April 9, 2017
There’s blood in the water. An uncapped class action settlement and $112.5 million in an attorney fee common benefit fund has many lawyers engaged in a feeding frenzy for their piece of the pie, leaving many retired NFL players and their families perplexed and distressed as to if they will see any substantial award.
Recently ESPN Outside the Lines reported:
As they finally close in on being compensated for brain injuries stemming from football, those former players and their families have been facing an onslaught of issues — from attorney retainer fees that could reach as high as 40 percent to lawyers poaching clients from competing attorneys; from a slew of opportunists seeking a piece of the pie to lawyers effectively threatening to sue former players to ensure they get their fees.
The article also referenced a letter written to Judge Brody by Liz Nicholson Sullivan, wife of Gerry Sullivan, a former offensive lineman with the Browns, along with dozens of other NFL wives, asking the judge to intervene. She wrote in part:
“For many of us, our husband’s medical care is dependent upon these monetary awards and they cannot survive another delay. … As wives and caregivers, we have struggled to keep the family unit intact on a shoestring budget, while managing the burden of their costly care. Our husbands need every penny they are entitled to receive out of this settlement. … Many of our men are now either gone or completely ‘lost’ to us. We have chosen to stand by them because we realize they were victims.”
I spoke with Liz and numerous other people in regard to the events taking place in the concussion settlement and have attempted to sift through the chaos.
Liz told me that her husband was diagnosed with dementia in 2005 and said that their attorney was not one of the 23 class counsel appointed which means that the Sullivan’s will pay a contingency fee to their lawyer for his work for them. She said she respects him and that “he’s doing good work for us.” Unlike many, he negotiated a lower percentage to take out of their individual award. Other players and their families haven’t been as fortunate. She told me that in many if not most instances “these class attorneys have been less than forthcoming with their clients to explain to these women and men in some cases that, oh yeah, ‘I’m taking a portion for my fair share.’”
Much of the dismay and confusion is related to the fact that not all attorneys representing plaintiffs or class members in the concussion case are designated as class attorneys and as such will not share in the $112.5 common fund that has been set aside for their pay.
Attorney arguments – literal and figurative
There are actually three primary areas in which attorney fees are in dispute. The common benefit fund set aside for class attorneys, contingency fees based on contractual agreements between individual players and attorneys, and attorney versus attorney disputes in regard to referral fees and division of work.
As the various lawsuits were consolidated and class certification sought, the attorneys involved reached out to other attorneys who represent NFL players asking them to refer their player clients and encourage them to join the class. Many attorneys feel that the class was built on these player referrals.
John Lorentz is one of those. Of the 235 players he referred to the class, three, including quarterback Jim McMahon became named Class Members. He states that Anapol-Weiss, one of the co-leads in the settlement failed to live up to the obligation of the referral contract between them. He has asked the court for intervention. Lorentz contends that he was initially promised “one-third of the net recovery reduced proportionally by any common benefit fee received by our lawyers.” He later was told he would not receive anything from the common fund and learned that the prior contingency fee with players was reduced from 33.3 percent to 23.5 percent. Since this was done without his knowledge or approval, he says he was promised a 50/50 split of this amount but states Anapol is now saying that he will receive only one-third of the 23.5 percent fee despite the considerable work he did on behalf of these clients prior to referring them to the class.
I spoke with another attorney who was also approached for referrals, Lysette Rios. She too, signed a similar contract and told me that after she referred players class counsel failed to stay in touch. I asked her if she felt she’d been deceived in the matter. “Well I technically haven’t been deceived YET so that wouldn’t be accurate. I haven’t spoken to them; I just don’t have an expectation of getting any fees based on how they are handling other lawyers.”
She explained, “I certainly understand no lawyer works for free and the lead class attorneys need to get paid. I just think the other attorneys who contributed [referral or otherwise] should get paid too. I believe there should be some consideration given to the fact that the lead counsel was there to represent the players who had been referred to them and it shouldn’t be lost on them to consider said attorneys when attempting to acquire fees. In other words, it’s possible they wouldn’t be up there representing such a large class if they didn’t have all those referrals. I can’t imagine the number of players involved didn’t have any impact on the settlement.”
I asked attorney Gene Egdorf, who is not involved in this case but has successfully litigated concussion injury against the NCAA his thoughts in this regard. “Generally speaking,” he said, “a written and signed referral agreement that has been approved by a client will be enforced.”
