Scott v. C.R. Bard, Inc.,

231 Cal. App. 4th 763, 180 Cal. Rptr. 3d 479 (2014) ................................................. 5

Federal Statutes

28 U.S.C. § 1254(1)............................................................................................................ 5

28 U.S.C. § 2101(f) ............................................................................................................ 5

Federal Rules

Fed. R. Civ. P. 59(e) ........................................................................................................ 13

To the HONORABLE JOHN G. ROBERTS, JR., Chief Justice of the Supreme Court

of the United States and Circuit Justice for the Fourth Circuit:

Petitioners, Anderson Law Offices and Benjamin H. Anderson (“Collectively

ALO”), have asked this Court to consider whether federal district courts possess the

authority to require appeal rights to be waived as a condition for applying for a

recovery otherwise available at law or in equity. The ALO Petitioners now request a

stay of any further disbursements of the fund in dispute, which is estimated at $550

Million. Order of the United States District Court for the Southern District of West

Virginia dated July 25, 2019 (“Allocation Order”), Apx. p. 00014. This Court’s review

of the petition for a writ of certiorari will be thwarted, and the lower courts may be

left without the ability to order a meaningful remedy in the event of a remand, if

these funds are lost or dissipated during the pendency of this appeal.

The United States District Court for the Southern District of West Virginia

appears to be the first in the history of modern jurisprudence to refuse to consider

granting a monetary recovery to any applicant that had not expressly or implicitly

consented to a relinquishment of the right to appeal the decision.

The ALO

Petitioners possess an equitable interest in funds that are presently being

administered by a court-appointed accounting firm, which will be at no risk of waste

or dissipation if the stay is ordered. To the contrary, the secure deposits will continue

to generate interest at a favorable rate if the status quo is maintained during the

remainder of this appeal.

The prospect that this Court will accept this appeal for review appears to be

high.

The District Court’s mandatory appeal waiver directive is not just

unprecedented in federal jurisprudence, but it will also undoubtedly serve as a

roadmap for like-minded jurists seeking a quick and conclusive resolution to complex

and contentious issues.

In this consolidated Multi-District Litigation (“MDL”)

proceeding, dozens and dozens of objections had been raised by several law firms to

the distribution of the estimated $550 Million Fund that had been prepared by

Respondent, Common Benefit Fee and Cost Committee (“FCC”). Although comprised

of just eight of over eighty participating firms, the FCC members proposed paying

themselves almost exactly two-thirds of the fund. And their effective hourly rate for

all lawyers and paralegals was a staggering $783.02, compared to just $268.22 for the

non-member firms.

Without specifically addressing any of the objections that were raised, the

District Court approved the FCC’s allocations in a six-page decision. Apx., pp. 000914. And the Fourth Circuit enforced the appeal waiver orders by promptly dismissing

Petitioner ALO’s appeal in a single sentence ruling. Both courts thus successfully

avoided the fundamental due process protections that have been afforded to common

fund applications, which were relegated instead to a committee comprised of

attorneys who profited the most from the outcome.

In re High Sulfur Content

Gasoline Prods. Liability Litig., 517 F.3d 220, 231 (5th Cir. 2008) (“Non-Fee

Committee members were entitled to notice and an opportunity to be heard.”); In re

Fine Paper Antitrust Litig., 751 F.2d 562, 584 (3d Cir. 1984) (“Our equitable fund case

law also makes clear that the attorneys' claim for fees from a fund in court is a cause

of action, belonging to the attorneys, for the reasonable value of their services, for

which a hearing is required.”).

For the reasons that follow, an order should be issued staying further

enforcement of the District Court’s Allocation Order.

OPINIONS BELOW

The order and judgment of the United States Court of Appeals for the Fourth

Circuit in Consolidated Docket Numbers 19-1849, 19-1850, 19-1851, 19-1853, and 191855 dismissing Petitioners’ appeal and denying the motion for stay pending appeal

are unpublished. The Order entered by the United States District Court for the

Southern District of West Virginia denying ALO’s Motion for Stay of Execution of the

Allocation Order was issued on August 2, 2019, and it is unpublished. The Allocation

Order entered by the United States District Court for the Southern District of West

Virginia overruling all objections and approving Respondent FCC’s common benefit

fee allocations was issued on July 25, 2019, and it is unpublished. 1 Citations to these

orders will refer to the attached appendix.

