The Clerk of Court is directed to amend the caption to *

appear as set forth in this opinion.

 The Honorable Lewis A. Kaplan, United States District **

Judge for the Southern District of New York, sitting by

designation.

07-3815-cv; 07-5539-op

In re: Zyprexa Products Liability Litigation

1 UNITED STATES COURT OF APPEALS

2 FOR THE SECOND CIRCUIT

3 August Term, 2008

4 (Argued: March 12, 2009 Final Submission: June 17, 2009

5 Decided: February 3, 2010

6 Corrected: February 8, 2010)

7 Docket Nos. 07-3815-cv, 07-5539-op

8 -------------------------------------

9 IN RE: ZYPREXA PRODUCTS LIABILITY LITIGATION

10 *******************************

11 MULLIGAN LAW FIRM, 

12 Appellant,

13 -v14 ZYPREXA MDL PLAINTIFFS' STEERING COMMITTEE II and 

15 ELI LILLY AND COMPANY,

16 Appellees.*

17 -------------------------------------

18 Before: McLAUGHLIN and SACK, Circuit Judges, and KAPLAN,

19 District Judge.**

20 Appeal from orders of the United States District Court

21 for the Eastern District of New York, No. 04-MD-01596 (Jack B.

22 Weinstein, Judge). This appeal concerns a set of orders by the
2

1 district court regarding attorney compensation in this ongoing

2 multidistrict litigation. We conclude that we do not have

3 jurisdiction to hear this interlocutory appeal and that it is not

4 appropriate for us to grant a writ of mandamus. 

5 Appeal dismissed; application for a writ of mandamus

6 denied. Judge Kaplan concurs in a separate opinion.

7 ROBERT J. LACK, Friedman Kaplan Seiler &

8 Adelman LLP, New York, NY (Eric

9 Roberson, The Mulligan Law Firm, Dallas,

10 TX, and William David George and Earnest

11 W. Wotring, Connelly, Baker, Wotring

12 LLP, Houston, TX, on the brief) for

13 Appellant.

14 WILLIAM M. AUDET, Audet & Partners, LLP,

15 San Francisco, CA (James M. Shaughnessy,

16 Milberg LLP, New York, NY, on the brief)

17 for Appellee Zyprexa MDL Plaintiffs'

18 Steering Committee II.

19 ANTHONY VALE, Pepper Hamilton LLP,

20 Philadelphia, PA (Nina M. Gussack,

21 Philadelphia, PA, and Samuel J. Abate,

22 Jr., New York, NY, on the brief)

23 for Appellee Eli Lilly and Company.

24 PER CURIAM:

25 This interlocutory appeal concerns the attorney

26 compensation structure established by the district court in this

27 ongoing multidistrict litigation ("MDL"), and the applicability

28 of that compensation structure to the Mulligan Law Firm

29 ("Mulligan"). Mulligan represents more than two thousand

30 plaintiffs in upwards of seventy cases that have been transferred

31 by the Judicial Panel on Multidistrict Litigation to the United

32 States District Court for the Eastern District of New York (the
3

1 "MDL court" or the "district court"), where they are being

2 considered alongside many similar cases. Mulligan asserts that

3 the federal courts do not have jurisdiction over sixty-one of

4 these cases, all of which were originally filed in various state

5 courts, removed to federal courts, and then transferred to the

6 MDL court. It has therefore filed motions in the MDL court to

7 remand the cases to the state courts from which they came. 

8 While the motions to remand were pending, the district

9 court instituted several attorney compensation protocols. 

10 Included were a cap on attorneys' fees and the creation of a

11 common benefit fund -- generated by a three percent set-aside

12 from funds from all settlements and judgments -- to compensate

13 members of the appellee Zyprexa MDL Plaintiffs' Steering

14 Committee II (the "PSC II") for their work on behalf of all of

15 the MDL plaintiffs. 

16 In a pair of orders dated August 17, 2007, the MDL

17 court (Jack B. Weinstein, Judge) ruled that all of Mulligan's

18 cases that were pending in that court were subject to these

19 attorney compensation strictures. The court also enjoined

20 Mulligan from making any disbursements from a fund that it

21 maintained (the "Qualified Settlement Fund") until a fund

22 administrator had certified that the protocols had been adhered

23 to.

24 Mulligan appeals from the August 17 orders. The firm

25 asserts: 1) that the district court lacks jurisdiction over the

26 sixty-one cases for which remand motions are pending, and that it
4

1 therefore also lacks jurisdiction to impose a fee cap and a set2 aside requirement with respect to those cases, and 2) that the

3 court abused its discretion in sua sponte placing a cap on

4 attorneys' fees in all of the Zyprexa cases pending in the MDL

5 court. 

6 The PSC II and Eli Lilly and Company ("Eli Lilly"), the

7 manufacturer of the drug Zyprexa and the defendant in the

8 underlying litigation, have moved to dismiss this interlocutory

9 appeal. They assert, inter alia, that we lack jurisdiction to

10 hear it. Mulligan disagrees. Mulligan further argues that if we

11 conclude that we do not have such jurisdiction, we should grant

12 its petition for mandamus relief with respect to the sixty-one

13 cases over which, it asserts, the district court lacks

14 jurisdiction.

15 We conclude that we do not have jurisdiction to hear

16 this appeal, and that mandamus relief is unwarranted. We

17 therefore dismiss the appeal.

18 BACKGROUND

19 The multidistrict litigation underlying this appeal

20 consists of hundreds of lawsuits brought by thousands of

21 plaintiffs against Eli Lilly, which manufactures the drug

22 Zyprexa. Zyprexa is an antipsychotic medication that has been

23 approved by the Food and Drug Administration to treat

24 schizophrenia and bipolar disorder. Eli Lilly had been the

25 subject of many lawsuits based on allegations that Zyprexa causes

26 diabetes. 
5

1 In April 2004, thousands of Zyprexa cases that were

2 pending against Eli Lilly were transferred to the United States

3 District Court for the Eastern District of New York -- the MDL

4 court -- pursuant to an order of the Judicial Panel on

5 Multidistrict Litigation. Transfer Order, In re Zyprexa Prods.

6 Liab. Litig., 314 F. Supp. 2d 1380 (J.P.M.L. 2004). A group of

7 lawyers was established as the Plaintiffs' Steering Committee to

8 help prosecute the cases in the MDL court. That litigation was

9 settled in late 2005. See In re Zyprexa Prods. Liab. Litig., No.

10 04-MD-1596, 2005 WL 3117302, 2005 U.S. Dist. LEXIS 29071

11 (E.D.N.Y. Nov. 22, 2005). A second Plaintiffs' Steering

12 Committee (the "PSC II") was then established to help prosecute

13 the many new Zyprexa cases that had been filed. 

14 As part of this second wave of Zyprexa litigation,

15 Mulligan, a Dallas-based law firm, filed scores of cases

16 involving thousands of plaintiffs in state and federal courts

17 throughout the United States. Many of the state-court cases were

18 removed by Eli Lilly to federal court and then transferred to the

19 MDL court. Mulligan asserts that sixty-one of those cases --

20 brought by more than one thousand plaintiffs -- were improperly

21 removed, and that the federal courts do not in fact have

22 jurisdiction over them. In 2006, Mulligan filed motions to

23 remand these cases to state court. The motions were pending at

24 all times relevant to this appeal.

