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Order No. 2640
re propriety of benefits claims Doctors, Lawyers Taken To Task in Fen-Phen Case By
Shannon P. Duffy
In a strongly worded opinion that questioned the ethics of two law firms and two doctors, the federal judge who is overseeing the $3.75 billion Fen-Phen diet drug class action settlement has found that dozens of claims of heart valve damage were "medically unreasonable" and that the doctors and lawyers responsible for the invalid claims must now be watched more closely. U.S. District Judge Harvey Bartle III said he was forced to issue an injunction because the settlement funds were set aside for "rightful claimants who suffered from Fen-Phen and not as a pot of gold for lawyers, physicians and non-qualifying claimants." The ruling in the matter of In re Diet Drugs is a significant victory for the team of lawyers who represent the settlement trust -- Andrew A. Chirls and Abbe F. Fletman of Wolf Block Schorr & Solis-Cohen -- who argued that the settlement fund is being rapidly depleted by a "deluge" of exaggerated claims. Chirls and Fletman focused on two New York law firms -- Napoli Kaiser Bern & Associates and Hariton & D'Angelo -- and said the claims submitted by their clients included a shockingly high percentage of claims for hefty benefits. Prior to the settlement, they said, statistics showed that only about 10 percent to 11 percent of Fen-Phen users would test positive for heart valve abnormalities. But the clients of the two New York firms were testing positive at a rate of 60 to 70 percent, they said. Fletman took the lead in a recent six-day hearing that focused on 78 claims. She argued that an unbiased doctor had reviewed them all and found that none of the diagnoses was medically reasonable. Bartle agreed, saying that he found Fletman's expert witness, Dr. John Dent, to be "extremely well qualified" and that he completely accepted Dent's conclusions about the medical unreasonableness of the readings. As a result, Bartle ordered that 78 claims submitted by the clients of two New York law firms "shall not" be paid. But Bartle also said those same claimants have the right to resubmit their claims if they get new doctors -- anyone other than Dr. Linda J. Crouse or Dr. Richard L. Mueller -- to conduct an echocardiogram and complete their claims forms. Some of the harshest criticism in Bartle's opinion was levied on Crouse, who was paid $725,000 by the Hariton and Napoli firms for reading 725 echocardiograms and $2 million from other law firms for similar work. "When considering the thousands of echocardiograms that Dr. Crouse interpreted during the period that she worked for the Hariton and Napoli firms, her practice resembled a mass production operation that would have been the envy of Henry Ford," Bartle wrote. Bartle found that Crouse had improperly relied on law firm employees to instruct her staff on how to interpret the echocardiograms and that she "spent little time actually reviewing and approving the results." He also found that Crouse "never met with the claimants, never reviewed their medical records, and largely relied on the law firms to provide the medical history," despite clear requirements that the cardiologist herself was responsible for attesting to the accuracy of the information on the claims forms. Mueller was also criticized by Bartle for allowing the law firms to fill out portions of the claims forms that were his responsibility and for employing what Bartle called questionable diagnostic practices. Significantly, Bartle found that some of the lawyers may have violated ethics rules by agreeing to pay Mueller a bonus for every diagnosis that resulted in a claim for benefits. Bartle found that Mueller's promised compensation was outlined in a letter from attorney Mario D'Angelo that said he would receive "an extra $1,500 if the claimant obtained a benefit or the claim was submitted to the trust for payment." Lawyers for the law firms argued that there was nothing improper in the payment arrangement because Mueller was simply being paid for doing the extra work that went along with submitting a claim. Bartle disagreed, saying, "That is not what happened here. Dr. Mueller received additional compensation not for simply filling out the [claims forms] but only if the claimant received a benefit or if the [form] was forwarded to the trust." As a result, Bartle concluded, "Mueller's remuneration depended on how he interpreted the echocardiogram and on what he stated on the form. He had a financial incentive to reach a particular result." Calling it a "highly questionable practice," Bartle said the payment "seems to violate a lawyer's ethical obligation not to compensate a witness on a contingent fee basis." In a separate order, Bartle referred the matter to the New York disciplinary authorities "for further review and consideration." But Bartle didn't give the trust's lawyers everything they asked for. Chirls and Fletman had asked Bartle to bar the two law firms from representing any clients in filing for benefits with the trust. Bartle declined to go so far, saying, "Although their conduct has certainly not been totally exemplary and in at least one respect there has been highly questionable behavior, we will not at this point take such a drastic step. To bar them now could cause needless harm to innocent claimants who are eligible for benefits." Instead, Bartle found that the appropriate remedy was to allow the trust to audit all claims filed by clients of the Hariton and Napoli firms. Under the settlement agreement, the trust is allowed to audit 15 percent of the claims. But Bartle found there was "good cause" to allow the trust to begin auditing 100 percent of the claims submitted by the two New York law firms, as well as any claim in which the attesting doctor is either Crouse or Mueller. Likewise, Bartle ruled that the settlement trust may now begin auditing 100 percent of the claims certified by either Crouse or Mueller. But the judge also refused to order that claimants cannot rely on attestations of Crouse or Mueller to support their right to "opt out" of the settlement and pursue a lawsuit. To exercise such an opt-out, claimants must submit a form that certifies that