The Allocation Order on appeal to this Court was entered in five of seven

consolidated multi-district litigation (“MDL”) proceedings. In re: C. R. Bard, Inc.,

Pelvic Repair System Products Liability Litig., S.D.W. Va. Case No. 2:10-md-02187

(“Bard”); In re: American Medical Systems, Inc., Pelvic Repair System Products

Liability Litig., S.D.W. Va. Case No. 2:12-md-02325 (“AMS”); In re: Boston Scientific

Corp. Pelvic Repair System Products Liability Litig., S.D.W. Va. Case No. 2:12-md02326 (“Boston Scientific”); In re: Ethicon, Inc. Pelvic Repair System Products

Liability Litig., S.D.W. Va. Case No. 2:12-md-02327 (“Ethicon”); In re: Coloplast

Corp., Pelvic Support Systems Products Liability Litig., S.D.W. Va. Case No. 2:12-md02387 (“Coloplast”). For ease of reference, the remainder of this Petition will refer

STATEMENT OF JURISDICTION

The United States District Court for the Southern District of West Virginia

issued its Allocation Order on July 25, 2019. Apx., pp. 0009-14. The ALO Petitioners

sought an order from the District Court staying execution of the Allocation Order on

July 26, 2019. Doc#: 8455, ALO’s Motion for Stay of Execution of Judgment; PageID#:

205805.

Respondent FCC opposed this request for a stay on July 31, 2019.

Doc#:8463, Response in Opposition to Motion for Stay of Execution of Judgment;

PageID#:205886. The District Court denied the requested stay on August 2, 2019.

Apx., pp. 0006-8.

On August 2, 2019, the ALO Petitioners appealed the District Court’s decisions

in all seven MDLs to the United States Court of Appeals for the Fourth Circuit.

Doc#:8472, ALO Notice of Appeal; PageID#:205966. The Court of Appeals filed a

notice with the District Court on August 9, 2019, indicating that the seven appeals

had been consolidated under case numbers 19-1849(L), 19-1850, 19-1851, 19-1853,

19-1855, 19-1856, and 19-1857. Doc#:8527, Order; PageID#:206182. That same day,

the ALO Petitioners sought an order from the Court of Appeals staying execution of

the Allocation Order. Doc#:8-1, Motion for Stay Pending Appeal. Respondent FCC

opposed this request for a stay on August 19, 2019. Doc#:12, Response in Opposition

to Motion for Stay Pending Appeal. The request was denied, and the appeal was

only to the orders and entries issued in the Ethicon MDL. The documents reproduced

in the attached appendix were filed in identical form in each MDL.

dismissed, on September 23, 2019. Apx., pp. 0001-5. On December 18, 2019, the ALO

Petitioners sought a writ of certiorari from this Court. 2

This Court possesses jurisdiction to stay the Allocation Order pending review

on a writ of certiorari. 28 U.S.C. §§ 1254(1) and 2101(f).

STATEMENT OF THE CASE

In July 2012, a civil jury seated in Bakersfield, California rendered a verdict

for $5 million in favor of Christine Scott as a result of serious and disabling internal

complications she suffered following the surgical implantation of an Avaulta Plus

Transvaginal Mesh (“TVM”) device in her abdomen to correct urinary incontinence.

Kern County Superior Court (Ca.) Case No. CV-266034. The judgment was upheld in

an appeal that was commenced by the product manufacturer, C.R. Bard, Inc. Scott

v. C.R. Bard, Inc., 231 Cal. App. 4th 763, 180 Cal. Rptr. 3d 479 (2014).

Christine Scott’s products liability action spawned a multitude of similar

lawsuits against Bard in state and federal courts across the country, which were

ultimately consolidated into the Bard MDL and assigned to the United States District

2 The ALO Petitioners have not appealed to this Court from two of the consolidated

appeals before the United States Court of Appeals for the Fourth Circuit, Nos. 191856 and 19-1857. Each of these appeals are now moot. These appeals were taken

from orders entered in In re: Cook Medical Inc. Pelvic Repair System Products

Liability Litig., S.D.W. Va. Case No. 2:13-md-02440 (“Cook”); and In re: Neomedic

Pelvic Repair System Products Liability Litig., S.D.W. Va. Case No. 2:14-md-02511

(“Neomedic”). The Cook MDL closed on August 6, 2019. Cook, Doc#:751, Order, p. 1;

PageID#:14194. The Neomedic MDL closed on March 12, 2018. Neomedic, Doc#:78,

Pretrial Order#:20, p. 16; PageID#:514. All common-benefit funds on hand as of July

25, 2019, have been disbursed consistent with the District Court’s Allocation Order.

