In the wake of the ugly breakup of Cohen Milstein Hausfeld & Toll, a heavyweight plaintiffs class action firm, a federal judge in Philadelphia has effectively ordered the lawyers to do their best to get along as they finalize the work on a massive antitrust suit that generated more than $120 million in settlements.

U.S. District Judge Paul S. Diamond is overseeing In re OSB Antitrust Litigation, a class action price-fixing suit against the country’s top lumber manufacturers (pdf).

Diamond has already granted final approval of four settlements as well as preliminary approval of settlements by the remaining five defendants. In the coming weeks, Diamond is expected to decide the size of the fees to be awarded to the plaintiffs lawyers, possibly as much as $39 million.

But on the eve of a fairness hearing for the final settlements, Diamond was suddenly drawn into the fray of an erupting dispute between the Cohen Milstein firm and one of its former partners, Michael D. Hausfeld.

Hausfeld was ousted from the firm Nov. 6 in a vote by the firm’s other partners. He reportedly learned of the vote when he found a note on his office chair.

The decision by the partners at the newly rechristened Cohen Milstein Sellers & Toll quickly led to a dispute over which firm would play a leading role in the OSB litigation.

The Philadelphia firm of Spector Roseman Kodroff & Willis serves as “lead counsel” for the plaintiffs and Cohen Milstein was appointed to serve as “co-lead counsel.”

On Nov. 12, Hausfeld filed a motion asking that his new firm, Hausfeld LLP, be substituted as co-lead counsel. Joining him on the brief was attorney William P. Butterfield, who is one of about 20 lawyers who left Cohen Milstein to join Hausfeld’s new firm.

The motion said that one of the lead plaintiffs, Columbare Inc., wanted Hausfeld and Butterfield to handle the case and “has instructed that no counsel other than” Hausfeld’s new firm and the Spector Roseman firm are authorized to act on behalf of Columbare “for the remainder of this litigation.”

In a Nov. 19 response, Cohen Milstein attorneys Patrick A. Tillou and George Farah contended that: “Contrary to Hausfeld’s assertions, plaintiff Columbare has made clear it wishes to continue to be represented by Cohen Milstein and has rescinded any authority for Hausfeld or its affiliated attorneys to represent it in this matter.”

The motion said Columbare “has never met or spoken with any of the attorneys currently at Hausfeld LLP, but has expressed approval of the work done by those remaining at Cohen Milstein.”

During the course of this litigation, the Cohen Milstein lawyers said, the firm’s duties as co-lead counsel were primarily fulfilled by four attorneys, with Tillou handling the firm’s day-to-day management and conduct of the litigation.

Tillou has billed more than 3,000 hours on the case, and Farah has billed more than 1,900 hours, the motion said, while Hausfeld has billed just 206 hours and Butterfield has billed 1,330.

“Patrick Tillou has been, and continues to be, the primary and most frequent point of contact between Cohen Milstein and SRKW on all facets of the case, including class certification, discovery, trial preparation, settlement agreements, notice, objectors, and opt-outs,” the motion said.

The motion said Cohen Milstein “remains more than qualified to continue in its role as co-lead counsel” and that Hausfeld’s new firm, which at the time had been formed just nine days prior, has “no offices of its own and was working from temporary space” provided by another Washington law firm.

“It is not clear what facilities and support staff the firm currently has in place or when Hausfeld LLP will be in position to open its own office,” the motion said.

But Butterfield, in a declaration filed in court, argued that Hausfeld’s new firm was in a better position to handle the remaining tasks in the litigation because “the primary attorneys” on the case — Hausfeld and Butterfield — are now at Hausfeld LLP, and “no other partner remaining at Cohen Milstein … had any significant responsibility for this case.”

In a reply brief, Hausfeld and Butterfield argued that, as the partners overseeing the case, it was they who made all of the strategic decisions, and that Tillou and Farah, as associates, were directed at every step. “Hausfeld and Butterfield’s combined experience running and managing antitrust class actions for the last 30 years make them eminently more qualified to judge other firms’ contributions to the case for allocation purposes than Mr. Tillou,” the brief said.

In a hearing Monday, Cohen Milstein withdrew its opposition to Hausfeld LLP’s representation of Columbare. On Tuesday, Diamond issued a two-page order that effectively gives both firms a place at the table during the final phase of the case.

“It is now undisputed that Hausfeld LLP represents Columbare Inc.,” Diamond wrote.

But Diamond also found that “there are lawyers at both Cohen Milstein and Hausfeld LLP who have considerable experience and expertise in this matter, albeit in different roles.”

As a result, Diamond said, “I believe the direct purchaser class would be best served if both firms served as co-lead counsel, with Spector Roseman … as lead counsel.”

In his final paragraph, Diamond said that “concern was expressed” at Monday’s hearing “as to whether the lawyers from Hausfeld LLP and Cohen Milstein could work together without acrimony.”

Diamond dismissed those concerns by essentially ordering the lawyers to get along — or else.

“I am confident that these lawyers understand their obligations to their clients and will work together in their clients’ best interests. Should any difficulties arise, however, I direct lead counsel to inform me immediately so that I can take appropriate action,” Diamond wrote.

According to court papers, the settlements in the case now total $120,730,000.

Diamond has granted final approval of four settlements: J.M. Huber Corp. agreed to pay $2 million; Georgia Pacific agreed to pay $9.88 million; Ainsworth Lumber agreed to pay $8.6 million; and Tolko Industries agreed to pay $4.325 million.

Monday’s fairness hearing focused on settlement offers from the five remaining defendants that have not yet won final court approval: Louisiana Pacific Corp. agreed to pay $44.5 million; Norbord agreed to pay $30 million; Weyerhaeuser agreed to pay $18 million; Potlatch Corp. agreed to pay $2.7 million; and Grant Forest Products agreed to pay $725,000.

In the suit, two classes — direct purchasers and indirect purchasers — claimed that the nine defendants conspired to fix the price of “oriented strand board,” or OSB, an engineered wood product that has largely replaced plywood in recent years.

The suit said the nine companies together control 95 percent of the OSB market in North America and allege that, in June 2002, the defendants tacitly agreed to raise OSB prices in order to revitalize the stagnating OSB market.

The conspiracy, the suits allege, centered on reducing supply in order to drive up prices.

The defendants kept OSB from the market through mill shutdowns, the suit alleged, and by delaying or canceling the construction of new OSB mills.

The defendants confirmed their agreements during meetings at industry trade shows and events, the suit alleged, and were able to police the conspiracy by monitoring each other’s production and pricing in Random Lengths, an industry periodical published twice a week.

Since Random Lengths included lists of OSB prices by region, the suits allege, the defendants could monitor their competitors and ensure that no member of the conspiracy “cheated” by offering significantly different prices.

The suits allege that the conspiracy was wildly successful, resulting in “a meteoric rise in OSB prices and ill gotten, record profits at plaintiffs’ expense.”