A judge has ended two months of plaintiffs lawyers' squabbling and picked two firms to take the lead in a class action potentially worth hundreds of millions of dollars against Aetna Health Inc.
U.S. District Judge Faith Hochberg in Newark, N.J., on Friday selected Pomerantz Haudek Grossman & Gross of New York to chair a seven-firm plaintiffs' executive committee and coordinate the litigation, which accuses Aetna of underpaying reimbursements for out-of-network health care.
Her order says that Carella, Byrne, Bain Gilfillan, Cecchi, Stewart & Olstein in Roseland will act as settlement liaison counsel with responsibility to organize and coordinate overtures in the case, In re: Aetna UCR Litigation, 07-3541.
Hochberg said the arrangement would bring efficiency and order to the litigation and that she expects it to settle.
Rival teams of plaintiffs attorneys had been negotiating since May to divide the work without ceding too much power or the right to hefty portions of any fees. On July 10, they reached a compromise to divide the leadership role among seven firms.
But Hochberg slew the seven-headed Hydra, saying in her order that it is "important that there be a single law firm to serve as a point of contact for defendants and the court with authority to speak on behalf of plaintiffs."
She said D. Brian Hufford of 19-lawyer Pomerantz Haudek's Columbus, Ohio office, had done good work in a similar case before her against Health Net Inc., which resulted in a $255 million settlement last year. The fee award in that case was $68 million, which gives an idea of what is at stake for lawyers.
Wilentz, Goldman & Spitzer of Woodbridge, which was co-lead counsel in the Health Net case and filed the first complaint in the Aetna litigation in 2007 almost two years before Pomerantz Haudek jumped into the fray, had applied to be interim lead counsel. Hochberg terminated that request and put Wilentz, Goldman on the executive committee.
The suit accuses Aetna of knowingly using a database created by a United Healthcare Group subsidiary, Ingenix, that was rigged in the company's favor to determine how much money millions of patients and their providers would receive in "usual, customary and reasonable" reimbursements for care performed by out-of-network providers.
Besides the Health Net settlement last year, other challenges to the database have prompted a proposed $350 million settlement with UHG in federal court in Manhattan.
After an investigation by New York State authorities, UHG promised to shelve the database and pay for a replacement by independent economists at New York University.
That has implications for the Aetna case, Hochberg suggested. "Given that the validity of the Ingenix databases has already been explored through the New York Attorney General's investigation and other matters, counsel for plaintiffs are advised that the Court will favor a prompt and fair resolution of this matter that achieves a timely benefit to injured putative class members," she said.