A half-dozen states that didn’t opt into the November settlement had previously agreed to set aside common benefit funds for the plaintiffs lawyers, but the PSC’s November motion asked Judge Fallon to force settling states South Carolina, Florida, and New York set funds aside in escrow as well. The motion also asked the judge “to extend the escrow order to all government actions in which there is a settlement with Merck and the governmental entity has not reached an agreement with the PSC for the payment common benefit fees.”
No dice. On Tuesday Judge Fallon denied the motion filed by plaintiffs liaison counsel Russ Herman of Herman, Herman, Katz & Cotlar and co-lead counsel Andy Birchfield Jr. of Beasley, Allen, Crow, Methvin, Portis & Miles and Christopher Weiss of Seeger Weiss. There is, the judge ruled, “an apparently insurmountable disconnect between the PSC’s work in the MDL and the [DOJ and states'] settlement fund.”
“[The PSC's] work produced a $4.85 billion master settlement agreement, and those attorneys were accordingly compensated with a portion of the fund created by their efforts,” Judge Fallon ruled. “Now the PSC seeks additional compensation for work in connection with the pending governmental actions, but the fund that the PSC requests be tapped and escrowed is not obviously a result of its efforts.” The judge noted that the government settlement was based at least in large part on a criminal investigation that began before the MDL was even created.
Plaintiffs’ liaison counsel Russ Herman told us Thursday that the judge’s ruling had prompted the PSC to decide not to enforce agreements for potential common benefit fees relating to November’s settlement. “The one thing that you’re looking for in any opinion is the reasoning and Judge Fallon’s opinions are always tight,” Herman said. “They just don’t leave a lot of room for a lot of controversy. I understand it. Do I like it? No.”
The committee’s motion faced stiff opposition from both Merck and the states involved. Here’s a copy of Merck’s opposition brief, filed by the company’s lawyers at Williams & Connolly; Skadden, Arps, Slate, Meagher & Flom; and Stone Pigman Walther Wittman, and here’s the brief from from the lawyers for New York, Florida and South Carolina.
“If you’re going to practice on the capitalist side of the law which involves risk. . .you’ll face a loss every now and again like every other capitalist,” Herman said. He added that the PSC still plans to seek common benefit fees on potential recoveries outside the government’s November settlement—-such as those that could result from separate claims against Merck by Kentucky and Washington, D.C. that are still being litigated.
Since Merck’s $4.85 billion settlement in the Vioxx mass tort back in 2007, the plaintiffs lawyers on the case have fought hard over how to assess and divvy up their fees. See our prior coverage here, here, here, and here.