A recent Law 360 story by J. Edward Moreno, “Final Approval in Glumetza Antitrust Deals Gives Attys $50M,” reports that a California federal judge granted final approval of three settlements resolving direct buyers' class claims that drugmakers plotted to delay the generic version of the blockbuster diabetes drug Glumetza, awarding $50 million in attorney fees to class counsel, less than half of the $112.8 million they had sought.
Judge William Alsup of the U.S. District Court for the Northern District of California ruled that in the case of so-called megafunds, settlements above $100 million, it's more effective when determining attorney fees to use the lodestar method — in which a court determines a prevailing market billing rate and then multiplies that by a reasonable number of hours expended on the case — rather than rely on a percentage. The lodestar in this case — determined as a reasonable amount of hours at a reasonable rate — is $22.5 million, so the $50 million attorney fee award reflects a 2.2 lodestar multiplier instead of 25% of the $453.85 million settlement fund that class counsel had proposed.
The $112.8 million award that class counsel suggested amounts to a 4.99 lodestar multiplier, which is significantly higher than the 1 to 2 multiplier that's been applied in similar cases, Judge Alsup said. "This award constitutes the second-highest amount of attorney's fees granted in a generic delay antitrust action filed post-Actavis," Judge Alsup said, referring to a 2013 landmark U.S. Supreme Court ruling that certain large payments to settle patent disputes amount to so-called reverse payments that likely trigger Sherman Act violations.
The Actavis ruling clarified the legal landscape of generic delay antitrust actions and "charted a more favorable path for future plaintiffs," Judge Alsup said, meaning that the attorneys in this case took on significantly less risk than attorneys litigating similar claims before the Actavis ruling. Judge Alsup also noted that the risk was divided among seven firms: Hagens Berman Sobol Shapiro LLP, Sperling & Slater PC, Hilliard & Shadowen LLP, Taus Cebulash & Landau LLP, the Roberts Law Firm, Tadler Law LLP and Frank LLP.
"Despite the fact that counsel undertook this litigation on a purely contingent basis, the risk of non-payment was spread out over seven different law firms, ensuring that no one firm would take too big a hit upon an adverse ruling," Judge Alsup said. "And, as previously discussed, unlike other reverse-payment antitrust actions with larger multipliers, counsel initiated this action nearly six years after the Actavis decision."
Class counsel was awarded what it had sought to cover expenses: $2.4 million for administrative costs and consulting fees. Judge Alsup also finalized the three settlements — Bausch's $300 million deal, Lupin's $150 million deal and Assertio's $3.85 million deal — totaling $454 million. Those direct purchasers objected to the $112.8 million proposed attorney fees and asked the court to slash the award to $22.5 million.