they have tested positive for heart valve damage. Bartle found that it was not his place to bar such claimants from relying on Crouse or Mueller. "While we do not condone the performances of Dr. Crouse or Dr. Mueller in the cases before us . . . this issue must be resolved in the lawsuit filed by the opt-out claimant and not before this court," Bartle wrote. In those lawsuits, Bartle said, the defendant, Wyeth, "will be able through the adversary process to dispute any questionable conclusions or findings of either Dr. Crouse or Dr. Mueller which might surface." One of the lawyers who represented the Hariton and Napoli firms - attorney Abraham C. Reich of Fox Rothschild O'Brien & Frankel - said he was disappointed by the judge's ruling, especially by the suggestion that his clients had behaved unethically. "These are honorable people," Reich said, adding that he expects that the New York disciplinary authorities would agree that no ethics violations occurred. Reich said he was disappointed that Bartle premised his decision on the complete acceptance of the credibility of the trust's expert witness. In court papers, Reich said, the two New York firms had set out to give the judge detailed information on each of the 78 challenged claims. But the judge's analysis, he said, didn't focus on any individual information. Date Received: November 18, 2002 Wyeth warns may need more reserves for diet litigation NEW YORK, Sept 27 (Reuters) - Wyeth <WYE.N> said on Friday it may have to take additional reserves in the future to pay for litigation related to its recalled diet-drug cocktail fen-phen. Wyeth, formerly known as American Home Products, in recent years had to pay billions of dollars to former users of two diet drugs once included in the "fen-phen" slimming cocktail, to settle lawsuits alleging the drugs caused heart damage. Chief Financial Officer Kenneth Martin told analysts and investors on a conference call Friday that Wyeth will take an additional reserve of $1.4 billion in addition to the $13.2 billion the firm has already taken to cover litigation. He said it is difficult to calculate reserves as additional patients emerge, adding "possible additional reserves may be required." The company cut earnings forecasts
for the year due in part to slowing sales of its flagship hormone replacement
products after prominent medical journal articles questioned the safety
of the drugs.
Current Pending Motions re Matrix Payments:
Joint Motion to Approve and Implement
the Fifth Amendment to the Nationwide Class Action Settlement with AHP,
filed 9/23/02 (click
here).
Joint
Motion for an Emergency Stay of Processing Matrix Claims to Tentative and/or
Final Determinations under the Nationwide Class Action Settlement Agreement
with AHP, filed 9/24/02 (click
here).
The
Court has issued an Order scheduling a conference on 10/9/02 to consider
the issues presented in the Motion above (click
here).
Motion by the AHP Settlement Trust for Emergency Suspension
of Certain Fund A Processing Deadlines, filed 9/25/02 (click
here).
Fen-Phen: Are Claims Exaggerated? Shannon P. Duffy
Payouts to claimants in the $3.75-billion fen-phen diet drug class action settlement could come to a screeching halt very soon if the lead lawyers on all three sides of the case persuade a federal judge that the fund is being rapidly depleted by a "deluge" of exaggerated claims. In court papers filed this week, the lawyers are asking U.S. District Judge Harvey Bartle III, of the Eastern District of Pennsylvania, to order an "emergency suspension" of all claims processing, and to reconfigure the entire process so that all future claims of actual heart valve damage will be audited. The problem, the lawyers say, stems from the "systematic abuse" of the settlement claims process by a group of plaintiffs' lawyers and the doctors they use as experts. In a separate motion, the lead lawyers are asking Bartle to permanently bar two New York law firms and two doctors from submitting any claims, saying the evidence shows that they were effectively running a "production line" that resulted in hundreds of "medically unreasonable" claims. Bartle has already temporarily frozen all payments to any client of the two firms -- Napoli, Kaiser, Bern & Associates and Hariton & D'Angelo -- or to any claimant whose echocardiogram was read by either of two doctors -- Linda Crouse and Richard Mueller -- pending the outcome of a 10-day hearing. Now the lead lawyers on all three sides -- the lawyers representing the settlement trust, the class action lead plaintiffs' lawyers and the defense lawyers for American Home Products -- are asking Bartle to go much further, saying the entire process must be redesigned to thwart widespread abuse. In the emergency motion, lead class plaintiffs' attorneys Arnold Levin and Michael Fishbein of Levin, Fishbein, Sedran & Berman say the fen-phen claims process "changed radically" around February 1992 when the percentage of claimants with lawyers rose sharply. But the much more disturbing statistic, they say, was the sharp increase in the number of claims for large cash awards. Prior to the settlement, statistics showed that about 10 percent to 11 percent of fen-phen users tested positive for heart valve abnormalities. And the epidemiologists said that about half of that group most likely had the valve condition caused by other factors like rheumatoid arthritis, before taking the diet drugs. The settlement was designed to account for those facts by establishing a "matrix" of benefits, with the largest cash awards paid to those with the most severe heart valve problems and no other potential causes in their medical histories. But the lead lawyers now say that some plaintiffs' lawyers treated the matrix as an invitation to abuse the system. While they expected to see 10 percent to 11 percent of the claimants in the top categories of the matrix, the lead lawyers say that some plaintiffs' firms had more than half of their clients in the matrix's top cash-payout boxes. "The high concentration of filings by a small number of
law firms, who have advertised extensively and appear to have conducted
en masse echocardiographic screening of their clients ... presents the
danger of systematic abuse," Levin and Fishbein wrote.