Apx., p. 00014. Significant funds are still being assessed in the other five MDLs now

on appeal, the first tranche of which is subject to disbursement on or before January

15, 2020. Id.

Court for the Southern District of West Virginia. Similar lawsuits against other TVM

manufacturers were also consolidated and assigned to that same court in the AMS,

Boston Scientific, Ethicon, Coloplast, Cook, and Neomedic MDL proceedings.

Although each MDL retained its separate status throughout the proceedings, the

District Court generally handled them collectively, with all MDLs subject to the same

orders and directives.

Petitioner ALO was one of over eighty law firms representing women in the

MDL lawsuits who had suffered debilitating complications from the TVM implants.

But ALO’s early introduction and extensive involvement in the proceedings had

differed markedly from the other firms in several important respects.

approximately May 2011, Petitioner Benjamin Anderson, Esq. (“Attorney Anderson”)

had devoted his entire practice to this effort against the well-funded legal defense

that had been organized by the TVM product manufacturers. Affidavit of Benjamin

H. Anderson, Esq. dated April 9, 2018 (“Anderson Aff.”), ¶ 5(a).3 ALO was one of the

first to undertake the mass-tort effort that was originally consolidated in the New

Jersey state court system against Ethicon, a division of Johnson & Johnson. Id., pp.

13-14.

Modern federal jurisprudence has recognized that under principles of equity,

special compensation is owed to the pioneering attorneys who have served the

3 This document, among others cited without “PageID#” references in this application,

would have been filed as a part of an in camera review of the FCC materials that was

ordered by the District Court.

Doc#:7639, Pretrial Order#:332, pp. 2-3;

PageID#:188217-18.

common benefit of all by developing and establishing successful claims for recovery

in mass tort litigation. Mills v. Elec. Auto-Lite Co., 396 U.S. 375, 391-92 (1970);

Boeing Co. v. Van Gemert, 444 U.S. 472, 478 (1980). Typically in MDL proceedings,

an order is issued requiring a small percentage of every settlement or judgment

recovery to be paid into a common benefit fund to be distributed by the court to the

deserving law firms near the conclusion of the litigation. See, e.g., In re Genetically

Modified Rice Litig., 835 F.3d 822, 825-26 (8th Cir. 2016); In re Avandia Mktg., Sales

Practices & Prod. Liab. Litig., 617 F. App'x 136, 141 (3d Cir. 2015).

In anticipation of common benefit awards in the instant proceedings, a written

agreement was entered on August 28, 2012, between representatives of both the New

Jersey proceedings and the recently formed Federal Ethicon MDL action (S.D.W. Va.

Case No. 2:12-md-02327) that required the state court common benefit work to be

afforded full and fair consideration in the common-benefit fee-allocation process. The

consolidated New Jersey action then merged into the federal MDL proceedings, in

which the right to compensation for state-court common-benefit work already

performed was judicially recognized.

Doc#:282, Pretrial Order#:18, pp. 11-12;

PageID#:3892-93.

The District Court followed the customary practice of establishing Respondent

FCC, which was comprised of eight attorneys representing the TVM plaintiffs and a

single

non-attorney

designee.

Doc#:4044,

Pretrial

Order#:262,

pp.

2-5;

PageID#:141778-81. The FCC’s responsibility was “to make recommendations to the

Court for reimbursement of costs and appointment of attorneys’ fees for common

benefit work and any other utilization of the funds.” Doc#:1845, Pretrial Order#:211,

p. 5; PageID#:23550. The Court remained obligated, however, to closely scrutinize

the committee’s proposals, particularly given the inherent conflict of interest that was

present. In re High Sulfur, 517 F.3d at 227.

What was unconventional, however, was the District Court’s unconditional

requirement that attorneys seeking such common-benefit compensation forfeit

specified rights to appellate review. A definition of “Participating Counsel” was

fashioned and adopted in each of the seven MDL proceedings that included an

acknowledgement “that the court will have final, non-appealable authority regarding

the award of fees, the allocation of those fees and awards for cost reimbursements in

this matter.” See Doc#:282, Pretrial Order#:18, pp. 5-6; PageID#:3886-87. No option

was afforded that would allow a firm to secure payment for its common-benefit

contributions while retaining the right to further review. By that point in time, ALO

had already generated several thousand hours of such work in the consolidated New

Jersey proceedings.

Anderson Aff., p. 14, ¶ 5(p)(4) (noting that 2,643 hours of

common-benefit work had been conducted in New Jersey by February 7, 2012).

