A recent Legal Intelligencer story, “Judge Approves Nearly $144 Mil. in Avandia MDL Attorney Fees,” reports that the federal judge presiding over the diabetes drug Avandia MDL has approved the dispersal of up to $143.75 million in attorney fees. The fees make up to 6.25 percent of the estimated aggregate value of the settlements in the litigation. U.S. District Judge Cynthia M. Rufe of the Eastern District of Pennsylvania also authorized that $10.1 million be held in reserve for the payment of future administrative fees and expenses.
Over 150 lawyers from over 50 plaintiffs law firms sought approval of the dispersal of attorney fees and costs undertaken for the common benefit of the entire mass tort litigation, including cataloging more than 30 million pages of documents, taking or defending 220 depositions, working with more than 20 expert witnesses, and “becoming educated on, and adept at addressing, complex medical and scientific issues,” Rufe said.
Between October 16, 2007 and February 14, 2012, “common benefit counsel and other members of their firms spent more than 134,000 hours preparing and litigating this case for the common benefit of all claimants,” Rufe said. “The time that common benefit counsel devoted to this case supports the reasonableness of the requested attorneys’ fees, as shown by a comparison to the hours spent in other super-mega-fund cases in which requests for attorneys’ fees have been approved.”
The judge conducted a cross-check of the lodestar of $55.3 million, which was calculated by multiplying the number of hours worked on the case by counsel’s reasonable hourly rates. The plaintiffs counsel billed $185 an hour for paralegals and rates for attorneys starting at $225 an hour and ranging up through $285, $380, $475 and $595 an hour, according to the 23-page opinion (pdf). Rufe said the plaintiffs counsel’s fees were reasonable in comparison to billable hourly rates in the Philadelphia market.
Rufe said the fee is reasonable when measured under any of the possible frameworks that the U.S. Court of Appeals for the Third Circuit would use to judge the fees. Rufe looked at the common fund analysis under Gunter v. Ridgewood Energy and In re Prudential Insurance Co. of America Sales Practices Litigation, which involved weighting factors such as the skill and efficiency of the attorney involved and the complexity and duration of the litigation; the Third Circuit’s common benefit attorney fees may be awarded if substantial benefit was conferred on every claimant and the fees were proportional; the managerial powers doctrine under which the federal judiciary has the power to manage docket and fashion a way to compensate attorneys who provide “class-wide services” and which also was discussed by the Third Circuit in Diet Drugs.
One way that the plaintiffs common benefit work was of substantial benefit was that the Food and Drug Administration’s “actions did not secure the payment of damages by [Avandia drugmaker GlaxoSmithKline] to injured claimants,” Rufe said. “Rather, payment was secured by the independent efforts of common benefit counsel, and only after a hard-fought battle with a well-represented opponent.” It was also reported that the individual plaintiffs steering committee members were each carrying costs of $750,000 to $1 million.