The trust, they said, has already has paid $7 million based upon improper readings of echocardiograms, and that money "is now unavailable for the payment of legitimate claims." Hanging in the balance, Chirls and Fletman say, is another $28 million in claims that were interpreted by Dr. Crouse and Dr. Mueller. The trust hired two expert cardiologists who collectively have reviewed all of the claims that Crouse and Mueller handled, they noted, and found that more than 90 percent of their diagnoses lacked a "reasonable medical basis." Chirls and Fletman argue that the doctors were lured by money. "It is not surprising that the system the law firms created produced medically unreasonable analyses, since the financial incentives it established encouraged slipshod work and preordained results. In just a handful of months, Dr. Linda Crouse earned $725,000 to take and review 725 echocardiograms for clients of Hariton/Napoli," they wrote. "In addition to the work she has done for Hariton/Napoli, Dr. Crouse has earned some $2.5 million during the past year reviewing 10,000 echocardiograms for a consortium of firms led by Petroff & Associates. She did all this while continuing to see up to 80 patients a week and still participating in some, if not all, of her extracurricular activities." Mueller's case is "even more suspect," they argue, due to the "contingent financial arrangement" he had with the lawyers. The trust's brief says Mueller got most of his money only if he completed one of the green claims form -- a form used only if the claimant is found to have at least moderate heart valve damage. "The financial incentives [were] created by the law firms for the doctors to 'fudge' claims," they wrote. Mueller, they note, found at least moderate damage in 25 percent to 30 percent of the cases he reviewed. Crouse's statistics were even higher, they note, finding at least moderate damage in more than 60 percent of the claims. As a result, Chirls and Fletman argued, the court should exercise its authority under the settlement to permanently bar both law firms and both doctors from submitting any claims. None of the lawyers representing the Napoli Kaiser and
Hariton firms could be reached for comment. The post-trial briefs from
both firms are due to be filed next week.
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Order 2622
re partial class fee award Plaintiffs' Lawyers Strike Back in Fen-Phen Settlement Case Shannon P. Duffy
The $3.75 billion settlement of the fen-phen diet drug class action -- once hailed as a brilliant solution to the vexing problem of getting courts to approve massive settlements -- is now mired in ugly disputes over whether plaintiffs' lawyers are draining the fund by persuading doctors to exaggerate their clients' injuries. Last week, leading lawyers asked U.S. District Judge Harvey Bartle III of the Eastern District of Pennsylvania to order an "emergency suspension" of all claims processing, and to reconfigure the entire process so that all future claims of actual heart valve damage will be audited. They also asked Bartle to permanently bar two New York law firms and two doctors from submitting any claims, saying the evidence shows that they were effectively running a "production line" that resulted in hundreds of "medically unreasonable" claims. But now the plaintiffs' lawyers are striking back, arguing that Wyeth (the successor to fen-phen manufacturer American Home Products) is trying to "rewrite" the settlement and is irresponsibly tarnishing the names of lawyers and doctors with accusations of fraud that it simply hasn't and can't back up with any evidence. Judge Bartle has temporarily frozen all payments to any client of the two New York firms -- Napoli Kaiser Bern & Associates and Hariton & D'Angelo -- or to any claimant whose echocardiogram was read by either of two doctors -- Linda Crouse and Richard Mueller -- pending the outcome of a 10-day hearing. In briefs filed last week in In re Diet Drugs, lawyers for the settlement trust -- Andrew A. Chirls and Abbe F. Fletman of Wolf, Block, Schorr and Solis-Cohen -- argued that the evidence at the recent hearing proved that the Hariton and Napoli firms have "submitted