Third Circuit disposition — 08-2363

PRECEDENTIAL
IN THE UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
Nos. 08-2363 & 08-2387
_____________
IN RE: DIET DRUGS (PHENTERMINE/FENFLURAMINE/
DEXFENFLURAMINE)
PRODUCT LIABILITY LITIGATION
Randy Hague, Jana L. Harris, and Brian S. Riepen, Esq.,
Appellants in 08-2363
Law Firms of Freedland, Farmer, Russo, Behren & Sheller
and Raymond Valori, P. A., individually and on behalf of
Diet Drugs clients represented,
Appellants in 08-2387
_______________
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. No. 99-cv-20593)
District Judge: Honorable Harvey Bartle, III
_______________
Argued July 8, 2009
Before: SLOVITER, AMBRO and JORDAN, Circuit
Judges.

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2
(Filed October 8, 2009)
_______________
Howard J. Bashman [ARGUED]
2300 Computer Avenue - Suite G-22
Willow Grove, PA 19090
Brian S. Riepen [ARGUED]
4607 W. Lovers Lane
Dallas, TX 75209
Counsel for Appellants Randy Hague, Jana L. Harris
and Brian S. Riepen
Raymond W. Valori [ARGUED]
Raymond Valori, P.A.
2843 Executive Park Drive
Weston, FL 33331
Counsel for Appellants Freedland Farmer Russo
Behren & Sheller and Raymond Valori
Sol H. Weiss
Anapol, Schwartz, Weiss, Cohan, Feldman & Smalley
1710 Spruce Street
Philadelphia, PA 19103
Charles R. Parker
Locke Lord Bissell & Liddell
600 Travis Streeet
3400 JP Morgan Chase Tower
Houston, TX 77002
Class Counsel & Appellee

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3
Arnold Levin
Michael D. Fishbein [ARGUED]
Laurence S. Berman
Levin, Fishbein, Sedran & Berman
510 Walnut Street - Suite 500
Philadelphia, PA 19106
Class Counsel, Plaintiffs’ Liaison Counsel &
Plaintiffs’ Co-Lead
Counsel in MDL 1203 on behalf of Appellees
_______________
OPINION OF THE COURT
_______________
JORDAN, Circuit Judge.
Three law firms and some of their clients challenge the
final award of attorneys’ fees that the United States District
Court for the Eastern District of Pennsylvania entered on behalf
of class counsel in this landmark class action. For the following
reasons, we will affirm the award.
I. Background
A. Diet Drugs Litigation and Settlement
This appeal arises from multidistrict mass tort litigation
concerning the appetite suppressants fenfluramine, marketed as
“Pondimin,” and dexfenfluarmine, marketed as “Redux.” Over

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For convenience, we refer to the multidistrict federal1
litigation in the singular, as a “case,” recognizing, however,
that it is an aggregation of numerous cases involving a large
number of individuals whose lives have been affected by the
litigation and its underlying events.
4
its decade-long course, the case has generated nearly 80001
separate orders from the District Court and numerous prior
rulings and opinions from this Court. E.g., In re Diet Drugs
Prods. Liab. Litig., 543 F.3d 179 (3d Cir. 2008); In re Diet
Drugs Prods. Liab. Litig., 431 F.3d 141 (3d Cir. 2005); In re
Diet Drugs Prods. Liab. Litig., 418 F.3d 372 (3d Cir. 2005); In
re Diet Drugs Prods. Liab. Litig., 401 F.3d 143 (3d Cir. 2005);
In re Diet Drugs Prods. Liab. Litig., 385 F.3d 386 (3d Cir.
2004); In re Diet Drugs Prods. Liab. Litig., 369 F.3d 293 (3d
Cir. 2004); In re Diet Drugs Prods. Liab. Litig., 282 F.3d 220
(3d Cir. 2002). Although we have already set forth the
background of the case and the class action settlement
agreement more than once, see, e.g., Diet Drugs, 385 F.3d at
389-93; Diet Drugs, 282 F.3d at 225-29, we do so once more in
order to provide context for our discussion of the fee award
entered by the District Court.
Beginning in 1997, a tide of products liability lawsuits
arose after researchers discovered an association between some
commonly prescribed appetite suppressants and a series of
disorders generally known as valvular heart disease (“VHD”).
The drugs involved were “fen-phen,” a diet drug regimen that
paired fenfluarimine with phentermine, and dexfenlfuarmine,
which was developed to produce the same anorectic effects as

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Wyeth, a Delaware corporation, was previously known2
as American Home Products but changed its name in March
2002. We will refer to the company as Wyeth throughout this
opinion.
Fen-phen and dexfenfluarmine were later linked to3
primary pulmonary hypertension (“PPH”) as well. PPH is a
rare but deadly disease that is more commonly known as
pulmonary arterial hypertension, or PAH, in the medical
community today. Because it was called PPH in the late
1990s, we will refer to it as such in this opinion.
5
fen-phen without the need for a drug pairing. Evidence of
serious coronary side effects from these drugs prompted the
United States Food and Drug Administration (“FDA”) to issue
a public health advisory alert, and the pharmaceutical company
Wyeth, which was responsible for the development and2
promotion of fenfluramine and dexfenfluarmine, to withdraw
the drugs from the market. Former fen-phen and3
dexfenfluarmine users filed lawsuits and instituted class actions
in numerous federal jurisdictions and state courts. Some of the
earliest litigation took place in state courts in Texas, where
attorneys, including Appellant Brian S. Riepen, brought
numerous actions against Wyeth. Those suits generated
extensive discovery, including the production by Wyeth of
approximately three million pages of documents.
Many diet drug suits were also filed in federal courts.
Pursuant to 28 U.S.C. § 1407, the Judicial Panel for Multidistrict
Litigation transferred all of those cases, including more than 130

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For convenience, we will sometimes use the singular4
pronouns “he” and “his” in reference to Valori when
attributing arguments made collectively by Freedland, Farmer,
Russo, Behren & Sheller and Raymond Valori P.A.
6
putative class actions, to the United States District Court for the
Eastern District of Pennsylvania for coordinated and/or
consolidated pretrial proceedings under MDL Docket No. 1203
(the “MDL”). Included among those actions were four cases
filed by Riepen. Likewise, Appellants Freedland, Farmer,
Russo, Behren & Sheller and Raymond Valori P.A. (collectively
“Valori” ) represented approximately ten clients involved in the4
MDL.
The District Court appointed a plaintiffs’ management
committee (the “PMC”) to oversee the litigation and to conduct
discovery of general applicability to the MDL plaintiffs. The
PMC began its discovery efforts in late 1998, and, by March
1999, it had taken 80 depositions and amassed approximately
nine million pages of documents, from which it winnowed 5,000
documents that, the PMC claims, established Wyeth’s liability.
The PMC stored the discovery results in an electronic document
depository and made it available to counsel for every plaintiff in
the MDL. As part of the discovery process, representatives of
the PMC attended regular status conferences held by a court-
appointed special discovery master (the “Special Master”) and
prepared motions and responses regarding class-wide discovery,
in addition to addressing a variety of other pre-trial issues.

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The state court in West Virginia had certified a personal5
injury class as well.
Those options, summarized here, are spelled out in6
greater detail in Diet Drugs, 431 F.3d at 144-45, and Diet
Drugs, 385 F.3d at 389-91.
7
Ultimately, the PMC filed a class action against Wyeth to
pursue medical monitoring on behalf of former users of Wyeth’s
diet drugs. The PMC moved for class certification, and, on
August 26, 1999, the Court granted the motion. By then, state
courts in Illinois, New Jersey, New York, Pennsylvania, Texas,
Washington, and West Virginia had also certified medical
monitoring classes.5
In April 1999, Wyeth, the PMC, and a coalition of
counsel involved in the state court class actions began to
negotiate a nationwide settlement. On November 18, 1999, they
executed an elaborate settlement agreement (the “Settlement
Agreement”) that contemplated a series of options for class
members. At the outset, class members could obtain an6
echocardiogram at Wyeth’s expense, to determine if they
suffered from VHD, or they could exercise an initial opt-out
from the settlement and pursue their claims in separate tort
cases. Class members who chose not to take the initial opt-out
and were diagnosed with VHD would have a second choice to
make: they could receive a cash and medical services benefit or
exercise an intermediate opt-out from the Settlement Agreement,

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Those drug users who were diagnosed with PPH were7
not covered by the Settlement Agreement.
The matrix grid recognized five levels of disease8
severity, ranging from Level I (least severe) to Level V (most
severe).
8
which, again, would free them to turn to the tort system. Wyeth7
agreed to waive its statute-of-limitations defense against tort
claims by those opting out at that point. In exchange,
intermediate opt-out claimants were barred from seeking
punitive damages against the company.
Class members who took the cash and medical services
benefit and developed more serious VHD before 2015 could
choose from yet a third pair of options. They could receive
payment in accordance with a matrix of calculations that
assigned compensation based on different levels of severity of
medical conditions. The “matrix claims” would be processed8
based on the attestation of a physician, with Wyeth being able to
test the foundations of the claims through an audit process
permitting medical review of up to 15% of all such claims,
unless the Court ordered an expanded audit for good cause
shown. Alternatively, class members with worsening VHD
could exercise a back-end opt-out so that they could pursue their
claims in tort under the same conditions applicable to the
intermediate opt-out claims.
To fund these various remedies, Wyeth agreed to create
a $3.75 billion settlement fund to be administered by court-

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9
appointed trustees. The settlement fund was to be divided into
two sub-funds: Fund A, into which $1 billion would be injected,
would be designated for the payment of all non-matrix benefits.
Fund B, which would receive $2.55 billion, would be designated
for the payment of the matrix benefits. The remaining $200
million would go into an account denominated the “Fund A
Legal Fees Escrow Account,” from which attorneys who helped
to create and implement the Settlement Agreement would be
paid for services related to the non-matrix benefits.
On August 28, 2000, the District Court certified the
settlement class and approved the Settlement Agreement. The
settlement was hailed as an innovative departure from ordinary
settlements requiring class members to make a “once-and-for-all
choice” between a private remedy scheme and the tort system.
Richard A. Nagareda, Autonomy, Peace, and Put Options in the
Mass Tort Class Action, 115 Harv. L. Rev. 747, 796 (2002).
Plaintiffs’ counsel and Wyeth were praised in particular for
creating the staged opt-out opportunities, which were viewed as
a bold compromise between the competing concerns of
individual autonomy for the class members and a comprehensive
legal peace for the corporate defendant. See id. at 797-805.
By the summer of 2002, however, the number of matrix
claims submitted to the trust and the number of class members
who exercised their intermediate and back-end opt-out rights
(collectively, “downstream opt-outs”) had grown well beyond
Wyeth’s expectations. Doubting the veracity of many of these
claims, Wyeth and the PMC sought, and were granted, an order
directing the medical review of 100% of the claims submitted to
the settlement trust. While the 100% audit helped to ensure the

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The total that Wyeth has spent, or will spend, to settle9
diet drug lawsuits is uncertain. One commentator estimated
Wyeth’s “total potential cost” at $22 billion. Francis E.
McGovern, A Model State Mass Tort Settlement Statute, 80
Tul. L. Rev. 1809, 1814 (2006). The District Court put the
value of the funds created pursuant to the Settlement
Agreement, as amended, at $6.44 billion. In re Diet Drugs
Prods. Liab. Litig., 553 F.Supp.2d 442, 472 (E.D. Pa. 2008).
10
integrity of the claims review, it also increased the cost of trust
administration. Between the influx of new claims and the heavy
processing burden they created, Wyeth feared that it would not
have sufficient funds to satisfy all of its diet drug liabilities. The
District Court likewise concluded that the settlement was in
jeopardy, commenting that “it is not unlikely, absent some
curative amendment, that thousands of deserving class members
may never receive any compensation for their medical
conditions from ingesting Pondimin and Redux.” In re Diet
Drugs Prods. Litig., 226 F.R.D. 498, 509 (E.D. Pa. 2005).
Wyeth and the PMC thus worked to amend the
Settlement Agreement. Most significantly for present purposes,
one of the changes, denominated the “Seventh Amendment,”
altered the payment matricies so that pending matrix level I and
II claimants became so-called “Category One Class Members.”
The claims of those Category One Class Members were
administered separately from the settlement trust, subjected to
independent medical review, and compensated from a separate
fund called the “Supplemental Class Settlement Fund,” into
which Wyeth injected an additional $1.275 billion.9