25 In an order dated March 28, 2006, the district court

26 established the following fee restrictions for the Zyprexa
 When this appeal was briefed, the relevant cases were all 1

still pending before the district court, and the settlement

6

1 litigation: 1) all attorneys' fees for claims of less than $5,000

2 were capped at no more than twenty percent of the client's

3 recovery; 2) all other attorneys' fees were capped at thirty-five

4 percent of the client's recovery; and 3) four special settlement

5 masters, whom the court had appointed to oversee settlement

6 negotiations and administer settlement agreements, were given

7 discretionary authority to order reductions or increases of fees

8 down to thirty percent or up to thirty-seven and one-half percent

9 depending on the circumstances. 

10 In an order dated December 5, 2006, the district court

11 granted in part a motion by PSC II to establish a common benefit

12 fund to compensate PSC II attorneys for their "significant

13 discovery work." The court ordered a set-aside equal to three

14 percent of judgments and settlements in favor of the plaintiffs

15 in any of the cases in the MDL court, including those for which

16 remand motions were pending, to be paid into the common benefit

17 fund. The court denied PSC II's motion, however, with respect to

18 cases that were at that time in state court. 

19 At the end of 2006 or the beginning of 2007, Mulligan

20 reached a tentative settlement of all of the MDL cases against

21 Eli Lilly in which it represents the plaintiffs. The settlement

22 is contingent on certain conditions being fulfilled, including,

23 with respect to each case, the individual approval of the

24 plaintiff or plaintiffs that Mulligan represents.1
agreement was tentative. Since oral argument, we have received a

communication from Mulligan implying that at least some of the

individual cases at issue are now in the Indiana state court

system, where the distribution of settlement proceeds has begun. 

See Letter from Robert J. Lack to Clerk of Ct. (June 17, 2009). 

Neither party has explained the chain of events that led to this,

nor have the parties offered any arguments regarding the possible

impact of this development on the case at hand. Nor are we aware

of the exact status of all (or, indeed, any) of the sixty-one

individual cases, originating not just in Indiana but also in

California and New Jersey, that underlie this appeal. We

therefore address only the arguments that are before us and the

facts as they are set forth in the record on appeal.

7

1 At a status conference on June 22, 2007, Mulligan

2 advised the district court of the tentative settlement and

3 inquired of the court as to the status of the fee cap and the

4 common benefit fund. The court responded with a pair of orders

5 dated August 17, 2007, and filed August 23, 2007. The first

6 noted that although Mulligan's contracts with its plaintiffs call

7 for a fee of forty percent of recovery, the firm was nonetheless

8 bound by the March 2006 order and the cap on attorneys' fees

9 there instituted. The second order rendered all of Mulligan's

10 cases pending before the MDL court, including the cases for which

11 motions to remand remained pending, subject to the March and

12 December 2006 orders. The second order therefore enjoined

13 Mulligan from making any disbursements from the Qualified

14 Settlement Fund until a fund administrator had certified that

15 there had been a segregation of funds representing both the

16 amount of fees sought by Mulligan in excess of the fee cap, and

17 the three percent set-aside for the common benefit fund. 

18 Mulligan appeals from both of the August 17, 2007

19 orders. 
 Mulligan explicitly waives any assertion of jurisdiction 2

under 28 U.S.C. § 1291. See Appellant's Reply Br. at 14 ("The

steering committee argues that this case is not appealable under

28 U.S.C. § 1291 because the MDL court has not entered a final

judgment. The Mulligan Firm agrees. As the Mulligan Firm said

in its opening brief, the only appellate jurisdiction is under 28

U.S.C. § 1292(a).") (footnotes omitted). We therefore do not

consider whether we have jurisdiction to entertain this appeal

under it. 

8

1 DISCUSSION

2 I. Jurisdiction

3 Mulligan argues that we have jurisdiction over this

4 appeal under 28 U.S.C. § 1292(a), which confers on the federal 2

5 courts of appeals jurisdiction over, inter alia, "[i]nterlocutory

6 orders of the district courts of the United States . . .

7 granting, continuing, modifying, refusing or dissolving

8 injunctions, or refusing to dissolve or modify

9 injunctions . . . ." Id. § 1292(a)(1). 

10 "As a general matter we have interpreted § 1292(a)(1)

11 to authorize an appeal only from an injunctive order that gives,

12 or aids in giving, substantive relief sought in the lawsuit in

13 order to preserve the status quo pending trial. We have held

14 nonappealable under § 1292(a)(1) orders that were unrelated to

15 the substantive issues of the litigation and that instead

16 regulated, or purported to regulate, such matters as pretrial

17 discovery and disclosure." Bridge C.A.T. Scan Assocs. v.

18 Technicare Corp., 710 F.2d 940, 943 (2d Cir. 1983) (citations

19 omitted); cf. Polymer Tech. Corp. v. Mimran, 975 F.2d 58, 64 (2d

20 Cir. 1992) ("An order awarding interim fees during the course of

21 litigation is not an injunctive order subject to interlocutory
 It appears that this is not entirely true, insofar as the 3

settlement remains tentative for at least some plaintiffs. While

some of the settlement proceeds have already been distributed in

part, see Letter from Robert J. Lack to Clerk of Ct. (June 17,

2009), the claims of other plaintiffs remain unresolved,

see Certification of Settlement Administrator at 2, Cope v. Eli

Lilly & Co., No. 79D01-0602-CT-14, at 2 (Tippecanoe Super. Ct.,

Ind., June 15, 2009) (referring to cases for which settlement

funds had not yet been approved by Eli Lilly). 

9

1 appeal."). We have been instructed to "approach [section

2 1292(a)(1)] somewhat gingerly lest a floodgate be opened that

3 brings into the exception many pretrial orders." Switz. Cheese

4 Ass'n v. E. Horne's Mkt., Inc., 385 U.S. 23, 24 (1966). 

5 We conclude that the injunction at issue here does not

6 give or aid in giving substantive relief sought in the lawsuit. 

7 Indeed, it does not so much as relate to the substantive issues

8 in the litigation. The only argument Mulligan makes in this

9 regard is a conclusory one: Because the only task that remains

10 in these cases is distribution of the settlement proceeds, and 3

11 because the injunction prevents Mulligan from distributing those

12 proceeds in accordance with its contracts with its clients, the

13 injunction "goes directly to the cases' substantive issues" as

14 they currently stand. Appellant's Br. at 7. Those facts simply

15 do not render the issues substantive.

16 "To qualify as an 'injunction' under § 1292(a)(1), a

17 district court order must grant at least part of the ultimate,

18 coercive relief sought by the moving party." Henrietta D. v.

19 Giuliani, 246 F.3d 176, 182 (2d Cir. 2001). The district court

20 orders here at issue do not relate to the ultimate relief that is

21 sought in this litigation. Indeed, to the extent that there is a
 "[A]ll courts established by Act of Congress may issue 4

all writs necessary or appropriate in aid of their respective

jurisdictions and agreeable to the usages and principles of law." 

