Federal judge dives into Digitek lawyer fees

Steve Korris May 18, 2011, 7:35am


CHARLESTON, W.Va. (Legal Newsline) - U.S. District Judge Joseph Goodwin staged a 31-day test of wills between lawyers with so much drama he could have sold tickets.

On May 5, the West Virginia federal judge ruled that drug maker Actavis and distributor Mylan should pay lawyers who led national litigation against them, but not nearly as much as the lawyers want.

He prescribed "a very substantial reduction" for lead counsel and the plaintiff steering committee, who petitioned for more than $6 million on a $10 million settlement.

"Even a cursory review casts doubt on the accuracy and legitimacy of a sizable portion of the fee requests," he wrote.

He found "pages of vague time entries devoid of meaningful descriptions."

Actavis had asked him to award nothing or an extremely small amount, but he wrote that lead counsel and the committee "are entitled to a significant award."

He wrote that if the parties don't resolve it by June 5, he will.
Litigation started in 2008, after Actavis recalled a batch of heart medicine Digitek due to fears that a factory in New Jersey produced pills of double thickness.

Some suits claimed personal injuries, and some claimed economic losses.

The U.S. Judicial Panel on Multi District Litigation consolidated cases from around the nation and assigned them to Goodwin.

He granted a motion from Actavis and Mylan to inspect medical records of injury plaintiffs, and they found that many had sued without any records.

Those claiming economic losses moved to certify a class action, and Goodwin denied it.

He found individual issues would predominate over common issues.

No plaintiff produced a double pill.

Depositions of plaintiff experts last summer went well for the defense, according to briefs the plaintiffs don't dispute, and settlement quickly followed.

Actavis and Mylan agreed to pay $10 million to settle about 3,200 injury claims in Goodwin's court, plus $3 million for claims in state courts.

The agreement left the award of fees and expenses up to Goodwin.

Lead plaintiff lawyer Fred Thompson, of Motley Rice in Mount Pleasant, S.C., asked for about $4.7 million in fees and about $1.3 million in expenses.

Actavis lawyer Richard Dean of Cleveland proposed to award zero, or an amount as nominal as the settlement.

Thompson answered that his side wouldn't have signed the agreement if they had known it allowed Goodwin to award nothing.

He wrote that the conduct of Actavis met the elements of fraudulent inducement.

At first, Goodwin's order echoed Thompson's argument.

"Lead counsel and the PSC performed a lot of work that led to the creation of the fund. They served as architects for the coordinated litigation," Goodwin wrote. "Without their help, the plaintiffs may have received no settlement and no compensation.

"The second question is the amount to be awarded. I am still considering that matter. ... I am inclined to let the parties take the first pass on the issue."

He wrote that he was influenced by a defense statement that Thompson's view was tantamount to arguing that defendants wrote a blank check for the court to complete.

"So, in fairness, I am going to allow the parties some time to negotiate a resolution of the amount to be awarded," he wrote. "While this settlement may strike others as having mere nuisance value, I think otherwise.

"At the same time, the result achieved does not strike me, at this point, as the type of blockbuster award that the PSC doubtless hoped for at the outset of the litigation."

In a footnote he identified Thompson, Harry Bell of Charleston, and Carl Frankovitch of Weirton, W.Va., as lead counsel and committee members.

He identified Andres Alonso, Camp Bailey, Robert Binstock, Robert Blanchard, Lester Levy, Peter Miller, Ashley Ownby, David Peterson, Frank Pitre, Ed Blizzard, John Climaco, Brooks Cutter, Daniel Gallucci, Shelly Sanford, Paul Sizemore, Stacy Hauer, Scott Weinstein, Mark Lanier, John O'Quinn, and James Pettit as committee members.

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