These seven case-management orders were expressly endorsed by several of

the attorneys who had been performing common-benefit work, nearly all of whom

were either appointed to the FCC or later rewarded with generous fee allocations.

ALO’s electronic signature appeared on just two of the entries, which were adopted

in the Cook and Neomedic MDLs that have now closed without producing significant

common-benefit contributions. Neither of these moot MDLs have been included in

this appeal. ALO was not asked to, and did not, consent to the appeal waiver edicts

in the other five MDLs at issue in this Petition.

The District Court also established the position of External Review Specialist

(ERS), which was later filled by former Missouri State Court Judge Daniel J. Stack

(“Stack”). Doc#: 404, PTO#:262, p. 9; PageID#:141785. Notably, he has received

heavy criticism from a different district court judge while serving in the same

capacity in a separate MDL proceeding, who rejected Stack’s report and

recommendations “due to several structural and procedural flaws.” In re Syngenta

Mass Tort Actions, No. 3:15-CV-01221-NJR, 2019 WL 3887515, at *5 (S.D. Ill. Aug.

19, 2019). The decision described Stack’s approach as a “totally unprecedented

methodology that runs contrary to Common Benefit principles” as well as the prior

orders that had been issued. Id. at *5 n.4.

During the course of Respondent FCC’s review of the eighty-nine participating

law firms’ time and expense submissions, there was nothing “external” about ERS

Stack’s involvement in the effort. According to the Chairperson, he attended and

participated in “almost all” of the FCC’s closed-door meetings. Declaration of Henry

G. Garrard III, dated November 19, 2018 (“Garrard Dec.”), p. 20, ¶ 127. Stack even

served as the FCC’s advocate at times, such as when he issued a lengthy and terse

response just one day after ALO’s seemingly unobjectionable request to be allowed to

review the time and expenses data that purportedly justified the lopsided fee

allocations.

Respondent FCC’s Preliminary Recommendations were released on September

13, 2018, which proposed that its eight member firms should be paid almost precisely

two-thirds (66%) of the Fund that was supposed to be shared with ALO and eightyfour other applicants.4

See FCC Preliminary Written Recommendation dated

September 13, 2018, App. 174-78.5 Although their own time and expense entries were

never openly disclosed, simple calculations revealed that they were proposing to pay

themselves an average hourly rate of $783.02, while the average for the other firms

was just $268.22.

Acting as a de facto member of the FCC, ERS Stack immediately signed and

endorsed the FCC’s Preliminary Recommendations before any objections could be

raised. FCC Preliminary Written Recommendation dated September 13, 2018, App.

178.

While minor adjustments were made to the initial figures, neither the

staggering two-thirds recovery nor the nearly three-to-one disparity in the hourly

rates were significantly altered in the FCC’s Final Written Recommendations of

November 20, 2018. FCC Final Written Recommendation, App. 58-173. The FCC did

disclose at that time that the allocations were no longer founded upon the detailed

time entries that the attorneys had been required to submit to the court-appointed

4 While ALO and the other non-member firms were never allowed to review the FCC

members’ own time entries and expense receipts, Petitioners’ counsel were still able

to prepare spreadsheets detailing the total allocations that were recommended by the

FCC, which were attached to Anderson Law Office’s Objections to the Preliminary

Recommendations of the Common Benefit Fee and Cost Committee dated October 5,

2018, at Apx. 0001-6.

5 Citations to the appendix to the petition for a writ of certiorari will be made using

the same “App.” notation.

accountant. According to the Chairperson’s sworn statement: “The FCC did not use

an hourly rate method in arriving at its percent allocation for each applicant firm.”

Garrard Dec., p. 33, ¶ 223 (emphasis added). Instead, “the Chairperson proposed a

series of awards utilizing a percentage of the funds for each of the applicant firms.”

Id., p. 30, ¶ 201. This was the same purely subjective methodology that Chief District

Judge Rosenstengel had found to be unacceptable in her criticism of ERS Stack’s

report in the other MDL proceeding. In re Syngenta, 2019 WL 3887515, at *3-5.

The Chairperson suggested that a lodestar analysis served some secondary

role, commenting that “the FCC performed a review of the effective hourly rates

resulting from its percentage award set forth in its Preliminary Written

Recommendation.” Garrard, Dec., p. 33, ¶ 223. But the same sworn statement had

expressed: “The FCC did not request any information regarding billing rates utilized

by applicant firms.”

