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9 Drexel L. Rev. 1 (2016-2017)
How Not to Manage a Common Benefit Fund: Allocating Attorneys' Fees in Vioxx Litigation

handle is hein.journals/drexel9 and id is 7 raw text is: HOW NOT TO MANAGE A COMMON BENEFIT FUND: ALLOCATING ATTORNEYS' FEES IN VIOXX LITIGATION Charles L. Becker,* Shanin Spectert & Thomas R. Klinet ABSTRACT Kline & Specter, P.C. was significantly involved in the multidistrict Vi- oxx litigation and the resulting disputes concerning the allocation of com- mon benefit fees among the plaintiffs' counsel. Based on this experience, the authors discuss how the allocation offees in Vioxx provides lessons in how not to manage a common benefit fund. This Article first reviews the Vioxx litigation and the basic principles of common benefit fee allocation, including the lodestar approach. This Article then discusses how the Vioxx Fee Allo- cation Committee abandoned the lodestar approach in favor of a point sys- tem through which insiders sought to award themselves a lion's share of the common benefit fund. This Article reviews a deal between insiders and cer- tain law firms that resulted in an unauthorized distribution from the settle- ment fund to resolve objections over the size of the Vioxx common benefit fund. The Article argues that common benefit fees should be distributed ac- cording to the well-accepted lodestar approach, rather than an ad hoc point system created by self-interested parties, and that common benefit money should not be distributed through unauthorized deals. It concludes that Mul- tidistrict Litigation judges should closely supervise the actions of court-ap- pointed counsel to make sure that decisions around the size and distribution of common-benefit funds are transparent, jurisprudentially sound, and fun- damentally fair. * Partner, Kline & Specter, P.C.; Law Clerk to the Honorable Sandra L. Lynch, United States Court of Appeals for the First Circuit, 1997-1998; J.D., Yale University, 1997; B.A., Williams Col- lege, 1992. t Founding Partner, Kline & Specter, P.C; Adjunct Professor of Law, University of Pennsylvania Law School; Lecturer in Law, Stanford Law School; Lecturer in Law, UC Berkeley School of Law; Lecturer in Law, UC Hastings College of Law; J.D., University of Pennsylvania, 1984; LL.M., Cambridge University, 1984; B.A., Haverford College, 1980. * Founding Partner, Kline & Specter, P.C.; Board of Advisors Chairman, Drexel University Thomas R. Kline School of Law; Law Clerk to the Honorable Thomas W. Pomeroy, Jr., Justice of the Supreme Court of Pennsylvania, 1978; J.D., Duquesne University, 1978; M.A., Lehigh University 1971; B.A., Albright College, 1969. 1

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