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The federal judge who is overseeing the massive $3.75 billion settlement of the Fen-Phen diet drug case has rejected an attempt by a group of plaintiffs’ lawyers in Texas and New York to oust the team of 11 lawyers appointed by the court as lead lawyers for the class. Instead, U.S. District Judge Harvey Bartle III was sharply critical of the Texas and New York lawyers and found that none of their complaints about the lead lawyers had any merit. Bartle found that the lead lawyers acted correctly by insisting that all plaintiffs’ lawyers respect the terms of the settlement agreement — such as not pursuing punitive damages, and seeking increased benefits only for those who were truly injured — and by refusing to defend those plaintiffs’ lawyers whose actions threatened to violate its terms. In the motion, attorneys George M. Fleming of Houston, Tex., and Paul J. Napoli and Mario D’Angelo of New York argued that the lead lawyers suffer from conflicts of interest that have hampered their ability to represent the class. The motion accused the lead lawyers of failing to represent the interests of the 15,000 class members who chose to opt out of the settlement by May of this year to pursue individual suits in state courts. (Before the settlement, another 50,000 class members opted out of the MDL to file individuals suits in state courts.) Although those 15,000 plaintiffs — who are referred to in court documents as “intermediate opt-out plaintiffs” — took advantage of an opportunity to opt out of the settlement by May 2003, they remain members of the class and subject to the terms of the settlement agreement. The motion cited a series of instances in which the Texas and New York lawyers argue that the lead plaintiffs’ lawyers sided with defense lawyers — and against intermediate opt-out plaintiffs. It asked Bartle to discharge all seven of the lawyers on the Plaintiffs’ Management Committee — Arnold Levin and Michael D. Fishbein of Levin, Fishbein, Sedran & Berman in Philadelphia; John J. Cummings III of Cummings, Cummings & Dudenhefer in New Orleans; Stanley S. Chesley of Waite, Schneider, Bayless & Chesley in Cincinnati; Gene Locks of Greitzer & Locks in Philadelphia; Sol Weiss of Anapol, Schwartz, Weiss, Cohan, Feldman & Smalley in Philadelphia; and Charles R. Parker of Hill & Parker in Houston, Texas. It also sought the ouster of four lawyers who act as lead counsel for sub-classes in the case — Dianne M. Nast of Roda & Nast in Lancaster, Pa.; Richard Lewis of Cohen, Milstein, Hausfeld & Toll in Washington, D.C.; Mark W. Tanner of Feldman Shepherd & Wohlgelernter in Philadelphia; and R. Eric Kennedy of Weisman, Goldberg, Weisman & Kaufman in Cleveland. But Bartle found that none of the efforts of the lead lawyers amounted to a true conflict of interest. “In each of the … instances, we can find no fault with the conduct of experienced and able class counsel in this most complex litigation,” Bartle wrote. “They have rightly refused to make arguments and take positions inconsistent with the clear terms of the settlement agreement. They have rightly refused to participate in efforts to obtain benefits for those who are not entitled to them.” In class actions, Bartle found, the issue of conflicts of interest is complicated since class counsel for the plaintiffs is often required to take a position contrary to one or more class members. As a result, Bartle found, courts employ a “balancing approach” in which the judge must consider, among other things, whether there was any “actual prejudice” to class members; the cost and difficulty of obtaining new counsel; the complexity of the litigation; and the time needed for new counsel to become familiar with the case. “If class counsel were always disqualified for urging approval of a settlement when some class members object, the efficacy of class actions would be seriously undermined,” Bartle wrote. As a result, Bartle found, when objections to the adequacy of class counsel are raised, courts allow them to continue to represent the remaining class representatives and the class “as long as the interest of the class in continued representation by experienced counsel is not outweighed by the actual prejudice to the objectors of being opposed by their former counsel.” Applying that balancing test, Bartle found that the objecting lawyers didn’t come close to proving that the lead lawyers must be replaced. “Even if by a wild stretch of the imagination some fault could be found, the cost and difficulty in replacing them would be enormous. Their continued representation is in the best interest of the class and is not outweighed by actual prejudice to claimants or any other objector,” Bartle wrote. Bartle flatly rejected the argument that the lead lawyers suffered from a conflict of interest when they sided with Wyeth and the settlement trust in challenging the legitimacy of a slew of claims submitted by clients of Napoli’s and D’Angelo’s firms. After a six-day hearing in September 2002, Bartle ruled that 78 claimants were not entitled to benefits because their medical conditions did not satisfy the terms of the settlement agreement. Significantly, Bartle also found that their attorneys and the cardiologists the attorneys had hired had “participated in systematic abuses” that led to numerous inflated claims. Now Bartle has ruled that the lead lawyers were correct in opposing the lawyers who submitted the inflated claims. “Under the circumstances, class counsel rightly refused to support the spurious attempt of these 78 claimants to receive money from the trust,” Bartle wrote. “The funds available for payment of benefits, albeit large, are not unlimited. For every meritless claim that is paid, less money is available for class members with meritorious claims,” Bartle wrote. “The payment of illegitimate claims significantly increases the risk of insolvency of the trust and thus the chance that deserving individuals who ingested the diet drugs and suffered real harm will end up empty handed.” As a result, Bartle concluded that “class counsel acted in the best interest of the class in refusing to join in this most dubious effort … to obtain benefits for undeserving claimants.” Likewise, Bartle found that the lead lawyers were correct in supporting the trust’s request for the right to audit every claim. “Class counsel also acted in the best interest of the class in supporting the need for a 100 percent audit,” Bartle wrote. “Although the additional audits have increased the amount of time necessary for the processing and payment of claims, there was no alternative if the integrity of the settlement was to be protected.” Fleming, who took the lead role in seeking the ouster of the lead lawyers, was also criticized by Bartle. “George Fleming and his allies have attempted without surcease to inject the issue of punitive damages into lawsuits filed by intermediate and back-end opt-out class members in clear violation of … the settlement agreement,” Bartle wrote. Under the settlement, Wyeth waived its right to assert any statute of limitations defenses in lawsuits filed by the intermediate opt-out plaintiffs. In return, the settlement provided that those plaintiffs “may not seek punitive, exemplary, or any multiple damages.” Bartle found that Fleming has “persisted in seeking punitive damages in the Texas state courts in palpable contravention of the settlement agreement.” Fleming argued that the lead lawyers showed a conflict of interest when they sided with the defense in opposing him on that issue. Bartle disagreed, saying “if George Fleming and other attorneys having a similar bent are able to inject punitive damages into the various opt-out lawsuits, they not only will breach the settlement agreement but will put this massive settlement in jeopardy. “If punitive awards either in name or substance are allowed against Wyeth in intermediate and back-end opt-out cases, its financial viability could be placed in doubt, and many deserving class members may never receive a penny. Class counsel were acting for the true benefit of the class in refusing to collaborate in the efforts of George Fleming to thwart the court approved settlement,” Bartle wrote. Fleming, in an interview, said he intends to appeal Bartle’s decision not to remove the lead lawyers, and that he has also appealed Bartle’s ruling on the punitive damages issue. The conflict of interest is clear, Fleming said, because “class counsel has acceded to Wyeth’s wishes at every step of the way.”

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