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$91M Fee Award in Pfizer Neurontin MDL

November 13, 2014 | Posted in : Contingency Fees / POF, Fee Award, Fee Award Factors, Fee Jurisprudence, Fee Request, Hourly Rates, Lodestar

A recent Law 360 story, “Attys’ Fee Award Cut to $91M in Pfizer Neurontin MDL,” reports that a Massachusetts federal judge awarded $91 million to the plaintiffs attorneys in multidistrict litigation accusing Pfizer Inc. of illegally marketing Neurontin for off-label use, saying the $108.3 million they requested from the $325 million settlement pot was too high.

U.S. District Court Judge Patti B. Saris said in her ruling that the fee request, which represented a third of the settlement, was more than is traditionally awarded in “megafund” cases that settle for more than $100 million.  A study of cases in the First Circuit, where Judge Saris’ court is located, found that the mean attorney fee award in settlements between $250 million and $500 million was 17.8 percent, she said in her ruling.

“In fashioning the fee award, the Court gives the due weight to the fact that this case was lengthy and complex.  Class counsel achieved excellent results for their clients.  They brought a great deal of experience to the case, and throughout the litigation they performed with considerable skill,” Judge Saris said, noting that in a settlement with more than 40,000 class members, there was only one objection, unrelated to the amount of the fund or the attorneys’ fees.

She also considered the fact that class counsel has already been compensated in the case for its work in a bellwether trial against Pfizer in which Kaiser Foundation Health Plan served as the lead plaintiff.  On top of that, the attorneys didn’t provide detailed information backing their lodestar claim for $27.4 million, not including time spent on Kaiser trial, Judge Saris said in her fee ruling.

In analyzing the fee request, Saris wrote plaintiffs lawyers gave the court a $27.4 million "lodestar" amount for their work but did not provide hourly rates or hours worked.  In class actions, courts typically apply a multiplier to the lodestar figure--and, citing case law, Saris noted that multipliers of between one and three are the norm.  In this case, the multiplier of 3.32--to arrive at $91 million--was "well within the acceptable range," she wrote

Some courts have shied away from awarding large amounts of fees in “megafund” cases to “avoid giving attorneys a windfall at the plaintiffs’ expense,” Judge Saris wrote.  However, other courts refuse to lower those fees, believing that “the sliding-scale approach creates the perverse incentive for Class Counsel to settle too early for too little,” the fee ruling said.

The case is In re Neurontin Marketing and Sales Practices Litigation.  For more on this case, visit http://www.mad.uscourts.gov/worcester/MDL1629/