28 U.S.C. § 1651(a).

10

1 "moving party" -- PSC II filed a motion to create the set-aside

2 fund, compliance with which is one requirement of the injunction

3 before us -- it is not a party to the litigation itself and is

4 therefore not seeking "ultimate, coercive relief." In other

5 words, the injunction at issue does not "give[], or aid[] in

6 giving, substantive relief sought in the lawsuit." Bridge C.A.T.

7 Scan Assocs., 710 F.2d at 943. The orders are collateral to the

8 substance of the lawsuits.

9 We therefore conclude that we lack jurisdiction to hear

10 this appeal.

11 II. Mandamus

12 Anticipating that we might determine, as indeed we now

13 have, that we lack jurisdiction to hear this appeal, Mulligan

14 petitions for a writ of mandamus. 28 U.S.C. § 1651(a) codifies

15 this common law writ. Cheney v. U.S. Dist. Court for Dist. of 4

16 Columbia, 542 U.S. 367, 380 (2004). Mandamus "is a drastic and

17 extraordinary remedy reserved for really extraordinary

18 causes. . . . [O]nly exceptional circumstances amounting to a

19 judicial usurpation of power or a clear abuse of discretion will

20 justify the invocation of this extraordinary remedy." Id.

21 (citations and internal quotation marks omitted). Mulligan has

22 given us no basis in fact or in law on which we might conclude
11

1 that the district court usurped its power or clearly abused its

2 discretion. We will deny the petition. 

3 Finally, while Judges McLaughlin and Sack are in

4 sympathy with the carefully reasoned concurring views of Judge

5 Kaplan, the issues he addresses need not be resolved by this

6 panel in order to render our judgment here. Judges McLaughlin

7 and Sack therefore decline to use the extraordinary means of an

8 advisory mandamus order for the purpose of resolving those

9 issues. 

10 CONCLUSION

11 For the foregoing reasons, we dismiss the appeal for

12 lack of jurisdiction and deny the petition for mandamus.
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In re Zyprexa Prods. Liab. Litig., 549 F. Supp. 2d 496, 498-

99 (E.D.N.Y. 2008).

LEWIS A. KAPLAN, District Judge, concurring.

I concur in the dismissal of the interlocutory appeal and

denial of the petition for writ of mandamus. I write separately,

however, to address whether a district court may order that a

percentage of settlement monies paid in pending multidistrict

litigation (“MDL”) cases be set aside to fund possible fee awards

to counsel whose efforts confer a common benefit when motions to

remand those cases remain undecided in the district court. 

This question arises frequently in MDLs, often affecting

hundreds or thousands of plaintiffs. It is important and, as it

has not been addressed by any circuit, novel. I therefore have

concluded that the issue should be addressed head-on.

Facts

Zyprexa is an anti-psychotic drug manufactured by Eli

Lilly and Company (“Lilly”). It has been prescribed for the

treatment of schizophrenia and bipolar disorder in over twelve

million patients. The litigation below involved over 30,000

individuals who were prescribed and took Zyprexa and claimed that

they consequently suffered injuries.1

Many of these individuals filed personal injury law suits

in state courts across the country. Lilly removed most of the

cases to federal district courts. Some Zyprexa plaintiffs moved to

remand in the districts to which the cases were removed, arguing

that the federal courts lacked subject matter jurisdiction.
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See In re Zyprexa Prods. Liab. Litig., 314 F. Supp. 2d 1380,

1382-83 (J.P.M.L. 2004).

3

See FEDERAL JUDICIAL CENTER, MANUAL FOR COMPLEX LITIGATION FOURTH §

22.35, at 371 (2004) (hereinafter “MANUAL”).

4

See In re Zyprexa Prods. Liab. Litig., No. 04 MDL 1596, 2004

WL 3520245, at *2-3 (E.D.N.Y. Jun. 17, 2004).

5

See In re Zyprexa Prods. Liab. Litig., 467 F. Supp. 2d 256,

261 (E.D.N.Y. 2006).

Beginning in 2004, the Judicial Panel on Multidistrict

Litigation (“JPML”) transferred thousands of the Zyprexa cases from

federal district courts throughout the United States to the

Honorable Jack B. Weinstein in the Eastern District of New York for

coordinated or consolidated pretrial proceedings. Any pending 2

motions, including remand motions filed in the transferor

districts, accompanied the transferred cases.3

Soon thereafter, Judge Weinstein appointed a Plaintiffs’

Steering Committee (“PSC I”) composed of attorneys from thirteen

law firms who represented various individual plaintiffs. PSC I

was responsible for, among other things, coordinating and

conducting pretrial discovery for all plaintiffs, speaking for all

plaintiffs in pretrial proceedings, making and arguing any motions,

and pursuing settlement. 

4

In November 2005, virtually all of the cases then pending

in the MDL were settled. The settlement contemplated the creation 5

of a claims administration process pursuant to which settling cases

were divided into three tracks, attorneys fees were capped for
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In re Zyprexa Prods. Liab. Litig., 424 F. Supp. 2d 488, 490

(E.D.N.Y. 2006).

7

Id. at 497.

8

In re Zyprexa Prods. Liab. Litig., 467 F. Supp. 2d at 263.

9

See In re Zyprexa Prods. Liab. Litig., 467 F. Supp. 2d at

261.

cases in each track, and special masters were appointed to oversee

and apply that process.6

In early 2006, the district court entered an order which,

as far as is relevant here, provided that “the costs, disbursements

and fees of the plaintiffs' steering committee shall be paid out of

the general settlement fund” to the extent approved by the special

masters. This was implemented in part by setting aside one percent 7

of the gross settlement amount payable to each settling plaintiff

in an escrow fund.8

The district court then appointed a second Plaintiffs’

Steering Committee (“PSC II”) to coordinate pretrial proceedings in

the few non-settling early cases and in the thousands of incoming

and remaining cases, most of which had been filed, removed to

federal court, and subsequently transferred by the JPML following

the original settlement. Lilly and PSC II moved for the 9

establishment of a fund to compensate the attorneys who had worked

and would continue to work for the common benefit of all Zyprexa

plaintiffs after the original settlement. The district court

granted the motion and provided for the establishment of a common
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Id. at 275.

11

In re Zyprexa Prod. Liab. Litig., No. 04 MD 1596, 2007 WL

2340790, at *1 (E.D.N.Y. Aug. 17, 2007). An earlier order

imposed a set aside of a percentage of plaintiffs’ attorney’s

fees, rather than of each plaintiff’s gross recovery.

Following hearings before a special master and Judge

Weinstein, the nature of the set aside was modified. Compare

id. with In re Zyprexa Prod. Liab. Litig., 467 F. Supp. 2d

at 266.

12

In re Zyprexa Prod. Liab. Litig., 2007 WL 2340790, at *1.

13

In re Zyprexa Prod. Liab. Litig., 467 F. Supp. 2d at 266.

14

Id.

benefit fund with certain details to be worked out in subsequent

proceedings.10

In due course, the district court ordered that three

percent of each remaining plaintiff’s gross recovery, if any,

whether from a settlement or judgment, be placed in an escrow

account. Half the money was to come from each plaintiff’s 11

recovery and half from fees otherwise payable to his or her

attorney. Any lawyer who worked for the common benefit of all 12

federal Zyprexa plaintiffs, including but not limited to members of

PSC II, were eligible to apply for compensation from this account.

