Standing, Quick‑Pay Provisions, and “Trust‑but‑Verify” Fee Allocation in Class Actions:
Commentary on In re East Palestine Train Derailment (6th Cir. Nov. 25, 2025)

I. Introduction

The East Palestine train derailment spawned not only extensive personal, property, and business damages, but also complex federal class-action litigation. After a $600 million settlement with Norfolk Southern was approved, the principal remaining controversy moved away from victims and focused on the lawyers: how quickly they would be paid and how the fee award would be divided among dozens of firms.

The Sixth Circuit’s published decision in In re East Palestine Train Derailment, No. 24‑4086 (Nov. 25, 2025), addresses that dispute. The court resolves three key issues:

• Whether a plaintiffs’ firm has Article III standing to challenge a “quick-pay” provision that accelerates payment of its own fees;
• The extent to which a district court may delegate fee-allocation decisions to co-lead class counsel under Rule 23;
• What level of explanation is required when a district court reviews (or fails to review) an objection by one firm to its particular allocation of the total fee award.

The panel (Judge Readler for the court, joined by Judges Thapar and Hermandorfer) largely affirms the district court but remands on a narrow issue: whether Morgan & Morgan’s individual share of fees was miscalculated or unfairly reduced. Judge Thapar files a separate concurrence that, while agreeing with the result, sharply criticizes full quick-pay provisions and the district court’s lack of active supervision over fee allocation.

Taken together, the majority and concurrence set out an important framework in the Sixth Circuit for:

• Attorney standing to attack settlement features that benefit them;
• Permissible delegation of intra-plaintiff fee allocation to lead counsel;
• The non-delegable duty of district courts under Rule 23(e) and (h) to actively “trust but verify” any fee-allocation scheme; and
• Best practices—and pitfalls—for quick-pay provisions in class settlements.

II. Case Background and Procedural Posture

A. Factual and Litigation Background

In February 2023, a Norfolk Southern freight train derailed in East Palestine, Ohio, igniting fires, triggering controlled chemical releases, and leading to evacuations and fears of long-term environmental and health consequences. Within days, a flurry of lawsuits were filed in federal court in the Northern District of Ohio by residents, businesses, and others.

The district court:

• Consolidated related actions under Federal Rule of Civil Procedure 42;
• Authorized a master consolidated class action complaint;
• Appointed three attorneys as interim class counsel; and
• Designated those three plus T. Michael Morgan (Morgan & Morgan) as “co-lead counsel” with responsibility for coordinating both the class and individual actions.

Crucially, Morgan & Morgan’s role was atypical: it did not represent the putative class as such; it primarily represented individuals who had filed standalone (non-class) suits, even as it was part of the co-lead “management” team.

Negotiations, including mediations with a former federal judge, ultimately yielded a settlement:

• Norfolk Southern agreed to fund a $600 million settlement.
• The settlement released virtually all claims of a defined settlement class except personal-injury claims, which class members could elect to release for an additional payment.
• Settlement funds, net of administrative costs, attorneys’ fees, expenses, and service awards, would be distributed after appeals related to class certification and settlement approval were resolved.
• Attorneys’ fees and costs, however, were to be paid earlier under a “quick-pay” provision—14 days after district court approval of the fee award, subject to a robust claw-back if the settlement were later reversed or materially altered on appeal.

The district court preliminarily approved the settlement, later certified the settlement class, and set a July 1, 2024 objection deadline. No plaintiffs’ firm—including Morgan & Morgan—objected.

In early September 2024, co-lead class counsel and Morgan & Morgan jointly moved for final approval and for an attorneys’ fee of 27% of the recovery (about $162 million), plus expenses. In an affidavit, T. Michael Morgan affirmed his “full[] support” for the settlement and fee application, calling the settlement “fair, adequate, and reasonable.”

In response to an objection from others about how fees would be divided, all four co‑lead counsel (including Morgan & Morgan) submitted language authorizing co-lead class counsel (i.e., the three lawyers who actually represented the class, not Morgan & Morgan) to:

“distribute the fees in a manner that, in the judgment of Co‑Lead Class Counsel, fairly compensates each firm for its contribution to the prosecution of Plaintiffs’ claims.”

On September 27, 2024, the district court:

• Gave final approval to the settlement;
• Approved the fee award and the “quick-pay” mechanism; and
• Expressly retained jurisdiction over the settlement, including attorney-fee-related disputes among counsel.

Co-lead class counsel then allocated fees among 39 plaintiffs’ firms. Morgan & Morgan’s share was set at roughly $7.72 million. Allocations were finalized by early October, and payments commenced under the quick-pay timetable.

