Riceland Foods v. Bayer Cropscience US , 835 F.3d 822 ( 2016 )

United States Court of Appeals
For the Eighth Circuit
___________________________
No. 15-2690
___________________________
In re: Genetically Modified Rice Litigation
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Riceland Foods, Inc.,
lllllllllllllllllllll Plaintiff - Appellee,
Don M. Downing and Adam J. Levitt, Plaintiffs’ Co-Lead Counsel and
Co-Trustees of the Genetically Modified Rice Common Benefit Fund,
lllllllllllllllllllllMovant - Appellee,
v.
Bayer Cropscience US; Bayer CropScience LP; Bayer AG; Bayer CropScience
Holding, Inc.; Bayer Corporation; Bayer BioScience NV; Bayer CropScience AG;
Bayer CropScience Inc.; Bayer CropScience LLC; Bayer CropScience Holding SA,
lllllllllllllllllllll Defendants - Appellants.
___________________________
No. 15-2693
___________________________
In re: Genetically Modified Rice Litigation
------------------------------
Riceland Foods, Inc.,
lllllllllllllllllllll Plaintiff - Appellant,
v.
Bayer Cropscience US; Bayer CropScience LP; Bayer AG; Bayer CropScience
Holding, Inc.; Bayer Corporation; Bayer BioScience NV; Bayer CropScience AG;
Bayer CropScience Inc.; Bayer CropScience LLC; Bayer CropScience Holding SA,
lllllllllllllllllllll Defendants,
Don M. Downing and Adam J. Levitt, Plaintiffs’ Co-Lead Counsel and
Co-Trustees of the Genetically Modified Rice Common Benefit Fund
llllllllllllllllllllllMovant - Appellee.
___________________________
No. 15-2850
___________________________
In re: Genetically Modified Rice Litigation
------------------------------
Riceland Foods, Inc.,
lllllllllllllllllllll Plaintiff - Appellee,
v.
Bayer AG; Bayer CropScience AG; Bayer BioScience NV; Bayer CropScience
LP; Bayer CropScience LLC; Bayer CropScience Holding, Inc.; Bayer
CropScience Inc.; Bayer Corporation,
lllllllllllllllllllll Defendants - Appellants.
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___________________________
No. 15-2893
___________________________
In re: Genetically Modified Rice Litigation
------------------------------
Riceland Foods, Inc.,
lllllllllllllllllllll Plaintiff - Appellant,
v.
Bayer AG; Bayer CropScience AG; Bayer BioScience NV; Bayer CropScience
LP; Bayer CropScience LLC; Bayer CropScience Holding, Inc.; Bayer
CropScience Inc.; Bayer Corporation,
lllllllllllllllllllll Defendants - Appellees.
___________________________
No. 15-3245
___________________________
In re: Genetically Modified Rice Litigation
------------------------------
Riceland Foods, Inc.,
lllllllllllllllllllll Plaintiff - Appellee,
Don M. Downing and Adam J. Levitt, Plaintiffs’ Co-Lead Counsel and
Co-Trustees of the Genetically Modified Rice Common Benefit Fund,
lllllllllllllllllllllMovant - Appellant,
v.
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Bayer Cropscience US; Bayer CropScience LP; Bayer AG; Bayer CropScience
Holding, Inc.; Bayer Corporation; Bayer BioScience NV; Bayer CropScience AG;
Bayer CropScience Inc.; Bayer CropScience LLC; Bayer CropScience Holding SA,
lllllllllllllllllllll Defendants - Appellees.
____________
Appeals from United States District Court
for the Eastern District of Missouri - St. Louis
____________
Submitted: April 12, 2016
Filed: August 31, 2016
____________
Before COLLOTON and SHEPHERD, Circuit Judges, and BOUGH,1 District Judge.
____________
COLLOTON, Circuit Judge.
Bayer AG, along with several of its corporate subsidiaries, and Riceland, Inc.,
appeal an order of the district court2 requiring Bayer to cause the deposit of a portion
of a settlement between Bayer and Riceland into a common-benefit trust fund. This
fund was established to compensate attorneys leading the multidistrict litigation
(“MDL”) concerning Bayer’s LibertyLink LL601 genetically modified rice. We
addressed challenges to the creation of the fund in In re Genetically Modified Rice
Litigation (Rice I), 764 F.3d 864, 870-71, 873-74 (8th Cir. 2014).