hundreds of medically unreasonable claims." But in a joint brief filed this week, a team of lawyers representing the two New York firms argues that the evidence of any fraud was utterly lacking and that the real motive behind the latest moves is to "kill" the settlement. "This motion ... is not about doctors or lawyers; it is about victims of Wyeth's dangerous drugs that the FDA ordered off the market," wrote attorneys Abraham C. Reich and Gregory B. Williams of Fox, Rothschild, O'Brien & Frankel (for the Hariton firm) and Gerard E. Harper, Jeh C. Johnson and Eric Alan Stone of Paul, Weiss, Rifkind, Wharton & Garrison (for the Napoli firm). In the brief, the plaintiffs' lawyers argue that Wyeth and the settlement trust are trying to take back many of the key concessions made in the settlement. "Rather than face a jury trial on the damages sustained (or to be sustained) by the many millions of people who ingested these defective drugs, Wyeth settled. In that settlement, in addition to foregoing any right to challenge whether its drugs caused heart disease, Wyeth forfeited the right to contest (1) what constitutes valvular heart disease, (2) how cardiologists are to determine whether Fen-Phen users have valvular heart disease, and (3) subject only to an audit program, whether a reasonable medical basis exists for particular cardiologist to have concluded that a Fen-Phen user has valvular heart disease as defined in the Settlement Agreement," they wrote. "Now Wyeth wants all those rights back," the brief says. In the brief, the Fox Rothschild and Paul Weiss lawyers urge Bartle to see the accusations lodged against their clients as "reckless." They also argue that the move by Wyeth to ask for modifications of the settlement -- most notably the move to a 100 percent audit of all injury claims -- is proof that the two New York firms are not unique. Instead, they argue, it shows that Wyeth and the trust are simply unhappy with the settlement terms. "In that extraordinary motion, using its longtime paid consultant, Wyeth now insists that thousands of claims involving hundreds of law firms and scores of cardiologists are bogus -- including, by our count, at least half of those submitted by lawyers on the Plaintiffs' Management Committee," the brief says. "That motion, which seeks to kill the settlement agreement, exposes this motion [to bar the Hariton and Napoli firms] as a mere stalking-horse," the brief says. The Hariton and Napoli lawyers complain in the brief that payments due to 88 of their clients whose cases were the focus of the hearing have been unfairly put on hold along with other clients of their firms "about whose conditions this court heard not a word of evidence." Halting the payments is unfair, they argue, because Wyeth and the settlement trust failed to prove anything approaching fraud. Instead, they argue, the hearing boiled down to disagreements among doctors about how to read echocardiograms. But while Wyeth and the trust criticize the plaintiffs' doctors for reading a huge volume of tests in a short time, the New York firms argue that the expert witnesses called to the stand to lodge those criticisms were hypocrites since they themselves reviewed the suspected doctors' work in just as short a time. "This court should order all these claims to be instantly paid because movants failed to carry their burden of proof. They failed to prove that the claims lack a reasonable medical basis or are the product of fraud," the brief says. The "whole case," the brief says, is premised on a faulty syllogism. As Wyeth and the trust see it, the brief says, "since
its two allegedly independent experts disagreed with so many of the interpretations
that Drs. Crouse and Mueller made, some systemic explanation must exist
to explain the wide divergence of views.
In fact, the brief says, the evidence showed that the disparity of views among the doctors was actually based on disagreements about what the settlement agreement requires. "One set of experts wants echocardiograms conducted and
interpreted in a particular way, while Drs. Crouse and Mueller conducted
and interpreted echocardiograms in a way the [settlement form] dictates,"
the brief says.