B. The Late-Breaking Fee Dispute

Four weeks after final approval, Morgan & Morgan abruptly pivoted. It moved to:

• Enjoin the distribution of attorneys’ fees pending resolution of appeals (thus effectively neutralizing the quick-pay feature);
• Amend the fee order to remove or modify co-lead class counsel’s authority to allocate fees; and
• Appoint T. Michael Morgan to participate in the allocation process.

In its papers and a subsequent telephonic conference, Morgan & Morgan raised three distinct concerns:

1. Quick-pay provision: Paying lawyers within 14 days, while class members awaited appeals, allegedly endangered the clients’ recovery and created unjustified risks, including potential future claw-backs.
2. Delegation of allocation: Granting co-lead class counsel unfettered discretion to apportion fees allegedly violated Rule 23 and ethical duties; Morgan & Morgan also claimed its name had been used on briefings seeking that delegation without its informed consent.
3. Its own allocation amount: Based on lodestar-hour data shared by co-lead class counsel, Morgan & Morgan asserted that the numbers did not “add up,” claiming roughly a $20 million “deficit” in how hours translated into compensation and suggesting that co-lead class counsel had inflated multipliers for themselves at the expense of others, including Morgan & Morgan.

The district court denied Morgan & Morgan’s reconsideration motion without separately analyzing the specific allocation math or its fairness. Morgan & Morgan appealed.

Meanwhile, separate objector appeals to the settlement and the global fee percentage were resolved in a companion decision, In re East Palestine Train Derailment, 2025 WL 3089606 (6th Cir. Nov. 5, 2025), leaving only this intra-plaintiff fee dispute.

III. Summary of the Sixth Circuit’s Decision

The Sixth Circuit’s disposition has three main components:

1. No standing to challenge the quick-pay provision.
   Morgan & Morgan, as a beneficiary of the quick-pay provision, lacked Article III standing to attack it because:
   • Quick-pay made the firm better off (earlier payment); and
   • Any alleged harms were either speculative or self-inflicted, given the firm’s active role in negotiating and endorsing the settlement.
   Thus, the court lacked jurisdiction over that part of the appeal.
2. No abuse of discretion in delegating initial fee allocation to co-lead class counsel.
   The district court acted within its discretion under Rules 59(e) and 60(b) in refusing to undo its earlier order that allowed co-lead class counsel to apportion the award among the 39 firms, because:
   • Morgan & Morgan had full notice of, and participated in, the process yet never objected until after final approval; and
   • Delegating initial allocation to lead counsel, while the court retains ultimate jurisdiction to resolve disputes, is a well-accepted “trust but verify” approach in complex class actions and multidistrict litigation.
3. Abuse of discretion in failing to address Morgan & Morgan’s specific allocation complaint; remand required.
   The court held that Morgan & Morgan had adequately preserved its argument that its individual allocation was miscalculated or unfair. The district court abused its discretion by:
   • Inviting argument at the telephonic hearing about those alleged discrepancies;
   • Cutting off further written submissions; yet
   • Issuing an order that did not meaningfully grapple with Morgan & Morgan’s substantive allocation challenge.
   The panel therefore remanded for the district court to consider that specific argument and to explain or correct the allocation as appropriate.

Accordingly, the judgment was affirmed in part, reversed in part, and remanded.

Judge Thapar’s concurrence agrees with the outcome but issues a strong warning to district courts about approving full quick-pay fee provisions and about perfunctory oversight of class counsel’s internal allocation decisions.

IV. Analysis of the Court’s Reasoning

A. Article III Standing and Quick-Pay Provisions

1. The Standing Framework

The court begins with first principles: under Article III, a party invoking federal jurisdiction must have standing—a “personal stake” in the outcome. Relying on TransUnion LLC v. Ramirez, 141 S. Ct. 2190 (2021), and Hollingsworth v. Perry, 570 U.S. 693 (2013), the panel reiterates that:

• Standing is required for appellants just as it is for parties in the district court;
• The appellant must show a concrete, particularized, actual or imminent injury that is:
  • Fairly traceable to the challenged conduct; and
  • Likely to be redressed by a favorable appellate decision.

Morgan & Morgan was not a class representative or named plaintiff; it joined the appeal as an “interested party–appellant,” challenging provisions that affected how, and how quickly, lawyers would be paid.

2. Why Morgan & Morgan Lacks Standing to Attack Quick-Pay

The court’s reasoning has two pillars: benefit vs. harm, and self-inflicted injury.

First, the quick-pay provision clearly benefited Morgan & Morgan:

• It guaranteed payment of its share of fees soon after district court approval, rather than after lengthy appellate proceedings.
• Under basic financial logic (the “time value of money,” illustrated by Irving Fisher’s The Theory of Interest), a dollar received now is more valuable than the same dollar later.
• Thus, Morgan & Morgan is “better off” under quick pay than under a traditional delayed-fee regime.