1
The Honorable Stephen R. Bough, United States District Judge for the
Western District of Missouri, sitting by designation.
2
The Honorable Catherine D. Perry, United States District Judge for the Eastern
District of Missouri.
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Bayer and Riceland argue that because their settlement was the product of
negotiations following a state-court judgment, the district court lacked jurisdiction
to order Bayer to cause a percentage of the settlement to be deposited into the fund.
As the district court explained, however, Bayer and Riceland were parties to several
federal cases in the consolidated federal litigation, and their settlement resolved the
very claims asserted by Riceland in those federal cases. We conclude that the district
court properly ordered Bayer to hold back a portion of the Bayer-Riceland settlement,
and we therefore affirm the judgment.
I.
In 2006, Bayer reported to federal regulators that trace amounts of its
experimental LL601 genetically modified rice, which was not approved for human
consumption, had contaminated the commercial long-grain rice supply in the United
States. In response to this disclosure, several major importers of U.S. rice—including
Japan, the European Union, and Mexico—banned the import of U.S. long-grain rice
or imposed stringent testing requirements. Rice commodity prices and export volume
dropped precipitously following the disclosure. Although LL601 was retroactively
approved for human consumption, the contamination caused significant economic
loss to the domestic rice industry.
In hundreds of individual lawsuits, approximately seven thousand rice growers
(“producers”) and others in the rice industry (“non-producers”) sued Bayer and
related entities for losses suffered as a result of the LL601 contamination.
Approximately three hundred of those lawsuits, comprising the individual claims of
approximately five thousand plaintiffs, were filed in or removed to federal court; the
remaining plaintiffs proceeded in state court. The Judicial Panel on Multidistrict
Litigation, pursuant to 28 U.S.C. § 1407, transferred the federal cases to the United
States District Court for the Eastern District of Missouri for pretrial proceedings. In
re LLRice 601 Contamination Litig., 466 F. Supp. 2d 1351 (J.P.M.L. 2006).
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In April 2007, the district court appointed a leadership group of plaintiffs’
attorneys to coordinate the centralized multidistrict proceedings. Don Downing and
Adam Levitt, appellees and cross-appellants here, were named co-lead counsel for
this coordinated effort. Over the course of the litigation, the leadership group took
over one hundred depositions, managed extensive discovery, and conducted several
bellwether trials; evidence generated from each of these efforts was made available
to all plaintiffs in state and federal court. In addition, the leadership group prevailed
on several motions for summary judgment. A special master determined that the
leadership group and other lawyers engaged by the leadership group invested over
100,000 hours for the common benefit of all plaintiffs.
To compensate lawyers who would contribute to this collective effort, the
district court ordered the creation of a common-benefit trust fund (“Common Benefit
Order”). This order required Bayer to hold back and deposit into the fund a
percentage of all recoveries in the federal litigation: eleven percent of recoveries by
producer plaintiffs, ten percent of recoveries by non-producer plaintiffs, and nine
percent of recoveries by European non-producer plaintiffs. The district court
“reluctantly” determined that it lacked jurisdiction to apply the Common Benefit
Order to “settlements and judgments related to cases pending in state courts,” even
though the state-court plaintiffs would be “unjustly enriched,” because plaintiffs in
those cases were not parties before the district court. As a result, the court limited the
scope of its order to gross recoveries “related to each federal genetically modified rice
case.” In Rice I, we affirmed the district court’s conclusion that it lacked jurisdiction
over state-court plaintiffs, holding that an MDL judge “does not have the power to
order parties in cases not before it to contribute to the Fund.” 764 F.3d at 874.