“Many states require that the referring lawyer be jointly responsible and perform work on the case,” he explained. “So those claims are going to vary based upon the facts of each referral. A lawyer doesn’t want a reputation of not paying his referrals. Of course here the big money is in the class fee award.”
While Rios feels the manner in which class counsel is treating both referral lawyers and supporting attorneys unfair, she is not pursuing an attempt to collect any fees for her referrals; instead, her primary concern is for the players. “I hate the idea that some players will walk away without a single dollar, yet lawyers are asking for excess of $100 million,” she said. “Let’s just hope the Court evaluates each petition for fees scrupulously and ensures money isn’t lost on the players in the process.”
As mentioned previously a common fund of $112.5 has been established for payment of Class attorneys. Inevitably disagreements are arising as to how much work was done by the various claimants in this regard. One of these is Jason Luckasevic, a Pittsburgh attorney who filed the first concussion-related case against the NFL in 2011 and represents about 500 former players. Christopher Seeger, co-lead attorney in the class action has thus far been responsible for determining attorney contributions to the common benefit and designating allocations to the various class attorneys. Luckasevic feels that Seeger is keeping the lion’s share of the common fund and that his own seven years of contributions to the class exceed the amount that has been allocated as his share.
While Judge Brody will have final say on the Petition for Attorneys Fees, detailed in Seeger’s Memorandum to the Court, it is highly unlikely that the $112.5 million set aside for these fees will be enough to satisfy the 23 firms it must be divided amongst.
An economist I spoke with feels the controversy over the $112.5 million common benefit fund is framed incorrectly. “Why would the league authorize such an enormous fee to a group of lawyers ill-equipped to prosecute such a case in court?” he questioned, further stating, “Paul Weiss wiped the floors with them and billed $31 million. The NFL paid Seeger et al. this sum to eliminate CTE and TBI from the agreement. The protocol is designed to minimize payouts and is administered by Seeger et al. He lacks the background to remotely understand the scientific minefield sowed by the NFL awaiting the claimants.”
Most if not all of the class attorneys have brought clients to the class and done work on their behalf as well as work for the common benefit. As such in the majority of instances, the attorney’s clients signed a contingency agreement designating that a percentage of any player-clients award will be deducted from the gross award as compensation for counsel. Many of the players feel their attorneys are “double dipping” and should waive their contingency fees.
In an interview with ESPN, Luckasevic said that he’d invested $1.7 million in the litigation and stood to only have $700,000 of that reimbursed through the common fund leaving him losing money for the work he did. “I’ll waive the common benefit money so I can get 25 percent,” Luckasevic said, referring to his contingency fee agreements with players he represents. This leaves many of his clients upset and worried since they didn’t feel the contingency fees would be collected after learning of the $112 million common benefit fund. An additional source of ire and worry among the players and their families is the extra 5 percent of their awards that Seeger has requested to be deducted and put into a pool for future legal fees related to the settlement.
Gene Egdorf noted, “As for the non-leads, their workload varies from case to case. You often find in class settings that the leads want their firms to do the most work and thus have the most hours to obtain the largest share of the fees. In most cases, the supporting firms are needed because of the volume of cases and/or know how, and they are given work in order to bolster their support, eliminate eventual opt-outs, cultivate future working relationship, etc. Here I don’t know what any of the lawyers did,” Egdorf said, “I’ve heard some of the ‘hours’ that have been stated by several of the lawyers and I have a hard time understanding how that level of work was done in a case that settled as this one did, with no depositions or document production.”
While some attorneys may waive or reduce contingency fees if they are sharing in the common benefit fund, others will not. The various contingency fees in play have the potential to impact players’ settlement awards greatly. Much rumor and speculation has swirled in this regard, so in order to get some perspective on this, I spoke with one of the most respected voices in the world of sports law, Daniel Wallach, who correctly predicted that Judge Brody would assign the handling of the liens against players to a U.S. Magistrate Judge. When I spoke with Wallach, Judge Brody had not yet ordered the disputed fees to Magistrate Judge David Strawbridge, but he felt this would take place and explained the process.
Wallach said that in order to minimize payout delays to the players, contested fees would be withheld from settlement awards in a registry of the court until the dispute is resolved but the remainder would be sent to the player upon approval and designation of the award amount. “I’ve seen these battles play out in other class actions and there could be an appeal of some of these decisions on these attorneys’ liens,” he explained. “It’s possible that if the attorney is unhappy with the rulings [he] can take it up on appeal and that could slow out payouts to the affected players but this will not impact the entire class. Only those players who have attorneys that are litigating these fee disputes.”
