Mass Tort Litigation Blog

Merck to Settle Vioxx Advertising Claims by AGs for $58 Million & Ban on Medical Ghostwriting

Article in the Wall Street Journal -- Merck Will Pay $58 Million To Settle Vioxx Ad Claims, by Kevin Kingsbury.  Here's an excerpt:

Merck & Co. agreed to pay $58 million to settle claims by 28 states and the District of Columbia that the drug maker used deceptive advertising for its Vioxx painkiller.

The drug maker also agreed to a ban on medical ghostwriting, under which an author's true identity is concealed. Last month, two medical-journal studies suggested Merck violated scientific-publishing ethics by ghostwriting dozens of academic articles, and minimized the impact of patient deaths in its analyses of some human trials involving Vioxx.

Pennsylvania Attorney General Tom Corbett said Tuesday that in 1999, Merck launched "an aggressive and deceptive advertising campaign which misrepresented the safety and improperly concealed the increased risks associated with Vioxx." The drug was pulled from the market in 2004, after safety concerns were raised.

BGS

No, the Minnesota Bridge Compensation Deal is not a Mini-9/11 Fund

Yesterday, Gov. Tim Pawlenty signed a $38 million settlement for victims of the I-35W bridge collapse.  Here's the AP story in USA Today.  Interestingly, state legislator Phyllis Kahn, who co-authored the compensation bill, was quoted in this article in the Minnesota Daily as saying that the bill was modeled after the 9/11 Victim Compensation Fund, including the waiver of the right to sue the state.  For reasons I explained on Monday, the Minnesota compensation deal is better understood as an ordinary mass tort settlement rather than as an extraordinary government compensation package like the September 11 Fund.  There's an enormous difference between the government's using taxpayers' money to settle potential claims against that government (the Minnesota deal) and the government's using taxpayers' money to settle potential claims against others (the 9/11 Fund, which used federal government funds but required participants to release whatever claims they may have had against the airlines or Port Authority).  The former might occur anytime a government defendant faces mass tort claims.  That's why the Minnesota package makes me glad as long as both the claimants and the state are satisfied with its terms. The latter, however, can rarely be justified.  This is the point that special master Ken Feinberg made powerfully in his final report on the Victim Compensation Fund: the 9/11 situation and the government's generous response to it should be viewed as sui generis.  That strikes me as exactly right, which is why it makes me nervous to hear the 9/11 Fund invoked as a model for something that in fact is quite different and much less problematic.

HME

Oil Companies Settle Groundwater Contamination Suit

The New York Times reported yesterday that some of the oil companies involved in a groundwater contamination suit that spanned across 17 states, including New York and California, have agreed to settle for $423 million. Over a hundred public water providers initiated the suit, which claimed that a popular gasoline additive called methyl tertiary butyl ether (MTBE) contaminated drinking water supplies. According to the EPA, MTBE causes cancer in laboratory rats. The full story is available here.

ECB

Compensation Deal for Minnesota Bridge Collapse Victims

The Minnesota state legislature appears on the verge of approving a $38 million compensation package to settle the claims of victims of the 2007 collapse of the I-35 bridge over the Mississippi River in Minneapolis, according to this AP story on law.com (via Point of Law):

Minnesota lawmakers reached agreement on a $38 million compensation package for victims of a deadly bridge collapse, culminating months of work to provide relief beyond the state's legal liability.  The deal struck in a joint committee of the House and Senate will offer everyone who was on the bridge up to $400,000, with an additional $12.6 million pool for the people who suffered the most severe injuries and losses. Thirteen people died in the Aug. 1 collapse and 145 were hurt. ...

The package is expected to be approved by the Legislature on Monday and sent off to Republican Gov. Tim Pawlenty, who called it "needed relief and support" for victims.

If victims agreed to take the money, they would have to sign away their rights to sue the state and other governmental entities in Minnesota. They would not be precluded from suing other parties in the collapse. ...

The National Transportation Safety Board is investigating the cause of the collapse. Officials have focused on a design flaw involving gussets, the plates that help connect steel beams, and the weight of construction materials at vulnerable points in the bridge. Victim lawsuits are on hold until a final determination is made.

As a legislative decision to compensate disaster victims, the package bears a passing resemblance to the September 11 Victims Compensation Fund.  It is better understood, however, as an ordinary mass tort settlement, in which a defendant (the state) offers to settle plaintiffs' claims against it.  Unlike the 9/11 Fund, which used government funds but required participants to release their claims against the airlines and other private parties, the Minnesota deal apparently requires only the release of claims against the state, just like any other settlement offer by a defendant.