Compensation would be granted only on a showing that the attorney

“provided significant assistance to all plaintiffs.” If any money 13

remained in the fund after all claims on it settled, it would be

distributed on a pro rata basis to those who had paid portions of

their recoveries into the account.14
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A-319, 349, 393, 589. 

16

In re Zyprexa Prod. Liab. Litig., No. 04 MD 1596, 2007 WL

2340791, at *1 (E.D.N.Y. Aug. 17, 2007).

17

Oral Arg. 11:34-36.

18

Id.

Petitioner–appellant the Mulligan Law Firm (“Mulligan”)

represents over two thousand plaintiffs who originally filed their

actions in state and federal courts in seven states and whose cases

against Lilly are pending in the MDL. Motions to remand sixty-one 15

of these cases to state courts remain pending in the district

court. 

In December 2006, Mulligan and Lilly agreed in principle

to settle all of Mulligan’s Zyprexa cases, although the settlement

had not yet been implemented as of the date of argument, because

the settling plaintiffs had not fully satisfied the preconditions

to consummation. Hence, it was not then certain that the 16

settlement funds in fact will be distributed to the Mulligan

plaintiffs.17

 Anticipating that the settlement would be finalized, the

district court enjoined Mulligan from distributing settlement funds

to itself or its clients until the fund administrator certified

that three percent of the funds designated for each settling

plaintiff had been set aside. It specified that “[p]ayments may 18

be made to individual plaintiffs as soon as that can be done while

ensuring that sufficient funds have been held back to comply with
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Id.

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Oral arg. 11:04-05; 11:24-27.

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A-816.

22

Ex parte Fahey, 332 U.S. 258, 260 (1947); see also Aref v.

United States, 452 F.3d 202, 206 (2d Cir. 2006) (“Mandamus is

an extraordinary remedy, available only in extraordinary

circumstances.” (citing In re United States, 10 F.3d 931, 933

(2d Cir. 1993))); In re Nagy, 89 F.3d 115, 117 (2d Cir. 1996)

the three percent common benefit assessment.” As of the date of 19

oral argument, however, the court below had not awarded any fees or

costs out of the fund. Mulligan acknowledges that it will have the

opportunity to oppose any award of fees in the event fee

applications are filed.20

Plaintiffs appeal the district court’s order enjoining

them from distributing any settlement funds without a certification

that the set-aside had been made. Alternatively, they seek a writ 21

of mandamus ordering the district court to vacate the injunction.

Discussion

I. Mandamus

A. The Traditional Mandamus Standard

Mandamus and other prerogative writs “are reserved for

really extraordinary causes.” Mandamus is “not to be used as a 22
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(requiring an “extraordinary showing” to get mandamus review

in lieu of appeal from final judgment (citing In re Drexel

Burnham Lambert Inc., 861 F.2d 1307, 1312 (2d Cir.1988))); In

re Repetitive Stress Injury Litig., 11 F.3d 368, 373 (2d Cir.

1993) (“The granting of a writ of mandamus is an extraordinary

measure and should be done sparingly.”); United States v.

Victoria-21, 3 F.3d 571, 575 (2d Cir. 1993) (“Such writs may

not be used as a mere substitute for an appeal, but rather the

power should only be exercised in extraordinary situations.”)

(internal quotations omitted).

23

Schlagenhauf v. Holder, 379 U.S. 104, 110 (1964) (citations

omitted); accord Bankers Life & Cas. Co. v. Holland, 346 U.S.

379, 383 (1953); Roche v. Evaporated Milk Ass’n, 319 U.S. 21,

30 (1943); In re Ivy, 901 F.2d 7, 10 (2d Cir. 1990) (quoting

Roche); cf. In re Traffic Executive Ass’n-E. R.R.s, 627 F.2d

631, 634 (2d Cir. 1980) (denying writ where district court

disapproved settlement agreement, noting that “[t]he

likelihood that class members will find it tedious and time

consuming to prove their losses does not make this an

out-of-the-ordinary case”).

24

E.g., Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460

U.S. 1, 18 (1983); Bankers Life, 346 U.S. at 384; In re

Certain Underwriter, 294 F.3d 297, 302 (2d Cir. 2002); In re

Aguinda, 241 F.3d 194, 202 (2d Cir. 2001); Drexel, 861 F.2d at

1312.

25

E.g., United States v. Giffen, 473 F.3d 30, 38 n.7 (2d Cir.

2006); United States v. Amante, 418 F.3d 220, 222 (2d Cir.

2005); In re SEC ex rel. Glotzer, 374 F.3d 184, 187-88 (2d

Cir. 2004); United States v. Coppa, 267 F.3d 132, 138-39 (2d

Cir. 2001); In re von Bulow, 828 F.2d 94, 98-99 (2d Cir.

1987).

substitute for appeal, even though hardship may result from delay

and [a] perhaps unnecessary trial.” Indeed, it often has been 23

said that mandamus is not available unless the petitioner’s right

to relief is “clear and indisputable” and a direct appeal from a 24

final judgment would not be an adequate remedy. Moreover, while 25

traditional formulations of the standard have spoken of using the
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See, e.g., Parr v. United States, 351 U.S. 513, 520-21 (1956);

Bankers Life, 346 U.S. at 382-83; Roche, 319 U.S. at 26; Hong

Mai Sa v. Doe, 406 F.3d 155, 159 (2d Cir. 2005) (citing

Richardson Greenshields Secs., Inc. v. Lau, 825 F.2d 647, 652

(2d Cir. 1987)).

27

See, e.g., Ex parte Chicago, R.I. & Pac. Ry. Co., 255 U.S.

273, 275-76 (1921) (Brandeis, J.) (mandamus does not lie to

review doubtful district court jurisdictional determination);

In re Ivy, 901 F.2d at 10 (“[T]he writ will not issue to

review an order overruling a plea to the jurisdiction . . . .”

(quoting Roche, 319 U.S. at 31)); Ward Baking Co. v. Holtzoff,

164 F.2d 34, 36 (2d Cir. 1947) (denying writ where “[w]e are

not satisfied that the district court ‘clearly’ lacks

jurisdiction”); see also United States v. DiStefano, 464 F.2d

845, 850 (2d Cir. 1972) (Friendly, J.) (“[M]ere error, even

gross error in a particular case, as distinguished from a

calculated and repeated disregard of governing rules, does not

suffice to support issuance of the writ.”); accord, e.g.,

Nat’l Right to Work Legal Def. v. Richey, 510 F.2d 1239, 1242

(D.C. Cir. 1975) (“If the lower court is clearly without

jurisdiction, the writ will ordinarily be granted. If,

however, the jurisdiction of the lower court is doubtful . .

. the writ will ordinarily be denied.” (quoting Ex parte

Chicago, 255 U.S. at 275)) (citations omitted); Comfort Equip.