Riceland, an Arkansas rice-milling and wholesaling cooperative, was named
as a defendant in over two hundred LL601-related lawsuits; in many cases, Riceland
was a co-defendant with Bayer. But, in the words of Riceland’s attorney, the
company “quickly pivoted and was immediately at the forefront of . . . the LLRICE
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litigation as a plaintiff against Bayer.” Riceland filed a complaint and multiple cross-
claims and third-party complaints against Bayer, claiming that Bayer was negligent
in failing to prevent its experimental rice from contaminating the U.S. long-grain rice
supply. Riceland asserted claims against Bayer in at least seven cases that were part
of the consolidated multidistrict proceedings.
Two cases in which Riceland asserted claims against Bayer are relevant to this
appeal. In Meins v. Bayer AG, No. CV-2008-108 (Ark. Cir. Ct. Arkansas Cty. filed
Aug. 7, 2008), rice farmers and rice-farming entities sued Bayer and Riceland over
the LL601 contamination. Riceland filed a cross-claim against Bayer in Meins; on
the same day, Riceland filed an identical, original complaint against Bayer in federal
court. Riceland Foods, Inc. v. Bayer AG, No. 3:09-cv-00008-BSM (E.D. Ark. filed
Jan. 20, 2009), transferred, No. 4:09-cv-00433-CDP (E.D. Mo. dismissed Aug. 3,
2015).
The plaintiffs in Meins settled their claims against Bayer, leaving only
Riceland’s cross-claims for trial. A jury entered a verdict in favor of Riceland and
awarded the company $11.83 million in compensatory damages and $125 million in
punitive damages. The trial court, applying Arkansas’s statutory cap on punitive
damages, reduced the punitive damages award to $1,073,292.
Riceland appealed the remittitur in Meins. After Riceland filed its notice of
appeal, the Arkansas Supreme Court held in a separate LL601 case that the limit on
punitive damages violated the state constitution. Bayer CropScience LP v. Schafer,
385 S.W.3d 822, 829-32 (Ark. 2011). In its opening brief to the state supreme court,
Riceland argued that Schafer required the court to reinstate the full punitive damage
award; Bayer cross-appealed, arguing that the jury’s finding that Riceland was thirty
percent at fault barred the company from recovering damages. On the punitive
damages issue, Bayer conceded that Schafer applied, but argued that if the verdict
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stood, then remand was appropriate to determine whether the $125 million award
violated the state or federal constitution.
After briefing was complete in the Meins appeal, Riceland and Bayer agreed
to settle Riceland’s claims. Under the settlement agreement, Bayer agreed to pay
Riceland $92 million and to indemnify Riceland against any claims arising out of the
LL601 litigation. In exchange, Riceland released “any and all claims . . . growing or
arising out of the presence in the United States rice supply of Bayer GM Rice.” The
release clause stated: “This specifically includes, but is not limited to, the claims
brought in the Scott Meins, et al. v. Bayer AG, et al. case.” The settlement also
required Riceland to dismiss with prejudice its claim in Meins, but did not specifically
mention Riceland’s pending federal lawsuit. Neither Bayer nor Riceland moved to
dismiss Riceland’s federal complaint. Bayer represents to the court that it has paid
the $92 million due to Riceland under the settlement.
The plaintiffs’ leadership group attempted, on three separate occasions, to
require Riceland to contribute to the common-benefit fund. On the eve of the Meins
trial, the leadership lawyers moved in the district court for an order applying the
Common Benefit Order to any recovery Riceland obtained in the state-court trial.
The district court denied the motion, again concluding that although Riceland
received a substantial benefit from the leadership group’s work, the court lacked
jurisdiction over the state-court case. The leadership group also moved to intervene
in Meins to have the state trial court determine whether Riceland should be required
to abide by the Common Benefit Order; the motion to intervene was denied.
After Bayer and Riceland reached their settlement, the leadership group moved
to apply the Common Benefit Order to Riceland’s recovery under the settlement.
Because Riceland was a non-producer plaintiff and a party in the coordinated federal
proceedings, the leadership group argued that Riceland was bound by the Common
Benefit Order to contribute ten percent of the settlement to the common-benefit fund.
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The district court agreed, concluding that the agreement’s release of “any and all
claims”—including those asserted in Riceland’s federal lawsuit—gave the court
jurisdiction to order funds to be held back from the settlement. The court thus
ordered Bayer to “cause to be deposited” $9.2 million into the common-benefit fund.
