United States District Court, E.D. Pennsylvania
GLENDA JOHNSON, et al.
SMITHKLINE BEECHAM CORPORATION, et al.
S. Diamond, J.
in this thalidomide products action ask me to reallocate
exclusively to Plaintiffs' counsel the fees and costs
incurred by Special Discovery Master William T. Hangley, whom
I appointed to address the discovery complaints made by those
same Defendants. The fees and costs Defendants find
particularly irksome were incurred when Mr. Hangley inquired
into the circumstances surrounding the formation of an
unsavory agreement by which lead Defendant GlaxoSmithKline
would not seek sanctions against Plaintiffs' counsel
Hagens Berman Sobol Shapiro in return for Plaintiffs
withdrawing their products claims against GSK. Until Mr.
Hangley completes this inquiry, I cannot determine which (if
any) “party is more responsible than other parties for
the reference to [Mr. Hangley].” Fed.R.Civ.P. 53(g)(3).
Accordingly, I will deny Defendants' Motion without
previously set out the tortuous background of this
litigation. (See Doc. Nos. 371, 482.) Briefly, from
2011 to 2014, fifty-two Plaintiffs represented by Hagens
Berman initiated actions in which they alleged that some
fifty years before, thalidomide had caused them to suffer
severe birth defects. The drug was produced or distributed by
Defendants GlaxoSmithKline LLC, GlaxoSmithKline Holdings
(Americas) Inc., Sanofi-Aventis U.S. LLC, and Grünenthal
GmbH. Most of the Complaints were initially filed in state
court and removed to this Court. See Johnson v.
SmithKline Beecham Corp., 724 F.3d 337, 360 (3d Cir.
2013). The verifications attached to those Complaints were
signed by Counsel.
Appointment of a Special Discovery Master
a statute of limitations affirmative defense, Plaintiffs
alleged, inter alia, that Defendants' fraudulent
concealment had tolled the running of the limitations clock.
(See Doc. No. 76.) Some Plaintiffs also alleged that
they could not reasonably have discovered until very recently
that thalidomide had caused their birth injuries.
(Id.) Defendants moved to dismiss, arguing that
because Plaintiffs had sustained their birth injuries in the
late 1950s or early 1960s, their claims necessarily were
time-barred. (Doc. Nos. 74, 86.) Because I was obligated to
accept Plaintiffs' allegations as true, however, I denied
Defendants' Motions and allowed discovery to go forward.
(Doc. No. 92); see also Van Buskirk v. Carey Canadian
Mines, Ltd., 760 F.2d 481, 498 (3d Cir. 1985)
(“Since the applicability of the statute of limitations
usually involves questions of fact for the jury, defendants
bear a heavy burden in seeking to establish as a matter of
law that the challenged claims are barred.”).
promptly sought to learn when each Plaintiff knew or
reasonably should have known that thalidomide may have caused
his or her birth defects. (See Doc. No. 95.) After
Defendants complained that Plaintiffs had repeatedly failed
to comply with these critical discovery requests, Defendants
urged me to dismiss all Plaintiffs' claims with
prejudice. (Doc. No. 232; see also Doc. Nos. 147,
154, 166, 206, 222.) Although I declined to dismiss, I
recognized the legitimacy of Defendants' complaints.
Accordingly, on June 17, 2014, I proposed appointing Mr.
Hangley in the hope that he would resolve Defendants'
discovery difficulties. (Doc. No. 239); see also
Fed.R.Civ.P. 53(b)(1). Indeed, I ordered Mr. Hangley,
inter alia, to “[m]onitor and report on
Plaintiffs' compliance with their discovery and
disclosure obligations respecting the Thalidomide discovery
issue, and . . . ensure Plaintiffs' compliance with
[those] obligations.” (Doc. No. 256 ¶ 4(b).) No
Party objected to Mr. Hangley's appointment, or to my
Order that the Special Master's fees and costs would be
paid equally by Plaintiffs (fifty percent) and Defendants
(fifty percent). (Id. ¶ 9.)
Berman Seeks to Withdraw After Defendants Seek
time Mr. Hangley was able to confer with all counsel, the
claims of several Plaintiffs had been terminated because the
facts refuted Plaintiffs' allegations. (See Doc.
Nos. 168, 258, 263, 265.) Accordingly, on July 17, 2014, Mr.