Co. v. Steckler, 212 F.2d 371, 373 (7th Cir. 1954) (“If a

rational and substantial legal argument can be made in support

of the questioned jurisdictional ruling the case is not

appropriate for mandamus or prohibition even though on normal

appeal a reviewing court might find reversible error.”

(quoting Am. Airlines v. Forman, 204 F.2d 230, 232 (3d Cir.

1953))).

writ to confine a lower court to the exercise of its proper

jurisdiction, it long has been clear that mandamus will not lie 26

to review a claim of mere error in a lower court’s jurisdictional

determination. Indeed, any different view would conflict with the 27

requirement that the petitioner’s right to relief be clear and

indisputable.

Mulligan argues that this Court may grant its petition

under the traditional mandamus standard because the district court
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Moses H. Cone Mem’l Hosp., 460 U.S. at 18; see also In re

Vazquez-Botet, 464 F.3d 54, 57 (1st Cir. 2006) (“‘[E]ven

where the merits clearly favor the petitioner, relief may

be withheld for lack of irreparable injury[.]’” (citing

In re Martinez-Catala, 129 F.3d 213, 217 (1st Cir.

1997))); In re Nat’l Presto Indus., Inc., 347 F.3d 662,

663 (7th Cir. 2003) (requiring showing of irreparable

harm before granting mandamus relief); United States v.

Wexler, 31 F.3d 117, 128 (3rd Cir. 1994) (same).

29

379 U.S. 104.

lacked jurisdiction to issue the set aside order in sixty-one of

the cases Mulligan originally filed in state court. At least until

the district court actually awards fees out of the common benefit

fund, however, Mulligan cannot demonstrate a need for traditional

mandamus because it has not yet suffered any injury. In any case,

it lacks a “clear and indisputable” right to relief even assuming 28

that the set aside order were erroneous. But traditional mandamus

is not the only potentially relevant standard. 

B. Advisory Mandamus

The stringencies of traditional mandamus standards admit

of a limited exception for what has been termed “advisory mandamus”

– the use of mandamus to provide guidance on a novel question of

general or exceptional importance to the administration of justice

that should not await review by appeal from a final judgment.

In Schlagenhauf v. Holder, the Supreme Court “departed 29

in some degree” from the traditional mandamus standards to
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Kaufman v. Edelstein, 539 F.2d 811, 817 (2d Cir. 1976)

(Friendly, J.). See generally Note, Supervisory and Advisory

Mandamus Under the All Writs Act, 86 HARV. L. REV. 595 (1973)

(hereinafter “Harvard Note”). 

The Supreme Court has recognized a second limited exception to

traditional mandamus standards for the exercise of

“supervisory control of the District Courts by the Courts of

Appeals.” La Buy v. Howes Leather Co., 352 U.S. 249, 259-60

(1957). In La Buy, the district court, notwithstanding prior

admonitions by the Seventh Circuit against excessive use of

special masters, referred two antitrust cases to special

masters on the ground that its docket was too congested. It

did so in line with a prior practice of too frequent

references to special masters that the Supreme Court

characterized as “little less than an abdication of the

judicial function.” 352 U.S. at 256, 258. In those

circumstances, the Court held that supervisory mandamus was

appropriate. Id. at 259-60. The case therefore appears to

authorize “supervisory” mandamus “when a plausible case could

be made for the danger of frequent recurrence” of a “probably

erroneous practice.” See Harvard Note, 86 HARV. L. REV. at 609-

10; see also, e.g., United States v. Yemitan, 70 F.3d 746, 748

(2d Cir. 1995) (“[A]n arbitrary practice of sentencing without

proferred [sic] reasons would amount to an abdication of

judicial responsibility subject to mandamus.”) (dictum). 

As demonstrated by the discussion below, because the practice

challenged here was not “probably erroneous,” much less an

“abdication of the judicial function,” supervisory mandamus

has no proper role in this case. 

31

379 U.S. at 110-11.

countenance the use of the writ for such advisory purposes.30

There, the Court indicated that mandamus may be used to settle

important questions of first impression where there is a

“substantial allegation of usurpation of power” by the district

court. Thus, courts of appeals have some scope for use of 31

mandamus to settle novel questions. On the other hand, as this

Court has written, “[n]o one could reasonably suppose that the

[Supreme] Court has now subscribed . . . to a doctrine that any
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32

Kaufman, 539 F.2d at 819 (citations omitted).

33

687 F.2d 591 (2d Cir. 1982).

34

418 F.3d 220.

Additionally, this Court has read Schlagenhauf as creating an

“escape hatch” from the finality rule in the context of

discovery, when the “question is of extraordinary significance

or there is extreme need for reversal of the district court’s

mandate before the case goes to judgment.” Am. Express

Warehousing, Ltd. v. Transamerica Ins. Co., 380 F.2d 277, 282

(2d Cir. 1967). Subsequent discovery cases also have invoked

this standard. See, e.g., In re Attorney Gen. of the United

States, 596 F.2d 58, 63 (2d Cir. 1979); Nat’l Super Spuds,

Inc. v. N.Y. Mercantile Exch., 591 F.2d 174, 181 (2d Cir.

1979); see also Glotzer, 374 F.3d at 187 (quoting Coppa, 267

F.3d at 137-38 (applying same standard, but without

characterizing mandamus review as “advisory”)).

These cases establish that mandamus sometimes may be granted

to reverse an erroneous discovery ruling where the ruling

orders discovery that could not be undone on appeal from a

final judgment because the allegedly undiscoverable

information will have been disclosed. But the discovery cases

shed little light on the appropriate course in this case, in

part because Mulligan would suffer no cognizable harm if

review were denied unless and until there is a final order to

disburse money it contributes to the set aside.

non-frivolous claim of error in a decision is a claim of

‘usurpation of power’ on the theory that courts are bound to decide

all issues correctly.”32

The Second Circuit’s decisions subsequent to Schlagenhauf

do not resolve entirely the uncertainty as to the criteria dividing

appropriate from inappropriate uses of advisory mandamus. The

cases that bear most strongly on the facts at bar are In re

International Business Machines Corp. and United States v. 33

Amante. In IBM, the Circuit granted mandamus to halt the district 34
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35

15 U.S.C. § 16(e)(1).

36

The district court had heard argument on the issue but had not

yet issued a decision. 687 F.2d at 596.

37

Id. at 600.

38

Id. at 599-600.

39

Id. at 600-02.

court’s consideration of whether the Tunney Act requirement of

judicial approval of consent decrees in government antitrust cases35

applied to stipulations of dismissal under Federal Rule of Civil

Procedure 41(a)(1). It did so, however, not simply because it 36

disagreed with the district court’s retention of jurisdiction to

consider the issue, but for three other reasons. First, both

parties were united in their desire that the case be dismissed

outright. Second, the case already had gone on for thirteen 37

years, tying up “one of the nation’s largest industrial concerns,”

during which time “many of the underlying products [had become]

commercially outmoded.” Finally, there was no serious basis for 38

the assertion that the Tunney Act applied to a Rule 41(a)(1)

dismissal in light of the plain language of the statute and “the

clear and indisputable legislative history.”39

Amante concerned a different question, viz. whether a

district court had erred in bifurcating a simple felon-inpossession firearm case to require first a trial on the issue of

possession and then a separate trial on the issue of the prior
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418 F.3d at 222.