The court entered a separate order dismissing Riceland’s federal lawsuit based on its
finding that the settlement resolved the parties’ dispute. Bayer and Riceland appeal
the application of the Common Benefit Order to the settlement.
Two other actions involving the subject matter of this appeal are currently
pending. In Downing v. Riceland Foods, Inc., No. 4:13-cv-00321-CDP (E.D. Mo.
filed Feb. 20, 2013), the leadership group has sued Riceland for unjust enrichment
and quantum meruit based on the services rendered by the leadership group. The
district court stayed the suit pending resolution of this appeal. Riceland has also sued
Bayer in Arkansas state court, seeking a declaratory judgment that the settlement
agreement assigned to Bayer the cost of contributing to the common-benefit fund.
Riceland Foods, Inc. v. Bayer CropScience LP, No. CV-2015-072 ND (Ark. Cir. Ct.
Arkansas Cty. filed June 30, 2015).3
II.
This issues presented on appeal can be distilled into three principal questions.
First, Bayer and Riceland both argue that the order requiring Bayer to hold back a
portion of the settlement should be vacated because the district court lacked
jurisdiction to apply the Common Benefit Order to their settlement. Downing and
Levitt, on behalf of the plaintiffs’ leadership group, maintain that the district court
properly exercised jurisdiction over these parties. Next, even if the district court had
3
Bayer’s motion for the court to take judicial notice of the state declaratory-
judgment action is granted. See Fed. R. Evid. 201(b)(2), (d); Great Plains Tr. Co. v.
Union Pac. R.R. Co., 492 F.3d 986, 996 (8th Cir. 2007). Bayer’s motion to strike
Parts I and II of the plaintiffs’ leadership group’s reply brief is denied.
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jurisdiction to order an allocation of funds from the settlement, Bayer and Riceland
argue that the amount ordered here was too large. Finally, if the court properly
required a payment, the parties dispute whether Bayer or Riceland should be required
to deposit money into the common-benefit fund. Bayer and Riceland each argue that
the other should be required to pay. The leadership group contends that the district
court’s order was correct as entered, but argues alternatively that Riceland should be
required to pay if Bayer is not.
A.
Bayer and Riceland argue that the district court lacked jurisdiction to order a
contribution to the common-benefit fund. They contend that the order conflicts with
this court’s decision in Rice I.
In Rice I, the plaintiffs’ leadership group appealed the district court’s
conclusion that it lacked jurisdiction to apply the Common Benefit Order to plaintiffs
who recovered damages from Bayer in state court. 764 F.3d at 873-74. State-court-
only plaintiffs, the leadership group argued, benefited from the common-benefit work
and would be unjustly enriched unless the Common Benefit Order was applied to
them as well. Id. at 874. While recognizing the potential inequities involved, we
agreed with the district court that it lacked jurisdiction over plaintiffs that were not
in federal court. Id.; accord In re Showa Denko K.K. L-Tryptophan Prods. Liab.
Litig.-II, 953 F.2d 162, 165-66 (4th Cir. 1992); Hartland v. Alaska Airlines, 544 F.2d
992, 994, 996, 1001-02 (9th Cir. 1976). Bayer and Riceland now argue that Rice I
precluded the district court from ordering an allocation from their settlement, because
the settlement was the product of negotiations during the appeal of a state-court
judgment.
Rice I does not control this case, because Riceland and Bayer were parties to
multiple federal lawsuits before the district court at the time of settlement. Unlike the
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state-court-only plaintiffs in Rice I, Riceland pursued its claims against Bayer in both
state and federal court. Applying the Common Benefit Order to the state-court-only
plaintiffs in Rice I would have required the federal court to exercise authority over
parties that never appeared in federal court. Riceland, by contrast, “voluntarily
entered the litigation” and sought a federal forum by filing a federal complaint and
asserting third-party claims in the consolidated federal proceedings. Showa Denko,
953 F.2d at 166. The district court therefore had jurisdiction to enter any orders
regarding Riceland that are consistent with the authority of a transferee court in
centralized multidistrict litigation.
