Drug company balks at $6M fee request

By Steve Korris | Mar 17, 2011

Goodwin CHARLESTON –- Owners of drug maker Actavis, who led a successful $30 million defense against suits over heart medicine Digitek, don't feel like paying $6 million more to lawyers who sued them.


CHARLESTON –- Owners of drug maker Actavis, who led a successful $30 million defense against suits over heart medicine Digitek, don't feel like paying $6 million more to lawyers who sued them.

"If you weave a carpet that no one buys, the weaver should bear that loss," Richard Dean of Cleveland wrote for Actavis on March 15.

He asked U.S. District Judge Joseph Goodwin to deny a fee petition from a plaintiff committee that settled about 3,200 cases against Actavis and distributor Mylan for $10 million last year.

"If the Court should somehow conclude that there is a basis for the petition, any award should be extremely small," Dean wrote. "It is a settlement based upon nuisance value.

"It reflects the fact that plaintiffs never produced evidence that they possessed or ingested defective Digitek, and that their experts candidly conceded that there was no basis to conclude that Digitek reached consumers. Encouraging attorneys to take on massive fishing expeditions like the Digitek litigation is not in the interest of the public."

Lead plaintiff lawyer Fred Thompson, of Motley Rice in Mount Pleasant, S.C., petitioned in February for $4,400,041.75 in fees and $1,338,260.91 in expenses.

He provided little or no documentation of travel and meal expenses. He requested an additional $340,073.50 in fees and $7,848.39 in expenses for lawyers who pursued a class action over economic losses, even though Goodwin denied class certification.

"While efforts to achieve class certification were ultimately unsuccessful, the work performed by class counsel and the time and money spent pursuing these claims did further the litigation as a whole," Thompson wrote.

The litigation started in 2008 after Actavis recalled a batch of Digitek from a plant in New Jersey due to fears it had doubled the thickness of some pills.

The first class action sought $1 billion in damages.

The U.S. Judicial Panel on Multi District Litigation consolidated federal cases and transferred them to Goodwin, whose docket grew to about 600 suits in a year and a half.

"This feeding frenzy was fueled by plaintiffs' lawyers' web sites and blogs and their jockeying for what they hoped would be lucrative positions on a plaintiffs' steering committee," Dean wrote. "Once the momentum of litigation like this builds, sometimes truth and reality cannot slow it down."

Litigation over personal injuries lost momentum when Actavis and Mylan discovered that many plaintiffs sued without medical evidence.

Litigation over economic losses lost momentum when Goodwin denied class certification.

Remnants of the case fell apart at defense depositions last June, according to Dean.

"One witness collapsed completely, Dr. Karen Frank," he wrote. "The plaintiff steering committee realized that these depositions had not gone well for them and that they would have an extremely difficult time proving product defect."

The parties settled for $10 million in September, under an agreement that didn't award fees.

This year, when Thompson proposed to bill defendants for more than $6 million, Dean vented three years of frustration.

"While the plaintiff steering committee admittedly did far more work than lawyers who simply watched from afar, no precedent entitles them to have defendants pay for that work," he wrote. "They volunteered for their roles and apparently took the risk that they would not be compensated.

"Unlike a class action, the individual plaintiffs here were represented by counsel, presumably had their own individual fee agreements, filed their own individual complaints, and had a chance to participate in discovery."

The committee could have negotiated with their colleagues for fees and expenses, he wrote. The committee apparently didn't provide for assessments or liens on lawyers who did little or no work, he wrote.

The committee could have provided terms in the settlement agreement to award fees and expenses from the settlement fund, he wrote.

"Defendants are not responsible for the choices that put the plaintiff steering committee in their present position and should not have to pay for them," he wrote. "Here, any award of attorneys' fees should be as nominal as the plaintiff steering committee's success in this litigation.

"The settlement agreement itself says that this was primarily a settlement to stop spending money on lawyers, experts, court reporters, hotels and airplanes. Many plaintiffs have already dismissed their suits, having realized that they could not submit complete claim forms for lack of medical records documenting an injury.

"This is the result of plaintiffs' counsel hastily filing hundreds of lawsuits with no pre-suit investigation into whether their clients received defective product or whether there was unexplained digoxin toxicity in those clients."

He wrote that the settlement averaged about $3,100 per claim, adding that these were wrongful death and personal injury claims. He also wrote that under a typical fee arrangement, the average plaintiff would receive $2,000.

"That is not a substantial benefit or great result," he wrote. "The plaintiff steering committee has chosen to seek an award from defendants, despite the lack of grounds to do so, because the settlement funds would be unpalatable to the plaintiffs if shared with the plaintiff steering committee."

He wrote that lawyers raised expectations of thousands and used their money for filing fees. He also wrote that federal and state courts expended precious resources administering the cases.

"Defendants and their insurance carriers were forced to expend over $30 million to defend the cases," he wrote.

Goodwin hadn't set a hearing as of March 16.

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