IMPORTANT! All echoes must be completed before Jan. 3, 2003! To ever obtain anything for damaged heart valves, you must have an echocardiogram by January 3, 2003 which shows at least mild aortic or mitral regurgitation. For more important fen phen deadline information, read below, and to ensure that you do not blow any important deadlines, contact Feldman & Rifkin, LLP toll free 888-766-2690 or fax all echo results to us at 215-885-3303, include your phone number, and we will call you back to discuss your situation. Introduction
Fen Phen Deadlines at a glance:
January 3, 2003 - If you ever hope to obtain matrix level payments or exercise an opt-out right, you must have an echo by this date which shows FDA+ injuries or mild mitral regurgitation. May 3, 2003 - If you ever hope to obtain matrix level payments, you must file your blue form by this date, and file your green form at the time you are diagnosed with a matrix level injury. If you qualify for an intermediate or back end opt-out right by January 3, 2003, you must file your opt-out form (Orange #2 for intermediate, Orange #3 for back-end) by this date. If you qualify for an intermediate or back end opt-out right after January 3, 2003, you must file your opt-out form within 120 days of qualifying for opt-out right. You must bring your opt-out suit within 1 year of exercising your opt-out right. (Click to see if you qualify for an intermediate opt-out right.) Free echo
Fen Phen Injuries
Aortic regurgitation: JH/LVOTH = jet height/left ventricular outflow tract height Mild Aortic Regurgitation > 10% and < 25% or 11-24% JH/LVOTH Moderate Aortic Regurgitation = 25% ?— 49% JH/LVOTH Severe Aortic Regurgitation > 49% JH/LVOTH
Mitral Regurgitation: RJA/LAA = regurgitant jet area/left atrial area Mild Mitral Regurgitation > 5% and < 20% or 6-19% rJA/LAA Moderate Mitral Regurgitation = 20% — 40% RJA/LAA Severe Mitral Regurgitation > 40% RJA/LAA
Primary Pulmonary Hypertension (PPH): PPH can loosely be defined as a disease resulting in increased pulmonary artery pressure, caused by Pondimin or Redux ingestion, in the absence of any other significant contributing factor. Primary pulmonary hypertension is generally the most serious and potentially deadly of the injuries caused by the fenfluramines. However, progressive and deadly PPH generally manifests within one year of usage. As both Pondimin and Redux have been off the market since September 1997, the occurrences of this disease, which is only encountered in a small percentage of Fen-Phen recipients, are becoming even less frequent. However, Round Two will involve hundreds (if not thousands) of people who took the drugs and now have a peculiar and just recently-described form of PPH which involves normal or mildly elevated pulmonary artery pressures while resting, but increased artery pressures while performing light exercise during the right heart catheterization procedure. This is not normal. This disease process, evident in latent pulmonary hypertension, will comprise the majority of the PPH litigation in the Second Round of Fen-Phen. The medical community is years away from defining the contours (i.e., prognosis and extent) of this rare type of disease. However, the legal community cannot wait for the medical community to define this disease. It is likely there will be trials in Round Two involving this new disease, and such trials will occur long before the medical community can even begin to define the contours of this new disease. It is important to remember those claims for primary pulmonary hypertension (PPH) are not settled under the class action. Therefore, any client diagnosed with PPH will proceed under the tort system with statutes of limitations determined by the jurisdiction where the case is filed, totally separate from the Class Action Agreement. A person must meet the class action settlement definition of PPH to sue for this disease. Go to http://fenphencentral.com/pph to see if you satisfy the definition. The statute of limitations for a PPH case will not begin to run until these requirement are met. Settlement Compensation
More significant compensation is available for individuals meeting a heightened medical criterion, who would qualify for Matrix benefits. The Matrix is the settlement’s method for offering a table of pay-outs to the most severely injured recipients of Pondimin or Redux. To qualify as a Matrix case, an individual must be diagnosed with (1) severe regurgitation of the mitral or aortic valves, (2) moderate regurgitation of the mitral or aortic valves in combination with specified complicating factors, (3) heart surgery, or (4) endocardial fibrosis. The majority of individuals qualifying for Matrix compensation will be eligible by virtue of one of the “complicating factors,” which are listed in the Settlement Agreement. To have an opportunity to qualify for Matrix benefits based on valvular damage, an individual must either (1) be diagnosed with an injury qualifying for Matrix level benefits by the end of the screening period or (2) be diagnosed with at least mild mitral or aortic regurgitation by the end of the screening period, and thereafter be diagnosed with a Matrix level injury for the same valve by the Matrix payment cut-off date. The Matrix payment cut-off date will be Dec. 31, 2015. However, an attorney must not be lulled into thinking they have fourteen years to evaluate these cases. It is essential that all clients have an echocardiogram taken before Jan. 3, 2003 and read shortly thereafter, or the lawyer responsible will be faced with explaining to clients why their rights to recover have been lost by not insisting that an echo be performed during the screening period. To see what you are entitled to under the class action settlement, go to http://settlementanalyzer.com Jan. 3, 2003! continued in col. 3
This information has been brought to you by:
Licensed to practice in Pennsylvania and New Jersey, and in other states by special arrangement. Please note that the information contained herein does not constitute leagl advice, nor does it create an attorney-client relationship. Please contact us to discuss your specific situation. Much of the information was taken from an article available on Leflaw.net's bulletin board service, http://noticenetwork.com. Click here for the complete article. We are not the settlement administrator. For the
official settlement administrator and full explanation of these deadlines,
go to Settlement Trust website http://www.settlementdietdrugs.com
Firms Fault PMC For Failing To Assert Neurotoxicity Claims PHILADELPHIA — Two law firms that pressed unsuccessfully to develop a case for neurological injuries from diet drugs filed objections to the Plaintiffs’ Management Committee’s (PMC) $567 million joint petition for fees (In Re: Diet Drugs The Law Offices of Daniel E. Becnel Jr. filed a motion March 25 asking the court for reimbursement for money withheld from 51 settlements the firm’s clients reached with American Home Products Corp., now Wyeth, to disallow "inappropriate" common benefit fund fees and expenses and to award common benefit fees to Becnel attorneys and an "enhancement benefit" to its plaintiffs. "The Becnel Attorneys believe that the PMC’s efforts in the diet drug litigation did not directly or indirectly benefit them in any way," the firm’s motion and memorandum states. "Moreover, the PMC never pursued studies to prove that neurotoxicity was related to ingestion of the diet medications at issue or to prove the progression of heart valve damage after such ingestion." The firm says examination of billing by PMC and other firms represented by the joint petition shows duplicative efforts, such as attendance at meetings by several partners from a single firm. The firm also filed a motion April 4 seeking leave to take discovery, including whether: The PMC had "sweetheart deals" with certain state lawyers
not to pursue objections to the national settlement in return for a rebate
of the 9 percent common benefit fund fee and expense.
