Antitrust Law Daily Wrap Up, RICO—D. Mass.: Neurontin class attorneys awarded 28% of settlement fund, (Nov 12, 2014)

By Jody Coultas, J.D.

Attorneys representing the plaintiffs in the Neurontin Marketing and Sales Practices Litigation were awarded 28% of the common fund for attorney fees and costs by the federal district court in Boston (Harden Manufacturing Corp. v. Pfizer Inc., November 10, 2014, Saris, P.).

The attorneys represented a nationwide class of third-party payors who covered the cost of Pfizer’s epilepsy drug Neurontin for off-label uses. The class had alleged that Pfizer Inc. falsely marketed Neurontin to treat bipolar disorder. Attorneys for the class requested fees and expenses amounting to 33 1/3% of the $108.33 million settlement fund.

The “common fund doctrine” states that attorneys whose efforts lead to the creation of a fund for the benefit of the class are entitled to reasonable attorney fees from the fund as a whole. To determine whether an award is reasonable, courts look at “(1) the size of the fund and the number of persons benefitted; (2) the skill, experience, and efficiency of the attorneys involved; (3) the complexity and duration of the litigation; (4) the risks of the litigation; (5) the amount of time devoted to the case by counsel; (6) awards in similar cases; and (7) public policy considerations.”

Class counsel were awarded 28% of the settlement fund, inclusive of reimbursement of reasonable litigation expenses, plus interest accrued thereon. Counsel emphasized that they invested more than 10 years and millions of dollars in expenses and should receive more than the lodestar because of the risk they took in taking the case, which involved novel legal questions and complex scientific issues. The court noted that the case was lengthy and complex, and counsel achieved excellent results for their clients, brought a great deal of experience to the case, and performed with considerable skill. However, the sizes of fee awards in similar mega-cases suggested that 33 1/3% of the settlement fund was too high a percentage of the common fund.

Counsel stated only a bottom line lodestar figure and failed to provide detailed information regarding hours worked, hourly rates charged, or expenses charged, rendering it impossible for the court to perform a proper lodestar cross-check on the reasonableness of the proposed 33 1/3% award. Therefore, the court reduced the proposed percentage and awarded counsel 28% of the common fund.

The case is No. 04-10981-PBS.

Attorneys: Thomas M. Greene (Greene LLP), and Thomas M. Sobol (Hagens Berman Sobol Shapiro LLP) for Harden Manufacturing Corp. John A. Boyle (Marino & Associates), Neal H. Klausner (Paul, Weiss, Rifkind, Wharton & Garrison), and Paul F. Corcoran (Davis & GIlbert LLP) for Cline, Davis & Mann, Inc. Asa Groves, III (Groves and Verona PA) for Eckerd Corp. Andrew Muscato (Skadden, Arps, Slate, Meagher & Flom, LLP), Andrew C.S. Efaw (Wheeler Trigg & Kennedy LLP), and Brigette L. Mitchell (Shook, Hardy & Bacon LLP) for Pfizer, Inc.

Companies: Harden Manufacturing Corp.; Pfizer Inc.

Cases: RICO StateUnfairTradePractices MassachusettsNews