Citing In re Flint Water Cases, 63 F.4th 486 (6th Cir. 2023), the court explains that parties who are better off under a settlement term should not be heard to challenge that term—they lack the requisite injury in fact.

Second, any purported injury was self-inflicted. Morgan & Morgan:

• Helped negotiate the settlement including the quick-pay clause;
• Signed the settlement agreement;
• Swore to its “full support” for the settlement and fee application.

If the firm later regrets the quick-pay clause, that regret does not become a judicially cognizable injury. Under Buchholz v. Meyer Njus Tanick, PA, 946 F.3d 855, 866 (6th Cir. 2020), harms not traceable to “anyone but the party seeking judicial relief” cannot support standing.

3. Rejected Theories of Injury

Morgan & Morgan advanced several alternative theories, each of which the court rejected:

1. Risk to clients’ recovery.
   The firm argued that quick-pay jeopardized its clients’ ability to recover settlement funds. The panel sidestepped the factual premise and focused on standing doctrine:
   • It is not enough to assert injuries to third parties (clients);
   • Under FDA v. Alliance for Hippocratic Medicine, 144 S. Ct. 1540, 1563 n.5 (2024), and Hollingsworth, lawyers cannot “shoehorn” themselves into standing simply by pointing to injuries suffered by those they represent;
   • Morgan & Morgan needed a personal, concrete injury.
2. Misallocation of fees.
   The court acknowledged that if Morgan & Morgan received less than its fair share of the fee award, that deprivation of attorneys’ fees would be a cognizable injury. It cited, among others:
   • Weeks v. Independent School District No. I‑89, 230 F.3d 1201, 1207 (10th Cir. 2000) (counsel have standing to appeal orders that directly aggrieve them); and
   • In re Volkswagen “Clean Diesel” Marketing, Sales Practices, & Products Liability Litigation, 914 F.3d 623, 640 (9th Cir. 2019) (deprivation of attorneys’ fees is an injury in fact).
   But that injury relates to fee allocation, not the timing mechanism of quick-pay as such. Article III requires standing “for each claim [a party] seeks to press” (DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 352 (2006)); Morgan & Morgan could not bootstrap its potential allocation injury into standing to challenge the quick-pay feature.
3. Speculative future harms.
   The firm hypothesized a series of “what ifs”: what if it had to repay its fees due to a successful appeal? What if another firm was wrongly overpaid? The court, invoking Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992), and Clapper v. Amnesty International USA, 568 U.S. 398 (2013), held:
   • Conjectural or hypothetical injuries are not enough;
   • Any risk of future injury must be “certainly impending,” not based on a tenuous chain of contingencies; and
   • Here, objector appeals had already been resolved, fee distributions had occurred, and no other firm was challenging the allocation—leaving little practical uncertainty to redress.
   The court even flagged mootness concerns: once distributions were effectively irreversible, an appellate ruling to “slow down” payments could not give meaningful relief, see Uzuegbunam v. Preczewski, 141 S. Ct. 792 (2021).

Thus, Morgan & Morgan lacked standing to attack the quick-pay provision, and that portion of the appeal was dismissed for want of jurisdiction.

4. Doctrinal Significance

The decision draws a clear line in the Sixth Circuit:

• Law firms have standing to contest how much they are paid (allocation), but not to attack aspects of settlement structure (like quick-pay) that unequivocally benefit them, absent some independent attorney-specific harm.
• Lawyers may not repackage clients’ interests as their own for standing purposes where the clients themselves already had full opportunity to object and appeal.

Future fee disputes in class actions and MDLs in the Sixth Circuit will likely turn on this distinction: if you are litigating as counsel, your appeal must focus on your own financial aggrievement, not global structural terms you agreed to and that improved your own position.

B. Delegating Fee Allocation to Co-Lead Class Counsel

1. The Reconsideration Posture: Rules 59(e) and 60(b)

Morgan & Morgan challenged the district court’s decision via a motion styled under Federal Rules of Civil Procedure 59(e), 60(b)(1), and 60(b)(6). The Sixth Circuit reviews the denial of such motions for abuse of discretion, asking whether the trial judge made a “clear error in judgment.” See U.S. ex rel. Angelo v. Allstate Insurance Co., 106 F.4th 441, 453 (6th Cir. 2024).

The panel emphasizes a familiar but critical principle about post-judgment motions:

• Rules 59(e) and 60(b) are not vehicles for presenting arguments that could have been raised earlier; they are primarily to correct clear legal errors, account for newly discovered evidence, or address extraordinary circumstances.
• Cases such as Roger Miller Music, Inc. v. Sony/ATV Publishing, LLC, 477 F.3d 383 (6th Cir. 2007), and Jinks v. AlliedSignal, Inc., 250 F.3d 381 (6th Cir. 2001), confirm that new arguments are generally not appropriate at this stage.