Another law firm that sought to assert claims of neurotoxicity and that objected to the national settlement filed papers opposing the joint fee petition. Ronald R. Benjamin seeks reimbursement of approximately $797,850 withheld from his clients’ settlements by the MDL. Benjamin’s March 21 affirmation says class counsel will "be well-compensated under the Brown class action and that their efforts to seek fees from the funds withheld under MDL-1203 amounts to double-dipping." Benjamin argues that MDL work produced little benefit to those outside the settlement class and in some instances worked against the claims of opt-outs. "[Y]our affiant settled cases on behalf of victims who sustained neurotoxic injuries and it is clear that petitioners not only failed to provide common benefits for these class members, but in fact litigated against them and retained experts for the express purpose of providing evidence in opposition to their claims," Benjamin says. Benjamin is involved in a related battle, with the PMC seeking sanctions against him for a lawsuit he filed in New York state court accusing the PMC of malpractice for its alleged failure to develop a case for the neurotoxicity of fenfluramine and dexfenfluramine. In February, U.S. District Court Judge Harvey Bartle III denied a PMC rule to show cause, but he did so without prejudice. The PMC argues that Benjamin’s New York lawsuit, which has been removed to the Southern District pending transfer into the MDL, was "a blatant attempt by Mr. Benjamin to forum shop." The PMC says Benjamin’s motive in filing the New York lawsuit is to challenge the adequacy of the PMC’s representation and thus "to launch a veiled attack on the court-ordered PMC fee and cost assessment." "The litigation of this issue outside of the proceedings in this Court constitutes a direct attack on this Court’s exclusive jurisdiction over this matter and, therefore, contemptuous conduct," the PMC’s Jan. 21 reply memorandum states. The PMC argues that it is Benjamin who is guilty of malpractice, by having failed to preserve his clients’ claims in the litigation. The PMC’s criticisms of Benjamin found support recently in the Third Circuit U.S. Court of Appeals, which denied an appeal by several former Benjamin clients whose cases were dismissed for failure to comply with case-specific discovery requirements. "Suffice it to say, appellants have been the victim of some bad lawyering by their trial counsel, Ronald R. Benjamin," Judge Maryanne Trump Barry wrote for the appeals court. "Indeed, Benjamin’s discovery abuses can be summarized as a parade of obstinance that ultimately cost his clients their day in court." |
Leflaw's Fen-Phen E-sources
Fen Phen II information at http://fenfenclassaction.com
Mass diet-pill litigation inflates settlement costs to $13.2 billion By L. Stuart Ditzen
Four and a half years after it was besieged with thousands
of lawsuits charging that its diet drugs caused heart-valve damage, a huge
Madison, N.J., pharmaceutical firm has arrived at a stratospheric estimate
of what it expects to pay to settle all the claims: $13.2 billion.