HME

Pfizer Settlements for Bextra and Celebrex

Article in the Wall Street Journal -- Pfizer Settles Lawsuits Over Two Painkillers, by Nathan Koppel and Heather Won Tesoriero.  What's interesting is Pfizer's approach to settlement: negotiating settlements with plaintiff's firms that have a large inventory of plaintiffs, rather than attempting (like Merck in Vioxx) to offer a massive settlement to all plaintiffs nationwide.  Here's an excerpt:

Pfizer Inc. has struck tentative settlements with groups of plaintiffs who allege that the painkillers Celebrex and Bextra caused heart attacks and strokes, according to lawyers at three firms involved in the litigation.

These firms represent more than 200 out of the thousands of people who sued Pfizer over the two medications. The drug maker may have struck additional deals and remains in discussions with other plaintiffs' law firms, according to lawyers involved in the talks.

Unlike Merck & Co.'s recent global settlement of litigation involving the painkiller Vioxx, Pfizer is attempting to resolve its liability on a firm-by-firm basis, lawyers say. The Bextra and Celebrex cases didn't present nearly the same threat to Pfizer that Vioxx did to its maker, though.

BGS

DePaul Symposium Issue on Challenges to the Attorney-Client Relationship

The DePaul Law Review has published its issue based on its symposium, Challenges to the Attorney-Client Relationship: Threats to Sound Advice?  Among the interesting articles are the following:

Nancy J. Moore, The American Law Institute's Draft Proposal to Bypass the Aggregate Settlement Rule: Do Mass Tort Clients Need (or Want) Group Decisionmaking?, 57 DePaul L. Rev. 395 (2008) (ssrn link).

Frank M. McClellan, The Vioxx Litigation: A Critical Look at Trial Tactics, the Tort System, and the Roles of Lawyers in Mass Tort Litigation, 57 DePaul L. Rev. 509 (2008).

BGS

Grisham's Latest

What do mass tort scholars do in their down time?  ... Well, read a mass tort novel, of course.  John Grisham's latest book, The Appeal, involves a toxic tort of groundwater pollution that injures many in a Mississippi town -- sort of Grisham thriller meets Jonathan Harr's A Civil Action.  The plot steers off into pursuing issues of judicial elections, but along the way there are plenty of mass tort themes, involving David vs. Goliath plaintiff-defendant litigation, class actions, and the implications of a trial verdict for case inventories.  I'm in the middle and having fun, as I have reading Grisham since The Firm came out back in the early 90s.

For the last few years, I've been gradually assembling a "mass tort movie library" of DVDs, which I lend out to students in my mass tort litigation class, and I use a clip of the film version of A Civil Action in class.  I've been mulling over incorporating excerpts from novels in my class, as well -- Grisham's King of Torts also sounds many mass tort themes.  Part of the appeal of studying mass tort litigation is the variety of perspectives available -- not only substantive and procedural, but also factual and fictionalized.

BGS

Behrens, Sebok on Nagareda's Mass Torts in a World of Settlement

Mark Behrens of Shook, Hardy & Bacon has a short book review of Professor Richard Nagareda's Mass Torts in a World of Settlement in the Federalist Society's February issue of Engage.  Prior posts on Professor Nagareda's book are here (see interview below) and here.

For further views of Professor Nagareda's book, see also a September 2007 FindLaw column from Professor Anthony Sebok (Brooklyn), who will also be reviewing Professor Nagareda's book in a forthcoming issue of the Michigan Law Review.

BGS

Parties in Pet Food Litigation Near Settlement

New Jersey Law Journal reports that parties are close to settling the multi-district litigation against Menu Foods for injuries resulting from its contaminated pet food. Here’s an excerpt:

On Feb. 19, the U.S. Judicial Panel on Multidistrict Litigation consolidated suits from around the nation, finding they involve questions of fact common to 31 cases already assigned to U.S. District Judge Noel Hillman, who sits in Camden.

Menu Foods' lawyer, Amy Schulman of DLA Piper in New York City, wrote to Hillman on Feb. 28, saying the parties have made substantial progress during mediation. Hillman gave them until March 19 to report back.

Michael Ferrara Jr. of Cherry Hill, N.J.'s Ferrara Law Firm, who along with co-counsel in Chicago and San Francisco represent a dozen plaintiffs, agrees that his cases are likely to be resolved soon.

Suits were filed soon after Menu Foods Inc., of Ontario, Canada, recalled 60 million containers of 90 brands of pet food early last year. Pet owners alleged that by February 2007, the company was receiving complaints of pet illness and death due to contaminated food. The products contained whole-wheat flour, imported from China, that was later found to be tainted with melamine, a toxin.