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In In re Diet Drug Litig., California Judicial Council10
Proceeding No. 4032, the Court entered a coordination order
requiring plaintiffs to deposit into the MDL Fee and Cost
Account a percentage of their recovery equal of two-thirds the
assessment levied by the District Court in the MDL, in
exchange for access to PMC work product. Attorneys in
various other state cases entered into agreements reflecting
the same terms with the PMC.
For example, 6% of the value of the settlement obtained11
by a claimant in a coordinated state case, taken from his
lawyer’s 30% fee, would amount to a withholding of
11
B. Attorneys’ Fees
The MDL and settlement process yielded four potential
sources for fees to compensate the PMC and other attorneys
who had a hand in creating common benefits for the enormous
class of claimants (collectively, “Class Counsel”). First, through
Pretrial Order (“PTO”) 467, entered in 1998, the District Court
ordered Wyeth to withhold 9% of the payments it made to
plaintiffs whose cases were transferred to the MDL and place
those funds in the “MDL Fee and Cost Account,” from which
Class Counsel would be compensated for providing case-wide
services. Likewise, the Court provided for the sequestration of
6% of the value of claims in state court cases where the
litigation was coordinated with the MDL. That money also10
went into the MDL Fee and Cost Account. The percentages
were to be deducted from the fees due to the individual lawyers
for the opt-out claimants who recovered against Wyeth.11

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approximately 20% of the attorney’s fee.
By the terms of the Seventh Amendment, the fund12
administrator was to deduct the Common Benefit Percentage
Amount from any distribution made to a Category One Class
Member. The District Court did not set the Common Benefit
Percentage Amount until it issued a final fee award, as
discussed below.
12
Second, as discussed above, Wyeth deposited $200
million into the Fund A Legal Fees Escrow Account pursuant to
the Settlement Agreement. That account was the means of
paying Class Counsel for services related to the non-matrix
benefits.
Third, also pursuant to the Settlement Agreement, $229
million was transferred from Fund B into an account known as
the “Fund B Legal Fees Escrow Account” to compensate Class
Counsel who helped to create the matrix benefits.
Fourth and finally, the Seventh Amendment authorized
the Court to award a “Common Benefit Percentage Amount,”
i.e., “common benefit fees to attorneys for professional services
... found by the Court to be of ‘common benefit’ to Category
One Class Members.” (App. at 11882.) Those common benefit
fees would be drawn directly from the Supplemental Class
Settlement Fund, and not a separate legal fees account that
correlated to the fund. Where a Category One Class Member12

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Otherwise, the award was to be deducted from the13
benefit due to the Category One Class Member.
13
was represented by an attorney, the common benefit award was
to be deducted from the attorney’s fees.13
To summarize, then, the Court was authorized to pay
Class Counsel from four distinct “pots” of money: the MDL
Fee and Cost Account, the Fund A Legal Fees Escrow Account,
the Fund B Legal Fees Escrow Account, and the Supplemental
Class Settlement Fund. The first pot was established to
compensate Class Counsel for services, such as its efforts in
obtaining and storing discovery, performed for the benefit of all
class members, including those who were compensated outside
the context of the Settlement Agreement because, for example,
they suffered from PPH, opted out of the Settlement Agreement,
or participated in coordinated state litigation. Each of the other
pots corresponded to a particular fund established pursuant to
the Settlement Agreement and was evidently intended to reward
counsel for creating the particular benefits that claimants
received from that fund. Collectively, we will refer to these
latter three pots as the “Settlement Accounts.”
1. Interim Fee Award
In the spring of 2001, the District Court established
procedures that would govern its consideration of the fee award
due to Class Counsel. As an initial step, it required all Class
Counsel to submit time and expense records to a court-appointed
auditor and to a lawyer designated as Plaintiffs’ Liaison

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The lodestar value is calculated by “multipl[ying] the14
number of hours class counsel worked on a case by a
reasonable hourly billing rate for such services.” In re AT&T
Corp., 455 F.3d 160, 164 (3d Cir. 2006) (citation omitted).
14
Counsel. The auditor, who was charged with determining which
items of time and expense met previously established criteria for
payment, reported that seventy-two law firms had performed
354,431.49 hours of compensable work and that a “lodestar
value” of $101,076,658.54 was appropriate in view of their
services.14
Each law firm claiming to be Class Counsel then had to
submit to Plaintiffs’ Liaison Counsel a fee presentation, which
was to contain a litany of information relevant to the services
rendered, including “[a] summary of the professional time for
which compensation or reimbursement is claimed ...” and
“[v]erified copies of all pertinent time records which were
maintained contemporaneously ... throughout this litigation ... .
” (App. at 7733.) The seventy-two firms that provided their
records to the auditor filed fee presentations with Plaintiffs’
Liaison Counsel, who, on February 15, 2002, submitted to the
Court a thirty-volume compendium containing the fee
presentations. On the same day, those same seventy-two firms
filed a joint petition for attorneys’ fees in which they requested
a total of approximately $567 million from the four available
funds.

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Valori did not object at this point.15
The issues regarding the contract attorneys involved16
whether they billed at rates that exceeded their experience in
mass tort litigation and the sort of work that they performed.
15
There were nine objectors to the joint petition, including
Riepen. Riepen argued that he should not have to pay an MDL15
assessment because he did not use PMC discovery, and he
argued that the requested class fee was too high, given what he
viewed as the low risk of non-compensation in the case. On
March 4, 2002, the District Court entered an order permitting
the objectors to request and, subject to court approval, to take
limited discovery regarding the petition. Riepen participated in
several discovery conferences, but did not seek any discovery.
Other objectors deposed PMC lead counsel on subjects that
included the details of the records submitted to Plaintiffs’
Liaison Counsel and the contributions of contract attorneys to
the PMC’s efforts. Once discovery was complete, the District16
Court held a two-day hearing on the propriety of the fee award
sought in the petition.
The District Court ruled on the fee petition on October 2,
2002, in an order designated as “PTO 2622.” In re Diet Drugs
Prods. Liab. Litig., Civ. Action No. 99-20593, 2002 WL
32154197 (E.D. Pa. Oct. 3, 2002). Based on its findings that (1)
“[t]he PMC faced significant risk at the beginning of the
litigation that the work they did would be unsuccessful and
uncompensated,” (2) “[t]he discovery package created by the
PMC ultimately paved the way for the class settlement and many

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Because the total amount in the MDL Fee and Cost17
Account represented 9% of the MDL plaintiffs’ recoveries
and 6% of recoveries by claimants in coordinated state
actions, the Court directed the refund of one-third of the
amount sequestered from recoveries in those cases.
The interim fee determination occurred before the18
Seventh Amendment to the Settlement Agreement.
Accordingly, there was no Supplemental Class Settlement
Fund from which to draw attorneys’ fees.
16
individual settlements,” and (3) “the PMC conferred great
benefits on all litigants in the MDL and state-coordinated
litigation [and] ... performed their duties with admirable skill,
diligence, and efficiency,” the Court awarded Class Counsel 6%
of the recoveries by claimants whose actions were part of the
MDL and 4% of the recoveries by claimants in coordinated state
actions (the “6% & 4% Assessment”). Id. at *19. That17
entitled Class Counsel to a distribution of $76,861,455 from the
MDL Fee and Cost Account.
As to the fees to be drawn from the Settlement Accounts,
the Court found it “premature to perform a definitive ... analysis
... [because t]here is a significant amount of work still to be
done ... in assisting the administration of the Settlement
Agreement.” Id. at *11. It concluded, however, that Class
Counsel was entitled to a payment of almost $77 million –
$38,430,728 from the Fund A legal fees escrow account and the
same amount from the Fund B legal fees escrow account.18
Riepen and other objectors appealed, but we dismissed for lack

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By that time, the Court had already conducted two19
public hearings on the adjudication of a fee award – one in
May 2005 and one in June 2005. Pursuant to those hearings,
the Court ordered all counsel who were claiming entitlement
to a fee award to submit their time and expense records,
onward from June 30, 2001, for audit review in accordance
with the procedures that it had established in the Spring of
2001.
17
of jurisdiction, holding that PTO 2622 was neither a final order
nor a collateral order from which an appeal could be brought.
Diet Drugs, 401 F.3d 143.
2. Final Fee Award
On January 5, 2007, the Court sought suggestions
regarding the procedures and timetable it should use in
determining a final fee award. It invited any interested party to
submit a memorandum on the subject, and it scheduled a hearing
for March 1, 2007. In response, the PMC filed a compendium19
of written agreements among the now ninety firms that claimed
entitlement to common benefit fees and between those firms
and a group of lawyers that came to be known as the “Major
Filers.” The Major Filers consist of more than fifty law firms
that together represented approximately 97% of the downstream
opt-out plaintiffs, 26,000 claimants who were compensated
under the Seventh Amendment, and half of all class members

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None of the Major Filers were members of the PMC20
and none performed compensable work for the benefit of the
entire class.
Appellants refer to the agreements as the “Major Filer21
Agreements,” so we do as well. That said, we recognize that
the term is a bit of a misnomer because the compendium
submitted to the District Court included agreements among
Class Counsel, along with agreements between Class Counsel
and the Major Filers.
That monetary amount represents 77.78% of the amount22
originally deposited into the account.
18
who received matrix payments through May 31, 2007. Neither20
Riepen nor Valori was among the Major Filers.
Those agreements (the “Major Filer Agreements” )21
reflected the shared understanding of Class Counsel and the
Major Filers that “the amount to be awarded in common benefit
fees ... is to be determined by the Court in the exercise of its
sound discretion ... .” (App. at 12976-77.) Subject to that
understanding, however, Class Counsel and the Major Filers
agreed that Class Counsel would request the entire $200 million
originally deposited in the Fund A Legal Fees Escrow Account,
plus interest; $178,111,111 from the Fund B Legal Fees Escrow
Account; and 7% of the benefits paid under the Seventh22
Amendment. Additionally, they agreed that it was appropriate
for Class Counsel to levy a reduced assessment – 2% in federal
cases and 1.33% in state cases – on recoveries obtained by

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In contrast, recoveries in the initial opt-out and PPH23
cases occurred completely outside the context of class
settlement, because those plaintiffs either chose to go without
the benefits created by the Settlement Agreement (the initial
opt-out claimants) or were expressly not contemplated by the
Settlement Agreement (the PPH claimants).
19
downstream opt-out claimants. The rationale behind the
reduction, as stated in the Major Filer Agreements, was that
recoveries in the downstream opt-out cases – as opposed to the
initial opt-out and PPH cases – occurred in part because of the
Settlement Agreement, which had its own mechanisms for
compensating attorneys. In the PMC’s words, the reduction23
“served as a prophylactic against ‘double dipping’” by Class
Counsel. (Appellee’s Br., No. 08-2387, at 25.) The Major
Filers agreed that they would not object to the fees sought by
Class Counsel, and the parties represented that there were no
other “agreements, promises, or undertakings” among them.
(App. at 13023.)
After the March 1 hearing, the District Court entered an
order, in accordance with the procedures it had established to
adjudicate the interim fee award, requiring that the auditor
submit a report of the compensable time and expenses claimed
by counsel, that Class Counsel submit supplemental fee
presentations to Plaintiffs’ Liaison Counsel, and that Plaintiffs’
Liaison Counsel file a compendium of the fee presentations with
the Court. The auditor reported that, from the inception of
litigation, Class Counsel had expended 553,020.53 hours in
common benefit time, thereby producing a lodestar value of

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20
$156,849,257.24. On July 16, 2007, Plaintiffs’ Liaison Counsel
filed the compendium of fee presentations and, on behalf of
Class Counsel, a joint fee petition that complied with the terms
to which Class Counsel and the Major Filers had agreed.
As it did in connection with the 2002 joint fee petition,
the Court authorized those who objected to the petition to
request limited discovery. Valori moved for discovery on
August 7, 2007. The Special Master concluded that the motion
was untimely and, because it did not adhere to the Court’s
instruction that any such motion set forth a concise statement of
the need and legal basis for discovery, deficient. Nevertheless,
the Court permitted Valori to depose the PMC’s lead counsel
regarding the terms and meaning of the compendium of
agreements that lead counsel had submitted to the Court and
whether any side agreements existed between Class Counsel and
the Major Filers.
Thereafter, Valori filed an objection to the joint fee
petition. The two primary arguments in the objection were that
the requested award was too high because there was a low risk
of non-payment, given the existence of the legal fees escrow
accounts, and that the requested award did not allocate the
burden of payment proportionally between the initial opt-out and
PPH claimants, on one hand, and the downstream opt-out
claimants, on the other, according to the benefits that each group
received. Riepen also objected to the joint fee petition,
renewing the arguments that he had made in response to the
2002 fee petition.

