The federal judge presiding over the diabetes drug Avandia multidistrict litigation has approved the dispersal of up to $143.75 million in attorney fees.

The fees make up 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.”

Just over 134,000 hours were approved as compensable common benefit time by the court-appointed independent auditor, Rufe said.

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 the counsel’s reasonable hourly billing 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 opinion.

Rufe said the plaintiffs counsel’s fees were reasonable in comparison to billable hourly rates in the Philadelphia market, which include that partners at Pepper Hamilton bill up to $825 per hour, Cozen O’Connor partners bill up to $900 per hour, Duane Morris partners bill up to $875 an hour, Saul Ewing partners bill up to $750 an hour, and Fox Rothschild partners bill up to $725 an hour, and that the lowest associate billing rates for the firms are $245 an hour at Saul Ewing, $235 an hour at Pepper Hamilton, $225 an hour both at Cozen O’Connor and Duane Morris, and $190 an hour at Fox Rothschild.

Rufe was taking “judicial notice” of billing-rate information supplied by the plaintiffs counsel’s fee committee to the court.

Dianne Nast, a plaintiffs attorney with RodaNast in Lancaster who was involved in the common benefit work, said that Rufe is a “very, very careful jurist” who looked at the facts and the law, and it showed in her opinion about the fees.

Traditionally, partial payments of attorney fees are triggered in mass-claim cases when the balance of megafunds reach certain specified levels, but Rufe has not yet been requested by counsel, nor yet ruled, on how dispersal of the fees will be made, Nast said.

There were 60,000 to 65,000 federal and state cases, and there are perhaps 400 cases left, Nast said.

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 fee.

Rufe looked at the fee under the common fund analysis under Gunter v. Ridgewood Energy and In re Prudential Insurance Co. of America Sales Practices Litigation, which involve weighing factors such as the skill and efficiency of the attorneys involved and the complexity and duration of the litigation; the Third Circuit’s common benefit analysis used in In re Diet Drugs Products Liability Litigation, which states that common benefit attorney fees may be awarded if substantial benefit was conferred on every claimant and the fees were proportional; or the managerial powers doctrine under which the federal judiciary has the power to manage dockets 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 federal 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.”

GSK was represented by Pepper Hamilton.

So far there has not been a single federal or Pennsylvania state trial over the diabetes drug and GSK has been settling the cases by a firm-by-firm basis. The MDL was established in October 2007.

During the hearing Rufe held on approving the common benefit attorney fees, The Legal reported that the individual plaintiffs steering committee members were each carrying costs of $750,000 to $1 million.

Amaris Elliott-Engel can be contacted at 215-557-2354 or aelliott-engel@alm.com. Follow her on Twitter @AmarisTLI.

(Copies of the 23-page opinion inIn re Avandia Marketing, Sales Practices and Products Liability Litigation, PICS No. 12-2149, are available from The Legal Intelligencer. Please call the Pennsylvania Instant Case Service at 800-276-PICS to order or for information.) •