Various factors are in play regarding the attorney fees. Some are legitimate and others appear to be predatory. Some lawyers will share in the common benefit fund; others will not. Some have represented their clients throughout the litigation; others came aboard later. Another problem arising out of the competition for attorney fees is that some attorneys have gone to great lengths to poach clients from other firms, convincing players that their contingency fees are lower and that they need to change lawyers. This is only making the problem worse. Most of the liens filed thus far are from attorneys whose clients have released them “without just cause” to go with one of those attorneys. In these cases players signed contingency agreements with their original lawyers, and the liens have been filed to insure their payment. Some players now owe contingency fees to potentially two attorneys.
Daniel Wallach believes that the motions for attorney fees will be evaluated on a case by case basis, “based on the value by which the lawyer contributed to the client.” Of those I spoke with he seemed most optimistic that the courts would be able to cut through the inflated claims and arrive at a fair decision. One instance that stood out to him was a lien filed by an attorney who only retained his client this past December. “That was several years after the settlement was agreed to and after the Supreme Court finalized the settlement, so what value if anything could that attorney have brought to the client?” Wallach stated, “I really doubt they’ll be receptive to the matter of that kind of extreme situation.”
Gene Egdorf weighed in on this as well, “Many of the claimants were not plaintiffs prior to the settlement. So there are lawyers asking for fees to do no work other than perhaps to walk the claimant through the paperwork. That makes no sense to me,” he said. Egdorf further stated, “Contingency fees vary by lawyers, cases, and jurisdictions. Some states cap a fee at 33%, some have no cap. These days a 40% contingency fee is common. But let’s keep in mind, the fee is supposed to be a consideration of the work and risk involved for the attorney. I’ve had cases where our expenses have been many millions of dollars. Here, for the vast majority of NFL players, almost no real legal work was done nor financial risk undertaken. Do these lawyers deserve some compensation -sure- but what’s fair for all under the circumstances?”
All of the attorneys I spoke with felt the jockeying for position by many of the lawyers involved reflected poorly on the legal profession, but Wallach noted “This is not something that’s unique to sports litigation or that concussion settlement. The battling between lawyers in a class action is essentially par for the course in big money class action litigation. It inevitably happens and courts have to sort it out.” He called it “one of the rights of passage in class litigation,” indicating the more intense the legal battle, the more intense the fee battle is for “a piece of the pie.”
So what will actually be deducted from player awards?
Potentially, at least four things can be deducted from a class action settlement award. Contingency fees are receiving the most attention at the present time but Medicare and Workers’ Compensation payments that have already been made on behalf of class members will also be deducted, as well as any other lien (such as unpaid taxes) that may be imposed by a governmental agency. Loans made by companies that have extended “cash advances” on their settlement awards may also be deducted.
In May, Ken Belson reported in the New York Times that “already, a handful of players have borrowed thousands of dollars from these lenders, according to industry officials and players, against the payouts they hope to receive once the deal is completed.” Often these loans charge up to 40% interest and players with cognitive impairments are being targeted. Robert Lee, who has advocated for retired NFL players on his Independent Football Veterans Blog for over 9 years, which he says has directed numerous former players to the concussion class, is especially concerned about this. He told me this type of predatory lending “has been going on for the last ten, fifteen, twenty years for the NFL players, it’s just now, all of a sudden, because of the concussion lawsuit getting attention.” Lee says he’s considered posting warnings to the players on his blog that the interest starts accruing upon receipt of the money and will compound many times if an award is delayed – essentially wiping out any part of the award outside the amount loaned (which according to Belson usually about 10% and tops out at no more than 25% of an anticipated settlement.) This could leave players who were already in a bind in even worse shape than they were in before.
While it’s typically agreed this kind of lending is predatory, it’s largely legal and unregulated, however, the New York Attorney General has filed a lawsuit against R.D. Legal Funding, one of these lenders, alleging they’ve scammed both 9/11 victims and brain-damaged pro football players out of millions. In a February 8 live streamed concussion settlement conference, Judge Brody addressed the problem and stated that she wanted to be contacted should players feel they’ve been scammed in this manner. According to attorney Dan DeCiccio, “Not all clients appreciate the legal ramifications of signing a contract,” alluding to the fact that this type of loan is generally enforceable. “The brain injury victim typically will be required to sign a lengthy one-sided written contract loaded with fine print. . . The rate of interest is so high it can, depending on the case, wipe out or substantially reduce the net recovery (what is left over after payment of attorney’s fees, case costs, medical liens and letters of protection). The lending agreement gives the lender contractual rights, possible standing to claim priority among creditors, perhaps intervene in the case and leverage or delay receipt of funds from a hard-fought and long-awaited recovery,” he said. At this point, it’s mere speculation as to how these loans will be handled, but if other class action settlements are an indicator, the implications for players are not good.