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As discussed in more detail below, this method requires24
the Court to determine the overall value of the common fund
and then calculate an appropriate percentage of that fund to
award in attorneys’ fees based on a series of reasonableness
factors that have been developed through our jurisprudence.
21
On April 8, 2008, the District Court ruled on the petition,
in an order designated as “PTO 7763(A).” In re Diet Drugs
Prods. Liab. Litig., 553 F.Supp.2d 442 (E.D. Pa. 2008). It
awarded Class Counsel a total amount of approximately $567
million, including the approximately $154 million that
constituted the interim fee award, broken down in the following
manner. First, the Court applied the percentage-of-recovery
method to determine the appropriate fee award to be allocated24
from the Settlement Accounts. Id. at 467-85. In light of the
reasonableness factors that we articulated in In re Prudential
Ins. Co. Am. Sales Practice Litig. Against Agent Actions, 148
F.3d 283 (3d Cir. 1998), and Gunter v. Ridgewood Energy
Corp., 223 F.3d 190 (3d Cir. 2000), it concluded that an award
equaling 6.75% of the recoveries under the Settlement
Agreement – which the Court valued at $6.44 billion – was fair
and appropriate. Diet Drugs, 553 F.Supp.2d at 485. The Court
then performed a lodestar cross-check “to gauge whether the ...
award creat[ed] a windfall” for the petitioners. Id. By the
Court’s calculation, the award represented a lodestar multiplier
of 2.6. Id. at 486. While it recognized that its multiplier was
artificially low, given that the auditor’s report did not separate
the time spent on the Settlement Agreement from time spent on

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Recall that the Court was authorized to pay Class25
Counsel from four pots of money, three of which
corresponded to particular funds established pursuant to the
Settlement Agreement and one of which – the MDL Fee and
Cost Account – was designed to compensate Class Counsel
for the benefits that they bestowed on all plaintiffs, including
those who recovered outside the context of the Settlement
Agreement.
By “super-mega-fund cases,” the Court was referring to26
“cases with valuations of larger than one billion dollars.” Id.
at 487.
22
the MDL, it felt confident that the true multiplier – whatever25
it was – was not excessive for a “super-mega fund case” such as
this one. Id. at 487.26
Second, the Court determined how to apportion the
6.75% award from among the Settlement Accounts. From the
Fund A Legal Fees Escrow Account, it awarded Class Counsel
$161,569,272, which, when added to its interim distribution of
$38,430,728, equaled $200,000,000 – the amount that was
originally deposited into that account. Id. at 487. From the
Fund B Legal Fees Escrow Account, it awarded
$124,633,410.60, which, when added to its interim distribution
of $38,430,728, equaled $163,064,138.60, which represented
6.39% of Fund B’s original $2.55 billion value. Id. at 488.
Finding no reason why the fee award pertaining to recoveries
under the Seventh Amendment should be materially different

-- 22 of 75 --

Recall that Class Counsel was to be compensated from27
the Fund B Legal Fees Escrow Account for the matrix
benefits established pursuant to the Settlement Agreement and
from the Supplemental Class Settlement Fund for benefits
established pursuant to the Seventh Amendment.
In summary, then, the District Court awarded Class28
Counsel $200 million from the Fund A Legal Fees Escrow
Account ($38,430,728 in its interim distribution and
$161,569,272 in its final award), $163,064,138.60 from the
Fund B Legal Fees Escrow Account ($38,430,728 in its
interim distribution and $124,633,410.60 in its final award),
$71,447,638.10 from the Supplemental Class Settlement Fund
23
from that related to matrix benefits, the Court also awarded27
Class Counsel 6.4% of the Supplemental Class Settlement Fund.
Id. That distribution amounted to $71,447,638.10. Id.
Third, the Court determined that the justifications that
supported the 6% & 4% Assessment in 2002 still applied with
equal force, and it approved Class Counsel’s proposed reduction
in the assessment – to 2% in federal cases and 1.33% in state
cases – for downstream opt-out claimants based on the logic that
those claimants had incurred value from the Settlement
Agreement that initial opt-out and PPH claimants did not incur,
and Class Counsel was rewarded for creating that value from the
Fund A Legal Fees Escrow Account. See id. at 491-96. It
updated the award from the MDL Fee and Cost Account
accordingly, adding $56,300,000 to the interim distribution of
$76,861,455 for a total award of $133,161,455. Id. at 496.28

-- 23 of 75 --

(all in its final award), and $133,161,455 from the MDL Fee
and Cost Account ($76,861,455 in its interim distribution and
$53,000,000 in its final award), for a total fee award of
$567,673,231.70, which we have approximated to $567
million for purposes of discussion.
Riepen filed an appeal on his own behalf and on behalf29
of two of his clients in the diet drug litigation, Randy Hague
and Jana L. Harris.
24
The District Court then requested submissions regarding
how to refund the money left over in the MDL Fee and Cost
Account and the funds established pursuant to the Settlement
Agreement, and it instructed Plaintiffs’ Liaison Counsel to
submit a plan regarding the allocation of the award among Class
Counsel. On July 21, 2008, the Court completed adjudication of
the fee award. PTO 7896 wrapped up the remaining refund and
allocation issues, and PTO 7897 certified as final PTOs 2622,
7763(A), and 7896.
C. Appeal
Riepen filed a notice of appeal from PTO 2622, the
interim fee award, and from PTO 7763(A), the final fee award,
on May 6, 2008. Valori filed a notice of appeal from PTO29
7763(A) on May 8, 2008. We have consolidated the appeals for
disposition.

-- 24 of 75 --

The District Court had jurisdiction over this30
multidistrict litigation pursuant to 28 U.S.C. §§ 1332(a),
1407. We have jurisdiction under 28 U.S.C. § 1291, despite
the fact that Appellants took an appeal from PTO 7763(A), in
which the Court ruled on the joint fee petition, instead of PTO
7897, in which the Court entered PTOs 2622, 7763(A), and
7896 as final judgments. Under Fed. R. App. P. 4(a)(2), a
notice of appeal filed after the court announces a final
decision or order, but before it enters final judgment, “is
treated as filed on the date of and after the entry.” See also
FirsTier Mortgage Co. v. Investors Mortgage Co., 498 U.S.
269, 276 (1991) (Rule 4(a)(2) permits a premature notice of
appeal from a final decision, but not an interlocutory one.).
While PTO 7763(A) left open issues of allocation and
redistribution, it bestowed a definitive award on Class
Counsel. It is thus a final decision under our jurisprudence.
See, e.g., United Auto. Workers Local 259 Soc. Sec. Dept. v.
Metro Auto Ctr., 501 F.3d 283, 286 (3d Cir. 2007) (“Because
the District Court’s order ... reduced the fee award to a
definite amount, it was a final decision.”); Interfaith Cmty.
Org. v. Honeywell Intern., Inc., 426 F.3d 694, 701 (3d Cir.
2005) (Honeywell timely appealed “f[inding] that ICO was
entitled to $4,530,327.00 in [attorneys’] fees”).
25
II. Discussion30
“[A] thorough judicial review of fee applications is
required in all class action settlements.” In re Gen’l Mots. Corp.
Pick-up Truck Fuel Tank Prods. Liab. Litig., 55 F.3d 768, 819
(3d Cir. 1995). We review the District Court’s fee

-- 25 of 75 --

26
determination for abuse of discretion, “which can occur if the
judge fails to apply the proper procedures in making the
determination, or bases an award upon findings of fact that are
clearly erroneous.” In re Cendant Corp. PRIDES Litig., 243
F.3d 722, 727 (3d Cir. 2001) (internal quotations and citations
omitted). To ensure that we will have a sufficient basis for
review, we require district courts to set forth the reasoning in
support of a fee award. In re Rite Aid Corp. Sec. Litig., 396
F.3d 294, 301 (3d Cir. 2005).
Appellants object to three aspects of the fee award in this
case: the level of transparency inherent in the process that led
to the award, the size of the award derived from the Settlement
Accounts, and the applicability of the MDL assessments to their
individual cases. We address each challenge in turn.
A. Transparency of the Proceedings
Riepen claims that the fee award was the product of a
flawed process in which the District Court accepted summaries
from the auditor and Plaintiffs’ Liaison Counsel instead of
requiring the public filing of actual time and expense reports
from Class Counsel. According to Riepen, the procedure
adopted by the District Court violates the principles of
transparency espoused by the United States Court of Appeals for
the Fifth Circuit in In re High Sulfur Content Gasoline Prods.
Liab. Litig., 517 F.3d 220 (5th Cir. 2008). In High Sulfur, the
lead plaintiffs’ counsel in a class action persuaded the district
court, during an ex parte hearing and without the benefit of
supporting data, to divide a lump sum attorneys’ fee award
among more than six dozen plaintiffs’ lawyers. Id. at 223. At

-- 26 of 75 --

27
that same hearing, the Court “accepted [l]ead [c]ounsel’s
proposed order sealing the individual awards; preventing all
counsel from communicating with anyone about the awards;
requiring releases from counsel who accepted payment; and
limiting its own scope of review of objections to the allocation.”
Id. at 223-24. Because “the record [was] bereft of factual
information essential to ... appellate review,” and because the
sealing of the record “protect[ed] no legitimate privacy interest
that would overcome the public’s right to be informed,” the
Court of Appeals vacated the award. Id. at 229-30.
There are two answers to Riepen’s reliance on High
Sulfur. First, this case is so factually distinct from that one that
comparing the two is fruitless. Far from adjudicating the fee
award in an ex parte hearing, the District Court solicited
submissions from all interested parties concerning “what steps
and procedures the court should implement, as well as a
suggested timetable, in determining any final or other awards of
attorneys’ fees,” and it held three public hearings on the matter.
(App. at 12624.) Moreover, during adjudication of both the
interim and final fee awards, the Court permitted objections and
allowed objectors to take limited discovery, though it need not
have granted any discovery at all. See Prudential, 148 F.3d at
338, 342 (recognizing that “discovery in connection with fee
motions should rarely be permitted,” and that “whether to grant
discovery is committed to the sound discretion of the [district]
court” (internal quotations and citation omitted)). Finally, the
Court required the auditor and Plaintiffs’ Liaison Counsel to
submit volumes of data reflecting the time and money that Class
Counsel spent on the diet drugs litigation – data that the Court

-- 27 of 75 --

Riepen also claims that the compendium of fee31
presentations prepared by Plaintiffs’ Liaison Counsel was
missing from the public record when he went to the
courthouse to examine it, and he questions whether the
compendium contained “the detail of time and expense
records required by basic judicial standards of transparency.”
(Appellant’s Br., No. 08-2363, at 29.) Suffice it to say that
the compendiums included in the appellate record are not
lacking in detail. Riepen also argues that the PMC’s decision
not to file the compendium electronically “in and of itself
creates a transparency problem,” because the paper-filing
method deterred people from accessing the documents.
(Appellant’s Br., No. 08-2363, at 28.) That contention is
undermined by the fact that the compendium was accessed,
and used as the basis for discovery requests, by objectors to
the joint fee petition.
28
put on the public record and used to support the fee award that
it ultimately granted.31
Second, High Sulfur aside, the fee proceedings were
amply transparent under our precedent. Indeed, it is difficult to
discern what the District Court reasonably could have done to
increase the level of transparency associated with the fee award.
Riepen suggests that the Court should have considered and made
public Class Counsel’s individual billing records, but we have
held that courts need not always engage in that time-consuming
process. See Rite Aid, 396 F.3d at 306-07 (“[D]istrict courts
may rely on summaries submitted by the attorneys and need not
review actual billing records.” (citing Prudential, 148 F.3d at

-- 28 of 75 --

In a related transparency argument, Riepen contends32
that the District Court abused its discretion in finalizing the
award without requiring Class Counsel to specify how many
hours and which expenses were related to each aspect of their
common benefit work. Specifically, Riepen contends that by
permitting Class Counsel to commingle their records, the
Court endorsed a fee allocation that violated the Settlement
Agreement and the mandates of Boeing Co. v. Van Gemert,
444 U.S. 472 (1980). Section VII.E.1 of the Settlement
Agreement authorizes the District Court to award fees for
services related to Fund A from the Fund A Escrow Account
and provides that “[a]ttorneys’ fees relating to Fund B shall be
paid from Fund B.” (App. at 633.) However, the purpose of
that section is to create the mechanisms by which the Court
could award attorney fees; it does not mandate how – or,
indeed, whether – counsel must submit their time records in
order to get paid. Riepen’s reliance on Boeing is similarly
misplaced. That case requires courts awarding attorneys’ fees
to ensure that “the benefits of class recovery” are “traced with
some accuracy.” Id. at 480-81 (internal quotations and
citation omitted). However, the “benefit” to which it refers –
and which must be “traced with some accuracy” – is the
29
342)). In large cases, especially one of prodigious proportions
like this, reliance on summaries is certainly within the discretion
of the district court. Also, as the High Sulfur Court recognized,
transparent fee proceedings are necessary, in part, so that we can
engage in meaningful appellate review of the resulting award.
The District Court’s procedures in this case have been more than
adequate to that end.32