The chronology was damning for Morgan & Morgan:

• On September 23, 2024, plaintiffs’ counsel (including, on its face, Morgan & Morgan) filed a public reply brief and proposed order explicitly asking that co‑lead class counsel be empowered to distribute the fee award among all firms.
• The filing was emailed to multiple Morgan & Morgan email addresses, including T. Michael Morgan’s.
• At the September 25 fairness hearing—where Morgan personally appeared and acknowledged his presence—co-lead class counsel expressly argued for fee-allocation authority; Morgan remained silent.
• Only after final approval and after fees had been allocated and distributed did Morgan & Morgan lodge an objection.

Under Leisure Caviar, LLC v. U.S. Fish & Wildlife Service, 616 F.3d 612 (6th Cir. 2010), this pattern looks very much like an impermissible attempt to “take a mulligan” after full opportunity to object pre-judgment.

2. The Norm: “Trust but Verify” Fee Allocation

On the merits, the Sixth Circuit endorses, as within the district court’s discretion, a widely used paradigm in complex litigation:

Let lead counsel initially allocate the total attorney’s fee among plaintiffs’ firms, but retain judicial authority to review the allocations and resolve disputes if and when they arise.

Drawing on:

• Gascho v. Global Fitness Holdings, LLC, 822 F.3d 269 (6th Cir. 2016) (broad discretion in supervising fee awards);
• In re Dry Max Pampers Litigation, 724 F.3d 713 (6th Cir. 2013) (courts must “carefully scrutinize” attorney fees and guard against preferential treatment);
• In re Genetically Modified Rice Litigation, 764 F.3d 864 (8th Cir. 2014); and
• Treatise and academic commentary (Newberg & Rubenstein; Cheng, Edelman & Fitzpatrick),

the panel notes that it is common and often efficient for the lawyers who organized and led the litigation to apportion fees based on their granular knowledge of who did what. Courts in multiple circuits have recognized this model, including:

• In re Prudential Insurance Co. America Sales Practice Litigation Agent Actions, 148 F.3d 283, 329 n.96 (3d Cir. 1998);
• In re Warfarin Sodium Antitrust Litigation, 391 F.3d 516, 533 n.15 (3d Cir. 2004);
• In re Life Time Fitness, Inc., 847 F.3d 619, 623–24 (8th Cir. 2017);
• Victor v. Argent Classic Convertible Arbitrage Fund L.P., 623 F.3d 82, 90 (2d Cir. 2010); and
• In re Vitamins Antitrust Litigation, 398 F. Supp. 2d 209 (D.D.C. 2005).

The panel approvingly uses President Reagan’s phrase “trust but verify” to describe this approach. Importantly:

• The district court did not surrender its authority under Rule 23. It retained jurisdiction “to resolving issues relating to or ancillary to” the settlement, expressly including attorney-fee disputes.
• Unlike In re High Sulfur Content Gasoline Products Liability Litigation, 517 F.3d 220 (5th Cir. 2008), there was no ex parte determination or perfunctory rubber stamp of a contested allocation plan.
• No other firm objected to the allocations, and the allocation did not affect the class’s net recovery (the total fee percentage was fixed).

The court therefore rejects the notion that Rule 23 prohibits any delegation of internal allocation authority to class counsel, so long as:

• The court retains ultimate control and the power to adjudicate disputes;
• The class’s recovery is not adversely affected; and
• Due process is afforded to any firm that claims it was under-compensated.

3. Ethical Concerns about the Signature

Morgan & Morgan contended that its name and T. Michael Morgan’s signature were affixed to the September 23 filing without his authorization. The panel recognizes that such an allegation is serious, but:

• Notes the district court expressed skepticism;
• Observes that the filing was public, emailed to Morgan, and discussed in a hearing he attended; and
• Concludes that on this record it cannot second-guess the trial court’s implicit rejection of the claim.

The court treats the allegation as insufficient to justify belated withdrawal of approval for a framework that Morgan & Morgan effectively endorsed through silence and participation.

4. Excluding Morgan & Morgan from Allocation Authority

The firm argued that, at minimum, it should have been given a seat at the table as a co‑allocator. The panel finds no abuse in the district court’s decision to exclude it:

• Morgan & Morgan’s primary role was to represent individual (non-class) plaintiffs;
• The work of co-lead class counsel formed the core of the settlement that generated the common fund;
• It was not a clear error in judgment to leave fee allocation among the 39 firms to those who had primary responsibility for prosecuting the class case.

