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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.


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