No party challenges the propriety of the Common Benefit Order or the “well
established” authority of a district court to compensate leadership lawyers by ordering
funds to be set aside from recoveries obtained by other plaintiffs in multidistrict
litigation. Walitalo v. Iacocca, 968 F.2d 741, 747 (8th Cir. 1992). The Common
Benefit Order required Bayer to hold back amounts “related to each federal
genetically modified rice case.” The Bayer-Riceland settlement released “any and all
claims” of Riceland against Bayer, including Riceland’s claims in the federal cases.
As a payment in consideration for resolving all of Riceland’s claims, including those
in federal cases, the settlement amount thus “related to” a federal genetically modified
rice case within the meaning of the order.
Bayer and Riceland attempt to narrow the scope of the settlement to exclude
the claims asserted in Riceland’s federal complaint and cross-claims. Riceland argues
that the settlement’s release clause “expressly—and only—applies to Meins.” This
argument is belied by the plain language of the settlement agreement, which states
that the release “includes, but is not limited to,” the claims asserted in Meins. The
agreement expressly disclaims that it applies only to Meins.
Bayer advances the more nuanced argument that even if the terms of the
agreement could be interpreted as relating to the federal case, the parties clearly
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intended to exclude the “worthless” federal lawsuit. Bayer contends that in light of
the jury verdict in Meins, it could have secured dismissal of Riceland’s federal
lawsuit under the doctrine of claim preclusion. See Crockett & Brown, P.A. v.
Wilson, 864 S.W.2d 244, 246 (Ark. 1993) (holding that a judgment has preclusive
effect even while on appeal). Bayer argues that it would be illogical to interpret the
agreement as settling a case with de minimis settlement value.
That Bayer might have resolved or defeated Riceland’s federal claims in a
different way, however, does not alter the plain terms of the settlement agreement.
Bayer and Riceland opted for a release that “includes, but is not limited to” Meins and
extends to “any and all claims.” “The term ‘any and all’ . . . is all-encompassing” and
includes Riceland’s federal claims against Bayer. See Sander v. Alexander
Richardson Invs., 334 F.3d 712, 716 (8th Cir. 2003).
Bayer might have eschewed such broad language and instead relied on the
doctrine of claim preclusion to defeat other claims—federal and state—arising from
the presence of Bayer genetically modified rice in the U.S. rice supply. But Bayer’s
proposed interpretation of the settlement agreement—excluding supposedly
“worthless” claims arising from the same nucleus of operative facts—would mean
that the agreement was in fact “limited to” Meins when the agreement said precisely
the opposite. If the parties wanted to resolve only the Meins lawsuit, and to leave
Riceland’s federal claims open for resolution outside the agreement, then they could
have drafted the settlement agreement more narrowly. The district court did not err
by refusing to vary the terms of the written agreement. See Hurt-Hoover Invs., LLC
v. Fulmer, 448 S.W.3d 696, 703 (Ark. 2014).
Bayer also asserts that Riceland’s federal lawsuit was “never litigated,” but this
too would not be a reason to ignore the agreement’s resolution of “any and all
claims.” In any event, there was important litigation relating to Riceland’s federal
claim. One month after Riceland filed its federal lawsuit, Bayer moved for partial
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summary judgment on all non-producer claims based on the preemptive effect of the
Plant Protection Act, 7 U.S.C. § 7756(a). If Bayer had prevailed on its motion for
summary judgment, then all of Riceland’s claims would have failed, but the
leadership group successfully defeated Bayer’s motion. The leadership group also
obtained summary judgment on several of the affirmative defenses that Bayer asserted
against Riceland, and it obtained extensive discovery materials that benefitted all
plaintiffs. So while Riceland itself may have done little individually to litigate its
federal claim, litigation on its behalf in the consolidated multidistrict proceedings did
benefit Riceland’s claims.
Riceland takes a different tack, arguing that the federal case was moot once the
parties settled, and that the district court thus lacked jurisdiction over the federal case
when it ordered Bayer to cause a deposit into the common-benefit fund. Riceland’s
argument effectively concedes that the settlement agreement encompassed the federal
claims. But while Riceland may be correct that the settlement mooted its federal
lawsuit, the district court retained jurisdiction to resolve outstanding collateral
matters, such as attorney fees. Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 395
(1990). Application of the Common Benefit Order was a comparable collateral
matter that the district court had jurisdiction to resolve in light of the settlement.