This reinforces a practical reality of modern MDLs and complex class actions: not every firm with leadership status in some aspect of the litigation will be entrusted with dividing the fees, especially if it was not appointed as Rule 23 class counsel.

C. Preservation of Allocation Challenges: Oral Argument in the District Court

A key intermediate question is whether Morgan & Morgan preserved its specific argument about misallocation of its fees. The firm did not foreground this issue in its written reconsideration motion, which focused on quick-pay and delegation. It raised the allocation-discrepancy point in detail only during the telephonic conference.

The Sixth Circuit distinguishes its own appellate practice from district court practice:

• On appeal, arguments first raised at oral argument are typically deemed forfeited (Resurrection School v. Hertel, 35 F.4th 524, 530 (6th Cir. 2022) (en banc)).
• In the district courts, however, practice is more fluid; hearings frequently serve as forums to refine or add arguments beyond the papers.

Citing United States v. Huntington National Bank, 574 F.3d 329 (6th Cir. 2009), Stryker Employment Co. v. Abbas, 60 F.4th 372 (6th Cir. 2023), and Bard v. Brown County, 970 F.3d 738 (6th Cir. 2020), the panel reiterates that:

“Litigants may preserve an argument in the district court by raising it for the first time at a hearing, even when they neglected to make the argument in a pre‑hearing filing,” so long as the issue is stated with sufficient clarity to give notice to the court and the opposing parties.

Applying that standard:

• Morgan & Morgan clearly indicated that it was “concerned” with “the amount that’s been allocated to” it.
• It walked through its allegation of a $20 million discrepancy in how lodestar hours translated into fee dollars and criticized allegedly inflated multipliers for co‑lead class counsel.
• Co-lead class counsel directly responded on the record, disputing the math and defending the allocation methodology.
• The district court acknowledged that Morgan & Morgan had provided “a general idea of the discrepancies [it] believe[s] exist in the allocation,” then affirmatively barred further filings and took the matter under advisement.

Under these circumstances, the court holds that Morgan & Morgan sufficiently preserved its allocation-based objection in the district court, even though it did not present it with the same emphasis in its written motion.

D. Duty to Address the Allocation Objection: Abuse of Discretion and Remand

Having found the issue preserved, the panel turns to whether the district court abused its discretion in disposing of it. An abuse of discretion can occur when a court:

• Applies the wrong legal standard;
• Relies on clearly erroneous facts; or
• Fails to consider the parties’ competing arguments.

Relying on Garner v. Cuyahoga County Juvenile Court, 554 F.3d 624, 643 (6th Cir. 2009), and U.S. Structures, Inc. v. J.P. Structures, Inc., 130 F.3d 1185, 1193 (6th Cir. 1997), the court underscores that:

• District courts must provide enough explanation of fee decisions to permit meaningful appellate review;
• Summarily ignoring a party’s material contentions, after inviting them, crosses the line into abuse of discretion.

Here, the district court’s order:

• Responded only to the arguments that Morgan & Morgan had briefed (quick-pay and delegation);
• Did not mention—much less analyze—the asserted $20 million deficit, the claimed lodestar or multiplier discrepancies, or whether Morgan & Morgan’s hours were treated comparably to other firms’ hours.

The panel characterizes this as a failure to “engage with” the allocation objection. Given:

• The competing narratives about Morgan & Morgan’s contributions vs. co‑lead class counsel’s;
• The potential significance of the alleged math error; and
• The district court’s special vantage point on the litigation and its fee-guideline regime,

the Sixth Circuit concludes it is inappropriate for an appellate court to resolve the factual and methodological dispute in the first instance. It therefore remands with instructions for the district court to:

• Fully consider Morgan & Morgan’s allocation argument;
• Allow whatever additional submissions or evidence are necessary to understand the data and methodology (lodestar hours, multipliers, treatment of various categories of work); and
• Explain its conclusions in a way that can be reviewed on any subsequent appeal.

Notably, the court does not suggest that Morgan & Morgan’s argument is meritorious—only that it deserves a reasoned response. The remand is narrow: it does not reopen global questions about the total fee award, class certification, or the settlement itself.

E. Judge Thapar’s Concurrence: A Cautionary Blueprint on Quick-Pay and Fee Oversight

Judge Thapar concurs in full but writes separately to address systemic concerns about quick-pay provisions and fee allocation, using this case as a cautionary example.