Id., p. 31, ¶ 207.

Rather obviously, billing rates are

indispensable for any meaningful lodestar computation.

See Pennsylvania v.

Delaware Valley Citizens' Council for Clean Air, 478 U.S. 546, 565 (1986) (“A strong

presumption that the lodestar figure—the product of reasonable hours times a

reasonable rate—represents a ‘reasonable’ fee is wholly consistent with the rationale

behind the usual fee-shifting statute[.]”).

On January 30, 2019, District Judge Goodwin approved the FCC’s requests in

the seven MDLs for five percent of the recoveries realized to date—totaling $7.25

billion—to be disbursed for common-benefit work performed and expenses advanced.

In re Cook Med., Inc., Pelvic Repair Sys. Prod. Liab. Litig., 365 F. Supp. 3d 685

(S.D.W. Va. 2019). There was no suggestion in the ruling that the Court intended to

follow the FCC’s lead and abandon the time data as a basis for calculating the

reasonable allocations to the applicant attorneys.

To the contrary, a “blended”

approach was adopted in which District Judge Goodwin would “verify the

reasonableness of the 5% award with a lodestar cross-check.” Id. at 695-96, citing In

re Vioxx Prod. Liab. Litig., 760 F. Supp. 2d 640, 652 (E.D. La. 2010).

Given that Respondent FCC had forsaken the traditional lodestar/multiplier

calculations in favor of the percentage-of-the-funds approach that ERS Stack had

attempted to employ in In re Syngenta, 2019 WL 38887515, at *3, it came as no

surprise that he approved the FCC’s Final Recommendations with only minor

adjustments on March 11, 2019. ERS Recommended Allocation, App. 19-57. The

eight member firms’ collective share remained close to two-thirds of the fund, while

the nearly three-to-one disparity in hourly rates ($738.02 vs. $268.22) was left intact.

See Doc#:7718-2, Fee and Expense Grid; PageID#:189431-34.

The following day, the District Court directed the FCC to submit the original

and adjusted time entries, the attorneys’ objections, and additional information for

an in camera review. Doc#:7639, Pretrial Order#:332, pp. 2-3; PageID#:188217-18.

Petitioner ALO and several other non-member firms filed their comprehensive

objections to the FCC’s Final Recommendations on March 26, 2019. ALO observed

inter alia: “It is not realistic to expect that all the flaws and errors in the fund

allocation process can be identified and substantiated if the submitted time and

expense

data

remains

concealed.”

Doc#:7718,

ALO’s

Objections,

PageID#:189399, App. 197.

In the seventy-five-page Omnibus Response that

followed, the FCC members continued to insist that the allocations should be

approved without any disclosure to objectors of the FCC members’ own time and

expense entries and supporting data.

Doc#:7816, FCC’s Omnibus Response;

PageID#:190025.

On April 22, 2019, Petitioner ALO formally sought a hearing to present

additional evidence and argumentation upon new criticisms that the FCC had leveled

against the firm’s billing statements in the Omnibus Response. Doc#:7896, Motion

to Schedule Hearing; PageID#:198956, App. 224-232. Respondent FCC vigorously

opposed the request. Doc#:8005, FCC’s Response; PageID#:58197.

Despite the parties’ submission of over 150 pages of briefing, the District Court

remarked in the decision that was issued on July 25, 2019, that there had been “very

few objections[.]” Doc#:8453, Pretrial Order#:342, p. 1; PageID#:205790, App. 11.

The Court summarily overruled all objections in a six-page ruling without specifically

addressing a single one. Allocation Order, Apx. p. 0009-14. And the Court furnished

no indication that it had performed a lodestar cross-check with the eighty-nine

applicant firms’ submitted time entries multiplied by reasonable hourly rates as

promised in the January 30, 2019, ruling. See Id.; In re Cook Med., Inc., 365 F. Supp.

3d at 695-96.

As permitted by Fed. R. Civ. P. 59(e), Petitioner ALO requested on July 30,

2019, that the District Court modify the final order to reflect that there had been no

waiver of any rights to appeal because (1) the firms had been justifiably relying upon

prior orders requiring the fee allocations to be based at least in part upon objectively

verifiable lodestar calculations; and (2) no viable alternatives had been afforded to

firms like ALO, which were already heavily invested in common benefit work.