Hangley ordered Hagens Berman to “investigate each of
the remaining active cases” and “decid[e] [by
September 16, 2014] whether it should continue to be
prosecuted or dismissed with prejudice by consent.”
(Doc. No. 268 ¶ 1.) In July and August, 2014, GSK and
Grünenthal asked me to sanction Hagens Berman (but not
its clients) for its bad faith prosecution of three of these
time-barred matters. (Doc. Nos. 258, 281, 310.) I referred
the sanctions requests to Mr. Hangley-again, without
objection from any Party. (Doc. No. 316.)
October 28, 2014-well after briefing and argument of the
Sanctions Motions- GSK's counsel reported that GSK had
reached an extraordinary “agreement” with Hagens
Berman: GSK would withdraw its Sanctions Motions in exchange
for all Plaintiffs (save one) dismissing with prejudice their
claims against GSK. (Letter from Michael T. Scott to Court,
Doc. No. 394.) GSK later clarified that-despite their prior
representation that the “agreement” included
“[a]ll plaintiffs currently represented by Hagens
Berman”-the “agreement” did not include the
six Plaintiffs as to whom Hagens Berman had filed Motions to
Withdraw between May and October, 2014. (Doc. No. 397.)
Accordingly, on November 14, 2014, Hagens Berman moved for
voluntary dismissal of the claims twenty-eight
Plaintiffs' had brought against GSK. (Doc. No. 409.)
Hangley Inquires Into the Propriety of the GSK-Hagens Berman
appeared to me that the “agreement” benefitted
GSK and Hagens Berman to the detriment of the twenty-eight
Plaintiffs, who would give up their claims for no benefit.
Accordingly, I ordered Mr. Hangley to determine whether these
Plaintiffs had knowingly, voluntarily, and intelligently
agreed to dismiss their claims against GSK. (Doc. No. 420);
see also Green v. Nevers, 111 F.3d 1295, 1301 (6th
Cir. 1997); United States v. Mercedes-Benz of N. Am.,
Inc., 547 F.Supp. 399, 400 (N.D. Cal. 1982) (the court
may “look behind” a stipulation of dismissal
“to determine whether there is collusion or other
improper conduct giving rise to the dismissal”).
Although Defendants did not object, Hagens Berman objected
vigorously, unsuccessfully seeking mandamus to stop Mr.
Hangley's inquiry. See In re Alexander, No.
15-2245, 2015 WL 3479384, at *1 (3d Cir. May 29, 2015). On
August 10, 2016, Mr. Hangley submitted a Report in which he
reluctantly recommended that I grant the dismissals, noting
that Hagens Berman had at least partially obstructed his
inquiry. (Doc. No. 535 at 4, 35.) I have not yet ruled on
Plaintiffs' Motions for Voluntary Dismissal or decided
whether to accept the August 10 Report and Recommendation.
point, I turned my attention to the six Plaintiffs who had
refused to dismiss their claims against GSK and the other
Defendants. In its Motions to Withdraw from representing the
six, Hagens Berman stated that that the firm could not,
consistent with its professional obligations, continue to
prosecute the claims. (Doc. Nos. 207, 301, 342, 343, 375,
382.) Needless to say, this gave rise to concerns respecting
both the propriety of Hagens Berman's actions throughout
the litigation and the viability of the consents to dismiss
the firm had already obtained. See Chester v. May
Dep't Store Co., No. 98-5824, 2000 WL 12896, at *1
(E.D. Pa. Jan. 7, 2000) (withdrawal denied where there is
“no suggestion that counsel was unaware of his
client's history and propensities when he accepted the
representation and proceeded to litigate this matter”).
Accordingly, on March 14, 2016-without objection from any
Party-I ordered Mr. Hangley to advise me as to whether to
grant the Motions to Withdraw. (Doc. No. 532.)
Mr. Hangley anticipated questioning the six Plaintiffs (one
of whom has since passed away) and their Hagens Berman
lawyers (now adverse to their clients with respect to the
withdrawal motions) about privileged communications, he
proposed proceeding in the absence of Defendants or their
counsel. (Doc. No. 539.) Defendants readily agreed. On
December 12, 2016, all three Defendants waived participation
in the proposed in camera proceedings. (Doc. No.
546.) Mr. Hangley conducted those proceedings on September
26, 27, and 28, 2017, during which he sought to ...