But it appears that only a relatively small number of people - an estimated 1,000 to 2,000 - suffered serious health problems from the drugs. Wyeth's general counsel, Louis L. Hoynes Jr., said he believes that in a different legal climate his company might have been able to settle all serious claims for less than $1 billion. That would amount to an average of $1 million each for 1,000 cases. The price has soared to more than a dozen times that sum. Why? Legal experts say $13.2 billion is a price Wyeth will pay for the failure of the American court system to deal effectively with a modern phenomenon called mass litigation. Big corporations, which once dominated the legal process with battalions of highly paid lawyers, now frequently find themselves outgunned and outmaneuvered by teams of highly skilled plaintiffs' lawyers capable of producing firestorms of litigation almost instantly. A tightly choreographed pattern has developed: When a widely used product is identified as potentially harmful, as happened with Pondimin and Redux in 1997, organized groups of plaintiffs' lawyers rapidly inundate the manufacturer with lawsuits, loading the dockets of federal and state courthouses around the country. Targeted corporations become entangled in a sprawling legal war that has the elastic capacity of constant expansion. Ever-rising numbers of claims scattered through a maze of courthouses can become overwhelming, even for the largest companies. To extricate themselves, companies often agree to pay huge sums, far beyond the measure of harm their products caused. That, Hoynes said in a recent interview, is precisely what happened to his company - on a scale he believes is unprecedented. He said most of the money that Wyeth has paid in settlements has gone to people who were not seriously injured by the diet drugs - or not injured at all - and to lawyers who filed their claims. To a large extent, Hoynes said, that was because Wyeth, after agreeing to what it believed was a global settlement in federal court, was whipsawed by unexpected lawsuits in state courts. The threat of a stream of runaway verdicts in several "notoriously hostile" state court jurisdictions, he said, drove the settlement costs sky high. Many legal professionals, including the chief justice of the United States, believe the courts need a major overhaul to cope with the growing trend of mass litigation. Stephen B. Burbank, a professor at the University of Pennsylvania Law School, said changes were needed to produce fair and consistent results - and to regulate the amount of money that plaintiffs' lawyers extract. "There is unquestionably a certain amount of fraud going on in this type of litigation," he said. "People who have not been injured and people who have been injured in the most minor ways get swept in with those who are seriously injured." Chief Justice William H. Rehnquist has all but begged Congress in recent years to enact laws to help the courts deal with a problem that, he has said, "cries out for a legislative solution." Last month, the House of Representatives passed a bill that would consign all class-action cases of nationwide scope to the federal courts. In theory, because federal courts are governed by the same rules, that would establish uniformity in the way claims are resolved. But the bill would not prevent individual litigants from opting out of federal class-action settlements and filing separate suits in state courts - a key reason that Wyeth's costs soared. Few plaintiffs' lawyers want the system changed. Wilbur Colom, a lawyer who recently has filed several hundred diet-drug claims in rural Noxubee County, Miss., said his clients "view their prospects" better there than in federal court. Wyeth is one of the largest pharmaceutical companies in the world, with 52,300 employees and a product line that includes prescription drugs, vaccines and consumer products such as Advil, Robitussin and ChapStick. The company's sales last year were $14.1 billion. An estimated 5.8 million Americans took its diet drugs Pondimin and Redux in the mid-1990s. In 1997, doctors reported evidence that Pondimin and Redux might damage heart valves. The Food and Drug Administration suggested taking the drugs off the market, and Wyeth complied. The company said it had been taken by surprise by news that the drugs could damage heart valves. Plaintiffs' lawyers argued that the company had failed to do testing that might have revealed the danger. To determine the extent of harm the drugs caused, research studies were launched. They gradually determined that only a tiny fraction of people who used the drugs had suffered moderate or severe levels of heart damage. A few hundred diet-drug users had suffered an even more severe heart-lung disease called primary pulmonary hypertension. By 1999, more than 7,000 lawsuits were under way. The theme of the suits was that Wyeth had sought to make huge profits from a pair of dangerous drugs. Documents showed that the company had been slow to update warnings about a risk that clearly was known - that the diet drugs in rare instances could cause primary pulmonary hypertension. The company had waited two years before putting new warnings about that danger on its drug labels. In perhaps the most sensational case of the litigation, a 30-year-old Quincy, Mass., woman named Mary Linnen died of primary pulmonary hypertension in 1997 after taking Pondimin to lose weight for her wedding. Documents unearthed by plaintiffs' lawyers appeared to show a cavalier, uncaring attitude among some Wyeth employees toward people who used the diet drugs. In one 1996 e-mail, a Wyeth employee complained to a colleague about the prospect of a flood of diet-drug refund requests: "Am I off the hook or can I look forward to in my waning years signing checks for fat people who are a little afraid of some silly lung problem?" "The internal documents in this case were very bad," said Philadelphia lawyer Sol Weiss, a major player in the litigation. "I don't see any reason to feel sorry" for Wyeth. But there was a major inequity in the way claims were handled. A case valued at $6,000 in one jurisdiction could be worth $30 million in another. Wyeth and its lawyers thought they had effectively resolved the bulk of the litigation in 1999 in a $3.75 billion settlement. The complex and carefully constructed deal, worked out before U.S. District Judge Louis C. Bechtle in Philadelphia, was considered one of the most comprehensive class-action settlements in history. Grades of compensation up to $1.4 million were established for diet-drug users with serious heart ailments. Heart-screening tests called echocardiograms were offered to anyone who took the drugs for more than two months. Refunds were given for the purchase price of the drugs. Benefits were built in to protect people who might develop heart problems in the future. The settlement was announced with much fanfare in October 1999 by a coterie of plaintiffs' lawyers who had negotiated it. But dozens of other lawyers soon staged a nationwide advertising blitz urging diet-drug users to opt out. About 50,000 people - far more than Wyeth's lawyers had anticipated - chose to try for a better deal in state courts, particularly in Mississippi, Texas and West Virginia, where juries have gained national attention for handing out exorbitant verdicts. In one trial in Mississippi, five people with minor heart malfunctions were awarded $30 million each. Under the federal settlement, diet-drug users with similar conditions would have received $6,000 each. After two other big losses - a $56.5 million verdict in Texas and a $29.1 million verdict in Oregon - Wyeth threw in the towel. The company rapidly began working out "inventory settlements" with opt-out lawyers with large blocs of clients. "You're just overwhelmed by the numbers," Hoynes said. "You've got to deal with it." In the Mississippi case, the company made a deal to pay a lump sum - reported to be between $350 million and $500 million - to settle the claims of 873 people. A series of similar diamond-studded deals ended up costing the company substantially more than the $3.75 billion set aside for the federal settlement. The lawyers handling the opt-out cases are estimated to have made fees of $2.8 billion. And how many people in all the litigation were severely injured? Hoynes estimates fewer than 1,000.