-- 29 of 75 --

monetary relief that the plaintiffs recover, not the work that
the attorneys do to secure it. It is true that, in addition to the
“benefits of class recovery,” Boeing addresses the manner in
which the costs of attorneys’ fees must be shifted to the
beneficiaries. See id. But Riepen’s transparency argument
does not implicate that aspect of Boeing. Moreover, for the
reasons discussed infra, we believe that the District Court has
satisfied the cost-shifting requirements set forth by the Boeing
Court.
30
B. Size of the Settlement Award
Appellants argue that the portion of the fee awarded from
the Settlement Accounts, more than $434 million in all, was
excessive. Riepen claims that the District Court improperly
calculated the award as a percentage of the recovery, instead of
using the lodestar method, and Riepen and Valori both contend
that the award is based on an erroneous application of the
reasonableness factors we have previously articulated.
1. Method of Calculation
“Attorneys’ fees are typically assessed through the
percentage-of-recovery method or through the lodestar method.”
In re AT&T Corp., 455 F.3d 160, 164 (3d Cir. 2006) (citation
omitted). The former “applies a certain percentage to the
[settlement] fund.” Id. (citation omitted). The latter “multiplies
the number of hours class counsel worked on a case by a

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After a court determines the lodestar amount, it may33
increase or decrease that amount by applying a lodestar
multiplier. “The multiplier is a device that attempts to
account for the contingent nature or risk involved in a
particular case and the quality of the attorneys’ work.” Rite
Aid, 396 F.3d at 305-06.
31
reasonable hourly billing rate for such services.” Id. (citation33
omitted).
Riepen argues that the District Court’s employment of the
percentage-of-recovery method was erroneous because, when a
case involves fee shifting as does this one, the lodestar method
should be used. Riepen’s contention is misguided for two
reasons. First, no “fee shifting,” as that term is traditionally
used, occurred in this case. Fee shifting – an exception to the
so-called “American Rule,” whereby parties pay their own
attorneys’ fees – occurs when one party is compelled by statute
to bear the opposing party’s fees. Alyeska Pipeline Svc. Co. v.
Wilderness Soc’y, 421 U.S. 240, 269-70 (1975). It is true that,
under our precedent, the lodestar method is often applied in
cases where fee-shifting statutes operate. Prudential, 148 F.3d
at 333. But there is no such statute at work here. Wyeth
voluntarily undertook the process of compensating opposing
counsel, by establishing and funding various escrow accounts
dedicated to the payment of claimants’ legal costs. Second,
even if this case could be said to involve fee shifting, Riepen
does not complain about fee shifting at all. His problem is not
that the burden of attorneys’ fees was improperly “shifted” from
the plaintiffs to Wyeth. Rather, Riepen is appealing the fee

-- 31 of 75 --

32
award to challenge the allocation of fees among the various
attorneys who represented plaintiffs’ interests.
Contrary to Riepen’s characterization, this case falls
under the common fund doctrine, a second exception to the
American Rule. That “doctrine ‘provides that a private plaintiff,
or plaintiff’s attorney, whose efforts create, discover, increase,
or preserve a fund to which others also have a claim, is entitled
to recover from the fund the costs of his litigation, including
attorneys’ fees.’” In re Cendant Corp. Sec. Litig., 404 F.3d 173,
187 (3d Cir. 2005) (quoting G.M. Trucks, 55 F.3d at 820 n.39).
When calculating attorneys’ fees in such cases, the percentage-
of-recovery method is generally favored. Prudential, 148 F.3d
at 333; see also The Manual for Complex Litigation § 14.121
(4th ed. 2004) (reporting that “the vast majority of courts of
appeals now permit or direct district courts to use the percentage
method in common-fund cases”).
It was entirely appropriate for the District Court to adhere
to the general convention and apply the percentage-of-recovery
method in this case. The lodestar method is “designed to reward
counsel for undertaking socially beneficial litigation in cases
where the expected relief has a small enough monetary value
that a percentage-of-recovery method would provide inadequate
compensation.” Prudential, 148 F.3d at 333. Riepen contends,
however, that the percentage-of-recovery method resulted in too
much, as opposed to “inadequate,” compensation for Class
Counsel in this case. Moreover, the financial stakes in this case
were enormous, and the lawyers involved were primarily
concerned with obtaining relief for their clients and the members
of the class, not with serving the public interest. Thus, the

-- 32 of 75 --

The Gunter/Prudential factors are not exhaustive. “In34
reviewing an attorneys’ fee award in a class action settlement,
a district court should consider [those] factors ... , and any
33
District Court correctly applied the method better designed to
“reward[] counsel for success and penalize[] it for failure.”
G.M. Trucks, 55 F.3d at 821.
2. Percentage-of-Recovery Analysis
In determining what constitutes a reasonable percentage
fee award, a district court must consider the ten factors that we
identified in Gunter, 223 F.3d 190, and Prudential, 148 F.3d
283. They are: (1) the size of the fund created and the number
of beneficiaries, (2) the presence or absence of substantial
objections by members of the class to the settlement terms
and/or fees requested by counsel, (3) the skill and efficiency of
the attorneys involved, (4) the complexity and duration of the
litigation, (5) the risk of nonpayment, (6) the amount of time
devoted to the case by plaintiffs’ counsel, (7) the awards in
similar cases, Gunter, 223 F.3d at 195 n.1; Prudential, 148 F.3d
336-40, (8) the value of benefits attributable to the efforts of
class counsel relative to the efforts of other groups, such as
government agencies conducting investigations, (9) the
percentage fee that would have been negotiated had the case
been subject to a private contingent fee arrangement at the time
counsel was retained, and (10) any innovative terms of
settlement, Prudential, 148 F.3d at 338-40; see also AT&T, 455
F.3d at 165.34

-- 33 of 75 --

other factors that are useful and relevant with respect to the
particular facts of the case.” AT&T, 455 F.3d at 166.
Additionally, Valori argues that the Court could not35
have properly applied at least two Gunter/Prudential factors –
the efficiency of the attorneys involved and the relative value
of the benefit attributable to counsel’s efforts – because it did
not know how many hours Class Counsel devoted to each
aspect of its common benefit work. We have never said that a
court must have that sort of information to apply the
Gunter/Prudential factors. To the contrary, as noted above,
we have explained that “courts may rely on summaries
submitted by the attorneys and need not review actual billing
records.” Rite Aid, 396 F.3d at 306-07 (citing Prudential, 148
F.3d at 342). It would be inconsistent to permit courts to rely
on billing summaries, in lieu of actual records, but to require
that those summaries have the sort of itemization that Valori
insists they should have. Moreover, while the lodestar
method is focused on the hours that counsel expended, the
percentage-of-recovery method is, by definition, calculated
34
Trial courts must “engage in robust assessments of the
[Gunter/Prudential] factors when evaluating a fee request,” Rite
Aid, 396 F.3d at 302 (citation omitted), and that occurred here.
In an exhaustive opinion, the District Court gave thorough
consideration to each of the factors. Appellants do not argue to
the contrary. Instead, they challenge the Court’s analysis of
three particular factors: the presence or absence of substantial
objections, the risk of nonpayment, and the value of benefits
attributable to the efforts of other groups.35

-- 34 of 75 --

based on the benefit that counsel conferred on the plaintiffs.
Thus, neither law nor logic required the District Court to
consider the division of counsel’s labor while determining the
appropriate percentage of recovery through its analysis of the
Gunter/Prudential factors.
Relatedly, Riepen argues that both section III.B.3 of the36
Settlement Agreement, which prevented Wyeth from
participating in fee award proceedings, and the Major Filer
Agreements eliminated likely objectors to the fee arrangement
in a manner that violated public policy. Why Riepen believes
that Wyeth was concerned about how the money it designated
35
i. Presence or Absence of Substantial
Objections
The District Court found it “remarkable” that there were
so few objections to the settlement terms and to the fees
requested by counsel, given the approximately six million class
members in the MDL. Diet Drugs, 553 F.Supp.2d at 473. By
the Court’s count, fewer than thirty objections to the Settlement
Agreement, eleven objections to the interim joint fee petition,
and only four objections to the final joint fee petition were filed.
Id. Valori claims that it was clear error for the District Court to
rely so heavily on the absence of objections to the final joint fee
petition because the Major Filers, some of whom had vigorously
contested the interim petition, agreed not to object. In essence,
according to Valori, the Class Counsel improperly influenced
this factor through their Agreement with the Major Filers, and
the Court should not have considered it.36

-- 35 of 75 --

for attorneys’ fees was distributed is unclear, but, in any
event, the time to object to the District Court’s eight-year-old
finding that section III.B.3 was proper – a finding that was
part of the order approving the Settlement Agreement, see
Diet Drugs, 385 F.3d at 396 – has long since passed. As to
the Major Filer Agreements, no authority suggests that courts
should abrogate valid fee division contracts. To the contrary,
we have recognized the benefits of agreements regarding the
distribution of attorney fees. See, e.g., In re Warfarin Sodium
Antitrust Litig., 391 F.3d 516, 533 n.15 (3d Cir. 2004) (noting
“the accepted practice of allowing counsel to apportion fees
amongst themselves”); Prudential, 148 F.3d at 329 n.96
(private allocation agreements relieve courts from
“undertak[ing] the difficult task of assessing counsels’
relative contributions”) (citation omitted)).
36
Valori overstates the Court’s reliance on the lack of
objections. In fact, the Court explicitly declared that
[t]he paucity of objections filed in response to the
original and renewed petitions for attorneys’ fees
and costs does not necessarily establish that the
requests in the Joint Petition are proper. Indeed,
some objectors may not have been forthcoming
because this court is obligated to “exercise its
inherent authority to assure that the amount and
mode of payment of attorneys’ fees are fair and
proper ... independently of any objection.”
Diet Drugs, 553 F.Supp.2d at 474 (quoting Cendant PRIDES,

-- 36 of 75 --

37
243 F.3d at 730). Valori also fails to recognize the breadth of
the Court’s analysis. Whatever weight the Court gave to this
factor it gave based on the dearth of objections throughout the
settlement and fee adjudication process, instead of focusing only
on the objections to the final joint fee petition. Finally, Valori
distorts the effect of the agreement between Class Counsel and
the Major Filers. The record indicates that only one Major Filer
objected to the interim fee petition, and there is nothing but
Valori’s argument, unsupported by evidence, that suggests that
more of the Major Filers would have objected to the final
petition absent the agreement. In short, Valori’s contention
leaves us unpersuaded that the District Court erred – clearly or
otherwise – in its consideration of this factor.
ii. Risk of Nonpayment
Appellants claim that the District Court applied the
wrong legal standard to its risk-of-nonpayment analysis, made
at least one erroneous factual finding, and neglected to consider
an important risk mitigator. We disagree with them on each
point.
Valori argues that the District Court erred as a matter of
law by assessing the risk of nonpayment only at the beginning
of litigation, instead of throughout the action. That risk,
according to Valori, dissipated after the Settlement Agreement
was reached and, pursuant to its terms, Wyeth agreed to fund
escrow accounts from which Class Counsel would be
compensated.

-- 37 of 75 --

38
We have never addressed whether courts must reconsider
the risk of nonpayment as the action evolves, and we need not
do so here because, whether it was required or not, the District
Court did reassess the risk in this case. Although the Court
stated that it was evaluating the risk of nonpayment as of “the
inception of the action and not through the rosy lens of
hindsight,” Diet Drugs, 553 F.Supp.2d at 478 (citing In re
NASDAQ Market-Makers Antitrust Litig., 187 F.R.D. 465, 488
(S.D.N.Y. 1998)), its analysis was more comprehensive than
that. The Court specifically concluded:
The risk of non[]payment did not end with the
approval of the Settlement Agreement. The
“second wave” of litigation increased the liability
exposure Wyeth faced and endangered the entire
Settlement Agreement. [Class Counsel] renewed
and redoubled their efforts at this point, not
knowing whether the Settlement Agreement could
be saved. Fortunately it was, but during this time
it again appeared uncertain whether [Class
Counsel] could reach a point in this litigation
where they would be compensated for all of their
efforts. At the inception, and throughout this
litigation, there was a substantial risk that the
efforts of [Class Counsel] would not be
successful.
Id. at 479. In practice, therefore, the Court evaluated the risk of
nonpayment in the very manner that Valori advocates; Valori
simply does not like the conclusion the Court reached.

