In Downing v. Riceland Foods, Inc., Case No. 4:13-CV-321 (E.D. Mo. Mar. 19, 2015), Judge Catherine D. Perry of the U.S. District Court for the Eastern District of Missouri certified a class of former MDL plaintiffs and plaintiffs’ counsel who brought suit against one of their co-plaintiffs seeking compensation for MDL work product that the co-plaintiff had used in other litigation. While not a workplace class action, this case serves as a warning that, in certain circumstances, employers could be liable for the legal fees and costs of co-defendants or co-plaintiffs. It also provides employers with a potential tool to recover attorneys’ fees from co-defendants or co-plaintiffs if they use common work product in other litigation.
After Bayer introduced genetically modified rice into the United States rice supply, rice farmers and others involved in the rice business brought more than 200 suits against Bayer and other entities, including Riceland Foods, in state and federal courts. Id. at 2. Riceland Foods filed cross-claims against Bayer and filed two other suits – one in state court and one in federal court – against Bayer. Id. at 3.
The federal cases were consolidated in an MDL. Id. at 2. To make the MDL manageable, the MDL court appointed lead counsel and set up a trust from which attorneys’ fees and costs would be paid to all the MDL plaintiffs’ counsel in the event of a recovery against Bayer. Id. at 3. The order did not apply to recoveries in state court cases absent consent or an order by the state court. Id. Under the order, Riceland Foods was to pay 10% of any recovery against Bayer to the trust. Id.
Over the course of five years, the MDL plaintiffs’ counsel drafted a consolidated complaint, opposed Bayer’s dispositive motions, reviewed more than 2.8 million pages of documents, and took and defended a total of 167 depositions. Id. at 3-4. They then conducted three bellwether trials, all of which resulted in plaintiffs’ verdicts. Id. at 4.
In separate state court litigation, Riceland Foods received $92 million from Bayer in a settlement. Id. at 3. The Downing plaintiffs sued Riceland Foods to recover ten percent of that recovery on unjust enrichment and quantum meruit theories, claiming that Riceland Foods used the work performed by the MDL plaintiffs’ counsel to achieve that settlement. Id. at 3, 5. They sought to certify, as a class, all persons and entities that provided or paid for services in the MDL action. Id. at 5-6.
The Court’s Ruling
The Court certified the proposed class action, stating that “[t]his action is uniquely suitable for class certification.” Id. at 2. The Court first found that the proposed class was numerous because it consisted of more than 30 law firms and more than 5,000 MDL plaintiffs. Id. at 7-8.
The Court then found that the proposed class action satisfied the commonality requirement. Id. at 9. Specifically, the Court reasoned that the class’s claims would face the common legal question of whether an unjust enrichment and quantum meruit action could be “based upon the use of an attorney’s work product by a non-client.” Id. at *8-9.
The Court found that typicality was established because “each of the proposed class members would have essentially the same grievances as the named plaintiffs – that Riceland had unjustly benefitted from work for which they had paid or provided.” Id. at *10. The Court also found that the class representatives and counsel were adequate. Id.
The Court then turned to deciding whether Rule 23(b)(3)’s requirements – that common questions predominate over individual questions and that class resolution is superior to other available resolution methods – were met. The Court held that common questions would predominate as to both the unjust enrichment and quantum meruit claims because the class members jointly incurred expenses that conferred benefits on Riceland Foods. Id. at 19. While agreeing that there would need to be “a great number of factual determinations related to [Riceland Foods’s] use of work product and value received,” the Court pointed out that those inquiries would “focus on what Riceland did and what benefit it received” which would be “issues that are common to the class.” Id. at 20.
The Court finally determined that class litigation was superior to other available methods for the fair and efficient adjudication of the controversy. Id. at 21. The Court concluded that the class members did not have an interest in individually pursuing separate actions and that “any difficulties in managing th[e] class action pale in comparison to the alternative.” Id.
Implications For Employers
While this case is not a workplace class action, it serves as both a warning and a notice of a potential opportunity for employers in multi-plaintiff or multi-defendant litigation. It serves as a warning that employers who are co-plaintiffs or co-defendants in cases could be on the hook for attorneys’ fees and expenses when they use work product from that litigation in related litigation. While this case involved a co-plaintiff who recovered money in another lawsuit, the theory of recovery in Downing could apply to the successful defense of a related lawsuit. It also provides notice of a potential opportunity for employers to recover fees and costs from co-defendants and co-plaintiffs when those co-defendants and co-plaintiffs use common work product in related litigation. It further can be used to show that the class action mechanism can be used in such suits if there are enough co-defendants or co-plaintiffs.