June 6, 2019
In a motion filed on June 4, attorney James Acho, implores the court to release the 5% holdbacks that have been deducted from every paid award since claims processing began for the NFL Concussion Settlement.
Acho, a respected sports law attorney who has represented athletes in various lawsuits for over 20 years, is the latest attorney to impress upon the court how the 5% holdback requested by Lead Counsel Christopher Seeger, who is the only member of Class Counsel to survive Judge Brody’s May 24 purge, is detrimental to the class of retired NFL players. When the uncapped settlement was agreed to, Seeger negotiated common benefit fees of $112.5 million directly with the NFL, but soon after the settlement became final asked the court for 5% of each monetary award that players will receive on top of the compensation paid by the NFL.
Acho notes that the comprehensive report prepared by Harvard Law Professor William Rubenstein, who was appointed by the court to assess attorney fees found the 5% holdback unnecessary.
In addition to Professor Rubenstein, all the attorneys who formerly held class counsel and other leadership positions agreed the holdback was excessive and unneeded, and many attorneys in and outside of leadership positions filed joinders or entered their own responses opposing the holdback.
Initially class members were outraged that after being told the NFL was paying attorney fees, they learned their settlement awards would be taxed an additional 5 percent, but at least for those represented by an attorney, the outrage subsided when they found out their lawyer would be docked the 5 percent instead of it coming directly from their awards.
Attorney fees have been a hot-button topic in the settlement and a subject of much confusion. When players were told the NFL was paying attorney fees, many didn’t understand that the common benefit was designated for class counsel and leadership committees that worked on the settlement during negotiation, promotion, and appeals, but no one else. Many were upset their attorneys were still charging contingency fees and felt the lawyers were double-dipping, not being instructed in how to differentiate between class and individual representation. This prompted numerous players to fire the attorneys who had initially represented them. Christopher Seeger’s announcement that he was dropping his contingency fees only added fuel to the fire. What most class members didn’t realize was that it was a no-brainer for Seeger, who represented, at most 13 players at the time, and would receive more in common benefit fees than all other attorneys combined, including those who personally represented hundreds, or even more than 1,000 players, leaving them dependent on their contingency fees for several years of work plus, the labor of shepherding individual claims through what turned out to be an extremely time-consuming and adversarial process.
Nevertheless, many firms lowered their fees considerably, partially due to pressure and partially because, at least in theory, the time of greatest risk had concluded when the settlement was adopted. Other firms who retained clients after the settlement had been approved set their fees at a lower rate than those who filed the lawsuits that eventually were consolidated into MDL 2323 and resulted in the global settlement. Acho was one of those attorneys.
When attorneys like Acho, initially set their fees, they were shooting for the lowest percentage they felt was viable to their livelihoods, along with other attorneys who greatly reduced their fees after the settlement was finalized. As Acho noted, he, along with many other attorneys assisted their clients in obtaining a qualifying diagnosis, and that wasn’t a cheap endeavor. While a few retainers call for reimbursement of costs in addition to fees, that isn’t always the case. The attorneys who didn’t reduce their fees were capped at 22% which in reality, was 17% after the holdback was deducted. Those who had set lower fees—15% to 20% like Acho, and some on information and belief as low as 10% found their anticipated earnings reduced anywhere from 25% to 50%. As a result, some firms didn’t feel the amount of work necessary to recoup the reduced fees was worth it and sold their client inventories to other firms for pennies on the dollar.
The firms who stuck it out and continued to provide quality representation for their clients had to various degrees found it risky to continue offering the level of service they had hoped to provide. When some of the early pre-effective date diagnoses were submitted and rejected, many players required retesting. Some attorneys economized and sent their clients to the free BAP program, but others, feeling their clients would fare better under the slightly less regimented MAF program forked out another $6,000 to $10,000 to get their players’ diagnoses confirmed through retesting.
As Acho points out, Judge Brody released almost $107 million in class counsel fees, the bulk of which went to Seeger, and she ordered a 22% cap on contingency fees as Rubenstein had suggested. She also ordered the claims administrator to continue to withhold 5% from payable awards, indicating intent on deciding in one year if the deduction would become permanent or if it would be released and distributed to the attorneys and players from whom it had been deducted. Acho reminds her that over a year has passed.
Acho points out how the “tax” is unfair to privately retained attorneys.
He emphasizes that it has been the work of individual counsel who have battled the NFL through appeals and audits and it has often been the role of individual counsel to invest in medical testing for their clients. He finds it unfair that Class Counsel aka Seeger, is receiving pay for work that he did not do. Indeed, as I’ve previously pointed out, Seeger appears to be spending the bulk of common benefit to battle litigation funders instead of the NFL.
Though not specifically detailed in Acho’s brief, the result of a permanent 5% holdback will have a chilling effect on players who have not yet sought or received monetary awards. Some have gone through the BAP and failed to receive a qualifying diagnosis despite the fact many of them have strong medical evidence to support impairment. Unfortunately, their private physicians can’t help them, nor can any other doctor who isn’t a settlement program doctor in either the BAP or MAF program. Players only receive one free BAP exam, after which they must see a MAF neurologist and possibly a neuropsychologist, and that will set them back typically between $6,000 and $10,000. Those who are scraping by on SSA or NFL disability pensions are barely surviving and often don’t have adequate credit to pay for exams, therefore, if attorneys find it too risky to assist with the exams, many deserving players will never receive a diagnosis that would qualify them for a monetary award. I’m sure the NFL is pleased.
