Think Through Representation in MDLs: Plaintiff’s Failure to Opt-In to Settlement Not Grounds for Plaintiff Counsel’s Withdrawal From Representation

It is well-established that lawyers seeking to withdraw from representation on the eve of trial face an uphill battle, if not guaranteed defeat.  This was recently reaffirmed by the United States District Court for the Eastern District of Missouri in HM Compounding Services, LLC, et al. v. Express Scripts, Inc.  Plaintiffs’ counsel filed a motion to withdraw citing “irreconcilable differences” two weeks before the breach of contract matter was set for trial, and not surprisingly, the court required counsel to proceed with the representation.

The complexity of and costs associated with multidistrict litigations (MDLs), on the other hand, may be speeding up the proverbial stopwatch as to when motions to withdraw are no longer viable.  In August 2018, the United States District Court for the District of New Jersey (DNJ) denied plaintiff counsel’s motion to withdraw even though discovery was ongoing, trial was not yet scheduled, and the representation was likely to cost counsel more than any potential verdict in the case – while simultaneously establishing that a plaintiff’s refusal to opt into a settlement program is not grounds for withdrawal.

In McDaniel v. Daiichi Sankyo, et al., about 2,000 lawsuits were filed in an MDL alleging adverse reactions to the olmesartan family of medications.  Approximately two years into the MDL, the parties negotiated a detailed voluntary settlement program into which each plaintiff was required to “opt in” in order to participate. When plaintiff McDaniel refused to opt in – one of only five plaintiffs to do so – plaintiff’s counsel filed a motion to withdraw from representation.  Counsel argued that settlement was in McDaniel’s best interest, the withdrawal would not have a materially adverse effect on McDaniel because trial had not yet been set nor discovery completed, and that to continue the representation would be oppressively expensive for counsel.

The DNJ denied the motion citing three reasons.  First, the fact that McDaniel’s retainer agreement permitted counsel’s withdrawal was immaterial because the agreement “did not supersede counsel’s obligations under the Rules of Professional Conduct.”

Second, the court found withdrawal would materially prejudice McDaniel because it was unlikely he could retain new counsel, even if the matter was not on the eve of trial.  McDaniel’s status as one of only five plaintiffs to refuse to settle, in tandem with the high expense associated with trying the case, rendered it “almost certain” in the court’s eyes that he would not be able to find substitute counsel.  The court also noted it would take replacement counsel “a significant amount of time to become familiar with the case” in light of the complex product liability theories involved; this was the same reason why McDaniel could not reasonably be expected to proceed pro se.

Finally, the court held that the financial burden on counsel to try McDaniel’s case was not grounds for withdrawal.  The court stressed that “[t]he fact that it will be expensive to litigate this case is not a surprise to counsel. . . . If counsel is now ‘scared off’ by the prospect for paying for trial, counsel should not have undertaken the representation of plaintiff in the first instance.”

The DNJ’s decision establishes that plaintiff counsel will not be able to escape representation simply because a plaintiff refuses to opt into a negotiated settlement program. The high costs associated with taking a product liability claim to trial are not only insufficient to warrant withdrawal, but actually weigh against permitting counsel to escape representation.