Doc#:8460,

Motion

Partially

Alter,

Amend,

Reconsider

Judgment;

PageID#:205873. Respondent FCC’s opposition followed two days later. Doc#:8465,

FCC’s Response to Motion to Partially Alter, Amend, or Reconsider Judgment;

PageID#:205916. The Motion was denied the next day. Doc#:8470, Memorandum

Opinion and Order; PageID#:205960.

On August 2, 2019, Petitioner ALO appealed the District Court’s decisions in

all seven MDLs to the United States Court of Appeals for the Fourth Circuit.

Doc#:8472, ALO Notice of Appeal; PageID#:205966.

The seven appeals were

consolidated seven days later under case numbers 19-1849(L), 19-1850, 19-1851, 191853, 19-1855, 19-1856, and 19-1857. Wasting no time, Respondent FCC filed a

Motion to Dismiss that same afternoon demanding enforcement of the District

Court’s appeal waiver orders.

Doc#:4.

ALO opposed this request on multiple

grounds, and the FCC submitted a Reply. Doc#:14, 20.

On September 23, 2019, the United States Court of Appeals for the Fourth

Circuit summarily dismissed all seven appeals. The order stated, in its entirety:

Upon review of submissions relative to the motions to

dismiss and the motion to stay pending appeal, the Court

grants the motions to dismiss and denies the motion for

stay pending appeal.

Entered at the direction of Judge Agee, and with the

concurrence of Judge King and Judge Diaz.

Doc#:24, Order, p. 5, App. 5.

On December 18, 2019, the ALO Petitioners sought a writ of certiorari from

this Court.

REASONS FOR GRANTING THE STAY

“The practice of the Justices has settled upon three conditions that must be

met before issuance of a § 2101(f) stay is appropriate. There must be a reasonable

probability that certiorari will be granted (or probable jurisdiction noted), a

significant possibility that the judgment below will be reversed, and a likelihood of

irreparable harm (assuming the correctness of the applicant's position) if the

judgment is not stayed.” Barnes v. E-Sys., Inc. Group Hosp. Med. & Surgical Ins.

Plan, 501 U.S. 1301, 1302 (1991) (Scalia, J., in chambers); Lucas v. Townsend, 486

U.S. 1301, 1304 (1988) (Kennedy, J., in chambers).

A REASONABLE PROBABILITY THAT CERTIORARI WILL BE

GRANTED AND THE PROSPECTS FOR REVERSAL

This Court has been asked to resolve whether a district court possesses the

authority to require attorneys to waive their appeal rights before they will be

permitted to vindicate a legal or equitable right in that court. Federal courts have

properly enforced waivers of appeal rights that, for example, have been freely entered

in binding settlement arrangements, arbitration agreements, and criminal pleas.

But in contrast to those acceptable forms of appeal waivers, the District Court below

embarked upon an unprecedented approach: It made a forfeiture of appellate review

mandatory for any law firm seeking a share of the Common Benefit Fund. There

were no exceptions. The absence of any viable alternatives was particularly and

acutely problematic for the ALO Petitioners, which had already devoted considerable

common-benefit time to the consolidated TVM proceedings in New Jersey. Had the

firm refused to acquiesce to the District Court’s “take-it-or-lose-it” edict, Attorney

Anderson would not have qualified as “participating counsel” and would have

received nothing for the effort he had already expended.

As a result of the enforcement by the District Court and the Court of Appeals

of the appellate waiver provisions, several novel issues have been raised that are

subsumed within the primary question presented. Broadly, what are the elemental

requirements for an enforceable waiver of the right to appellate review in federal

proceedings? May assent to a forfeiture of appeal rights be implied from mere

acquiescence to a district court’s order? Or must an express and knowing consent to

a forfeiture of appeal rights be established either through a valid written instrument

or in open court? Assuming for the sake of argument that there has been a valid

waiver, must the scope of an implied or involuntary waiver of appeal rights be

narrowly construed against the forfeiture? Is there an enforceable, implied guarantee

in an otherwise valid waiver of appeal rights that the federal court will still abide by

its own rulings in the case as well as basic principles of due process? Each of these

questions has come to this Court because, for seemingly the first time in American

jurisprudential history, a federal district court has managed to order that its own

rulings may not be appealed, and a federal court of appeals has blessed the exercise.

This is not an appeal that requires a fact-bound application of prior case law

on appellate waivers. See, e.g., Philip Morris USA Inc. v. Scott, 561 U.S. 1301, 1302

(2010) (Scalia, J., in chambers) (“I would not be inclined to believe that this Court

would grant certiorari to consider these fact-bound contentions that may have no

effect on other cases.”). Although the appeal to the United States District Court for

the Fourth Circuit would have explored the numerous factual and legal objections

lodged to the Allocation Order, those matters have not been ruled upon because the

ALO Petitioners have been denied any appeal at all.

