More Developments in NFL Concussion Litigation

Seeger's response, filed in January 2018, specifically took issue with Rubenstein's determination that, because the litigation settled relatively quickly, it was reasonable to recommend that the U.S. District Court for the Eastern District of Pennsylvania, presiding court, reject a proposed 5 percent set-aside that would go toward a common benefit fund for class counsel attorneys.

“Any suggestion that class counsel did not invest sufficient time in this litigation to warrant the requested $106.8 million in common benefit fees is simply wrong,” Seeger stated. “Although this may not have been a typical [multi-district litigation] involving extensive discovery bellwether trials, and the like, all kinds of labor, resources, and ingenuity went into resolving this litigation.”

In 2017, class counsel asked Eastern District Judge Anita Brody, who is overseeing the litigation, to approve $112.5 million for attorney fees and costs stemming from the settlement, which is intended to compensate about 20,000 former players suffering from concussion-related injuries. In Re: National League Football Players' Concussion Injury Litigation, 14-00029. The NFL has agreed to pay the money in addition to the money for the class members.

The fee request included a 15.6% rate for attorneys representing claimants directly, along with the 5% set-aside that would be paid to the common benefit fund either from attorney fees, if the claimant had individual representation, or from the claimants' recovery if they were unrepresented.

Rubenstein, who Brody asked to review the fee request, issued a 47-page expert report in mid-December recommending a presumptive 15% cap on contingency fees and that the court not adopt the 5% set-aside.

Responses largely took issue with the class participation rate Rubenstein used, and said the report did not take into account how vigorously the NFL would contest some of the claimant's petitions. A January 2018 filing by concussion counsel X1Law also argued that cutting the fees could have a chilling effect on attorneys wanting to represent claimants who have difficult cases.

“Capping attorney's fees at 15[%] would cut the legs out from under independently retained plaintiff's attorneys [IRPAs] due to the time and risk involved in this complex and contentious claims process, essentially gutting their ability to represent class members by making the representation financially dangerous,” X1Law attorney Patrick Tighe said in the filing. “Professor Rubenstein's proposed cap would severely chill access to IRPAs, limiting IRPA advocacy and oversight, resulting in a lack of oversight in any otherwise dangerous claims process for class members.”

When reached for comment, Tighe said a 15% cap on fees would specifically impact players whose symptoms do not presently show up on tests, but may manifest in a few years. “It's going to eliminate a vast majority of class members from being able to present a claim,” he said.

Meanwhile, a litigation funding company has appealed District Judge Brody's decision that barred third parties from entering into assignment agreements with former NFL players seeking recovery from the $1 billion concussion-related settlement.

Litigation funding company RD Legal, which has recently become the center of disputes in both Pennsylvania and New York federal courts, filed a notice of appeal in January 2018 the concussion injury litigation. The three-page notice said the company was appealing to the U.S. Court of Appeals for the Third Circuit over Judge Brody's order entered in December that said settlement language specifically forbid lenders from entering into loan agreements that required ex-players to assign over their monetary claims.

The one-paragraph notice of appeal did not indicate the substance of RD Legal's appeal. Judge Brody's order regarding third-party funding agreements rejected arguments from funders that the language of the settlement agreement only forbid assigning a claimant's tort claims, rather than monetary claims.

“A third-party funder that failed to perform proper due diligence before deciding to enter such an agreement is prohibited from now reaping the benefit of the contract,” Brody found.

According to the district judge, all contracts assigning or attempting to assign the claims are “void, invalid and of no force and effect.” She said litigation class members should return the money paid to them under the principle of rescission, or the funders could execute a waiver relinquishing the assignments and then the settlement claims administrator would withhold the amount from the class member's monetary award.

“The anti-assignment language in the settlement agreement clearly states the intent that class members are unable to make assignments,” Judge Brody said. “Thus, the court has little sympathy for a third-party funder that will not receive a return on its 'investment.'”

Judge Brody's decision came to the court by way of a referral from U.S. District Judge Loretta Preska of the Southern District of New York, who is presiding over an action that the Consumer Financial Protection Bureau and New York Attorney General Eric Schneiderman brought against RD Legal over agreements it entered into with retired NFL players and people seeking recovery for injuries suffered during the Sept. 11, 2001, terrorist attack in New York.

After RD Legal told District Judge Preska that assignment agreements were allowed in the NFL settlement, Seeger Weiss attorney Chris Seeger asked her to transfer the issue to Judge Brody. Seeger, co-lead class counsel in the NFL litigation, also filed a motion seeking to have the claims administrator withhold funds from several litigation funders who had entered agreements with claimants.

Seeger, however, later came under fire for failing to disclose his ties with Esquire Bank, a litigation funding company that also provided loans to ex-NFL players. Until May 2016, Seeger was a director at Esquire Financial Holdings, a holding company for Esquire Bank, which provided some loans to ex-players. The bank was not included as one of the funders Seeger brought to the court's attention.

Seeger later filed a declaration with the court outlining his history with Esquire Bank and said he did not previously mention the company's loans because they were properly structured loans with reasonable rates.

***** Max Mitchell is a reporter for The Legal Intelligencer, the Philadelphia-based ALM sibling of Entertainment Law & Finance.