Last week, the court-appointed mediator in the consolidated
Avandia marketing and product liability litigation against
GlaxoSmithKline informed U.S. District Judge Cynthia Rufe of
Philadelphia that 58 plaintiffs' firms in the case have agreed to an allocation plan for $143.75 million in common-fund fees.
As mediator Bruce Merenstein of Schnader Harrison Segal & Lewis
described the process, nine law firms objected to the initial allocation plan proposed by a Rufe-appointed fee committee.
After a dozen phone calls and 15 in-person sessions over the
last few months, members of the fee committee adjusted their own
take to bring the objectors on board. In the final allocation
outlined in Merenstein's report, the biggest share of the common
fees, $22.6 million, will go to Reilly Pozner. Wagstaff &
Cartmell is in line for $17.2 million; Andrus Hood & Wagstaff
for $14.7 million; and Miller & Associates and Heard Robins
Cloud & Black for more than $10 million. The Miller firm was an
objector to the original allocation plan, but all of the other
firms looking at eight-figure awards from the common fund were
on the fee committee.
Keep in mind that the common-fund fees are on top of
whatever contingency fees the plaintiffs' firms will receive as
a share of their clients' settlements with GSK over the diabetes
drug. Rufe ordered last October that all of the plaintiffs in
thousands of settled (and later-settled) cases must pay 6.25
percent of their settlements into a common fund to compensate
the lawyers who worked on behalf of all Avandia plaintiffs in
the consolidated litigation. If you do the math, that reflects a
total of $2.3 billion in Avandia settlements by GSK (Rufe
doesn't cite the total but based her order on an aggregated
estimate calculated by a plaintiffs' expert.)
So what, you may be wondering, is the total percentage of
that $2.3 billion that will go to plaintiffs' lawyers? We don't
know. And that's why the Avandia litigation model, which GSK
previously employed in the Paxil litigation, could be a boon to
plaintiffs lawyers.
Unlike defendants in the $4.85 billion Vioxx litigation or
the megabillions fen-phen diet drug litigation, GSK did not
reach a global settlement with Avandia claimants via a class
action. Instead, according to the MDL steering committee's memo in support of its common-fund fee request, the pharmaceutical
company reached thousands of individual settlements, typically
settling en masse with plaintiffs' firms that had large
portfolios of cases.
Individual settlements, unlike class deals, don't have to be
approved by the court. Nor do the fees associated with them,
which are typically the subject of contingency contracts between
lawyers and their clients. So, unlike the federal judges in the
Vioxx and fen-phen class settlements, Rufe is not overseeing all
fee awards to the lawyers who brought and settled Avandia cases,
just the common-fund fees for lawyers. That's icing on the fee
cake for the 58 firms that will receive common-share money for
taking 220 depositions, working with more than 20 expert
witnesses, reviewing millions of pages of documents and writing
and arguing briefs for the benefit of all Avandia plaintiffs.
I'm sure mediator Merenstein and representatives of the 58
common-share firms deserve a lot of credit for resolving their
differences and reaching a consensual allocation plan -- unlike
the lawyers in the Vioxx case, in which the judge had to step in
to decide distribution of the $350 million common fund -- but it
was also in the interest of the plaintiffs' firms.
I called lawyers at several of the firms on the fee
committee, including Reilly Pozner, Andrus Hood, Wagstaff &
Cartmell and Dianne M. Nast. None of them got back to me.
(Reporting by Alison Frankel)
Follow us on Twitter: @AlisonFrankel, @ReutersLegal | Like us on Facebook