Rather, the appeal before this Court presents solely unanswered and novel

legal questions. And if the orders of the lower courts are permitted to stand, the

consequences will be grave. As but one example, a court following the approach of

the District Court below may develop standard pre-trial orders directing that by filing

a motion to suppress, a criminal defendant agrees to become a “participating

defendant,” which has been defined as a person who has waived their right to appeal

all decisions on motions to suppress. Or a like-minded court could refuse to permit

removal from state court unless the defendant agrees that there will be no appellate

review of any rulings on dispositive motions. The mechanism employed by the

District Court below simply closes the doors of the courthouse to any who refuse to

close the doors of the appellate courts on themselves. And such an order can always

be justified with Respondent FCC’s backward notion that they “avoid the potential

for expensive and prolonged disputes with disgruntled or disappointed” parties.

Doc#:4, Appellee’s Motion to Dismiss Consolidated Appeals dated August 9, 2019

(“FCC’s Motion to Dismiss”), p. 9.

In light of the novelty and gravity of the issues presented by the petition for a

writ of certiorari filed by the ALO Petitioners, there is “a reasonable probability that

certiorari will be granted” and “a significant possibility” that the judgment of the

United States Court of Appeals for the Fourth Circuit will be reversed. Barnes, 501

U.S. at 1302.

THE LIKELIHOOD OF IRREPARABLE HARM

The ALO Petitioners stand to suffer irreparable harm if the Fund is disbursed

to the participating firms without any guarantee that the payments can be recouped

if this appeal is wholly or partially successful. The Allocation Order has already been

executed as to “all of the common benefit money on hand as of July 25, 2019,” which

totaled more than $350,000,000.00. Allocation Order, Apx., p. 00014. And yet, the

Common Benefit Fund continues to grow through contribution of assessments in the

five open MDLs. Id. The District Court ordered that seventy-percent of “all future

common benefit money received after July 25, 2019” must be dispersed on a quarterly

basis while the remaining thirty-percent shall be “be held in the common benefit fund

for a final evaluation of common benefit compensation until a further order of the

court.” Id.

If these funds are cast to the wind through the court-ordered quarterly

disbursement and are therefore subject to the disparate financial whims of almost 90

law firms, there will be no obvious legal mechanism to claw these payments back

should this Court agree with the ALO Petitioners that a district court may not order

that the parties must waive their basic right to appeal as a condition for asking for

and receiving the relief to which they are entitled. Put most bluntly, there is a serious

and unacceptable risk that any further disbursements will be gone for good. See also

In re High Sulfur, 517 F.3d at 231 (“[I]mmediate payments erect a serious obstacle

to re-allocating fees, should the court later alter its award. The court, as its order

acknowledges, would be placed in the difficult position of collecting pro rata sums

from dozens of attorneys. Immediate payment essentially discouraged the court from

trying to unscramble an unfair or erroneous initial allocation.”).

Although financial loss is not typically considered to qualify as irreparable

harm, Justice Antonin Scalia once observed that if “expenditures cannot be recouped,

the resulting loss may be irreparable.” Scott, 561 U.S. at 1304; see also Mori v.

Internat’l Brotherhood of Boilermakers, 454 U.S. 1301, 1303 (1981) (Rehnquist, J., in

chambers) (remarking that escrowed funds would be difficult to recover if they were

disbursed in an opinion announcing the decision to stay a mandate of the United

States Court of Appeals for the Ninth Circuit).

These are not the typical

circumstances, identified by Justice Scalia, in which “money can usually be recovered

from the person to whom it is paid.” Scott at 1304. A portion of the fund has been

preserved for later equitable adjustments to the allocations ordered by the District

Court, but the flow of funds will eventually cease. Allocation Order, Apx., p. 00014.

The ALO Petitioners have an equitable interest in these specific funds. Mills, 396

U.S. at 391-92; Boeing Co., 444 U.S. at 478. Once these funds have been released and

spent or commingled with the funds of the recipient firms, a remedy may no longer

be possible. It is the irrevocability of the disbursement that warrants a stay. Scott

at 1304-05.

