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Class Counsel Earn $22M in Attorney Fees in Provigil Litigation

April 24, 2020 | Posted in : Class Action / MDL, Contingency Fees / POF, Fee Award, Fee Award Factors, Hourly Rates / Hourly Billing

A recent Legal Intelligencer story by Max Mitchell, “Judge Approves $22M for End-Payer Attorneys in Provigil Litigation,” reports that the federal judge overseeing the Provigil antitrust litigation has awarded attorneys representing end-payers nearly $22 million in fees.  U.S. District Judge Mitchell Goldberg of the Eastern District of Pennsylvania awarded $21.9 million to leading attorneys representing the group of consumers and companies that paid for the drug after Cephalon, the company that makes the sleep disorder drug, allegedly entered into agreements with generic drug makers to delay the entry of competitors on the market. 

Goldberg’s ruling in the case, captioned Vista Health Plan v. Cephalon, also gave final approval to the nearly $66 million settlement the parties entered into to settle the end-payers’ claims.  Noting that the fee award represents a third of the total settlement and the litigation was complicated by changing Supreme Court precedent regarding patent and antitrust matters, Goldberg said the award was well within reason.

“Discovery was extensive and far-reaching.  The parties proceeded through years of certification, fact, and expert discovery involving approximately five million pages of documents, over 180 depositions, and depositions of numerous experts,” he said.  “The case was hard-fought on both sides.  The parties briefed multiple, highly-contested motions, including motions to dismiss, discovery motions, certification motions, and motions for summary judgment.”

Goldberg further noted that counsel spent roughly 41,000 hours on the litigation.  Class counsel for the end-payers are Spector Roseman & Kodroff, Kessler Topaz Meltzer & Check and Criden & Love.

The $65.8 million settlement is part of a much broader antitrust litigation over Provigil, which included a claim by a separate generic drug company, a $1.2 billion settlement with the Federal Trade Commission and suits brought by direct purchasers of the drug.  Much of the end-payer claims were litigated in conjunction with claims brought by third-party payers.  Defendants have agreed to pay nearly $143 million to settle the combined third-party and end-payer claims, with $77 million going to compensate the third-party payers.

The litigation was also significantly complicated when a dispute arose in the fall about whether outside counsel for one of the parties had been given authority to enter the settlement agreement.  United HealthCare Services had sought to back out of the deal, saying it hadn’t given its outside counsel the authority to enter into the accord.  However, in September, Goldberg rejected those efforts, finding that although the company never gave its outside lawyers express authority to enter into the settlement, facts showed that United had “cloaked” its outside counsel in the “apparent authority” to settle the claims.  The decision meant that the accord between the parties was binding.

“United—a major health insurance company with a deep and experienced bench of in-house lawyers—decided to hire outside counsel to conduct all settlement negotiations on its behalf on the Provigil litigation,” Goldberg said.  “In doing so, United placed complete authority in outside counsel to act on its behalf in these negotiations without providing outside counsel any parameters.”