-- 38 of 75 --

39
In a related argument, Riepen takes issue with the Court’s
finding that Class Counsel “faced significant risk [of
nonpayment] at the beginning of the litigation.” Id. at 478. He
claims that, to the contrary, the “deck [was] stacked against
Wyeth from the very beginning.” (Appellant’s Br., No. 08-
2363, at 41.) Wyeth, according to Riepen, faced potentially
crippling liability, through state and federal litigation, and high-
profile scholarship that established the link between the diet
drugs and heart disease. As a result, it entered into settlement
negotiations with the PMC very early in the litigation process,
and as part of the settlement it agreed to pay more than $400
million into two funds from which class attorneys would be
compensated.
Riepen confuses the risk of nonpayment at the inception
of litigation with the risk immediately after the Settlement
Agreement was executed. While the escrow funds undoubtedly
reduced the risk of nonpayment, those funds were but one part
of an intricate agreement that the PMC negotiated with Wyeth.
If, as the District Court recognized, the Settlement Agreement
“had not been structured to avoid a ruinous outcome for Wyeth,
the efforts of [Class Counsel] would have been for naught.”
Diet Drugs, 553 F.Supp.2d at 479. Additionally, Riepen’s view
of the risk of nonpayment is more myopic than the Court’s. As
noted above, the Court assessed risk not at one fixed point in the
action, but throughout its existence. Riepen does not challenge,
for example, the Court’s finding that the risk of nonpayment
increased once the “second wave” of litigation threatened the
Settlement Agreement, and, based on the record, he could not
persuasively do so.

-- 39 of 75 --

40
Lastly, Valori contends that the Court erred in evaluating
the risk of nonpayment by neglecting to consider the “potentially
billions of dollars in fees” that Class Counsel was receiving
from their representation of diet drug claimants in concurrent
state law cases. What individual counsel received in a particular
state case, however, is irrelevant to the fee award here, which
compensates Class Counsel for services that benefitted all class
members, as well as the litigants in coordinated state actions.
See, e.g., Rite Aid, 396 F.3d at 302 n.11 (refusing to “conflate []
two distinct settlements” when considering the “reasonableness
of the attorneys’ fees based on one settlement fund”).
iii. Value of Benefits Attributable to
Others
In assessing whether Class Counsel had benefitted from
“the efforts of other groups, such as government agencies
conducting investigations,” AT&T, 455 F.3d at 165 (citation
omitted), the District Court noted that this case differed from the
typical antitrust or securities litigation – in which the
Gunter/Prudential factors are often considered – “where
government prosecutions frequently lay the groundwork for
private litigation,” Diet Drugs, 553 F.Supp.2d at 481. The Court
concluded that, while Class Counsel was in some sense
beholden to the scholars who linked the diet drugs to VHD, and
beholden as well to the FDA for its efforts to remove the drugs
from the market, Class Counsel had not relied on “the
government or other public agencies to do their work for them
as has occurred in some cases.” Id. at 481-82.

-- 40 of 75 --

Similarly, we have referred to the settlement as “a37
landmark effort to reconcile the rights of millions of
individual plaintiffs with the efficiencies and fairness of a
class-based settlement.” Diet Drugs, 369 F.3d at 317.
41
According to Riepen, the Court committed an error of
law by limiting its analysis to the efforts of scholars and the
FDA, and thereby ignoring the contributions of the lawyers who,
while conducting contemporaneous diet drugs litigation in Texas
state courts, obtained millions of pages of discovery from Wyeth
and took 43 depositions before a single deposition took place in
the MDL. Because the MDL trial docket lagged behind those in
state court cases in Texas, Riepen believes that the Texas
lawyers provided Class Counsel a “litigation road map...[:] At
the end of the day, the PMC only had to take depositions for a
few months ... before [Wyeth] initiated settlement discussions
with them [sic].” (Appellant’s Br., No. 08-2363, at 39.)
Riepen is correct that the District Court did not mention
the Texas lawyers’ work in conjunction with this factor. That
does not mean, however, that the Court ignored the contributory
efforts of the Texas lawyers in determining an appropriate
percentage of recovery. The issue was litigated during both the
interim and final fee adjudication, and the Court determined
that, whatever the Texas cases may have added, the recoveries
arising from the MDL were due to the “herculean efforts” of the
PMC – in developing the case against Wyeth, in negotiating an37
agreement that allowed Wyeth to resolve the claims against it,

-- 41 of 75 --

To the extent that Riepen makes the related argument38
that the Gunter/Prudential factor of attorney skill and effort
does not support such a large award, the District Court has, as
noted above, said otherwise, and Riepen has not demonstrated
that the relevant findings are clearly erroneous.
“To say that this litigation was complex,” in the District39
Court’s view, “is seriously to understate the fact.” Diet
Drugs, 553 F.Supp.2d at 475. The Court emphasized “the
complicated nature of this matter, and the constant challenges,
42
and in amending the Settlement Agreement when it appeared to
be in jeopardy. Diet Drugs, 553 F.Supp.2d at 474.38
But even if we agreed that the District Court undervalued
the Texas lawyers’ contributions – or if we agreed with any one
of Appellants’ discrete challenges – we would not, on that basis
alone, vacate the fee award. “The fee award reasonableness
factors ‘need not be applied in a formulaic way’ because each
case is different, ‘and in certain cases, one factor may outweigh
the rest.’” AT&T, 455 F.3d at 166 (quoting Rite Aid, 396 F.3d
at 301). Our task is to discern whether the Court’s percentage-
of-recovery analysis, when examined in its totality, supports the
fee that it finally determined was appropriate.
The Court made numerous findings pertaining to the
Gunter/Prudential factors that Appellants do not dispute. For
instance, it found that (1) the work of Class Counsel yielded a
$6.44 billion settlement fund that benefitted more than 800,000
class members; (2) the Diet Drugs litigation was complex, and39

-- 42 of 75 --

many of them novel, which [Class Counsel] as well as this
court encountered year in and year out, and often day in and
day out.” Id.
In total, the Court considered nine such cases: In re40
Tyco Int’l Ltd., 535 F.Supp.2d 249 (D.N.H. 2007); In re Royal
Ahold N.V. Sec. & ERISA Litig., 461 F.Supp.2d 383 (D. Md.
2006); In re AOL Time Warner, Inc. Sec. Litig., No. 02 Civ.
5575(SWK), 2006 WL 3057232 (S.D.N.Y. Oct. 25, 2006); In
re WorldCom, Inc. Sec. Litig., 388 F.Supp.2d 319 (S.D.N.Y.
2005); In re Visa Check/Mastermoney Antitrust Litig., 297
F.Supp.2d 503 (E.D.N.Y. 2003); Deloach v. Philip Morris
Cos., No. 1:00CV01235, 2003 WL 23094907 (M.D.N.C. Dec.
19, 2003); In re Sulzer Hip Prosthesis & Knee Prosthesis
Liab. Litig., 268 F.Supp.2d 907 (N.D. Ohio 2003); Shaw v.
Toshiba Am. Info. Sys., 91 F.Supp.2d 942 (E.D. Tex. 2000);
In re NASDAQ Market-Makers Antitrust Litig., 187 F.R.D.
465 (S.D.N.Y. 1998).
43
it endured significantly longer than did other super-mega-fund
cases; (3) Class Counsel had devoted an extraordinary amount40
of time to the Settlement Agreement and the litigation
surrounding it; (4) the requested award was, in percentage terms,
slightly below the average award granted in the super-mega-
fund cases; (5) the Major Filers’ consent to the joint fee petition
indicated that the petitioners were not seeking fees in excess of
market value; and (6) many of the Settlement Agreement’s
features – including the multiple downstream opt-out rights –
were innovative and “ha[d] already served as models for other

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We too noted the “potential significance” that the41
Settlement Agreement’s innovations hold for future class
action settlements, Diet Drugs, 401 F.3d at 162 (3d Cir.
2005), as did at least one commentator, see Nagareda, supra,
115 Harv. L. Rev. at 797. The Settlement Agreement’s
potentially positive impact as a model for other cases appears
to be largely unrealized at this time. See, e.g., Richard A.
Nagareda, Mass Torts in a World of Settlement 147 (Chicago
2007) (acknowledging that scholars underestimated the
operational difficulties of the Diet Drugs settlement model);
McGovern, supra, at 1815 (“Most observers of mass torts
doubt that any other defendant will use a similar settlement
approach.”). However, the fact remains that Class Counsel
expended a great deal of effort to settle with Wyeth, and the
Settlement Agreement that the parties reached was innovative,
if perhaps not entirely worthy of imitation.
The District Court also performed a lodestar cross-42
check, which we have recommended as a means of assessing
whether the percentage-of-recovery award is too high or too
low. E.g., Rite Aid, 396 F.3d at 306-07. While the Court
determined that the award represented 2.6 times the lodestar
value of Class Counsel’s work, it recognized that its
44
cases.” Diet Drugs, 553 F.Supp.2d at 472-85. On the basis of41
those extensive – and uncontested – findings alone, we would
conclude that the District Court’s fee award was not an abuse of
discretion. As noted above, however, the aspects of the Court’s
analysis that Appellants challenge also support the percentage-
of-recovery award that Class Counsel received.42

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multiplier was artificially low because the auditor’s report
included time expended on the MDL, in addition to time
expended on the Settlement Agreement. See infra Section
I.B.2. By Riepen’s calculation, the actual lodestar multiplier
is 3.4. Whether the multiplier is 2.6, 3.4, or somewhere in
that neighborhood, it is not problematically high. It is either
below or near the average mutliplier in the “super-mega-fund”
cases discussed by the District Court, id. at 486, and
consistent with our advice regarding appropriate multipliers,
see, e.g., Cendant PRIDES, 243 F.3d at 735-36, 742
(“strongly suggest[ing]” a multiplier of 3 as the ceiling for an
award in a simple case where “no risks pertaining to liability
or collection were pertinent”); Prudential, 148 F.3d at 341
(“[M]ultiples ranging from one to four are frequently awarded
in common fund cases when the lodestar method is applied.”
(internal quotation and citation omitted)).
Riepen represented four initial opt-out clients. The43
PMC disputes whether Valori represented any such clients
45
C. Applicability of the MDL Assessments to
Appellants’ Cases
Appellants argue that it was improper, under the
common benefits doctrine, for the Court to levy assessments
against their clients (1) who recovered against Wyeth on their
PPH claims, which were not covered by the Settlement
Agreement (“PPH clients”), and (2) who exercised initial opt-
outs from the Settlement Agreement and recovered against
Wyeth independently (“initial opt-out clients”). In addition,43

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and, thus, whether he has standing to challenge the
assessments applied to initial opt-out and PPH recoveries. It
appears, however, that Valori represented at least one initial
opt-out plaintiff who settled her case against Wyeth, and
Valori asserted at argument that he represented PPH claimants
as well. We accept that Valori has standing.
While the common benefit doctrine is distinct from the44
common fund doctrine, the former derives from the latter.
See Polonski v. Trump Taj Mahal, 137 F.3d 139, 145 (3d Cir.
1998) (“The origins of [the common benefit] doctrine can be
traced to the common fund rule whereby those who share in a
fund must participate in paying attorney’s fees when a
prevailing plaintiff's litigation redounds to the benefit of the
common fund.” (citing Hall v. Cole, 412 U.S. 1, 5 n. 7 (1973);
1 Dan B. Dobbs, Law of Remedies § 3.10(2) (2d ed. 1993)).
46
Riepen contends that the MDL assessment should not have been
levied against one of his client’s recoveries because the District
Court lacked subject matter jurisdiction over that client’s claims.
“Under the common benefit doctrine, an award of44
attorney’s fees is appropriate where ‘the plaintiff’s successful
litigation confers a substantial benefit on the members of an
ascertainable class, and where the court’s jurisdiction over the
subject matter of the suit makes possible an award that will
operate to spread the costs proportionately among them.’”
Polonski, 137 F.3d at 145 (quoting Hall, 412 U.S. at 5). Thus,
in order to obtain common benefit fees, an attorney must confer
a substantial benefit to members of an ascertainable class, and