The necessity of securing an immediate stay to forestall irreparable harm was

underscored in an analogous appeal to the United States Court of Appeals for the

Third Circuit from a final award of attorneys’ fees in a “landmark class action” that

had been collected into a Federal MDL. In re Diet Drugs, 582 F.3d 524, 529-30 (3d

Cir. 2009). Hundreds of millions of dollars were allocated in a master settlement to

compensate attorneys, and a common benefit fund was created. Id. at 532. One firm

challenged the allocation on the basis that it treated different classes of firms

differently and it unfairly refunded common benefit assessments to some but not all

firms. Id. at 548-49. When the Court of Appeals considered whether ordering relief

to the appellant was even feasible, it was observed:

Months later, those refunds are not likely to be sitting in

the bank accounts of the law firms that received them. It

seems likely that taxes have been paid, referral counsel has

been compensated, and, generally speaking, the refunds

have, in all or in part, worked their way through the

channels of commerce and, accordingly, would be difficult

for the Court to reclaim.

We also find it significant—and surprising—that

[appellant], who has argued so vigorously that the

allocation is unfair, never sought a stay of the refund

distribution pending appeal. Had [appellant] moved for a

stay, and had the Court granted his motion, the practical

difficulties

associated

with

administering

the

redistribution that he requests would be alleviated.

***

Here, the assessments and fees awarded pursuant to the

Settlement Agreement were maintained in escrow

accounts under the District Court's control. It is therefore

quite possible, perhaps even likely, that the Court would

have waived the bond requirement or required a

substantially reduced bond in this case.

Id. at 551-552. Unlike the Diet Drugs appellants, the ALO Petitioners have promptly

undertaken every effort to avoid an irreparable wasting of the Fund.

Because the common benefit funds may not be recouped if they are disbursed,

there is a significant “likelihood of irreparable harm” if a stay does not issue. Barnes,

501 U.S. at 1302.

NO BOND IS NECESSARY

Extraordinary circumstances are presented that justify a stay without bond

until the appellate process has been completed. “The purpose of requiring the posting

of a supersedeas bond is ‘to preserve the status quo during the pendency of an appeal,

[protecting the winning party] from the possibility of loss resulting from the delay in

execution.’ ” HCB Contractors v. Rouse & Assocs., 168 F.R.D. 508, 512 (E.D. Pa. 1995)

(quoting Schreiber v. Kellogg, 839 F. Supp. 1157, 1159 (E.D. Pa. 1993)); see also

Cayuga Indian Nation of New York v. Pataki, 188 F. Supp. 2d 223, 254 (N.D.N.Y.

2002). The concerns that typically justify such security simply do not exist in a case

such as this, where no judgment at all has been imposed against the appealing party

(i.e., ALO) and the funds in dispute will continue to remain safely preserved in an

interest bearing account managed by a court-designated accounting firm, free from

any threats of waste or dissipation. Allocation Order, Apx., p. 00014. The various

interested law firms have—at most—an equitable claim to the specific funds that

have been held by the District Court to compensate for work done for the common

benefit. Mills, 396 U.S. at 391-92; Boeing Co., 444 U.S. at 478. The only way the

status quo may be maintained is by ensuring that none of those funds are released

until after this Court has had an opportunity to review the petition and issue a writ

of certiorari.

None of the parties possess any interests or potential recoveries beyond those

protected assets. This is precisely the sort of “ ‘alternative means of securing the

judgment creditor's interest’ ” that has justified a stay of execution pending appeal

without a supersedeas bond. Holland v. Law, 35 F. Supp. 2d 505, 506 (S.D.W. Va.

1999) (quoting Grand Entertainment Group, Ltd. v. Star Media Sales, Inc., No. 865763, 1992 WL 114953, at *1-2 (E.D.P.A. May 18, 1992)). As long as the funds in

dispute remain protected, the participating law firms will be “as well off during the

appeal as [they] would be if [they] could execute at once, but no better off.’ ” Alexander

v. Chesapeake, Potomac, and Tidewater Books, Inc., 190 F.R.D. 190, 193 (E.D. Va.

1999) (quoting Olympia Equip. Leasing Co. v. W. Union Tel. Co., 786 F.2d 794, 800

(7th Cir. 1986) (Easterbrook, J., concurring)). If the ALO Petitioners are ordered to

post a supersedeas bond, on the other hand, the interests of the parties will be secured

by more funds than the parties are collectively entitled to, and in that sense the bond

would be bald surplusage.

CONCLUSION

For the foregoing reasons, the application for a stay pending the disposition of

a petition for a writ of certiorari should be granted without the requirement of a

supersedeas bond.

Respectfully Submitted,

/s Paul W. Flowers