1. Rule 23(e) and 23(h): Dual Supervisory Obligations

He emphasizes two interrelated obligations under Federal Rule of Civil Procedure 23:

1. Settlement fairness under Rule 23(e).
   The court must ensure that any settlement (including fee terms) is “fair, reasonable, and adequate,” taking into account “the terms of any proposed award of attorney’s fees, including timing of payment.” Excessive or preferential attorneys’ fees can render a settlement unfair, see Dry Max Pampers.
2. Fee scrutiny under Rule 23(h).
   Beyond the total amount, Rule 23(h) requires “careful scrutiny” of all elements of a fee award:
   • How much the class’s lawyers are paid;
   • How that sum is allocated among multiple firms.
   The concurrence cites Newberg & Rubenstein and Bowling v. Pfizer, Inc., 102 F.3d 777 (6th Cir. 1996), noting that allocation is itself part of the Rule 23 analysis when the allocation may bear on fairness or adequacy.

2. Quick-Pay Provisions: Benefits and Dangers

Judge Thapar acknowledges that quick-pay provisions are common and, generally, not invalid per se:

• By 2006, more than one-third of federal class settlements used them (citing Brian Fitzpatrick, The End of Objector Blackmail?, 62 Vand. L. Rev. 1623 (2009)).
• They serve a legitimate function in helping plaintiffs’ counsel promptly recoup substantial case-fronting costs.

However, he distinguishes between:

• Quick pay of costs or a portion of fees (generally defensible); and
• Full quick-pay of all attorneys’ fees (highly problematic).

The latter raises three central concerns:

1. Misaligned incentives.
   Once lawyers are fully paid, they have “no financial reason to bring the litigation to a close,” even if clients remain unpaid due to ongoing appeals or claims administration.
2. Appearance of unfairness and reputational damage.
   Paying lawyers out in full while victims like Tracy Hagar and Anna Doss continue to suffer financial hardship undermines public confidence in the legal system.
3. Potential for collusion and self-dealing.
   Quick-pay coupled with unchecked allocation authority can tempt lead counsel to favor themselves or friendly firms. Judge Thapar quotes Judge Ambro’s vivid line in In re Diet Drugs, 401 F.3d 143, 173 (3d Cir. 2005) (concurring): “How much deference is due the fox who recommends how to divvy up the chickens?” Answer: very little.

He also questions the oft-stated justification that quick-pay is needed to combat “objector blackmail”—professional objectors threatening to hold up settlement implementation with frivolous appeals unless paid off:

• More recent experience and commentary (Newberg & Rubenstein) suggest quick-pay has not solved this problem;
• Courts already have tools to address abusive objectors (Rule 23(e)(5)(B) to scrutinize side payments, appeal bonds to discourage frivolous appeals).

3. Recommended Safeguards for Quick-Pay Provisions

Judge Thapar proposes that, where quick-pay provisions are used, district courts should require structural safeguards, including:

• Limit quick pay to costs or partial fees.
  Allow counsel immediate reimbursement of out-of-pocket expenses or a defined portion of the fee, but hold back the balance in escrow until the class is actually paid.
• Robust claw-back mechanisms.
  Ensure contracts explicitly require prompt repayment of any overpaid fees if appeals alter the settlement or fee award. (The East Palestine settlement did have a strong claw-back clause as to the funder, Norfolk Southern.)
• Express retention of jurisdiction and active supervision.
  The settlement agreement should preserve judicial power over intra-counsel disputes, and judges must exercise that power to ensure fairness.
• Use neutral escrow agents.
  Payments should pass through independent agents rather than through accounts directly controlled by lead counsel.
• Adequate time for objections before payout.
  Courts should “budget time” between final approval and the effective date of quick pay to allow:
  • Lead counsel to finalize and disclose allocations;
  • Other firms to review and object; and
  • The court to adjudicate any disputes before money irreversibly changes hands.
  The shorter the window between approval and payout, the heavier the scrutiny required at the approval stage.

4. Application to East Palestine: A “What Not To Do” Example

Judge Thapar acknowledges some virtues of the East Palestine settlement’s quick-pay design:

• The fee award was a fixed percentage of the fund, so quick-pay did not change the class’s ultimate net recovery.
• The settlement preserved the district court’s jurisdiction over disputes.
• A strong claw-back provision protected Norfolk Southern if the settlement were undone.

But he stresses serious flaws:

• The 14-day quick-pay timetable left virtually no time for negotiation among firms, internal auditing, or judicial review before funds were disbursed.
• Class counsel announced “finalized” allocations just 10 days after approval and began payments four days later—a total of 14 days from approval to distribution.
• This effectively made the allocations final, rendering the district court’s retained jurisdiction largely illusory.
• The court did not:
  • Review the auditor’s underlying data;
  • Verify the calculation of lodestar hours or multipliers;
  • Ask basic questions about the methodology used to differentiate among firms.

In his view, jurisdiction without meaningful supervision is not enough. Given the stakes—$162 million in fees across 39 firms and the reputational interests of the judiciary—district courts must not “take a backseat approach” to fee awards.