-- 46 of 75 --

47
the court must ensure that the costs are proportionately spread
among that class. Id. Both Riepen and Valori argue that Class
Counsel conferred no benefit on their initial opt-out and PPH
clients. Valori also contends that the initial opt-out and PPH
plaintiffs bear a disproportionate burden of the assessment,
when compared with the downstream opt-out claimants.
The PMC questions whether the common benefit doctrine
even applies in multidistrict litigations such as this one, and
suggests that the principal basis for the exercise of a district
court’s power to levy an assessment “derives from the docket
management powers of the federal judiciary.” (Appellees’ Br.,
No. 08-2363, at 57.) The Judicial Panel for Multidistrict
Litigation is empowered, under 28 U.S.C. § 1407, to transfer
related cases to a single court, and that court has – and is
expected to exercise – the ability to craft a plaintiffs’ leadership
organization to assist with case management. Inherent in that
ability, according to the PMC, is the power to fashion some way
of compensating the attorneys who provide class-wide services.
The PMC finds support for its position in In re Air Crash
Disaster at Fla. Everglades on Dec. 29, 1972, 549 F.2d 1006
(5th Cir. 1977). Like this case, Florida Everglades was a
multidistrict litigation in which, at the fee award stage, the MDL
court granted the plaintiffs’ management committee a fee award
drawn from the fees received by individual plaintiffs’ attorneys.
Id. at 1008-09. The United States Court of Appeals for the Fifth
Circuit concluded, over the appellants’ objection, that levying
such an assessment was within the District Court’s managerial
power:

-- 47 of 75 --

48
Appellants approach the case as though it were
purely a private contest over fees between
competing lawyers. This approach is a nostalgic
luxury no longer available in the hard-pressed
federal courts. It overlooks the much larger
interests which arise in litigation such as this.
Each case in the consolidated case was private in
its inception. But the number and cumulative size
of the massed cases created a penumbra of class-
type interest on the part of all litigants and of
public interest on the part of the court and the
world at large. The power of the court must be
assayed in this semi-public context.
Id. at 1012.
The Fifth Circuit’s observations are apt and apply with
even greater force in this MDL, which dwarfed the size of
Florida Everglades, with hundreds of thousands of class
members spread all across the United States. That is not to say,
however, that the District Court can ignore basic principles of
fairness in applying an assessment. Florida Everglades is not to
the contrary. Indeed, the Fifth Circuit vacated the fee award and
remanded so that the district court could conduct a “hearing in
the full sense of the word” and enter findings of fact and
conclusions of law from which the court of appeals could
determine whether the award constituted a fair and just
enrichment of the plaintiffs’ committee, should the district
court’s decision be appealed. Id. at 1021.

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49
Likewise, we must ensure that the District Court granted
Class Counsel a just award in this case. Whether we do so by
applying the common benefits doctrine or independently
assessing whether the District Court properly exercised its
managerial power is of no real consequence. No matter how we
label our analysis, we must determine whether the Court abused
its discretion in concluding that Class Counsel conferred a
substantial benefit on the initial opt-out and PPH plaintiffs or in
how it spread the burden of the assessment among claimants
who recovered outside of the Settlement Agreement.
1. Substantial Benefit
Appellants argue that their initial opt-out and PPH clients
did not enjoy a substantial benefit from the PMC’s services. By
Appellants’ lights, because those clients were not parties to the
Settlement Agreement, they did not receive any of the benefits
– such as medical testing or claims preservation – for which the
PMC bargained. And, although the PMC obtained class-wide
discovery to which all plaintiffs’ attorneys had access, Riepen
in particular contends that he did not use it in pursuing his initial
opt-out clients’ claims against Wyeth. Rather, he insists that the
only pre-existing discovery that he used to develop his initial
opt-out cases was procured by lawyers (including himself) in the
Texas state court cases against Wyeth. Valori is less clear about
whether he used the MDL discovery, but he nonetheless argues,
generally, that the PMC’s work product did not substantially
benefit his initial opt-out and PPH clients.
According to the District Court, however, the PMC
bestowed numerous benefits on initial opt-out and PPH

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Were we to credit Riepen’s argument, we would45
provide an incentive for lawyers who represent individual
clients in an MDL to ignore the work product generated by
Class Counsel in favor of generating duplicative discovery,
and we would thereby undermine the efficiency gains that the
judicial system realizes from MDLs.
The District Court also noted that part of the assessment46
was intended to reimburse the PMC for the fees that it paid to
the special discovery master. It was, according to the Court,
beyond dispute that the Special Master’s extraordinary
services had benefitted all MDL claimants. Appellants do not
dispute that finding.
50
claimants, even if their attorneys did not use the discovery that
the PMC marshaled and retained. The mere availability of the
discovery, in the Court’s words, “substantially influenced
[Wyeth’s] evaluation of every plaintiff[’]s case.” (App. at45
1194 (emphasis added).) More tangibly, the Court found that
the PMC had, to the benefit of every claimant, helped to
administer the MDL by tracking individual cases, distributing
court orders, and serving as a repository of information
concerning the litigation and settlement. Diet Drugs, 553
F.Supp.2d at 493. Furthermore, it obtained a number of
favorable discovery and evidentiary rulings that applied on a
litigation-wide basis, and it enforced a uniform procedure for the
production of documents, deposition testimony, and expert
disclosures that governed every MDL case against Wyeth.46

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We do not mean to imply that the existence of a47
settlement agreement by itself constitutes a substantial benefit
to opt-out claimants in every class action. This case presented
a unique set of circumstances – the staggering amount of
liability that Wyeth faced, the quality and quantity of the
discovery that the PMC amassed, and the speed with which
Wyeth and Class Counsel reached a settlement – that severely
weakened Wyeth’s bargaining position against PPH and
initial opt-out claimants. The District Court did not abuse its
discretion in deciding that the PMC deserves to be
compensated for increasing those claimants’ leverage against
Wyeth.
51
Appellants do not contest any of those findings, and each
has substantial support in the record. We think it beyond
reasonable denial that the initial opt-out and PPH claimants
benefitted from Wyeth’s loss of bargaining power due to the
PMC’s efforts. As the District Court noted, Wyeth had to
defend itself against the initial opt-out and PPH claimants
knowing that they had access to pertinent discovery and
understanding that they, in turn, knew Wyeth was heavily
invested in settling. It stands to reason, then, that those
plaintiffs stood a better chance of recovery from Wyeth than
they would have absent the PMC’s efforts. Thus, the PMC
conferred a substantial benefit on the initial opt-out and PPH
claimants.47

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Our dissenting colleague proposes that we order the48
District Court to recoup the refunds that the downstream opt-
out claimants received when their assessments were reduced
from 6% & 4% to 2% & 1.33 %, and to redistribute those
funds pro rata among the downstream opt-out claimants, the
initial opt-out claimants, and the PPH claimants. To the
extent that Valori specifically asked for that relief, he did so
in his reply brief (see Appellant’s Rep. Br., No. 08-2387, at
13) (“What the district court should have done ... was to
recognize that, to the extent money dedicated to pay Class
Counsel and the PMC due to the class action settlement
should be credited toward paying the assessments against any
opt-outs ..., the credits should be applied equally across all
categories of opt-outs.)) and we do not think it well-advised,
especially in evaluating a settlement with as many moving
parts as this one has, to consider a remedy not requested until
that point. See In re Surrick, 338 F.3d 224, 237 (3d Cir. 2003)
(Failing to argue an issue in one’s opening brief constitutes
waiver of the argument on appeal). Had the recommendation
been timely proposed, it could have been tested by the
adversary process and its ramifications could have been
thoroughly considered. That did not happen, and thus we
cannot agree that ordering relief which apparently was
suggested as an afterthought is an appropriate step now.
52
2. Proportionality
Valori argues that the burden of the assessment fell
disproportionately on the initial opt-out and PPH claimants and
that the fee award must be vacated on that basis. As he notes,48

-- 52 of 75 --

Recall that the 6% & 4% Assessment was designed to49
reward Class Counsel for work that benefitted all claimants,
including those who recovered from Wyeth outside of the
context of the Settlement Agreement. Recoveries by
claimants who were originally part of the MDL were assessed
at a rate of 6%, while 4% assessments were levied against
claimants who recovered in coordinated state actions.
53
a 6% & 4% Assessment was levied against all opt-out49
recoveries pursuant to the interim fee award, but, as applied to
downstream opt-out claimants, the Court, in its final analysis,
accepted the PMC’s recommendation that the assessment be
reduced to 2% & 1.33%. The PMC explained the logic behind
the disparate assessments thusly: Downstream opt-out claimants,
as opposed to initial opt-out and PPH claimants, recovered in
part because of the Settlement Agreement. The medical
monitoring that Wyeth paid for allowed them to establish their
injuries, and, without the claims preservation terms to which
Wyeth agreed, they may have been frozen out of the tort system.
Therefore, part of the fee award drawn from downstream opt-out
recoveries came out of the Settlement Accounts and the
assessments from the MDL Fee and Cost Account were reduced
accordingly. The reduction prevented Class Counsel from being
paid twice for the benefits conferred on the downstream opt-out
claimants.
That the PMC created, and the District Court approved,
a “prophylactic against ‘double dipping’” is laudable.
(Appellee’s Br., No. 08-2387, at 25.) However, it is also a non-
sequitur as a response to Valori’s contention that the burden of

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We cannot agree, however, with Valori’s suggestion50
that the Major Filers, many of whom represented downstream
opt-out claimants, refrained from objecting to the assessments
only because they received additional compensation that is not
reflected in the agreements submitted to the District Court.
(Appellant’s Br., No. 08-2387, at 36 and n.18.) Class Counsel
and the Major Filers agreed that there were no other
“agreements, promises, or undertakings” among them (App.
at 13023) and the Court found, as a matter of fact, that there
were no such secret deals in place. Diet Drugs, 553
F.Supp.2d at 483. Valori has pointed to no evidence that
indicates the Court’s finding is clearly erroneous, and we rely
on that finding.
The dissent would hold that the District Court abused
its discretion in not applying “extra scrutiny” to the Major
Filer Agreements, which are said to benefit the Major Filers at
the expense of attorneys for the initial opt-out and PPH
claimants. (Dissenting Op. at 73.) To rule as the dissent
suggests, however, would undermine the abuse-of-discretion
standard.
The boundaries set by that particularly deferential
standard of review can be difficult to discern at times, but the
standard ought to mean at least that an appellate court’s
54
the fee award was not allocated proportionately to the benefits
that each group of claimants received. Unlike the other aspects
of the District Court’s well-reasoned opinion that we have
already addressed, its logic regarding the assessments, as
allocated between the downstream opt-out claimants and the
initial opt-out and PPH claimants, is assailable. Even if we50

-- 54 of 75 --

suspicions alone cannot override a finding of fact made by a
district court judge who has managed the case for years and
developed the record being reviewed.
55
credit the math employed by the PMC and the District Court and
assume that, despite the disparate assessments, all opt-out and
PPH claimants paid a roughly equal portion of the fee award,
there is a sound argument that the downstream opt-out claimants
received, for the same price, a greater tangible benefit from
Class Counsel’s services than the initial opt-out and PPH
claimants received.
The inquiry we must make, however, is not whether a
portion of the District Court’s logic is subject to criticism, but
whether the fee award itself constitutes an abuse of discretion.
Certainly, limits on the reasoning behind an award may lead to
the conclusion that the award itself cannot stand. But when, as
in this case, the result can otherwise be justified, we are not
compelled to find an abuse of discretion. Cf. In re Nortel
Networks Corp. Sec. Litig., 539 F.3d 129, 134 (2d Cir. 2008)
(approving fee award even though the district court neglected to
use awards granted in similar cases as benchmarks). We look,
then, to the basis of Valori’s proportionality attack to see
whether the District Court’s order can be justified in spite of the
attack.