Egdorf says he has “serious doubts as to whether the players will see all the money they believe is coming.” Tragically that seems to be the consensus among the experts I spoke with.
I dialed into the concussion settlement webinar conducted by Chris Seeger on March 28. When he opened up the session to questions I attempted to get some answers about deductions from player awards. He ignored all of my questions in this regard. I later learned from a disability attorney who asked not to be identified that he had also dialed in and his questions regarding liens and other deductions were bypassed as well. He opined that Seeger would not take any questions that might place any aspect of the settlement in a bad light and at least during the webinar, he didn’t.
I find it troublesome that there is no public record regarding any negotiation for medical liens, nor anyone involved with the case who seems willing to answer questions of that nature. When I asked Gene Egdorf if he had any insights on this, he responded, “As for Medicare, that is obviously something that should been handled and resolved prior to or as part of the settlement. I have no reason to believe that has been done.” He explained, “There are provisions for groups to help manage the liens, but there is no set rules for handling. Let’s say this -if someone is getting $150,000, and the lawyer fee is $50,000, and the lien is $100,000 – why would ANY plaintiff agree to that deal? That’s why cases like this ordinarily aren’t resolved as classes – because all plaintiffs aren’t and can’t be treated the same. Between worker’s comp and Medicare liens, many older players are likely to find their payday even further reduced.” An economist who has advised the settlement objectors emphasized “It is essential that not a single dollar is distributed until earned by the lawyers. That is, once a player’s check [is in] his account.”
A disability attorney that I spoke with under conditions of anonymity said that he was very concerned for some of the players he represents, and is seeing two diverse reactions from them. Some are buying all of the hype and are very excited about the prospect of collecting a substantial award; others are terrified that when all is said and done they won’t see a dime. He feels that the first group will wind up very disappointed and hopes that the latter group’s fears don’t materialize, although he tends to feel that many deserving players will not receive nearly enough to cover their needs.
Enrollment, applications, and opt-outs
Perhaps the single statement made by Chris Seeger that no one debates is the final day of registration for benefits – August 7, 2017. In both the teleconference with Judge Brody as registration kicked off and during the March 28 webinar, Seeger clearly and repeatedly stated that a player will forever be locked out if he fails to register by the deadline. This means that if a retiree is feeling well today and doesn’t register but his health takes a sharp decline after the enrollment period ends, even a catastrophic diagnosis, he will be ineligible to receive an award from the settlement.
Seeger also stated that it takes about two minutes to enroll online (which it does) and that the claims process is quick and easy (which is debatable.) Egdorf called the process “onerous.” “The forms are dozens of pages long. And then a medical committee – which includes NFL doctors – has to confirm eligibility. Older players won’t be able to obtain the medical records. History shows that the vast majority of class action awards are not redeemed, and that’s when the claimants are sent coupons or even checks, or just have to fill out a short form. The payouts are bigger here than most ‘class actions’, but the hurdles are also far more onerous. It’s hard to imagine an ALS case being denied. The other diagnoses have enough gray and wiggle room that we are going to see problems.”
Though the settlement is referred to as “uncapped” both Wallach and Egdorf found that a bit incredulous. “The notion that ‘no cap’ in reality is wishful thinking. Does anybody really believe the NFL would do this without having a firm knowledge of the eventual payout and/or say and control of payment decisions?” Egdorf continued, “First, I don’t believe most players understand how they have been excluded from this settlement. The vast majority of players are not only ineligible to receive any funds, any future claim for anything other than Alzheimer’s or ALS is gone. A player that is diagnosed with CTE – the biggest problem impacting the lives of the most players – gets nothing.”
I asked one of the disability attorneys I spoke with how he would advise a client who asked him whether he should register with the concussion settlement or opt out and take his chances with outside litigation. He told me that players in reality don’t have any options out side the concussion settlement at this point if they didn’t opt out by the October 14, 2014 deadline. While the 153 cases that opted out by the court-imposed deadline can and will move forward the settlement precludes other players from taking that option.
