CHARLESTON – U.S. District Judge Joseph Goodwin stripped secrecy away from settlement of suits over heart medicine Digitek so citizens can understand his coming decisions on fees and expenses for plaintiff lawyers.
"Both parties injected the analysis of the court into the process of approval of plaintiff steering committee attorney fees and expenses in this instance," he wrote on March 21.
"Actions of the court are open to the public and absent an applicable rule or relevant case law, documents relied upon by the court in undertaking this analysis should be open to the public as well," he wrote.
He denied a motion from drug maker Actavis to seal the agreement, which settled cases in Goodwin's court for $10 million and cases in state courts for up to $3 million.
Actavis lawyer Richard Dean of Cleveland attached the agreement to a March 15 brief urging Goodwin to deny a plaintiff committee request for more than $6 million in fees and expenses.
"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."
Goodwin admitted the agreement but didn't seal it.
He had sealed an agreement once, but parties in that case didn't voluntarily elect to file it.
"Here the defendants are voluntarily filing the final settlement agreement so that the court may determine what the agreement does and does not say regarding the plaintiff steering committee's entitlement to fees and expenses," he wrote.
The agreement says, "The plaintiffs' steering committee and anyone who believes they have prepared work that was approved by PSC and is eligible for common fund work may make an application to the MDL Court using the procedure set forth" in federal rules of civil procedure.
It sets a deadline for filing a motion and objecting.
"Either PSC or defendants may request the MDL Court convene a hearing on any motion for attorneys' fees and expenses prior to making a decision on the motion," the settlement says. "The MDL Court's decision is final and non appealable.
"All fee agreements between program participants and their counsel remain in full force and effect and are not affected by this agreement."
Dean stressed that point in his brief opposing an award.
"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," he wrote.
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.
Some suits claimed personal injury or wrongful death, and some claimed economic losses.
The first class action sought $1 billion in damages.
As cases piled up in federal courts, the U.S. Judicial Panel on Multi District Litigation consolidated them and transferred them to Goodwin.
He allowed Actavis and Mylan to conduct discovery on medical records behind the injury suits, and they discovered that some plaintiffs sued with no medical records at all.
Lawyers dismissed dozens of injury suits, some conceding that they received no consideration.
Economic claims fizzled too, when Goodwin denied certification of a class action.
Settlement followed last September, with provisions practically requiring new lawsuits.
"Program participants must submit documentation supporting the existence of digoxin toxicity," the agreement says.
A participant must produce all records from a medically definable incident, all records from two years before the incident, and pharmacy records back to 2006.
Defendants reserved the right to submit records they gather on participants.
A special master will create a settlement grid and award points to each claim.
"The total point award is not to exceed 400 points unless the eligible claimant provides 'Proof of Defect' or 'Death,'" the agreement says.
No one gets fewer than 30 points.
Plaintiff lawyers Carl Frankovitch of Weirton and Harry Bell of Charleston signed the agreement, along with Fred Thompson of Motley Rice in Mount Pleasant, South Carolina.
In February, Thompson moved to award the plaintiff committee $4,400,041.75 in fees and $1,338,260.91 in expenses.
He requested an additional $340,073.50 in fees and $7,848.39 in expenses for lawyers who lost their bid for a class action over economic losses.
Dean replied that no precedent entitled the committee to have defendants pay for their work.
He wrote that they took a risk that they would not be compensated.
They could have negotiated with colleagues for fees and expenses, he wrote.
"Here, any award of attorneys' fees should be as nominal as the plaintiff steering committee's success in this litigation," he wrote.
He wrote that the settlement averaged about $3,100 per claim, adding that these were wrongful death and personal injury claims.
He 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. "If you weave a carpet that no one buys, the weaver should bear that loss."