Sunday, February 20, 2011

Merck Vioxx Accord Spawns Pay-Day Scrap Among Lawyers

Plaintiff lawyers involved in Merck & Co.’s $4.85 billion Vioxx settlement are accusing some of their colleagues of attempting to hog the lion’s share of more than $315 million in fees spawned by the accord.

Attorneys who lead a court-appointed committee that allocates fees are arbitrarily deciding fee awards, with a small number of firms getting a rate of $2,205 an hour for their work while others are assigned a $21 hourly rate for handling depositions of witnesses and poring through records, objecting lawyers contend in court filings in New Orleans.

Objectors like Turner Branch contend the committee’s division of the Vioxx fees “is unjustified, inexcusable, and lacking any rational basis,” according to a Feb. 9 court filing. Branch, a New Mexico-based plaintiff attorney, is seeking $3.9 million in fees. The committee initially awarded him about $281,000, yet listed zero in its recommendation to the judge, according to court filings. Branch didn’t immediately return a phone call seeking comment.

Merck won 11 of 16 Vioxx lawsuits that went to trial before agreeing in November 2007 to settle almost 50,000 claims of users who blamed the drug for heart attacks and strokes. Lawyers who worked on a consolidation of Vioxx cases before U.S. District Judge Eldon Fallon in New Orleans are slated to split $315.3 million in fees for their work on the cases.

Special Master

Fallon, who is overseeing all Vioxx cases filed in federal courts around the U.S., yesterday appointed a special master to oversee the fee split submitted last month by the so-called Vioxx Fee Allocation Committee, said Houston-based plaintiff attorney Mark Lanier. The committee, appointed by Fallon, includes lawyers representing nine of the 109 firms in the settlement pool.

More than 15 firms objected to the recommendations of the committee, which includes prominent plaintiff lawyers, such as Lanier, who won a $253 million verdict against Merck in the first trial over Vioxx, and Montgomery, Alabama-based Andy Birchfield, who helped negotiate the 2007 settlement.

“Out of the 100-plus law firms that are receiving a fee out of the settlement, very few are satisfied with how much they are getting overall,” Lanier said today in a phone interview. “But the committee worked very hard to come up with something equitable. I believe the majority of law firms involved have found the division to be something they can live with.”
$40.9 Million Each

Chris Seeger, of Seeger Weiss LP in New York, and Birchfield, from the law firm of Beasley Allen, are slated to get the largest share of fees at $40.9 million for each firm. They are followed by Herman Herman Katz & Cotlar LLP in New Orleans with $32.5 million.

Lanier’s $27 million and Philadelphia-based Levin Fishbein Sedran & Berman’s $21.4 million in fees round out the top five awards, according to the FAC’s recommendation, filed with the court on Jan. 19.

Seeger and Birchfield serve as co-lead counsel for the fee committee. Like Lanier, Russ Herman of Herman Herman Katz is also a member of the committee. Seeger, Birchfield and Herman didn’t return phone calls seeking comment.

Fallon ruled in October that common-benefit fees would total 6.5 percent of the $4.85 billion settlement, less than the 8 percent initially sought by lawyers.
562,944 Hours

The lawyers doing the common-benefit work billed for 562,944 hours at 109 law firms, Fallon said last year. They took more than 2,000 depositions, reviewed more than 50 million documents, briefed and argued more than 1,000 motions, conducted trials nationwide and negotiated a settlement, Fallon said.

Fallon appointed Patrick Juneau of Lafayette, Louisiana, as the special master to review the FAC’s recommendations, Lanier said.

“While the FAC makes very abstract statements about its process, it provides virtually no information that concretely describes its allocation methodology,” Kathy Snapka of Snapka, Turman & Waterhouse LLP in Corpus Christi, Texas, said in court papers filed Feb. 4 objecting to her allocation of $75,000.

Snapka, who won a $32 million jury verdict that was later cut to $8.73 million, is seeking $12 million for her work, according to court papers. Snapka didn’t return phone calls seeking comment.

The FAC’s analysis is “arbitrary,” Benedict Morelli with New York-based Morelli Ratner said in a Feb. 2 court filing. He said the committee’s allocations were “particularly disturbing” since it awarded about $230 million, or 74 percent of the total fund, to nine law firms that have representatives on the fee-allocation group.

In its recommendation to the court, the fee committee said it considered the type of work done by each firm and the “value” the work contributed to the litigation, developing a point system to evaluate the lawyers. The number of hours submitted wasn’t a dominant factor in deciding awards, the committee said.
$750,000 in Fees

The FAC recommended $750,000 in fees for Morelli Ratner, according to court filings. The firm is seeking $12 million. Morelli didn’t immediately return a phone call seeking comment.

Among other firms awarded fees are Los Angeles-based Girardi & Keese with $20.1 million, Weitz & Luxenberg PC in New York with $20 million and $15.6 million for Levin Papantonio Thomas Mitchell Eschner & Procter PA in Pensacola, Florida.

Robert Arceneaux, a plaintiff attorney in Metairie, Louisiana, who was appointed as co-lead counsel for fee objectors, is calling for an investigation into possible “side deals” involving Birchfield, Seeger, Herman and Michael Stratton, an attorney with Stratton Faxon in New Haven, Connecticut, according to a Feb. 4 filing.
8 Percent of Settlement

Stratton served as liaison for a group of objectors initially opposed to a steering committee’s plans to request that 8 percent of the Vioxx settlement be designated for legal fees, according to papers filed by Arceneaux on behalf of plaintiff lawyers Eric Weinberg in New Jersey and Chris Placitella of Cohen Placitella & Roth in Philadelphia.

In a July 27 meeting, Herman, Birchfield, Stratton and Seeger agree to recommend that fees total 7.5 percent in exchange for an $18.5 million payment to the list of objectors, according to a transcript of the meeting filed with Arceneaux’s court papers. Stratton mentions nothing about the payment to Fallon in a letter citing the agreement the next day, according to a copy of the letter filed by Arceneaux.

Stratton didn’t return a phone call left at his office.

In her filing, Snapka acknowledges that she received two checks from Stratton and was never given a “clear understanding of the source of the funds or the ability of anyone to distribute funds without court order,” according to court papers.

The case is Vioxx Products Liability Litigation, MDL-1657, U.S. District Court, Eastern District of Louisiana (New Orleans).

By Sophia Pearson, spearson3@bloomberg.net; Jef Feeley, feeley@bloomberg.net

Source: Bloomberg

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