41

Id. at 222; see also IBM, 687 F.2d at 603.

42

539 F.2d 811.

felony conviction, the latter of which would take place only after

a jury finding of possession. In granting mandamus to vacate the

bifurcation order, the Circuit relied upon its conclusions that (1)

the issue was significant because “[i]ts resolution will affect

numerous defendants in similar trials and will aid in the

administration of criminal justice,” and (2) “no remedy [wa]s

available to the government other than mandamus.”40

Both IBM and Amante demonstrate that this Court has

granted mandamus for advisory purposes when presented with

questions of significance and the district court had committed a

clear abuse of discretion and usurpation of power. In addition, 41

both cases reached the merits of the issues presented by the

petitions as, of course, the Court was compelled to explain the

district court’s error. But they did not involve the question

whether this Court may reach the merits for advisory purposes to

deny a petition for mandamus where the issue and need for review

are sufficiently pressing.

This question was answered in the affirmative in Kaufman

v. Edelstein. There, two expert witnesses whom the government 42

had subpoenaed to testify in a civil antitrust case petitioned for

a writ of mandamus directing the district court to quash the

subpoenas. Observing that the district court’s denial of the
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Id. at 819.

44

Id. at 819, 821.

45

Id. at 822; see also Stans v. Gagliardi, 485 F.2d 1290, 1292

(2d Cir. 1973.

46

The Manual for Complex Litigation instructs courts “[e]arly

in the litigation” to “determine the method of compensation”

motions to quash “clearly was no ‘usurpation of power’” nor a clear

abuse of discretion, the Court, speaking through Judge Friendly,

stated that the only argument in favor of granting the writ was

that the case presented a “novel and important” issue. The Court 43

then discussed the merits of the case at some length, concluding

that, although there existed no privilege protecting expert

witnesses from being called to testify, courts in their discretion

could protect expert witnesses when good cause was shown. Judge 44

Friendly listed a number of factors pertinent to deciding whether

a particular expert witness merited the protection of the court.45

In sum, we have held that it is appropriate for us to

discuss the merits of a challenged district court action to deny

mandamus when the question is of sufficient importance and there is

a dearth of guidance on the issue. 

C. Application To This Petition

The district court’s set aside order, in my view, raises

just such a question. The issue never has been addressed by this

Circuit. Yet it arises frequently in MDLs, many encompassing 46
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for lead and liaison counsel “and establish arrangements for

their compensation, including setting up a fund to which

designated parties should contribute in specified

proportions.” MANUAL § 14.215, at 202.

47

See, e.g., In re Wilson, 451 F.3d 161, 163 (3d Cir. 2006)

(30,000 - 35,000 plaintiffs with suits pending before MDL

court); In re Diet Drugs, 369 F.3d 293, 298 (3d Cir. 2004)

(MDL involved 18,000 individual lawsuits and over 100

putative class actions); In re Orthopedic Bone Screw Prods.

Liab. Litig., 193 F.3d 781, 784 (3d Cir. 1999) (“thousands

of plaintiffs” in MDL); In re San Juan Dupont Plaza Hotel

Fire Litig., 111 F.3d 220, 222 (1st Cir. 1997) (“hundreds of

claims” filed by “thousands of plaintiffs” consolidated in

MDL); In re Dow Corning Corp., 86 F.3d 482, 485 (6th Cir.

1996) (440,000 plaintiffs elected to become class members for

purposes of settlement in MDL); In re Food Lion, Inc. Fair

Labor Standards Act “Effective Scheduling” Litig., 73 F.3d

528, 531 (4th Cir. 1996) (nearly 1,000 plaintiffs in MDL);

In re Agent Orange Prod. Liab. Litig., 818 F.2d 145, 165-66

(2d Cir. 1987) (240,000 claimants in MDL).

48

SEC v. Stewart, 476 F.2d 755, 758 (2d Cir. 1973) (discussing

standard for supervisory mandamus).

hundreds and sometimes thousands of cases and affecting hundreds or

thousands of plaintiffs. A resolution of the issue here would be 47

“applicable to [this] entire class of cases.” A decision on the 48

merits thus would offer guidance to both courts and litigants and

aid the efficient administration of justice.

II. The District Court’s Order

A. Subject Matter Jurisdiction

The fundamental question here is whether a district court

has subject matter jurisdiction – power – to order that settlement

funds be set aside to fund possible fee awards to counsel in MDL

cases that have been removed to federal court and in which motions
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49

United States v. United Mine Workers of Am., 330 U.S. 258, 291

(1947); Kuhali v. Reno, 266 F.3d 93, 100-01 (2d Cir. 2001).

50

Sinochem Int’l Co., Ltd. v. Malaysia Int’l Shipping Corp., 549

U.S. 422, 431 (2007) (citing Ruhrgas AG v. Marathon Oil Co.,

526 U.S. 574, 585 (1999) and Steel Co. v. Citizens for a

Better Env’t, 523 U.S. 83, 100-01 & n.3 (1998)).

51

See Sinochem, 549 U.S. at 431 (recognizing that federal court

“has leeway ‘to choose among threshold grounds for denying

audience to a case on the merits’” before determining

jurisdiction and noting permissibility of dismissal of state

law claims on discretionary grounds, dismissal based on

Younger abstention, and dismissal under Totten v. United

States, 92 U.S. 105 (1876), all before considering

jurisdictional questions); United Mine Workers, 330 U.S. at

290 (district court “unquestionably had the power to issue a

restraining order . . . pending a decision upon its own

jurisdiction”); see also id. at 295 (noting Supreme Court

would affirm district court’s judgment of criminal contempt as

to remand remain undecided in the district court. In essence,

Mulligan argues that it does not and that we therefore either

should (1) decide the jurisdictional issues that were not passed

upon below and exempt from the set aside order any cases in which

removal was improper or, alternatively, (2) exempt all of these

cases from the set aside order on the theory that the entry of the

set aside order in advance of determination of the remand motions

was erroneous. These contentions are unpersuasive.

The starting point for this analysis is the proposition

that a federal court has jurisdiction to determine its own

jurisdiction. While it must make this determination before it 49

reaches the merits of the case before it, it is empowered to issue 50

non-dispositive orders between the filing of the action and its

ultimate determination on the merits. 

51
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validly punishing violations of order then outstanding, even

if it was later determined that the district court lacked

jurisdiction).

52

Pet. Br. at 32-34.

53

487 U.S. 72 (1988).

54

Id. at 76.

Mulligan nevertheless argues that federal courts are

permitted, prior to a ruling disposing of any subject matter

jurisdiction challenge, to take only such actions as may aid in

determining their jurisdiction and that actions reaching the merits

are void. The district court’s set aside order, in its view, 52

reached the merits and thus went beyond the limits of the court’s

authority. Mulligan relies for this proposition on United States

Catholic Conference v. Abortion Rights Mobilization, Inc. 

53

Catholic Conference involved an appeal from an order

holding two non-party witnesses in civil contempt, over their

objection that the district court lacked subject matter

jurisdiction, for refusing to comply with a subpoena. The Supreme

Court held that a non-party witness can challenge the subject

matter jurisdiction of a court in defense of a civil contempt

citation. It stated further that the contempt orders would be 54

void if the district court lacked subject matter jurisdiction.