While his observations are technically dicta, they provide a detailed roadmap for how district courts within the Sixth Circuit (and beyond) should evaluate quick-pay provisions and oversee fee allocations going forward.

V. Simplifying the Key Legal Concepts

A. “Quick-Pay” Provisions

A quick-pay provision is a settlement term that allows plaintiffs’ counsel to be paid all or part of their fees (and sometimes costs) before:

• All appeals are resolved; and/or
• The class or claimants receive their distributions.

In practice:

• The defendant pays the award into an escrow account shortly after final approval.
• Lead counsel then distributes funds to plaintiffs’ firms.
• If the settlement is later overturned or modified, a claw-back clause may require counsel to repay the money.

Quick-pay provisions shift risk away from plaintiffs’ firms (who might otherwise wait years to be paid) and onto:

• The defendant (which front-loads payment); and
• Potentially the integrity of the process, if oversight is weak.

B. Article III Standing

To bring an appeal in federal court, a party must satisfy constitutional standing requirements:

1. Injury in fact: a concrete, particularized, actual or imminent harm, not merely hypothetical.
2. Traceability: the injury must be fairly traceable to the challenged action.
3. Redressability: a favorable court decision must likely remedy the injury.

Crucially:

• You cannot rely solely on harms suffered by others (e.g., your clients) if you yourself suffered none;
• You must have standing for each claim or issue you raise—standing to contest allocation does not automatically confer standing to attack quick-pay timing or overall settlement structure.

C. Class Counsel, Co-Lead Counsel, and Allocation Authority

In large class actions and MDLs, courts often create a complex leadership structure:

• Class counsel (Rule 23(g)): Lawyers formally appointed to represent the class; they owe fiduciary duties to all class members.
• Co-lead counsel / steering committees: A management group coordinating filings, discovery, and strategy across many related cases (class and non-class), sometimes including firms that represent only individual (opt-out) plaintiffs.

Here:

• Three firms were appointed class counsel for the settlement class;
• Those three plus Morgan & Morgan were “co-lead counsel” for case management at earlier stages;
• Allocation authority was given only to the three “co-lead class counsel,” not to Morgan & Morgan.

Fee allocation refers to how the total court-approved fee award is divided among the many firms who worked on the cases. Courts may:

• Divide it themselves;
• Appoint a special master or neutral auditor; or
• Delegate initial division to lead counsel under court supervision.

D. Lodestar, Multipliers, and Percentage-of-Fund Methods

Courts typically use one of two methods (often cross-checked against each other) to set a total fee:

• Percentage-of-fund: Award a set percentage (e.g., 25–30%) of the total recovery.
• Lodestar: Multiply reasonable hours worked by a reasonable hourly rate, sometimes adjusting with a “multiplier” to reflect risk, quality, or results.

In East Palestine:

• The district court approved a 27% fee award (a percentage-of-fund approach).
• For allocation, co-lead class counsel appears to have relied on a lodestar-plus-multiplier framework, applying different multipliers to different firms’ hours based on the nature of their work.

Morgan & Morgan’s complaint was not about the total fee; it agreed the 27% cumulative award was fair. Its quarrel was with the internal arithmetic—whether its hours were:

• Fully credited in the lodestar tally; and/or
• Treated with a lower multiplier than similarly situated firms.

E. Rule 23(e) Settlement Review and Rule 23(h) Fee Review

Rule 23(e) requires the court to approve any settlement that binds a certified class. The court must assess whether the settlement is:

• Fair;
• Reasonable;
• Adequate;
• Free from collusion or conflicts of interest.

Rule 23(h) separately governs fee awards in class actions:

• Counsel must move for fees and provide supporting information;
• Class members must receive notice and an opportunity to object;
• The court must find the requested fee “reasonable.”

Modern practice—and this opinion—make clear that this “reasonableness” review extends beyond the total dollar figure to cover how that figure is allocated, especially when allocation may reflect favoritism, self-dealing, or unfair treatment of contributing firms, which in turn can affect:

• Future willingness of firms to participate in complex cases; and
• Public confidence in the integrity of the settlement process.

F. Motions for Reconsideration: Rules 59(e) and 60(b)

After judgment, parties can ask the district court to revisit its decision via:

• Rule 59(e): Motion to alter or amend the judgment, typically within 28 days, to correct manifest errors of law or fact or to consider newly discovered evidence.
• Rule 60(b): Motion for relief from a final judgment based on specified grounds (mistake, new evidence, fraud, etc.) or “any other reason that justifies relief” (subsection (6), reserved for truly exceptional cases).

However, courts consistently warn that these rules are not meant to:

• Give litigants a second chance to raise arguments they could and should have raised earlier; or
• Serve as an “appeal in disguise.”

The Sixth Circuit applies those principles here to affirm denial of Morgan & Morgan’s belated challenges to the quick-pay provision and to the general delegation of allocation authority.

