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Litigation

Federal Vioxx Judge Awards $315.3 Million To Core Attorney Group

NEW ORLEANS - (Mealey's) The judge supervising the Vioxx multidistrict litigation on Oct. 19 awarded $315.3 million to the group of attorneys who conducted discovery and other work of benefit to all federal litigants and those participating in the $4.85 billion settlement with Merck & Co. (In Re:  VIOXX Products Liability Litigation, MDL 1657, E.D. La.).

U.S. Judge Eldon E. Fallon of the Eastern District of Louisiana said the award -- which reflects 6.5 percent of the settlement -- will come out of a total attorney fee pool with a maximum theoretical value of $1.55 billion based on the judge's 32 percent contingent fee cap imposed in 2008 on "primary" attorneys whose clients participated in the settlement.  That would leave approximately $1.24 billion for the individual attorneys.

The Plaintiffs' Steering Committee had sought 8 percent of the value of the $4.85 billion settlement pool -- or about $388 million -- for common benefit work in its January 2009 motion for a common benefit fee.

"This Court has acknowledged the substantial work done by individual attorneys," Judge Fallon said.  "But the undeniable fact remains that the great bulk of the work as well as the expense was borne by the attorneys who performed common benefit work.  Thus, in determining a reasonable common benefit fee the Court must resolve the 'taffy pull' between the interests of common benefit counsel and primary attorneys in receiving fair compensation for their respective work.

"At first blush to award common benefit fees might be criticized as double dipping and not appropriate.  But on closer scrutiny it clearly is not.  It is true that many of those who have done common benefit work have their own clients and have received or will receive a fee from them.  But it is not double dipping because the common benefit fee will not come from any client.  Instead it will come from the attorneys, most of whom have not done any common benefit work but have received enormous benefit from it.  Thus as between a common benefit attorney who expended considerable time, resources, and took significant economic risks to produce the fee, and the primary attorney who did not, it is appropriate and equitable that the former receive some economic recognition from the beneficiary of this work."

Vioxx, a painkiller that was supposed to offer few gastrointestinal side effects, was withdrawn in September 2004 after a study conducted by Merck found that it doubled the risk of heart attack versus placebo.  The national settlement resolved most claims involving heart attack and ischemic stroke, although a small number of claims remain in litigation.

[Editor's Note:  Full coverage will be in the October issue of Mealey's Litigation Report: Arthritis Drugs.  In the meantime, the opinion is available at www.mealeysonline.com or by calling the Customer Support Department at 1-800-833-9844.  Document #72-101027-002Z.  For all of your legal news needs, please visit www.lexisnexis.com/mealeys.]

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For more information, call editor Michael Lefkowitz at 610-205-1161, or e-mail him at michael.lefkowitz@lexisnexis.com.