Mikal Watts, partner at Watts Guerra poses Wednesday, April 13, 2016, at his office in San Antonio, Texas. Photographed for Texas Lawyer Magazine. Photo Credit: Mark Sobhani Photography

Lawyers representing individual farmers who sued over genetically modified corn seed claim the lead plaintiffs attorneys in a $1.51 billion class action settlement cut them out of the negotiations so they could pocket exorbitant fees, and one of those attorneys, Mikal Watts, did so by convincing 60,000 farmers to retain him, according to a newly filed lawsuit.

Lead plaintiffs attorneys have challenged the claims, which U.S. District Judge John Lungstrum in Kansas rejected last month. Watts, of Watts Guerra in San Antonio, Texas, has called the new suit “without merit” and “frivolous.”

The complaints come as Lungstrum preliminarily approved the settlement last month on behalf of a class of more than 600,000 farmers who alleged Syngenta AG sold genetically modified corn seed that China refused to import, causing farmers and other producers to lose billions of dollars. He set a final approval hearing for Nov. 15.

Earlier this year, a pair of Texas attorneys claiming to represent 9,000 farmers filed a motion to delay approval of the settlement, insisting the lead lawyers who negotiated the deal kept their clients in the dark on “how the settlement would be divided and distributed between the class actions and the individual producer plaintiffs.” In particular, they claimed Watts and another lawyer on the plaintiffs settlement negotiation committee, Clayton Clark of Clark, Love & Hutson in Houston, dropped a more favorable settlement for farmers with individual lawsuits in exchange for higher fees.

Then, on April 24, a Minnesota attorney sued Watts. He claimed Watts and more than a dozen other firms conspired to convince 60,000 farmers not to participate in the class action, and now could end up with $200 million in fees. Such an “epic fraud of omission” violates the Racketeer Influenced and Corrupt Organizations Act, Minnesota attorney ethics rules, and their fiduciary duties to their clients, wrote Minneapolis attorney Doug Nill.

“Defendants' misconduct stains the administration of justice,” according to the lawsuit, brought by the owners of two North Dakota farms on behalf of the 60,000 farmers. “Defendants solicited farmers as clients through deceit and secretly traded their legal rights for money and favors.”

The suit asked to void the retainer agreements, which include a contingency fee rate of 40 percent.

It's not the first time Watts has faced scrutiny. Federal prosecutors indicted him on charges that he submitted phony clients to recover damages from the Deepwater Horizon oil spill in 2010. A federal jury acquitted him in 2016.

In an interview, Watts said he's never heard of Nill.

“He never set foot in the litigation in this case,” Watts said. “Nill's lawsuit is the byproduct of not being involved in any of the litigation nor any of the negotiations. His claims are demonstratively ignorant and false, and we'll prove he doesn't know what he's talking about.”

Nill called Watts' statement an “ad hominem attack.”

“They say the lawsuit is frivolous and false, but they do not say what is frivolous or false about the lawsuit,” he wrote.

The dispute mirrors similar fee fights that have erupted in mass torts between plaintiffs attorneys appointed to represent the class and those who have brought individual suits on behalf of their clients. Similar disputes have erupted in the $1 billion concussion settlement with the National Football League and in litigation over the water contamination in Flint, Michigan.

The issue comes up in mass torts that have a mix of individual cases, which have retainer agreements, and class actions where a judge approves the fee award, said Elizabeth Burch, a professor at the University of Georgia School of Law.

“There is a lot of precedent where there's a class action at the beginning and everyone knows the lay of the land, but when you convert mass actions to class actions, people are less certain about their fees,” she said.

In fact, Nill acknowledged the controversy in his statement: “This is a nationally significant case that addresses the intersection of mass torts with individualized injuries and class actions with common claims and damages,” he wrote. “It exposes how the mass tort … individual suit model has been exploited by some lawyers to collect unreasonable fees from clients.”

The Syngenta multidistrict litigation, created in 2014, involved subclasses of farmers in eight states planned for trials this year. Last year, a federal jury awarded $217.7 million to a class of Kansas farmers in the first bellwether trial.

The initial settlement, outlined in a Sept. 25 confidential term sheet filed under seal, called for two agreements—one on behalf of the class, and one on behalf of the individual plaintiffs, according to court filings. But the negotiated deal, outlined in a March 26 motion for preliminary approval, encompassed four subclasses—two on behalf of farmers, one for grain handling facilities and another for ethanol producers.

Watts said the claims process under the initial settlement model would have been too expensive to administer.

“The courts placed a significant amount of pressure on the litigants to simplify the settlement,” he said. “They persuaded me that a simplified single national class would result in the farmers being paid years sooner and more money.”

But in their Feb. 27 motion to delay the settlement's approval, attorneys Mitchell Toups and Richard Coffman, both in Beaumont, Texas, wrote that when they asked for details of the settlement negotiations, they received “radio silence.” Another Texas lawyer, D. Allen Hossley, who claimed to represent 650 farmers, joined the motion. Members of the plaintiffs' settlement negotiation team countered in court papers that the Texas lawyers were not entitled to drafts of the settlement. In an April 10 order, Lungstrum found the term sheet was not binding.

Neither Toups, of Weller, Green, Toups & Terrell, and Coffman, of The Coffman Law Firm, responded to email requests for a comment. Hossley, of Hossley & Embry in Tyler, Texas, also didn't respond.

Nill's suit claims Watts and the other firms never told the farmers, whose cases were brought in Minnesota state court, that they could participate in the class action. Instead, through “a barrage of advertisements and community meetings,” they insisted that filing an individual lawsuit was better than joining the class action, which would result in “only a gift certificate and discounts for seed corn.”

In addition to Watts, the case names firm partner Francisco Guerra and Jon Givens, of counsel, who lives in Alaska. It also names 13 other small law firms or solo practitioners in Indiana, Illinois, Kansas, Minnesota, Nebraska, North Dakota and Washington, D.C. Those firms either could not be reached or did not return calls or emails requesting a comment.

Clark and two other members of the plaintiffs' settlement negotiation committee, Chris Seeger of New York's Seeger Weiss and Daniel Gustafson of Gustafson Gluek, either declined to comment or did not respond to a request for comment. Patrick Stueve of Kansas City, Missouri-based Stueve Siegel Hanson, co-lead and liaison counsel, also did not respond.

Lead counsel's motion for attorney fees is due July 11. According to court filings, they plan to ask for 30 percent of the settlement fund.

Nill and the Texas lawyers called that request excessive. Nill's suit noted that in most mega-fund settlements, class action lawyers seek about 10 percent to 12 percent of the fund. If class counsel got 10 percent, the suit said, the Watts farmers would end up paying 46 percent in legal fees. At 30 percent, they would fork over 58 percent of their settlement payments.

Toups, Coffman and Hossley, in a March 26 opposition to approve the settlement, said that would put individual plaintiffs “at an unfair economic disadvantage” and “pit individual plaintiffs against their private counsel.”

But Watts, in his statement, said his firm had spent “tens of millions of dollars and invested tens of thousands of hours” on the case.

Objections to the settlement are due this summer. The settlement contains a provision that if a certain percentage of class members opt out—the exact number filed under seal—the deal is off. Nill said he has no issues with the settlement, and Watts felt confident about its approval.

“I don't see a run on the bank in terms of complaints,” Watts said. “I represent 57,000 farmers. I'm going to communicate to every one of them the details of the settlement, and why it's my belief that it's in their best interest. But I will communicate their right to opt out. I believe this is their best opportunity to get paid quickly in the amount that's fair.”

Correction: This story corrects the number of farmers retained by Mikal Watts. It's 60,000.