VI. Likely Impact of the Decision

A. For Class Action and MDL Practice in the Sixth Circuit

This decision—recommended for publication—will have precedential force within the Sixth Circuit (Ohio, Michigan, Kentucky, Tennessee). Its main practical effects include:

• Standing constraints for lawyers.
  Law firms seeking to challenge settlement terms must carefully articulate an injury to themselves, not just to their clients, and must distinguish between:
  • Injuries from how much they receive (allocation)—which may confer standing; and
  • Complaints about global settlement architecture or timing (e.g., quick-pay)—which may not.
• Acceptance of delegated allocation—if the court truly “verifies.”
  District courts in the Sixth Circuit are now explicitly authorized to adopt a “trust but verify” model, delegating initial allocations to lead counsel while retaining jurisdiction over disputes. But as the remand illustrates, courts must:
  • Take objections seriously;
  • Review underlying data and methodology when challenged; and
  • Explain their reasoning.
• Higher expectations for fee-oversight transparency.
  The remand signals that bare-bones orders will not suffice in complex fee disputes. Judges should expect to:
  • Describe the allocation methodology;
  • Address any claimed discrepancies or favoritism; and
  • Ensure the record is sufficient for robust appellate review.

B. For Plaintiffs’ Firms and Leadership Structures

Firms participating in large class or MDL cases should draw several lessons:

• Object early or forever hold your peace.
  If a firm is uncomfortable with:
  • Quick-pay timing;
  • Delegation of allocation authority; or
  • The leadership structure itself,
  it must object during the settlement-approval process—not after final judgment and fee distribution.
• Document contributions and monitor lodestar reporting.
  Firms should:
  • Maintain meticulous time and task records under court-approved guidelines;
  • Confirm how their hours are treated in any common-lodestar or audit process; and
  • Promptly raise concerns about undercounted hours or disparate multipliers.
• Realistic expectations about leadership and allocation seats.
  Not every “co-lead” in a management sense will be entitled to share in allocation authority. Firms that do not represent the class may have less influence over how the common fee is divided.

C. For District Judges: Implementing Judge Thapar’s Blueprint

Although normative, Judge Thapar’s concurrence is likely to shape best practices. District courts in the Sixth Circuit may increasingly:

• Require partial, rather than full, quick-pay of fees;
• Structure explicit holdbacks and claw-backs;
• Set schedules that ensure allocation plans are:
  • Disclosed early;
  • Subject to input and objections; and
  • Reviewed before disbursement;
• Demand more robust records (audit data, lodestar/multiplier tables) from lead counsel when approving allocations.

Courts that simply rubber-stamp fee allocations in complex cases, especially where quick-pay gives them little time to react, risk reversal or remand under the reasoning of this case.

D. For Class Members and Public Confidence

The case indirectly addresses a central legitimacy problem in class actions: the perception that “the lawyers got rich while the victims waited.” The concurring opinion specifically connects:

• The real-world hardships of East Palestine residents still waiting for compensation; and
• The optics of lawyers having already collected $162 million in fees under quick-pay.

By insisting on:

• Stringent standing rules for counsel;
• Active judicial supervision of allocations; and
• Careful assessment of quick-pay’s fairness and timing,

the Sixth Circuit’s decision—if followed in spirit as well as letter—may help restore some public trust in the integrity of large-scale settlements.

VII. Conclusion

In re East Palestine Train Derailment marks an important development in the law of class-action attorney’s fees within the Sixth Circuit. The court clarifies that:

• Attorneys must demonstrate a personal, concrete injury—distinct from that of their clients—to challenge settlement terms on appeal, and they cannot attack a quick-pay provision that clearly benefits them and that they helped secure;
• District courts may legitimately delegate initial fee allocation among plaintiffs’ firms to co-lead class counsel, provided they retain and exercise supervisory authority to resolve disputes; and
• When a firm raises a serious challenge to its share of a fee award—especially in a complex, multi-firm setting—district courts must meaningfully address that challenge and explain their reasoning, not simply subsume it in a generalized denial of reconsideration.

At the same time, Judge Thapar’s concurrence provides a powerful caution: quick-pay provisions that give lawyers their full payday while class members await relief threaten to misalign incentives and erode confidence in the judicial system. Courts must scrutinize not only “how much” lawyers receive in class settlements, but also “when” and “how” those sums are divided.

Taken together, the majority opinion and concurrence offer a “trust but verify” blueprint for managing attorney’s fees in high-stakes class actions. They encourage early and transparent objection to fee structures, robust recordkeeping and auditing, and a reaffirmation of courts’ non-delegable responsibility to safeguard both class members and the fairness of the lawyers’ own compensation.