For huge numbers of claimants, Hoynes said, the diet-drug litigation was like hitting the lottery. "People should care that the system be fair," he said. "No company should be battered the way we were battered."
AHP Seeks Summary After Physician Recants PHILADELPHIA — American Home Products (AHP) has filed a motion for summary judgment in a case in which the plaintiff's case-specific expert recanted his original position. A memorandum of law submitted by AHP in support of its Feb. 20 motion says Dennis Bowsher, M.D., issued a written report in September 2001 purportedly based on echocardiograms performed in March 1998 and February 2001. Bowsher's report, according to AHP, found "uniformly thickened mitral valvular leaflets, mild pulmonary hypertension and minimal aortic regurgitation," which the doctor said "within a reasonable degree of medical possibility" was caused by the plaintiffs former use of diet drugs. Test Said To Be Normal When deposed Dec. 20, however, Bowsher retracted that opinion, saying the echocardiogram values "are within normal limits." "When asked by plaintiff's counsel to explain why his views had changed so markedly and so soon after signing the report," the AHP memorandum says, "Dr. Bowsher explained that he was ‘embarrassed’ and said, ‘I guess I shouldn't have signed. I should not have signed here . . . the echocardiographic findings are what they are.’" AHP is represented by Michael C. Mattson of Cooney, Mattson,
Lance, Blackburn, Richards & O'Connor in Ft. Lauderdale, Fla. Rubin
is represented by Barry Mittelberg of Salomon & Mittelberg in New York.
Jan. 3, 2003! continued from col. 2 After receiving a Matrix payment, an individual is eligible for additional Matrix payments for subsequently diagnosed injuries, even after the Matrix payment cut-off date. The Matrix Payment Cut-Off Date is only significant for qualifying for an initial Matrix payment. Any additional compensation would equal any incremental value which the new diagnosis would provide above the previous payment. Intermediate Opt-Out
The largest differences between the intermediate opt-outs and back-end opt-outs are that the intermediate opt-outs will include the individuals who are FDA positive but who would not qualify for Matrix values, and that the back-end opt-outs may be exercised after the screening period, in some cases. An individual who registers for an intermediate opt-out but also qualifies as a back-end opt-out, will be deemed a back-end opt-out. As a drawback to the intermediate opt-out, plaintiffs waive the right to assert punitive damages. This is true as well for the back-end opt out. The only vehicle to allow recovery of punitive damages was the initial opt-out with its March 2000 deadline. Anyone who failed to properly exercise the initial opt-out will apparently be barred from ever suing for punitive damages unless they are PPH cases as defined in the National Settlement. Click to see if you qualify as an intermediate opt-out. Back-End Opt-Out
(1) Meet Matrix level criteria after Sept. 30, 1999 and before the end of the screening period; (2) Be diagnosed with at least mild aortic or moderate mitral regurgitation by the end of the screening period and be diagnosed with a Matrix level injury for the same valve after Sept. 30, 1999 and before the Matrix payment cut-off date; or (3) be diagnosed with endocardial fibrosis by September 2005. The back-end opt-out therefore allows individuals with valvular heart injuries not qualifying for the intermediate opt-out to file civil suits (1) if they are diagnosed with mild mitral regurgitation during the screening period, and progress to a Matrix level injury in the following fourteen years, or (2) if they were FDA positive prior to Sept. 30, 1999, and reached Matrix injury levels after Sept. 30, 1999. Like the intermediate opt-out, an individual must file a case within one year of exercising a back-end opt-out. Also, like the intermediate opt-out, the back-end opt-out absolutely and forever prevents any right to punitive damages recovery.
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