Those who register for the concussion settlement forever waive their right to sue the NFL in this regard. Because of the track record of NFL selected physicians in diagnoses which almost always result in disability plan denials, numerous people asked Seeger, during the webinar, if the doctors selected for the Baseline Assessment Program (BAP) have any affiliation with the NFL, to which he always responded, “No.” He did, however, indicate that the NFL has veto power over any doctor selected in response to my question. It seems at least one NFL favored physician has made his way into the BAP – Dr. Joel Morgenlander, who once served on the NFL’s Concussion Committee alongside the infamous rheumatologist Elliot Pellman who is best known for his discrediting of mainstream scientific research on brain injury.
There are 5 qualifying conditions under the Monetary Award Fund (MAF) through the settlement: ALS, Parkinson’s Disease, Alzheimer’s, Level 2 (moderate) dementia, and Level 1.5 (early) dementia, and CTE deaths prior to July 7, 2014. Players who have died or will die after this date are ineligible, as are any who may be diagnosed with CTE if a definitive diagnosis for the living is developed (although Judge Brody did leave this area up to future re-evaluation.) Medical monitoring (but no cash award) for Level 1 (mild) dementia is said to be covered through the settlement, however, it remains to be seen how dementia progressions will be evaluated.
Many worry that the cards in favor of an impartial diagnosis and benefit award are stacked against them. The BAP is presented to players as a benefit in which an impartial doctor will examine and evaluate their medical conditions. FAQ’s on the concussion settlement website states, “Although all Retired NFL Football Players are encouraged to take advantage of the BAP and receive BAP baseline assessment examinations, they do not need to participate in the BAP to receive Monetary Awards. However, any Monetary Award to a Retired NFL Football Player may be reduced by 10% if he does not participate in the BAP.” Some question this deduction as a way to manipulate the outcome of assessments.
Some disability lawyers I spoke with in preparation for this article expressed grave concerns as to how BAP assessments might be used against players, especially in regard to obtaining NFL disability benefits, which are already nearly impossible to receive at the higher levels. During the March webinar, I asked Seeger how this might impact players’ disability applications and he responded that he saw it as a positive that could help players receive their disability awards. I tried to dig a bit deeper and asked if implications of substance abuse might impact awards as they often do in disability cases. Seeger emphasized that football causation does not have to be proven in order to receive benefits and this would not be taken into consideration in the concussion settlement claims process, however, when reading through the information provided on the concussion settlement website one might reach a different conclusion:
This is a gray area for players in that no group is more prone to substance abuse or medication side effects than NFL players, who inherently are susceptible due to the NFL return to play by way of painkillers culture which has temporarily masked and exacerbated numerous medical conditions. Often medication side effects and brain damage are concurrent. How will a provider rule or determine causation if medications appear to factor into cases of dementia? Will players be disqualified for an award as a result? No one really knows the answer yet since claims processing has only recently begun, but it is an under-reported factor that should be closely monitored.
Should the settlement fail to provide relief for the players Egdorf stated that at least “the Agreement provides . . . that there is no reduction in payments under the CBA or the 88 Plan, and players can file Worker’s Comp claims. So In theory at least, there are other benefits still in play. With their own eligibility rules, offset rules, lien rules, etc.”
Like many others, Egdorf expressed concern for those suffering from CTE. “[T]he biggest issue for living retired players is CTE, and they get nothing, and the NFL doesn’t recognize it for purposes of disability or worker’s compensation.”
With all the potential liens, infighting among attorneys and other ambiguities, players and their families are understandably concerned about the amount of time it might take to receive an award for an approved qualifying diagnosis. Daniel Wallach said that payouts under a major class action are a “multi-tier process,” but felt that processes are in place to see determinations made in a matter of months as opposed to years. “If the Magistrate will rule on the [lien] motions in short order, this is a mechanism [Judge Brody] can employ to isolate the funds and not allow the entire corpus of the settlement agreement to be kept from the player.” He said the other portions of the settlement, such as medical monitoring and exams would proceed on schedule. “The motivation behind trying to settle the case early was to get help to these players in the most judicious manner possible,” he stated.
Both Wallach and Egdorf expressed confidence that Judge Brody will keep things moving on track and Wallach said she would not allow law firm disputes to tie up the settlement significantly as to “deny players’ benefits that they so badly need given their age, their physical condition, their health, and their life expectancy.” Others (primarily disability attorneys) expressed doubts given the involvement and influence of Seeger and the other co-leads on the programs. The next few months promise to be a critical indicator as to how much or how little the concussion settlement will be of genuine value to the thousands of players who compose the class.