Welcome to Critical Mass, Law.com's weekly briefing for class action and mass tort attorneys. Here's what's happening this week: Michael Avenatti's criminal charges fueled a fight over the appeal of his $454M class action verdict. Law firms objecting to their share of $550 million in mesh fees have accused lead plaintiffs' attorneys of self-dealing and bill-padding. Find out who's now representing Monsanto in the third Roundup trial.

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Class Needs a Substitute for Michael Avenatti

The embattled attorney Michael Avenatti–best known for his representation of the adult film actress known as Stormy Daniels and positioning himself as a nemesis of President Donald Trump–earned a measure of fame in the class action world for a $454 million verdict against Kimberly-Clark over the price of allegedly defective surgical gowns. That verdict is now on appeal, and two groups of attorneys are competing over who should replace Avenatti as lead class counsel in the wake of federal criminal charges filed against him last week over allegations of extortion and bank fraud.

Check out who's competing: Two lawyers already working on the case asked to lead, and Avenatti supported them. But another motion comes from a receiver appointed earlier this year to pursue a $10 million court judgment against Avenatti's former firm, Eagan Avenatti. The receiver wants lead class counsel to be Frank Sims & Stolper, where partner Jason Frank is pursuing the $10 million judgment to collect unpaid compensation earned as a former contract attorney at Avenatti's firm.

Coincidence? Not at all. In a separate judgment action, Frank filed a Feb. 12 motion to appoint a receiver and cited at least $10 million in attorney fees that could come from the class action. He also, by the way, mentioned the same $1.6 million settlement that Avenatti allegedly embezzled from a client trust account, according to California federal prosecutors.

Frank wrote that Eagan Avenatti and Avenatti “have been concealing millions of dollars of EA's assets in undisclosed bank accounts and client trust accounts and have been improperly and fraudulently transferring millions of dollars to Avenatti and his various corporate entities, as well as to third parties. This includes brazen acts of bankruptcy fraud that have been uncovered during these post-judgment proceedings.”

A New Mesh Mess Over Attorney Fees

With $550 million in the pot, a fee fight among the 94 law firms claiming common benefit work in the transvaginal mesh litigation is not surprising. But Adam Slater (Mazie Slater) last week leveled a bombshell accusation including allegations of self-dealing and bill-padding among the lead plaintiffs' attorneys.

Slater is objecting to the $6.02 million that a fee committee and a special master awarded to his firm. But get this: He also claims the special master, retired Madison County, Illinois, Circuit Court Judge Daniel Stack, told him he “was sickened” and “angered” that plaintiffs' attorney Bryan Aylstock (Aylstock Witkin) pressured the head of the fee committee, Henry Garrard (Blasingame Burch), to boost the amount of fees to his firm. Stack also told him that Motley Rice had padded its hours.

Shanin Specter (Kline & Specter), who is challenging $3.7 million in fees, raised similar concerns in the allocation process.

Garrard has denied the account, and his response is due April 9.

To get some perspective, I reached out to Elizabeth Burch (University of Georgia School of Law). She told me:

“These kinds of questions always seem to arise when you have a fee allocation committee comprised of lawyers who have a stake in the outcome. It's come up in Vioxx and Chinese Drywall, to name but two. Other judges have taken different approaches, by appointing a CPA from the outset to monitor monthly billing reports and spot billing outliers earlier on. That approach combined with a third party neutral in lieu of an attorney-led committee may head off some of these allocation questions and skirmishes by instituting a transparent process on the front end.”

Who Got the Work?

The day after a federal jury in San Francisco awarded $80 million in the second trial over Monsanto's herbicide Roundup, a third trial opened in California's Alameda County Superior Court. The plaintiffs are a married couple from California who allege they both got cancer after spraying Roundup on their properties for 20 years. Many of the same plaintiffs' lawyers are in court again: Michael Baum and R. Brent Wisner (Baum Hedlund), and Michael Miller (The Miller Firm). “We are building upon what we've learned form the prior two cases,” Baum told me. Bayer, which owns Monsanto, has switched up its trial team, led by Kelly Evans (Evans Fears & Schuttert) and Tarek Ismail (Goldman Ismail).

Here's more you need to know:

Talc Tiebreaker: A jury in New Jersey's state court returned a defense verdict last week in the third trial alleging Johnson & Johnson's talcum powder products caused mesothelioma. The verdict gives Johnson & Johnson a 2-1 record in the jurisdiction of its headquarters. It was a big win for Morton Dubin (Orrick) and Allison Brown (Weil Gotshal), and a loss for The Lanier Law Firm.

High Score: Lawyers who won an injunction barring the NCAA from capping education-related benefits for college athletes are seeking $45 million in attorney fees for their “historic and substantial judgment.” Winston & Strawn, Hagens Berman and Pearson, Simon & Warshaw claimed last week that plaintiffs' lawyers spent more than 51,000 hours on the case.

Los Angeles Gets Shook: Shook, Hardy & Bacon has opened a Los Angeles office by bringing in three partners from Sidley Austin. According to this Law.com story, Michael Mallow, co-head of Sidley's consumer class action defense practice, joined partners Mark Campbell and Rachel Straus, and Darlene Cho, of counsel, along with an associate, in the move. Straus cited Shook's commitment to diversity, noting that its executive council has 45 percent women and diverse attorneys, including firm chair Madeleine McDonough.

Thanks for reading Critical Mass! See you next week.