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Our dissenting colleague charges that, in assessing the51
proportionality of the fee award under Boeing, we have
applied the wrong body of law. As the dissent acknowledges,
however, it is Valori who contended that the fee award
violates the principles espoused in Boeing. Rather than
selecting that decision as the law to apply, we have simply
responded to the argument presented to us. Like the dissent,
we have recognized that the common fund rule and the
common benefit doctrine are distinct and, indeed, different in
nuanced ways. See supra n. 44. In this case, though, the
differences do not help Valori. The dissent is correct that in
Polonski, we observed that the common benefit doctrine, as
originally formulated, required the district court to “ensure
that costs are proportionally spread among the class.” 137
F.3d at 145 (citing Hall v. Cole, 412 U.S. 1, 5 (1973). We
also noted, however, that we had “refined” the language of
the test so that we now ask “whether the benefits may be
traced with some accuracy ... [and] whether there is a
reasonable basis for confidence that the costs may be shifted
with some precision to those benefitting.” Id. (citing
Marshall v. United Steelworkers, 666 F.2d 845, 848 (3d Cir.
1981)). That language is substantially similar to the Boeing
requirements, which, for the reasons stated below, are
satisfied here.
56
Valori contends that the District Court violated the
principles espoused in Boeing, 444 U.S. 472. In Boeing, the51
Supreme Court asserted that it is proper to award fees to a
common benefits attorney only where “the benefits of class
recovery have ‘been traced with some accuracy’ and the costs of

-- 56 of 75 --

We do not imply that there are no limits on how the52
burden of a fee assessment may be distributed among
individuals or subclasses who have received a common
benefit. Basic concerns for fairness and due process always
circumscribe judicial discretion, but those concerns and the
message of Boeing do not prohibit the result reached by the
District Court here.
Nor do we ask whether the individual lawyers who53
represented the downstream opt-out claimants, on one hand,
and the lawyers for initial opt-out and PPH claimants, on the
other, were equally burdened by Class Counsel’s fees. The
operative question is whether the costs of recovery were
“shifted with some exactitude” to the beneficiaries of Class
Counsel’s efforts – i.e., the parties who recovered from
57
recovery have been ‘shifted with some exactitude to those
benefiting.’” Id. at 480-81 (quoting Alyeska Pipeline, 421 U.S.
at 265 n.39). However, neither Boeing nor any other authority
requires courts to ensure that the “costs of recovery” are shifted
with exactitude among the various subclasses of claimants who
benefitted from class counsel’s efforts. Boeing and the other
cases defining the contours of the common fund doctrine
mandate only that the fee awarded to class counsel was
reasonable given the benefit that these attorneys provided to the
class members.52
Under Boeing, the pertinent question is not what the
initial opt-out and PPH claimant paid in fees relative to what the
downstream opt-out claimants paid. Rather, it is whether the53

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Wyeth. See Vincent v. Hughes Air West, Inc., 557 F.2d 759,
770 (9th Cir. 1977) (approving fee award for class counsel
drawn from individual claimants’ attorneys in part because it
was proportionate to the benefit class counsel provided to the
claimants).
We note that in rejecting Valori’s proportionality54
objection, the District Court did observe, “the necessity to
consider separately any awards under the Class Action
Settlement and any award from the MDL ... Fee and Cost
Account[,]” and the fact that “[t]he Class Action Settlement
and the MDL play significantly different roles and cannot
really be compared.” Diet Drugs, 553 F.Supp.2d at 495. To
the extent the District Court was concluding, as we do, that
the overriding question is not one of comparison among the
various categories of settling plaintiffs but instead is fairness
within the categories and overall fairness, we entirely agree
with that logic.
58
initial opt-out and PPH claimants paid, in an absolute sense, a
fair amount for the benefit of Class Counsel’s services. The54
answer to that question, in our view, is a definite “yes.” As
noted above, the District Court found that Class Counsel
substantially enhanced all claimants’ chances for recovery by
amassing meaningful discovery, drawing Wyeth to the
bargaining table, and negotiating with Wyeth a comprehensive
settlement that evinced the company’s acute interest in resolving
the claims against it. Appellants have not demonstrated that
these findings were clearly erroneous. Indeed, they are amply
supported by the record. Given all that the initial opt-out and

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59
PPH claimants received, the 6% & 4% Assessment levied on
their recoveries was reasonable, and, thus, it satisfies Boeing’s
charge that costs and benefits be traced with some accuracy.
Any lingering concern that the fee award imposed a
disproportionately heavy burden on the initial opt-out and PPH
claimants shrinks when the proportionality issue is considered
in the context of the fee award as a whole. Allocating the
burden of the award among the claimants was but one part of the
extraordinarily complicated endeavor of determining an
appropriate award in this massive MDL. Even the discrete
question of how to allocate the award was fraught with complex
considerations, including how to treat the downstream opt-out
claimants, who recovered outside the context of the settlement
but still received valuable benefits under the Settlement
Agreement, and what measures, if any, should be used to
prevent Class Counsel from over-recovering – via the
assessments and the Settlement Accounts – for their services
that benefitted the downstream opt-out claimants. It would, in
this case, be unwise to vacate the entire award based solely on
how it was allocated, when the award is persuasively justified in
all other respects and is justifiable in this one problematic
respect.
Moreover, even if we were inclined to vacate the fee
award based on the allocation, it is not clear to us that Valori’s
requested relief – a remand to the District Court with
instructions to reallocate the award – would be feasible.
Reducing the assessment on the downstream opt-out recoveries
required the District Court to order refunds totaling more than

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60
$52 million to numerous law firms that, by prior court order, had
paid the 6% & 4% Assessments into the MDL Fee and Cost
Account. Months later, those refunds are not likely to be sitting
in the bank accounts of the law firms that received them. It
seems likely that taxes have been paid, referral counsel has been
compensated, and, generally speaking, the refunds have, in all
or in part, worked their way through the channels of commerce
and, accordingly, would be difficult for the Court to reclaim.
We also find it significant – and surprising – that Valori,
who has argued so vigorously that the allocation is unfair, never
sought a stay of the refund distribution pending appeal. Had
Valori moved for a stay, and had the Court granted his motion,
the practical difficulties associated with administering the
redistribution that he requests would be alleviated. When
pressed on the matter during oral argument, Valori asserted that,
in order to request a stay, he would have had to post a
supersedeas bond – a bond that, given the enormous amount of
money at issue in this case, he would not have been able to
afford – so the Court probably would not have granted his
request anyway. That defeatist stance is too convenient an
excuse. Although Fed. R. Civ. P. 62(d) states that “[i]f an
appeal is taken, the appellant may obtain a stay by supersedeas
bond,” courts may forego that requirement when there are other
means to secure the judgment creditor’s interests. See, e.g.,
Arban v. West Pub. Corp., 345 F.3d 390, 409 (6th Cir. 2003)
(expressing the view that Rule 62(d), which speaks to stays
granted as a matter of right, does not constrain district courts
from granting stays in accordance with their discretion); Fed.
Prescription Serv., Inc. v. Am. Pharm. Ass’n, 636 F.2d 755, 759
(D.C. Cir. 1980) (same); Munoz v. City of Phila., 537 F.Supp.2d

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We therefore have no occasion to decide whether the55
doctrine of equitable mootness, which “dictates that an appeal
should be dismissed, even if a court has jurisdiction and is in
a position to grant relief, if ‘implementation of that relief
would be inequitable,’” In re Zenith Electronics Corp., 329
F.3d 338, 343 (3d Cir. 2003) (quoting In re PWS Holding
Corp., 228 F.3d 224, 236 (3d Cir. 2000)), applies outside the
bankruptcy context in which it is typically invoked or, more
specifically, to a case such as this one.
61
749, 751-52 (E.D. Pa. 2008) (granting a stay without requiring
a bond where the movant had sufficient funds to pay the
judgment against it and there was “no basis to think that prompt
payment [would] not take place should the judgment be
sustained on appeal”). Here, the assessments and fees awarded
pursuant to the Settlement Agreement were maintained in
escrow accounts under the District Court’s control. It is
therefore quite possible, perhaps even likely, that the Court
would have waived the bond requirement or required a
substantially reduced bond in this case. All of that being said,
we need not decide whether practical difficulties in
administering a reallocation, or Valori’s inaction in attempting
to mitigate those difficulties, foreclose us from remanding the
matter. As noted above, we do not believe that the District55
Court’s allocation, viewed in context, constitutes an abuse of
discretion.

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It is unclear from the record why the District Court56
ruled on Harris’s motion to remand after dismissing the case.
62
3. Assessment on the Harris Case
According to Riepen, the MDL assessment, even if
properly applied to the initial opt-out and PPH plaintiffs, should
not have been applied to the recovery of his client Jana Harris
because her case did not belong in federal court in the first
place. In February 1999, Riepen field suit in a Kansas state
court on the behalf of Harris, a citizen of Kansas. Among the
defendants named in the suit was a pharmacy with its principal
place of business in Kansas. Wyeth argued that the pharmacy
was fraudulently joined to defeat removal, and it proceeded to
file a notice of removal to shift the case to federal court.
Riepen’s co-counsel filed a motion to remand, but before the
United States District Court for the District of Kansas could rule
on the motion, the case was transferred to the Eastern District of
Pennsylvania as part of the MDL. Harris settled her case with
Wyeth, and the case was dismissed with prejudice pursuant to a
motion that Riepen did not oppose, before the District Court
denied the remand motion on December 7, 2000.56
“It is well-settled law that subject matter jurisdiction can
be challenged at any point before final judgment,” In re Kaiser
Group Intern. Inc., 399 F.3d 558, 565 (3d Cir. 2005) (citation
omitted), but the necessary corollary is that subject matter
cannot be challenged after such judgment is entered. See Hodge
v. Hodge, 621 F.2d 590, 592 (3d Cir. 1980) (“It was settled long

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It is irrelevant whether, as Riepen claims, he properly57
preserved the jurisdictional issue for appeal. This is not a
matter of waiver. Rather, the question is whether the District
Court’s subject matter jurisdiction over Harris’s case can be
challenged at all at this stage of litigation, and the answer is it
cannot.
63
ago ... that when a federal court proceeds to final judgment on
the merits, the issue of subject matter jurisdiction is res judicata
even though it was not litigated ... .” (citation omitted)). Here,
final judgment was entered in Harris’s case when the District
Court dismissed it with prejudice.
Riepen argues that the matter is still open because the
District Court retained the ability to exempt him from the
assessment until it issued its final, appealable attorneys’ fee
order in July 2008. But authority from the Supreme Court and
our Court makes clear that a decision on the merits is separate
from orders regarding attorneys’ fees for the purposes of finality
and appealability. See White v. N.H. Dept. of Employment Sec.,
455 U.S. 445, 451-52 (1982) (“[A] request for attorney’s fees ...
raises legal issues collateral to” and “separate from” the decision
on the merits.); In re Colon, 941 F.2d 242, 245 (3d Cir. 1991)
(“treat[ing] attorneys’ fees apart from the merits for purposes of
appeal”). Thus, while Riepen may challenge the attorneys’ fees
and cost assessments that were imposed on him, he cannot do so
by attacking subject matter jurisdiction on a case that was
dismissed with prejudice almost ten years ago.57

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64
III. Conclusion
The District Court set forth its reasoning in support of the
fee award in a careful opinion that gives us a more than
sufficient basis for review. It employed transparent procedures
and undertook a thorough and proper analysis – based on the
appropriate information – in determining the award. Given the
duration of the litigation and the extraordinary efforts of Class
Counsel, the amount of the award, though extraordinarily large,
is not excessive in this extraordinary case, and while we have
some reservations about the allocation of the assessments
between the downstream opt-out claimants and the initial opt-
out and PPH claimants, we do not believe the Court abused its
discretion in apportioning the award as it did. We will therefore
affirm the final fee award.

