An attorney traveling out-of-state for her clients to participate in settlement negotiations is subject to personal jurisdiction in the state where the negotiations occur. Downing v. Goldman Phipps, PLLC. The United States Court of Appeals for the Eighth Circuit has held that voluntary travel into Missouri for settlement negotiations is sufficient to establish personal jurisdiction where, as a result, the attorneys received compensation that was the subject of an unjust enrichment claim. The court reasoned that the attorneys’ actions constituted the transaction of business, and while the attorneys may have been acting for the benefit of their client, ABA Section of Litigation leaders suggest that attorneys should not expect special treatment in such situations, especially when their own financial gain is at issue.

MDL Giving Rise to the Subject Claims

The Downing case arose from multidistrict litigation (MDL) involving claims by rice producers against Bayer for damages resulting from contamination of the U.S. rice supply. The MDL was ultimately consolidated and transferred to the United States District Court for the Eastern District of Missouri for oversight and administration. To assist in administering the MDL, lead counsel sought to establish a common benefit fund for attorney compensation. The proposed fund would require contribution from all MDL recoveries “as well as from non MDL recoveries whose counsel had access to the MDL work product.” While the district court held it did not have jurisdiction over non-MDL cases, it approved the fund for MDL cases and encouraged non-MDL attorneys to participate in the fund.

Over the course of the MDL, contributing attorneys spent 107,000 hours and approximately $5.5 million contributing to and prosecuting the MDL. Before final settlement of MDL claims, several attorneys with state law cases outside of Missouri, who also did not join the fund, allegedly used MDL materials for their non-MDL cases (the Phipps group).

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