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The predictable post-settlement rhetoric ensued after Pfizer Inc. agreed to settle a Texas Rezulin case. The New York-based company, the world’s largest drug maker, announced the proposed settlement the day after a Corpus Christi jury awarded $43 million in actual damages to Margie Sanchez, who was the first plaintiff nationwide to prevail in the courtroom with a Rezulin claim. In a Dec. 21 statement, Pfizer indicates, without noting explicit figures, that the settlement amount is low when compared to the verdict. The company headlines its two-page statement with the news that “Settlement is Substantially Below Compensatory Award.” In his release dispatched the same day, however, Mikal Watts, the lead plaintiffs’ lawyer in Margarita “Margie” Sanchez, et al. v. Parke-Davis, et al., steers clear of any reference to a settlement figure. Indeed, Watts — founder of Corpus Christi’s 30-lawyer Watts & Heard — spells out at the end of his statement just why he’s keeping mum. A confidentiality provision, Watts notes, includes the following language: “The only statement to be made by the Plaintiffs and their attorneys regarding the settlement of the case is that the parties have mutually agreed to resolve their differences in a settlement agreement.” In other words, the plaintiffs’ lawyers agreed not to boast. It was a concession, Watts says, that he granted without hesitation. “They did negotiate for and receive the right to say whatever they want. We were limited. But I don’t care how they spin it. Just go and talk to the jury — we won the case,” Watts says. In exchange for the plaintiffs’ promise to keep quiet about the settlement amount, Watts & Heard partner Doug Gwyther says Pfizer agreed to pay the settlement more quickly than usual for this kind of case. A lawyer familiar with the settlement who requests anonymity says the company agreed to pay slightly more than $10 million to Sanchez. The Los Angeles Times reported, however, that the company agreed to pay more than $30 million — an estimate the lawyer says is too high. In the settlement, Pfizer does not admit liability. Jay Mayesh, a partner in New York’s Kaye, Scholer, Fierman, Hays & Handler who supervises the Rezulin litigation nationally for Pfizer, will not confirm a specific settlement amount. But the Pfizer defense lawyer claims that before trial the Corpus Christi plaintiffs rejected the exact amount that they ultimately accepted in the Dec. 21 settlement. Michael Rozen, a partner in the six-lawyer Feinberg Group in New York, also represented Pfizer in the final negotiations with the plaintiffs. “He and I worked together,” Mayesh says. But Watts and plaintiffs’ lawyer Mike Papantonio of 27-lawyer Lewin, Papantonio, Thomas, Mitchell, Echsner & Proctor in Pensacola, Fla., believe Rozen replaced the Kaye Scholer lawyer. “Out of the blue, we got a call from [Rozen] and he said, ‘We’re in charge,’” recalls Watts. Pfizer company spokesman Robert Fateaux denies any shuffling of defense counsel. “There has been no change in any of our relationships. We have worked with Mr. Rozen in the past and we continue to work with him. We are not going to comment any further,” Fateaux says. EXPENSIVE PROBLEM? Even if the plaintiffs’ lawyers can’t say much, the settlement in Sanchez, which was heard before Judge Jose Longoria of Corpus Christi’s 214th District Court, represents a significant boost for trial lawyers hoping Rezulin will be the next fen-phen, a drug that has cost its maker billions of dollars in liability litigation. “I think they will have to reassess every case they have out there,” says Gwyther about Pfizer’s Rezulin claims. “I truly believe Pfizer is facing a multimillion-dollar problem now,” says Michael Hackard, a partner in Sacramento, Calif.’s nine-lawyer Hackard & Holt, which has more than 200 pending Rezulin cases in 14 states, 24 of those in Texas. Approved by the Food and Drug Administration in 1997, Rezulin, a drug taken by nearly 2 million diabetics, was pulled by the federal government from pharmacy shelves in March 2000. At that time, the FDA reported the drug could be “possibly or probably” related to 63 deaths or liver failures. Pfizer has stated in Securities and Exchange Commission filings that nationally it faces 105 class action suits and 4,500 individual cases related to Rezulin. Hackard, who watched the closing arguments in Corpus Christi, believes the plaintiffs’ lawyers in Sanchez enjoyed an advantage, specifically a living plaintiff who could tell jurors her story, which their counterparts didn’t have in a Rezulin case tried in Houston recently. Laura Mercado, et al. v. Warner-Lambert Co., Parke-Davis Inc. ended in a defense verdict Dec. 17. (Pfizer merged with Warner-Lambert in February 2000 and continues to operate Parke-Davis as a division.) At the Corpus Christi trial, Sanchez testified and attended on the days she felt strong enough to be there. She told the jurors about the beeper she wore at all times so she could be alerted if a liver donation became available. Pfizer maintains that Sanchez would have been reversed on appeal. “The whole thing was driven by evidentiary rulings,” says Kaye Scholer’s Mayesh. “The judge granted zero of our objections. The trial was infected with numerous errors. It would be reversed.” Paul S. Miller, Pfizer’s general counsel who is retiring at the beginning of the year, makes a similar point in his written statement after the settlement was announced. “In reaching settlement, the plaintiffs recognized that a second and fair trial was likely to lead to a very different outcome,” he says. Jeffrey Kindler, who previously served as the top lawyer at McDonald’s Corp., will take over from Miller.

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