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A firm that represented plaintiffs in a now-settled federal class action may demand $41,831 in document production fees from a firm representing clients who opted out of the class and needed the case’s discovery to pursue their own lawsuits in state courts, the 3rd U.S. Circuit Court of Appeals has ruled. When Pittsburgh-based Specter Specter Evans & Manogue handled the class action, brought against Metropolitan Life Insurance Co. for alleged improper sales practices, the federal district court overseeing the case established a document depository and issued a case management order authorizing Specter to administer the depository and charge a fee to opt-out plaintiffs seeking access to the documents, the opinion stated. The three-judge panel found that the opt-out plaintiffs’ firm, Pittsburgh-based Behrend & Ernsberger, is obligated to comply with the case management order. “Once Behrend agreed to pursue its document request from the depository,” Circuit Judge Julio M. Fuentes wrote in Drelles v. MetLife, “it implicitly agreed to abide by CMO #4.” Fuentes was joined by circuit judges Thomas L. Ambro and Leonard I. Garth. The Drelles class action dates to 1996, when federal lawsuits against MetLife were consolidated before a Western District court. Among the plaintiffs’ allegations were that MetLife had sold policies with “vanishing premiums” — premiums that would be waived after a certain number of years of patronage — but never deleted the premiums from customers’ policies as promised. In August 1999, MetLife reached a $1.7 billion settlement agreement with the plaintiffs represented by Specter, but some of the original plaintiffs, including those represented by Behrend, chose to opt out of the class. In December 2003, Behrend overcame a significant hurdle when a panel consisting of Fuentes, Ambro and Garth allowed discovery for the state court cases to commence, rejecting MetLife’s argument that the opt-out plaintiffs’ state claims amounted to relitigation of the federal case. According to the opinion, Allegheny County Common Pleas Judge R. Stanton Wettick Jr. in July 2000 granted Behrend’s motion to compel discovery but gave MetLife the option of either providing the documents directly or having Behrend go to the document depository. MetLife ceded some of the requested documents directly but pointed Behrend in the direction of the document depository for the rest. Behrend asked Specter, administrator of the depository, for thousands of pages of documents, the opinion stated. Specter completed the request between August and December 2001, billing Behrend for 557.75 hours of paralegal work at $75 per hour. According to the opinion, Behrend objected and successfully petitioned Wettick to order that Behrend did not have to pay the cost of retrieving the documents from the depository. Soon thereafter, in response to a motion by Specter, a federal magistrate entered an order forcing Behrend to pay the $41,831 fee, and the district court affirmed. Behrend appealed that decision. The panel rejected the main points raised by Behrend, including that the terms of the Drelles case and its settlement did not apply to the opt-out plaintiffs. “Behrend cites to a litany of cases in support of its contention that the opt-out plaintiffs were not subject to the [multidistrict litigation federal class action] or any of its orders,” Fuentes wrote. “Those cases, however, all deal with attempts to enjoin opt-out plaintiffs from taking certain actions in their state court proceedings. The case before us is entirely different: It concerns the district court’s enforcement of its own case management directive.” The court also dismissed Behrend’s argument that the district court’s order to pay Specter conflicted with the Allegheny court’s ruling that Behrend was not required to do so. “CMO #4 simply dictates that Specter must be reimbursed for its production by the requesting party,” Fuentes wrote. “If Behrend in turn needs to be reimbursed for that cost by MetLife, it can seek that reimbursement from Judge Wettick.” The court also affirmed the district court’s ruling that the rate for paralegal work charged by Specter was reasonable. Behrend had claimed that the work it needed performed was file clerk labor, which typically requires a rate of $11 per hour. Specter countered that the $75-per-hour rate it had charged was marked down from the going hourly paralegal rate of $125. According to the opinion, Specter’s case was argued by firm partner David Manogue. Kenneth R. Behrend argued on behalf of the Behrend firm. Neither immediately responded to calls seeking comment. Laddie Montague of the Philadelphia complex litigation firm Berger & Montague said document production fees are common when attorneys for a class’ opt-out plaintiffs did not help the original attorneys for the class conduct discovery. “There has to be some sort of quantum meruit for the firm that does all the discovery work,” Montague said.

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