Mulligan argues that Catholic Conference therefore stands for the

proposition that federal courts are permitted only to “take actions
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55

Pet. Br. at 32.

56

503 U.S. 131 (2001).

57

Id. at 137.

58

Id.

in aid of determining [their] jurisdiction.” But he overreads the 55

decision.

In Willy v. Coastal Corp., the Supreme Court upheld a 56

district court’s Rule 11 sanctions order notwithstanding a

subsequent determination that the district court had lacked subject

matter jurisdiction, and it rejected the petitioner’s contention

that this result was precluded by Catholic Conference. As the

Court explained:

“[a] final determination of lack of subject-matter

jurisdiction of a case in federal court, of course,

precludes further adjudication of it. But such a

determination does not automatically wipe out all

proceedings had in the district court at a time when the

district court operated under the misapprehension that it

had jurisdiction.”57

Thus, a district court’s order that is “collateral to the merits”

may be upheld despite a later conclusion that the court lacked

subject matter jurisdiction over the litigation.58

In this case, the set aside order simply imposed an

assessment in order to create a fund that could be used to

compensate attorneys who demonstrate that their efforts conferred
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59

In re Zyprexa Prod. Liab. Litig., 467 F. Supp. 2d at 266.

60

See, e.g., Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 395

(1990) (“It is well established that a federal court may

consider collateral issues after an action is no longer

pending. For example, district courts may award costs after an

action is dismissed for want of jurisdiction.”); Moore v.

Permanente Med. Group, Inc., 981 F.2d 443, 445 (9th Cir. 2003)

(“It is clear that an award of attorney’s fees is a collateral

matter over which a court normally retains jurisdiction even

after being divested of jurisdiction on the merits.”); see

also In re Nineteen Appeals, 982 F.2d at 609 (“[A]n order

which definitively resolves claims for attorney’s fees and

expenses payable out of a common fund is severable from the

decision on the merits.”) (citing Trustees v. Greenough, 105

U.S. 527, 531 (1881)); Overseas Dev. Disc Corp. v. Sangamo

Constr. Co., 840 F.2d 1319, 1324 (7th Cir. 1988) (declaring it

to be “settled that a decision awarding or denying attorney’s

fees and expenses from a common fund . . . is severable from

the decision on the merits”); Memphis Sheraton Corp. v.

Kirkley, 614 F.2d 131, 133 (6th Cir. 1980) (award of

attorney’s fees from common fund “is collateral” to the merits

(citing Sprague, 307 U.S. at 780)).

a benefit on Zyprexa plaintiffs generally. It is even less 59

related to the ultimate merits than orders awarding attorney’s

fees, which are collateral matters over which a court retains

jurisdiction even if it ultimately is determined to lack subject

matter jurisdiction. It does not preclude the Mulligan plaintiffs 60

from challenging any proposed distribution of funds on the ground

that they did not benefit from the efforts of counsel to whom a

distribution might be made. At least in these circumstances, the

set aside order was collateral to the merits and well within the

district court’s power.

The district court’s determination to defer consideration

of the jurisdictional challenges also was comfortably within the

bounds of its discretion. While it usually is advisable for
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61

Landis v. North Am. Co., 299 U.S. 248, 254-55 (1936).

62

See, e.g., Galati v. Eli Lilly & Co., No. 05-4338-CV-C-NKL,

2005 WL 3533387, at *1 (W.D. Mo. Dec. 22, 2005) (hundreds of

remand motions pending in Zyprexa MDL).

63

A-814-15. 

district courts to rule on any challenge to subject matter

jurisdiction early in a lawsuit, district courts have broad scope

to manage their own dockets in light of considerations of “economy

of time and effort for itself, for counsel, and for litigants.”61

The impact of such considerations in this case, and in some other

MDL and mass tort cases, often may suggest a different course.

Alleged mass torts, as the term implies, spawn masses of

litigation. Plaintiffs understandably sue in fora that they regard

as convenient or likely to be favorable including, in many

instances, state courts. Indeed, some frame their complaints in

ways that raise issues concerning removability. Defendants, moved

by similar considerations, frequently remove many of these cases to

federal courts. These tactical steps in turn often provoke large

numbers of remand motions, as occurred in this MDL. Indeed, 62

Mulligan alone has filed motions to remand in over 50 of its

Zyprexa cases.63

A district judge managing such a complex situation

reasonably may conclude that the court’s time, especially early in

the litigation, is better spent on activities other than deciding

scores or hundreds of individual remand motions. It often would be

appropriate to conclude that many of the cases in which such
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See, e.g., In re Zyprexa Prods. Liab. Litig., 467 F. Supp.

2d at 261-62.

65

28 U.S.C. § 1407.

motions are filed are likely to settle and that the expenditure of

judicial resources on remand motions likely would be wasted.

Moreover, even if an MDL or comparable court dealt immediately with

remand motions pending at a given moment, new cases and new remand

motions are likely to be filed throughout the pendency of the

litigation. Deciding each motion prior to addressing other issues 64

common to all or most cases therefore could require a significant

expenditure of judicial time and resources, derailing the progress

of the litigation as a whole. Delays of this nature could well

frustrate the purpose of MDLs, which is “to promote just and

efficient conduct” of actions involving common questions of fact.65

While every case turns on its own facts, I cannot say

that the district court’s decision to give priority to moving

thousands of Zyprexa cases towards settlement or other disposition

over focusing promptly on the hundreds of pending remand motions

was an improvident exercise of the broad discretion that inheres in

its docket management function.

B. The Common Fund Doctrine

The district court’s set aside order raises also the

question whether a district court in an MDL or other litigation

involving a large number of separately represented individual

claimants, in which any recovery will be unique to each plaintiff,
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66

See, e.g., Alyeska Pipeline Serv. Co. v. Wilderness Soc’y,

421 U.S. 240, 247 (1975).

67

Boeing Co. v. Van Gemert, 444 U.S. 472, 478 (1980) (citing

Cent. R.R. & Banking Co. v. Pettus, 113 U.S. 116 (1885) and

Trustees v. Greenough, 105 U.S. 527 (1882)).

68

Id.; Alyeska, 421 U.S. at 245; Mills v. Elec. Auto-Lite Co.,

396 U.S. 375, 392-92 (1970); Sprague v. Ticonic Nat’l Bank,

307 U.S. 161, 164-65 (1939); Cent. R.R., 113 U.S. at 124-25;

Greenough, 105 U.S. at 532.

69

Boeing, 444 U.S. at 478 (citing Greenough, 105 U.S. at

532-37).

has the authority to create a fund out of those recoveries for the

purpose of financing an award of fees and expenses to those counsel

whose work benefits the entire group of plaintiffs. The answer to

this question lies in the common fund or common benefit doctrine.