B.
Bayer and Riceland argue alternatively that even if the federal lawsuits gave
the district court authority to order an allocation from the settlement, the amount
ordered here was too large. Bayer contends that the court was required to apportion
the amount between the federal and state cases, and to limit the order to an amount
that “constituted a federal-court recovery.” Riceland similarly argues that the court
erroneously “ascribed 100% of the value of the settlement to a defunct federal case.”
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If the district court were required to assess the relative value of Riceland’s
federal and state lawsuits, then it would apply Arkansas state contract law to make
that determination. See Amana Refrigeration, Inc. v. Pidgeon’s Furniture &
Appliance Stores, Inc., 883 F.2d 657, 658 (8th Cir. 1989). But there is a first-order
question here: whether the court was required to make an apportionment at all. That
is not a question of state contract law but a question of federal law concerning the
scope of a district court’s authority in overseeing multidistrict litigation.
The equitable common-benefit doctrine permits a district court to redistribute
costs among plaintiffs when “the litigation has conferred 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.” Mills v. Elec. Auto-Lite Co., 396 U.S. 375, 393-94
(1970); see Boeing Co. v. Van Gemert, 444 U.S. 472, 478 (1980); Alyeska Pipeline
Serv. Co. v. Wilderness Soc’y, 421 U.S. 240, 264 n.39 (1975); In re Diet Drugs, 582
F.3d 524, 546-47 (3d Cir. 2009); In re Air Crash Disaster at Fla. Everglades on Dec.
29, 1972, 549 F.2d 1006, 1017-18 (5th Cir. 1977). The district court found that the
plaintiffs’ leadership group here conferred a substantial benefit on Riceland.
Riceland was before the district court as a plaintiff, cross-claimant, or third-party
claimant in at least seven federal cases. The district court had subject-matter
jurisdiction over these federal actions. This jurisdiction was a sufficient basis for the
court to exercise its equitable and managerial authority to prevent Riceland from
freeriding on the work of the leadership group.
There is no separate requirement that the court also have jurisdiction over the
corpus of the settlement, as though this were a quasi-in rem proceeding. The district
court here chose to use amount of recovery as a proxy for the benefit conferred on
individual plaintiffs, but the court could have assessed a flat fee or used some other
measure. See Showa Denko, 953 F.2d at 164; cf. Mills, 396 U.S. at 392, 394. The key
point is that Riceland was enriched by the work of the plaintiffs’ leadership counsel,
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and Riceland’s participation in federal litigation gave the district court authority to
order the setting aside of funds recovered from Bayer to prevent unjust enrichment
of Riceland.
Riceland complains that the district court failed to consider its unique role as
both a plaintiff and a defendant. The company says that it was denied access to some
discovery material and forced to expend its own resources defending against litigation
by the plaintiffs’ leadership group. For these reasons, Riceland contends that the
district court should have analyzed whether the ten percent holdback is inequitable
as applied to Riceland. Riceland, however, did not object to entry of the Common
Benefit Order. The district court, moreover, concluded that Riceland substantially
benefited from the work of the leadership group, relying on its earlier finding that
“the leadership group’s work in discovery, motion practice, and the bellwether trials
has provided a foundation for all cases involved in the litigation.” That Riceland
supplemented this foundation does not disprove or diminish the benefit it derived
from coordinate pretrial litigation. Regarding Riceland specifically, the court noted
that the leadership group mounted a successful defense on the preemption issue, and
that Riceland’s own attorney sought reimbursement from the common-benefit fund,
thus suggesting coordination with other plaintiffs’ counsel. Given the substantial
deference owed to the district court, we cannot say the court committed an abuse of
discretion by concluding that Riceland should be subject to the same set-aside
requirement as other parties who recover from Bayer.
The Bayer-Riceland settlement was the culmination of an extensive effort by
Riceland to assert its claims against Bayer in over a half dozen lawsuits in both state
and federal court. The settlement “related to” and resolved Riceland’s federal claims.