More often than not, attorneys’ efforts are rewarded with endless audits and multiple appeals that require a large investment of time as well as money should they choose to make financial arrangements for MAF exams, which on information and belief, fewer and fewer are choosing to do, at least in all but the most severe cases of Parkinson’s and Alzheimer’s in which they feel they stand a good chance of recovering their investment.
A Glimpse into the Crystal Ball
Let’s take a look at some numbers as they pertain to hypothetical player William Roe.
William who is currently 49 years old has gone through the BAP and failed to receive a diagnosis that would qualify him for a monetary award. He thought he would qualify for a diagnosis of Level 1.5 Neurocognitive Impairment that would have brought him $842,476 according to the current grid. Discouraged that he failed to receive a diagnosis, he gives up and decides to try for NFL disability.
He is denied benefits, however, because he works a part-time job greeting customers at Walmart from which he earns about $9,000 per year. His cognitive and emotional functions continue to decline along with his personal hygiene. At age 57 he loses the job at Walmart because the managers can no longer accommodate his impairments due to customer complaints. At age 58 he receives $1,000 per month in Social Security Disability and at age 59 qualifies for Medicare, the first insurance he’s had in more than a decade. His doctor tells him he has severe dementia and encourages him to try again for a settlement award.
William learns that his doctor’s diagnosis isn’t acceptable to the claims administrator and is advised to make an appointment with a MAF neurologist. William calls several doctors only to learn that none of them accept Medicare. Though he represented himself when he filed his first claim against the settlement, that was denied, his friends convince him to hire an attorney this time. He calls several firms only to learn they once represented players in the settlement but stopped doing so because of the cost and difficulty of getting claims approved. Through much effort, he finally locates hypothetical attorney Jane Doe and she accepts him as a client and offers him a 20% contingency fee. William is Jane’s first settlement client.
Jane is convinced, after reading the settlement agreement and injury definitions that William will qualify for Level 2.0 neurocognitive impairment and agrees to pay for William to be examined by a MAF doctor and shells out $10,000 for the exam. The doctor qualifies him at Level 2.0 as she expected, but William’s claim lands in audit for over a year. When the audit concludes, William and Jane learn that the MAF has been disqualified and that William will need to be examined by another doctor. Jane bites the bullet and this time spends another $10,000 to provide William with a second examination. He again receives a Level 2.0 diagnosis just after his 6oth birthday. Again, the claim lands in audit, but after several months, in which the claims administrator grills Jane and orders her to provide every shred of medical records and work history she can locate, and justify why he is able to maintain a social media account, William finally emerges and is approved for a monetary award.
The NFL appeals the award, and Jane defends him, litigating with the NFL for another nine months. The special master decides to refer the claim to the AAP which downgrades the claim to a Level 1.5. Jane and William discuss the result and she advises him to take what they’re offering and tells him that she can’t afford to pay for him to see yet another doctor.
William finally receives an award of $378,594, from which he must settle a Medicare lien and an IRS garnishment due to the fact he forgot to file tax returns for most of the time he worked for Walmart. Jane’s 20% attorney fee of $75,718 is also deducted. After all the liens come out, William has less than $100,000 to use for long-term dementia care. William decides to leave the ramshackle mobile home he’s been living in and opts for assisted living, but his settlement proceeds only last for two years, finally forcing him to become a ward of the state.
Jane’s $75,718 fee quickly dwindles too. Immediately she must pay 5% , or $3,786 to class counsel, though she received no assistance in obtaining William’s award and fighting the NFL.
3,786 5% holdback deduction
500 document and medical record production
-20,000 medical examination costs
$52,432 is what Jane receives for three years’ worth of nerve-wracking work. She realizes that in the time she spent securing William’s award she could have handled five personal injury cases that would have brought her over $1 million in fees. Sadly, she decides that she won’t be able to accept another NFL player as a client unless he can afford his own medical expense, and is hesitant, even at that considering the vitriol she’s faced in defending just that one claim.
While William and Jane are hypotheticals they represent the players and attorneys who will battle against the NFL and the claims administrator in a few years’ time, if major changes aren’t implemented to place the NFL in check and ensure players receive what they were promised. If the first two and a half years of settlement implementation is an indicator, this is a glimpse into the future. A “carefully calibrated and negotiated result” as the NFL describes it.
While it won’t save attorneys and players from the NFL’s scorched earth attacks, at least a refund and discontinuance of the 5% holdback would show some much-needed good faith from the court following a number of questionable NFL-friendly rulings. Do I predict that Mr. Acho’s motion will be granted? No. But for many reasons, as outlined here it should be.
PDF of James Acho’s Motion For Ruling On And Elimination of 5% Hold-Back on Monetary Awards
10654 0 Acho Motion to Rule on Holdbacks (Text)
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Sheilla Dingus founded Advocacy for Fairness in Sports in October 2016, after a stint with Defenders of the Wall, a New England Patriots based blog where she dived deep into the legal aspects of Deflategate. Along the way, she observed many inequities in sports and felt a need to address some of the under-reported stories in sports law. She draws from her background as a former professional dancer, who like many of the athletes she writes about, took an early retirement due to orthopedic injuries. After a return trip to college she worked for a legal software company, with seven years as a Project Manager and Analyst. She brings her analytical skills to the table in breaking down complex lawsuits, and enjoys pursuing her longtime interest in journalism.