The so-called “American rule” is that the prevailing

litigant ordinarily must bear the litigant’s own attorney’s fees.66

Since the nineteenth century, however, the Supreme Court has

recognized an equitable exception to this rule – known as the 67

common fund or common benefit doctrine – that permits litigants or

lawyers who recover a common fund for the benefit of persons other

than themselves to obtain reasonable attorney’s fees out of the

fund, thus spreading the cost of the litigation to its

beneficiaries. The doctrine “reflects the traditional practice 68

in courts of equity,” which recognized “that persons who obtain 69

the benefit of a lawsuit without contributing to its cost are
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Id. (citing Mills, 396 U.S. at 392).

71

Id. (citing Mills, 396 U.S. at 394).

72

Alyeska, 421 U.S. at 264 n.39; see Boeing, 444 U.S. at 478-

79; In re Nineteen Appeals Arising Out of San Juan Dupont

Plaza Hotel Fire Litig, 982 F.2d 603, 607 (1st Cir. 1992).

73

See, e.g., Boeing, 444 U.S. 479-81; In re Agent Orange Prod.

Liab. Litig., 818 F.2d 226, 237 (2d Cir. 1987).

unjustly enriched at the successful litigant’s expense.” A court 70

acting in equity therefore may assess attorney’s fees

proportionally among those benefitted by the suit.71

In Alyeska Pipeline, the Supreme Court identified several

characteristics of cases in which the application of the common

benefit doctrine may be appropriate. These include the ease in

identifying the persons, or classes of persons, benefitted by the

recovery, ease in tracing the benefit flow from the fund to those

persons, and confidence that the costs of litigation can be shifted

with some exactitude to those benefitted by the litigation.72

Courts routinely employ the common benefit doctrine in

awarding fees to counsel in class actions which, when successful, 73

often result in lump sum recoveries that benefit identifiable

classes. Class actions present also the free-rider problems the

common fund doctrine was designed to remedy, as class members who

do not hire counsel nonetheless benefit from any recovery. The

doctrine thus prevents the unjust enrichment of these class members

at the expense of class counsel by compensating counsel in
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Boeing, 444 U.S. at 477; Lindy Bros. Builders, Inc. v. Am.

Radiator & Standard Sanitary Corp., 487 F.2d 161, 165 (3d

Cir. 1973); 4 NEWBERG ON CLASS ACTIONS § 14:6 (4th ed. 2002).

75

Goldberger v. Integrated Res., Inc., 209 F.3d 43, 47 (2d Cir.

2000).

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For example, in many MDLs involving personal injury claims,

courts have denied class certification pursuant to FED. R.

CIV. P. 23(b)(3) based on findings that questions affecting

individual members of the putative class regarding injury,

causation and/or damages predominate over questions of fact

or law common to the putative class. See, e.g., In re

Rezulin Prods. Liab. Litig., 210 F.R.D. 61, 66-68, 71

proportion to the benefit they have obtained for the entire class,

rather than just the named class representatives with whom they

contracted. Likewise, it prevents the unjust enrichment of class

members at the expense of the class representatives who contracted

with attorneys to prosecute the action.74

Application of the doctrine to class actions is

straightforward. The class generally is represented by counsel.

Any proceeds from the litigation are awarded to the class as a

whole or by a formula that permits determination of the amount of

the aggregate benefit conferred on the class. Courts may set some

percentage of the lump sum recovery as the fee or, using the

“lodestar approach,” ascertain the number of hours reasonably

billed to the class, multiply it by an appropriate hourly rate, and

deduct the product from any recovery.75

The situation is somewhat different with respect to MDLs

consisting of individual cases prosecuted by individual plaintiffs,

sometimes numbering in the thousands, and other litigation 76
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(S.D.N.Y. 2002); In re Phenylpropanolamine Prods. Liab.

Litig., 208 F.R.D. 625, 633 (W.D. Wash. 2002); see also In

re Prempro, 230 F.R.D. 555, 566-67 (E.D. Ark. 2005) (consumer

fraud claim).

77

See, e.g., Smiley v. Sincoff, 958 F.2d 498, 499 (2d Cir.

1992) (district court did not abuse its discretion in

requiring that attorney fee paid to plaintiffs’ committee be

distributed pro rata among committee members); Vincent v.

Hughes Air West, Inc., 557 F.2d 759, 774-75 (9th Cir. 1977)

(district court had authority to direct appointment of

committee of lead counsel); MacAlister v. Guterma, 263 F.2d

65, 68 (2d Cir. 1958) (approving appointment of “general

counsel” and consolidation of actions for pretrial purposes

to avoid unnecessary expenses, duplication and delay in three

stockholders’ derivative actions); MANUAL § 10.221 at 24-25.

involving large numbers of separately represented claimants.

Unlike most class actions, recoveries by individual plaintiffs or

groups of plaintiffs in such matters may occur at different times,

and individual plaintiffs or groups of plaintiffs, unlike most

individual class members, usually are represented by individual

counsel. Nevertheless, there are substantial similarities to class

actions as well. As an initial matter, the efficient handling of

such cases demands a similar approach to case management. District

courts typically appoint a lead counsel or plaintiffs’ steering

committee to coordinate and conduct pretrial proceedings on behalf

of all plaintiffs in order to avoid what otherwise might well

become chaotic. Moreover, while individual plaintiffs are 77

separately represented, they typically benefit also – often

predominantly – from the work of the lead counsel or committee. 

The same equitable considerations that warrant payment of

class counsel out of common funds generated by their efforts apply

in these circumstances as well. The desirability – indeed, the
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See In re Diet Drugs, 582 F.3d 524, 546 (3d Cir. 2009)

(approving district court’s apportionment of settlement funds

among class counsel in MDL pursuant to common benefit

doctrine); In re Air Crash Disaster, 549 F.2d 1006, 1016,

1018-19 (5th Cir. 1977) (holding that district court properly

exercised its authority to award fees to MDL lead counsel

committee paid by other plaintiffs’ counsel pursuant to common

benefit doctrine); see also Sprague, 307 U.S. at 166 (“That

the party . . . neither purported to sue for a class nor

formally established by litigation a fund available to the

class, does not seem to be a differentiating factor so far as

it affects the source of the recognized power of equity to

grant reimbursements.”); Smiley, 958 F.2d at 499, 501 (holding

that district court did not abuse its discretion in

establishing fee structure whereby non-committee member

attorneys placed percentage of their fees in escrow for pro

rata distribution among committee members).

79

Zyprexa, 467 F. Supp. 2d at 265-67.

compelling need – to have pretrial proceedings managed or at least

coordinated by lead counsel or a steering or executive committee

demands the existence of a source of compensation for their efforts

on behalf of all. The logical, and a most equitable, source of

that compensation is recoveries of individual plaintiffs who

benefit from that work. Indeed, foreclosing those recoveries as a

source of funding for the common benefit work would enrich the noncontributing individual plaintiffs unjustly at the expense of

either or both of the lead counsel and any contributing individual

plaintiffs. The district court thus acted within the scope of its 78

discretion when it established an account to compensate counsel for

common benefit work funded by a set aside of future Zyprexa MDL

recoveries.79

Conclusion
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For the foregoing reasons, I conclude that the district

court did not err as a matter of law or abuse its discretion in

ordering a set aside of settlement monies in a common benefit fund.

I therefore concur in the denial of the petition and dismissal of

the appeal.