The district court therefore properly applied the Common Benefit Order to the
settlement and required a percentage of the entire settlement to be redirected to the
common-benefit fund.
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C.
Having determined that the district court properly applied the Common Benefit
Order to the Bayer-Riceland settlement, we now must address whether the district
court properly ordered Bayer to “caused to be deposited” ten percent of the settlement
into the common-benefit fund. Bayer contends that because it already paid the
settlement amount to Riceland, the district court effectively compelled it to cover
Riceland’s litigation expenses. Such an order, Bayer argues, violates the American
Rule, which prohibits federal courts from shifting the costs of litigation between
adverse parties without statutory authority or a contract between the parties.
Walitalo, 968 F.2d at 747. Bayer did not present this argument to the district court,
so we review for plain error. See Wiser v. Wayne Farms, 411 F.3d 923, 927 (8th Cir.
2005).
Citing Universal Title Insurance Co. v. United States, 942 F.2d 1311, 1314 (8th
Cir. 1991), Bayer argues that we have discretion to consider a purely legal issue for
the first time on appeal, and that plain-error review should not apply. But the two
propositions are not necessarily inconsistent. If the resolution of a purely legal issue
is “beyond any doubt,” see Wiser, 411 F.3d at 927, then the plain-error standard may
well be satisfied. In any event, Universal Title merely recognized the court’s
discretion to consider certain issues for the first time on appeal. 942 F.2d at 1314.
We disagree with Bayer that it is entitled to more searching appellate review of a
forfeited error than a criminal defendant challenging a conviction or term of
imprisonment. See United States v. Olano, 507 U.S. 725, 732 (1993).
Bayer contends that the authority conferred under 28 U.S.C. § 1407, which
authorizes consolidated pretrial proceedings in multidistrict litigation, is “merely
procedural” and does not give the district court authority to enter a fee-shifting award.
Rice I, 764 F.3d at 873-74 (quoting Showa Denko, 953 F.2d at 165). The district
court, however, did not order Bayer to pay attorney fees. It ordered Bayer to comply
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with the Common Benefit Order and “cause to be deposited” a portion of the
settlement into the fund. Bayer has never objected to its assigned role of holding
back portions of recoveries. That Bayer opted to pay Riceland before clarifying its
obligations under the Common Benefit Order did not convert enforcement of the
order into an impermissible fee award.
Although Bayer is required under the order to cause a deposit into the common-
benefit fund, the order does not mean that the district court has shifted the ultimate
burden to finance Riceland’s litigation. The parties are disputing in state court
whether the settlement agreement assigned to Bayer the cost of complying with the
Common Benefit Order. Riceland Foods, Inc. v. Bayer Cropscience LP, No.
CV-2015-072 ND (Ark. Cir. Ct. Arkansas Cty. filed June 30, 2015). If Bayer
assumed liability for the common-benefit fee by contract, that agreement would be
a permissible form of fee shifting under the American Rule. See Walitalo, 968 F.2d
at 747. Bayer also has not disclaimed an ability to seek contribution or
indemnification from Riceland, and the district court’s carefully worded order
allowed Bayer to “cause” Riceland to make the deposit if Bayer had a legal basis to
do so. We therefore find no plain error in the district court’s order assigning to Bayer
the duty of causing a deposit of the funds due under the Common Benefit Order.
* * *
The big picture here is that Riceland was enriched by the work of the plaintiffs’
leadership group. The district court had authority to prevent unjust enrichment of
federal-court plaintiffs through the administration of a common-benefit fund. We
concluded in Rice I that where a party proceeded against Bayer exclusively in state
court, the district court lacked jurisdiction to apply the Common Benefit Order to
recoveries obtained in the state-court litigation. As a consequence, some plaintiffs
proceeding exclusively in state court would be unjustly enriched by the work of the
plaintiffs’ leadership group. Where, however, a plaintiff who benefited from this
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work chose to litigate against Bayer in both federal and state court, and to resolve its
claims in a global settlement, the district court was not required to make the loophole
larger. Application of the Common Benefit Order to the Bayer-Riceland settlement
was a proper exercise of the equitable common-benefit doctrine. The judgment of the
district court is affirmed.
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