After testing its products on 50 animals, seven of which died, Menu Foods issued a recall on March 16, 2007. But more animals were harmed in the interim, the suits charge: As of April 2007, a total of 3,730 pets died of kidney failure and another 11,700 got sick.

About 120 suits were filed in Arkansas, California, Connecticut, Florida, Indiana, Illinois, Minnesota, New Jersey, New York, New Mexico, North Carolina, Ohio, Ontario, Oregon, Pennsylvania, Rhode Island, Tennessee, Texas, Wisconsin and Washington.

The plaintiffs claim unfair and deceptive trade practices; negligence in failing to provide adequate quality control; unjust enrichment and breach of implied and express warranties. Some claim emotional trauma was caused by the death or illness of pets.

Here’s a link to Milberg Weiss’s complaints and the FDA page on the pet food recalls.  These complaints do not contain claims for emotional distress, for which recovery varies significantly from state to state.

ECB

Chris Seeger to speak on Vioxx settlement

  Chris Seeger, a leading plaintiffs' lawyer and one of the chief architects of the Vioxx settlement, will deliver a lecture entitled "The Vioxx Story: Mass Settlement Without Class Actions" on March 11, 2008, 6:30 p.m. at Cardozo Law School in New York.  The program will be moderated by Cardozo Professor Tony Sebok and will include commentary from Kathleen O'Connor of Dechert and from Howard Erichson (me).

For those who wish to understand mass tort litigation, Vioxx is the most important tale to grapple with since fen-phen.  It's a story of mass collective representation, parallel state and federal litigation, multiple categories of claims, class cert denials, rejection of large-scale trial consolidation, informal bellwether trials, widely varying trial outcomes, a classic turnabout in defense strategy from vigorous litigaton to comprehensive resolution, and a sophisticated but not problem-free mass aggregate settlement.  It's pretty much everything that's right and wrong with mass tort litigation today.  I'm looking forward to the event.

HME

Rhode Island Nightclub Fire Settlement

Another settlement has been reached in the Rhode Island nightclub fire litigation.  Clear Channel Broadcasting, which owns the radio station that promoted the 2003 rock concert that ended in a tragic fire when pyrotechnics used by the band Great White ignited the club's soundproofing foam, has agreed to a $22 million aggregate settlement, according to this AP article on Law.com.  The deal still requires the consent of each of the plaintiffs.  According to the Law.com story, "[t]he tentative deal brings to more than $70 million the total amount of settlement money offered to survivors and victims' relatives. Other defendants that have reached settlements in recent months include The Home Depot, a manufacturer of insulation material, a pyrotechnics maker and a TV station whose cameraman was accused of blocking an exit while filming the fire."  An earlier aggregate settlement was negotiated with other defendants several months ago.  Here's more from today's news report:

The owner of a radio station that promoted a rock concert where pyrotechnics ignited a deadly blaze reached a tentative $22 million settlement with survivors and victims' relatives, according to court papers filed Wednesday.

The deal with Clear Channel Broadcasting is the latest in a series of settlements stemming from the Feb. 20, 2003, fire at The Station nightclub in West Warwick, R.I., that killed 100 people and injured more than twice that many. ...

The settlement requires the approval of all the plaintiffs and the federal judge overseeing the case, among other conditions, the court papers said. A Duke University law professor has been appointed to create a formula for the distribution of settlement money.

HME

A Meaner Class Action World Without Lerach & Bershad

Other authors at this blog have been following the prosecutions of lawyers from Milberg, Weiss.  Did those prosecutions have any effect on the world of class actions?  The answer, according to lawyers at the Professional Liability Underwriting Society’s D&O Symposium on February 6, 2008 seems to be yes, but not in the way you would expect.  There's no reduction in filings, but instead in collegiality.  According to a defense-side lawyer at WilmerHale, "overcaffeinated 35-year-olds" are taking over some of the suits that Milberg Weiss would have brought.  The article reporting on the conference, which you can find in the National Underwriter P&C, goes on to quote another defense side lawyer from Cravath:

the new lawyers are importing tactics from product liability cases, resulting in “an increasing inexorable tide of nastiness and incivility.”  In particular, he referred to tactics such as filing discovery sanction motions, noting that while good-intentioned people on the defense side are trying to find “millions of pieces of paper,” they are being accused of “all sorts of high crimes and misdemeanors” by these younger attorneys who are “hijacking” the litigation process.  [emphasis added].

