Judge decides to cap lawyers’ fees in multidistrict opioid litigation.
U.S. District Judge Dan Polster of Cleveland, Ohio, who is overseeing the multidistrict consolidated opioid litigation, recently made the decision to cap attorney fees at 15% of the total $26 billion settlement, ensuring that the parties’ representation don’t gauge them come payday.
The settlement deal was originally announced in late July and requires that McKesson Corp., Cardinal Health, and AmerisourceBergen pay a combined $21 billion while drugmaker Johnson & Johnson (J&J) will pay an additional $5 billion. As part of the deal, $2.3 billion is reserved for paying attorneys’ fees and expenses. The three major drug distributors have to make payments over 18 years while J&J will make payments over nine years.
The settlement money will be allocated to the addiction treatment and prevention as well as other costs associated with the opioid epidemic. None of the families that have lost their loved ones or those who submitted to the court firsthand accounts of their experience with addiction will receive any cash payouts.
In deciding to cap attorney fees, Polster acknowledged that court “orders capping fees are often unpopular with the plaintiffs’ bar.” However, he felt that the order was needed so the communities devastated by the crisis would receive the compensation they need. Polster wrote, “A contingent fee in excess of 15% of the client’s total award under the Settlement Agreements is presumptively unreasonable.”
“The newest decision could influence some attorneys to not participate in the settlement,” Elizabeth Chamblee Burch, a University of Georgia law professor, pointed out. “For some, a dollar today is worth ten tomorrow,” she said. “Others who are financially sound may be willing to roll the dice, depending on their contingency arrangements.”
If there are parties who hold out as a result of the new order, this could cause further delays. The MDL has already been in process for a few years.
Paul Geller, an attorney at Robbins Geller Rudman & Dowd who helped negotiate the settlement, said that while Polster correctly noted fee caps are unpopular, he agreed with the decision. He said, “If there ever were a case where a lawyer should agree to a fee cap, this is it. At some point we all have to ask ourselves where we fall on the continuum between altruism and avarice; I think one’s reaction to this order answers that question.”
The attorneys involved and representing each of the parties include as follows:
Joe Rice of Motley Rice, Elizabeth Cabraser of Lieff Cabraser Heimann & Bernstein, Peter Mougey of Levin Papantonio Rafferty, Paul Geller of Robbins Geller Rudman & Dowd, Chris Seeger of Seeger Weiss and others are for the plaintiffs. For McKesson Corp., Thomas Perrelli of Jenner & Block, Paul Schmidt and Andrew Stanner of Covington & Burling. Jeffrey Wintner of Wachtell, Lipton, Rosen & Katz, Steven Pyser and Enu Mainigi of Williams & Connolly represent Cardinal Health. Michael Reynolds of Cravath, Swaine & Moore, Michael Salimbene and Robert Nichols of Reed Smith represent AmerisourceBergen and Charles Lifland, Mike Yoder and Amy Lucas of O’Melveny & Myers represent J&J.
The case is: In re National Prescription Opiate Litigation, U.S. District Court, Northern District of Ohio, No. 17-md-02804.
Sources:
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Lawyers’ fees from $26 bln opioid settlement capped at 15%, judge rules
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