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65
AMBRO, Circuit Judge, dissenting in part
I join Judge Jordan’s excellent opinion on all points save
one—I believe the District Court abused its discretion in
assessing the “downstream opt-out” plaintiffs at a lower rate for
the case-wide services provided by the plaintiffs’ management
committee (the “PMC”) than it assessed the “initial opt-out” and
primary pulmonary hypertension (“PPH”) plaintiffs. I would
therefore grant the request of appellants—Freedland, Farmer,
Russo, Behren & Sheller and Raymond Valori P.A. (collectively
“Valori”)—to vacate the District Court’s order refunding fees
exclusively to the downstream opt-out plaintiffs, and remand so
that the refunds can be redistributed pro rata to all plaintiffs
charged for the PMC’s services.
To review, the District Court awarded Class Counsel
attorneys’ fees for assisting in the recoveries of two separate sets
of plaintiffs whom its members did not represent: (1) plaintiffs
who recovered within the class action (recoveries that essentially
involved proving eligibility for the various funds created by the
Settlement Agreement and its subsequent amendments); and (2)
plaintiffs who recovered outside the class action (but whose
recoveries were, according to the District Court, aided
substantially by the PMC’s case-wide services). The latter set
of plaintiffs included three different groups: PPH plaintiffs
(whose claims were not covered by the Settlement Agreement),
initial opt-out plaintiffs (who opted out of the class action
entirely and pursued individual tort actions against Wyeth), and
downstream opt-out plaintiffs (who exercised their opt-out
rights after receiving some benefits from the Settlement

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The 9% and 6% assessments were levied exclusively58
on plaintiffs who had recovered outside the class action.
For ease of reference, I refer hereafter to these59
assessments as the “PMC fees.”
Initially, Class Counsel argued that all of the PMC fees60
assessed against the downstream opt-out plaintiffs should be
rebated. For the reasons discussed below, the District Court
rejected that aspect of the proposal.
66
Agreement and with respect to whom Wyeth agreed, as part of
the Settlement Agreement, to relinquish any statute-of-
limitations defenses in exchange for those plaintiffs being barred
from seeking punitive damages).
In 1998, the District Court ordered Wyeth to withhold 9%
of all payments made to federal diet drug plaintiffs (whose cases
had passed through that Court pursuant to the directions of the
Judicial Panel for Multidistrict Litigation) and 6% of all
payments made to plaintiffs in coordinated state cases. The58
money withheld was placed into the “MDL Fee and Cost
Account,” with the idea that it would later be used to
compensate Class Counsel for the PMC’s case-wide services.59
In 2002, the Court lowered those percentages to 6% and 4%,
respectively. In 2008 (in one of the orders before us now), the
Court ratified Class Counsel’s proposal to refund a portion of
the downstream opt-out plaintiffs’ PMC fees while refunding
nothing to the initial opt-out or PPH plaintiffs. The result of60
that refund was that the downstream opt-out plaintiffs ended up

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The Court’s rationale for attributing half of the61
recovery of the downstream opt-out plaintiffs to the
Settlement Agreement was that, because the Settlement
secured a waiver from Wyeth of any statute of limitations
67
assessed at rates of (respectively) 2% and 1.33%, while the other
plaintiffs subject to PMC fees were kept at 6% and 4%. Class
Counsel made the refund proposal pursuant to an agreement it
had reached prior to submitting its final fee petition with the so-
called “Major Filers,” a group that included lawyers for
approximately 97% of the downstream opt-out plaintiffs (along
with lawyers for a large number of plaintiffs who recovered
within the class action). As part of that agreement, the Major
Filers pledged to refrain from lodging any objections to Class
Counsel’s subsequent fee petition.
On its face, it seems suspicious that the one group that
was charged less for the PMC’s class-wide services also
happened to be the one group that reached an outside deal with
Class Counsel. Nonetheless, the District Court justified
subjecting the downstream opt-out plaintiffs to the lower
assessment through the following chain of reasoning. It
reasoned, first, that, because the purpose of the PMC fees was
to compensate Class Counsel for benefits provided to those who
recovered outside the Settlement Agreement, it could not assess
PMC fees on recoveries that were the product of the Settlement
Agreement. The Court then inferred that, because in calculating
the value of the Settlement Agreement it had credited that
Agreement with producing half of the $2.3 billion recovered by
the downstream opt-out plaintiffs, it would be improper for61

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defenses against the downstream opt-out plaintiffs, this was
substantially responsible for those recoveries, even though
they technically occurred outside the framework of the
Settlement.
The one exception is that, as mentioned in note 6062
above, the fee petition urged the District Court to attribute all
of the downstream opt-out plaintiffs’ recovery to the
Settlement Agreement and, accordingly, to rebate all of the
PMC fees assessed on those plaintiffs. Because the Court
determined that only half of the downstream opt-out
plaintiffs’ recovery could fairly be credited to the Settlement
Agreement, it did not go as far as urged by Class Counsel.
68
Class Counsel to receive PMC fees corresponding to the full
amount recovered by the downstream opt-out plaintiffs. From
that, the Court concluded that it should refund the excess back
to the downstream opt-out plaintiffs. In taking this path, the
District Court was (largely) adopting the reasoning that Class
Counsel had laid out in its fee petition.62
As the majority recognizes, every step in the District
Court’s reasoning makes sense, except the last. It is true that
Class Counsel’s award for the Settlement Agreement included
compensation for creating half the value recovered by the
downstream opt-outs plaintiffs. But the money to fund that
compensation did not come out of the downstream opt-out
plaintiffs’ recovery (even though it was compensation for
enabling part of that recovery). Rather, as Class Counsel
conceded during oral argument, that money came out of the

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As the majority notes, Class Counsel contends that, in63
the end, the downstream opt-out plaintiffs were essentially
charged the same as the initial opt-out and PPH plaintiffs,
albeit through a different route. I am skeptical. For that to
have happened, Wyeth, in settling the downstream opt-out
cases, needed to have priced in the attorneys’ fees that would
later be taken out of the Fund A Legal Fees Escrow Account
to compensate Class Counsel for half of the value of those
settlements. As Wyeth had no way of knowing at the time
that fees would be assessed in that manner, I find Class
Counsel’s contention unconvincing (to say the least).
69
$200 million Wyeth deposited into the Fund A Legal Fees
Escrow Account. Accordingly, while it was appropriate for the
Court to be concerned about authorizing double dipping (by
allowing Class Counsel to recover twice, in two different
capacities, for enabling the same recovery), there was no
corresponding danger that the downstream opt-out plaintiffs
would be double-charged. As such, the effect of the District
Court’s refund order was that the downstream opt-out plaintiffs
ended up being charged less for the PMC’s case-wide services
than were the other groups subject to PMC fees, despite the63
fact that the downstream opt-out plaintiffs received no fewer
benefits from those services, and, overall, certainly received
more from the efforts of Class Counsel (since they benefitted
both from the Settlement Agreement and the PMC’s services).
The majority nonetheless holds that it was not an abuse
of discretion for the District Court to order the excess PMC fees
refunded solely to the downstream opt-out plaintiffs, rather than

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My colleagues concede that “[b]asic concerns for64
fairness and due process always circumscribe judicial
discretion . . . .” Maj. Op. at 57 n.52. Their point is, I
believe, that there is nothing in the doctrine justifying the
assessment of the PMC fees that requires the kind of
proportionality demanded by Valori. As explained below, I
disagree.
70
(as Valori urges us to do here) distributing the refunds among all
those assessed such fees. The majority’s reasoning essentially
is that the applicable body of law merely requires that the fees
assessed against a particular beneficiary be proportional to what
that beneficiary received, not that the fees be proportional to
those assessed against other beneficiaries. On that basis, the
majority concludes that there was no abuse of discretion here
because the PMC fees assessed against the initial opt-out and
PPH plaintiffs were proportional to the benefits they received
from the PMC’s case-wide services, leaving those groups with
basically no cause for complaint.
I agree that, viewed from the vantage point merely of the
particular benefits the initial opt-out and PPH plaintiffs
received, the PMC fees assessed against them were fair. I
disagree, however, that that is the only legally relevant vantage
point.64
For starters, I believe that the majority applied the wrong
body of law. They derive their conclusion from Boeing Co. v.
Van Gemert, 444 U.S. 472 (1980), a case that lays out the
contours of the “common fund doctrine.” Boeing, as the

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I do, however, believe that such a requirement is65
implicit in Boeing based on the following two passages. First,
in explaining the rationale for the common fund doctrine, the
Boeing Court reasoned this way:
The [common fund] doctrine rests on the
perception that persons who obtain the benefit
of a lawsuit without contributing to its costs are
unjustly enriched at the successful litigant’s
expense. Jurisdiction over the fund involved in
the litigation allows a court to prevent this
inequity by assessing attorney[s’] fees against
the entire fund, thus spreading fees
proportionally among those benefitted by the
suit.
444 U.S. at 478 (emphasis added) (internal citation omitted).
Second, in explaining how the doctrine works in practice, the
Court provided this account:
Although the full value of the benefit to each
absentee [class] member cannot be determined
until he presents his claim, a fee awarded
against the entire . . . fund will shift the costs of
litigation to each absentee in the exact
71
majority notes, does not articulate an explicit requirement that
a district court, in awarding attorneys’ fees, ensure that those
fees are allocated proportionally across the entire class of
beneficiaries. Yet the PMC fees were not assessed pursuant to65

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proportion that the value of his claim bears to
the total recovery.
Id. at 479 (emphasis added). It will only be the case that each
class member who accesses a common fund will be charged
in “exact proportion that the value of his claim bears to the
total recovery” if every class member’s recovery from the
fund is assessed at the same rate (since that is the only way to
ensure that a class member who recovers more than another
class member will necessarily pay more in fees). Thus, even
were it the case that Boeing applied to the PMC fees (which it
does not), the disproportional allocation of those fees would
still, I believe, be an abuse of discretion.
In fairness to the majority, Valori did cite Boeing in66
support of its proportionality argument.
72
the common fund doctrine. That doctrine applies only where66
(as in the case of the award for the Settlement Agreement) fees
are being awarded as compensation for giving “each member of
a certified class . . . an undisputed and mathematically
ascertainable claim to part of a lump-sum.” Id. at 479. The
PMC fees, on the other hand, were not awarded for creating a
fund from which the different opt-out and PPH plaintiffs
recovered. Rather, they were awarded for creating diffuse, non-
monetary, benefits (e.g., discovery materials, drawing Wyeth to
the bargaining table, etc.) that helped those plaintiffs recover
outside the class action. As such, they were awarded pursuant
to the “common benefit doctrine,” which requires only that the
party receiving the attorneys’ fees have conferred a “substantial

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My view does not change even if, as Class Counsel67
urges, we think of the PMC fees as having been assessed
pursuant to the District Court’s broad managerial powers,
rather than the common benefit doctrine. Because assessing
fees such as the ones at issue here involves charging litigants
for benefits they may have only involuntarily received, I
believe the fairness concerns that always cabin a district
court’s discretion weigh especially heavily in this context. I
would thus find an abuse of discretion even were we to
conclude that the fees were assessed under neither the
common fund doctrine nor the common benefit doctrine.
73
benefit” on “members of an ascertainable class,” not that the
benefit it conferred creates a recovery fund. Polonski v. Trump
Taj Mahal Assocs., 137 F.3d 139, 145 (3d Cir. 1998).
The reason this distinction matters is that it is an explicit
requirement of the common benefit doctrine that, in awarding
fees, a “court . . . ensure that the costs are proportionally spread
among that class.” Id. The District Court failed to do that here,
and, accordingly, I believe it abused its discretion.67
In addition, I am more troubled than my colleagues that
the District Court arrived at the lower rate of assessment for the
downstream opt-out plaintiffs in response to an agreement
reached between Class Counsel and a group, the Major Filers,
that included almost all the downstream opt-out plaintiffs. I
believe that, presented with a proposal that benefitted a group
that was a party to the proposal (the downstream opt-out
plaintiffs) at the expense of group that was not a party to it (the

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74
initial opt-out and PPH plaintiffs), the District Court was
required to subject that proposal to extra scrutiny. That the
District Court adopted Class Counsel’s flawed reasoning more
or less in full suggests to me that such scrutiny was not applied.
That, too, was an abuse of discretion.
My suspicion is that what is driving the majority’s
reluctance to find an abuse of discretion here (despite agreeing
that the District Court’s reasoning was flawed) is its belief that
it would be a shame “to vacate the entire award based solely on
how it was allocated, when the award is persuasively justified in
all other respects.” Maj. Op. at 59. I share the view that the
problem I am focusing on represents, at most, a minor blemish
in the District Court’s otherwise excellent, and persuasive,
treatment of an extraordinarily difficult case. But I do not agree
that rectifying the disproportionate allocation of the PMC fees
requires anything so drastic as vacating the entire award. All
that needs to be vacated is the separate order refunding the
excess PMC fees exclusively to the downstream opt-out
plaintiffs. That would leave the entire award to Class
Counsel—both the $434,511,777.33 it received for the
Settlement Agreement and the $133,161,455 it received in PMC
fees—untouched.
I agree that there might be some administrative
difficulties associated with reclaiming the $52 million in PMC
fees that were already refunded to the downstream opt-out
plaintiffs. I too share the majority’s frustration with Valori’s
failure to request a stay of the distribution order he later
challenged on appeal. I do not, however, consider such
problems insoluble, since we deal here with purely fungible

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75
assets—money. For that reason, I consider wholly inappropriate
Class Counsel’s suggestion—wisely sidestepped by the
majority, Maj. Op. at 61 n.55—that we extend beyond the
bankruptcy context the controversial doctrine of equitable
mootness, which applies only to attempts to “unscrambl[e]
complex bankruptcy reorganizations,” and even then “‘is limited
in scope and should be cautiously applied.’” Nordhoff Invs., Inc.
v. Zenith Elecs. Corp., 258 F.3d 180, 185 (3d Cir. 2001)
(quoting In re PWS Holding Corp., 228 F.3d 224, 236 (3d Cir.
2000)).
In sum, I would vacate the order refunding the excess
PMC fees exclusively to the downstream opt-out plaintiffs and
remand with instructions that the excess be redistributed pro
rata to all plaintiffs assessed such fees. Because the majority
would affirm the District Court in all aspects, I respectfully
dissent as to this issue only.

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