These lawyers, at least, seem to be feeling the loss of repeat players.  Securities litigation was rather predictable, they assert, allowing insurers to determine risk early on.  The removal of these prominent plaintiff's attorneys from the scene is apparently changing all that.  A couple of thoughts.  First, I wonder if the Cravath lawyer concerned about good-intentioned people (and note that "good-intentioned" -- rather than well-intentioned -- are the words of the journalist and not the lawyer), had forgotten the recent flurry over the Qualcomm case when he made his comments.  For more on Qualcomm, look in Law Technology Today and at the Legal Ethics Forum.  Second, the overall tone seems to be that aggressive litigation is a bad thing (one lawyer is quoted as saying new lawyers make the case "about the process of litigation rather than about the merits").  But sometimes aggressive litigation is what addresses the merits, as compared with, say, just settling all cases in some smoky back room. I'm not saying that is what lawyers were doing before the entry of these over-caffeinated folks.  But I'm also not against a cup or two if you're a bit slow in the morning.  How do you determine the "merits" in the absence of litigation?

ADL
 

 

"Thomas" Toy Train Lead-Paint Class Action Settlement

Article on cnn.com -- 'Thomas' toymakers to pay $30M settlement.  Here's an excerpt:

The maker of "Thomas & Friends Wooden Railway" toys has agreed to pay $30 million to settle a nationwide class-action lawsuit by thousands of families who purchased lead-tainted products, a plaintiffs' attorney said Wednesday.

Under the deal, Oak Brook-based RC2 Brands will offer cash refunds or replacement toys, plus what the company calls a bonus toy; it also promises to implement new quality controls, said Jay Edelson, a plaintiffs' attorney in the case.

"We believe this really is the first step toward cleaning up the problem of lead paint in toys," the Chicago attorney said. "It will put a lot of pressure on other companies to step up and act morally. We hope this becomes a problem of the past."

BGS

Registration for Southwestern Law School Asbestos Symposium

On Friday, January 18, 2008, Southwestern Law School is hosting a symposium entitled, Perspectives on Asbestos Litigation.   Here's the press release, and brochure: Download southwestern_law_school_asbestos_symposium_brochure.pdf  For further information about the conference, see my prior posts here and here.  Attendees may register in advance by contacting the Student Affairs Office of Southwestern Law School at (213) 738-6716.  We look forward  to an engaging and informative day with a remarkable slate of speakers, and hope you will be able to join us.

BGS

Merck Recalls Child Vaccine

An article on cnn.com -- Merck recalls kids' vaccine -- discusses Merck's recall of 1.2 million doses of child Hib vaccine, because of contamination risks and possibility of infection.  The article also summarizes Merck's status in light of the proposed Vioxx settlement:

While the company took a black eye with its September 2004 withdrawal of the painkiller Vioxx due to increased risk of heart attacks and strokes, Merck has been performing well recently. On Tuesday, it gave an upbeat assessment in its annual briefing for analysts.

Five weeks ago, Merck reached a deal to settle up to 50,000 Vioxx lawsuits for $4.85 billion, an amount expected to save the company millions in trial costs.

Its stock price has more than recovered from its post-Vioxx slump, a two-year-old restructuring plan is going well and profits are up. For example, Merck posted a 62 percent increase in its third-quarter profit as revenues jumped by double digits

BGS

Perspectives on Asbestos Litigation Symposium

As I previously mentioned, Southwestern Law School is hosting a symposium entitled, "Perspectives on Asbestos Litigation," on Friday, January 18, 2008.  Here is a copy of the brochure Download lr_perspectiveinasbestoslitigation.pdf, which lists the exceptional speakers and panels that will occur throughout the day.  Hope you can join us.  We're overjoyed at the remarkable speakers who have agreed to participate.

BGS

Attorney's Fee in the Swiss Bank Litigation

Magistrate Judge James Orenstein approved a $3.1 million attorney’s fee award to NYU Professor Burt Neuborne for his work in representing the Holocaust victims in the Swiss bank litigation. Neuborne is scheduled to speak on a panel about Representation and Conflicts of Interest in Class Actions and Other Group Actions next week at the Globalization of Class Actions Conference in Oxford, England. New York Law Journal has more information on the attorney’s fee award. Here’s an excerpt:

Attorney Burt Neuborne will receive $3.1 million in fees for representing Holocaust victims in litigation that resulted in a $1.25 billion settlement with Swiss banks.

Eastern District of New York Judge Frederic Block said Thursday that Neuborne deserved the payout for work he did as lead settlement counsel in rendering post-settlement services beginning in January 1999. His previous work on behalf of those who claimed that the Swiss banks collaborated with the Nazis had been pro bono.

The decision was the latest in a series of Neuborne's application for fees, which had been vehemently opposed by attorney Robert A. Swift of Swift Kohn & Graf and others who claimed Neuborne had volunteered to perform post-settlement work for free.

Swift, who represented the class, and Samuel J. Dubbin, a Florida lawyer who filed objections to the award on behalf of 17 individual class members and the Holocaust Survivors Foundation USA, later withdrew those objections after Magistrate Judge James Orenstein issued the report and recommendation ultimately endorsed Thursday by Block.

"I'm relieved," Neuborne said Thursday. "It was an unpleasant process and I'm glad it's over."

Neuborne had set the lodestar fee $5.7 million, an amount he said represented 8,178.5 hours at a rate of $700 per hour. He then said he deemed it appropriate, in keeping with the practices of special master and the "unique nature of the litigation," to discount that fee by about 25 percent to $4.1 million.

ECB

California Ford Explorer Settlement Agreement

The recent settlement agreement in the California state court class action against Ford Motor Company is available through the Superior Court of California’s website. The system doesn’t provide a direct link, but if you follow this link, then click "other," and enter JCCP 4266/4270, the November 29th agreement is currently the sixth document listed. Although I haven’t had a chance to read the full 273 pages, the pertinent compensation and attorneys’ fees are described in paragraph 34. Paragraph 34(e), covering attorneys’ fees, reads as follows:

e. Plaintiffs and Class Counsel may apply to the Court for an award of reasonable attorneys' fees and expenses incurred by them in litigating the Related Actions. Ford agrees to pay an award of attorneys' fees and expenses that is determined by the Court to be reasonable, does not exceed an aggregated total of $25 million for fees and expenses incurred in litigating the Related Actions, and is included in the Final Order and Judgment as of the Effective Date of Settlement. This amount includes any award for attorneys' fees in connection with securing final approval of this Agreement by the Court at the Fairness Hearing. Ford does not agree to pay for any additional attorneys' fees or expenses that may be incurred by or on behalf of Plaintiffs, the Settlement Class, or any Settlement Class Member after the date on which this Agreement is approved by the Court in, and by entry of, the Final Order and Judgment at or following the Fairness Hearing. Class Counsel and Plaintiffs agree not to seek, accept, or enforce, on behalf of themselves, any others, or any combination of themselves and any others, any award of attorneys' fees and expenses that in the aggregate exceeds $25 million. In no event shall Ford be obligated to pay Plaintiffs, Settlement Class Members, Class Counsel, or other counsel in aggregate any attorneys' fee, cost, or expense in any amount greater than the amount specified in this Paragraph for any activity or cost related to any of the Related Actions, the negotiation or implementation of this Agreement, or the allegations that form, or could have formed, the basis of any of the Related Actions, or any combination of the foregoing. Failure of the Court to approve attorneys' fees and expenses of the full amount requested by Plaintiffs or Class Counsel, or approval by the Court of any amount of attorney fees and expenses less than the amount sought by Plaintiffs or Class Counsel, shall not affect any of the other terms of this Agreement. Ford shall deliver to Class Counsel payment of the final award of attorneys' fees, costs and expenses no later than ten (10) days after the Effective Date of Settlement. Ford, in its sole discretion, and upon consultation with Class Counsel, may agree to commence issuance of Certificates and/or Settlement benefits and/or payment of Court-awarded attorneys' fees, costs and expenses before the Effective Date of Settlement.

ECB

Issacharoff and Nagareda on Class Action Settlements

Sam Issacharoff and Richard Nagareda have posted on SSRN their new paper, Class Action Settlements Under Attack.  They presented the paper at the symposium on CAFA held last week at the University of Pennsylvania (which, by the way, turned out to be a really interesting conference with enough good papers to prove that, as a topic for scholarship, CAFA hasn't become boring yet).  Here's the abstract:

Settlements dominate the landscape of class actions, and the value of claims so resolved corresponds directly to the finality that the settlement offers. The law of class actions remains surprisingly unsettled, however, on where judicial review of class settlements may take place, what that review encompasses, and how the parameters for review should be defined. This article offers a cohesive account of the "where," "what," and "how" questions surrounding class settlement review, with particular attention to the long-running debate over collateral attacks on such settlements.

The "where" questioned is informed by the recognition in the Class Action Fairness Act (CAFA) of the difficulties presented by what one might describe charitably as the anomalous court - for CAFA proponents, one inclined to certify a nationwide class action when the vast majority of other courts would not. Most of the class action commentary assumes the original certifying court to be suspect and the subsequent reviewing court to be virtuous. Our contention is that the problem of the anomalous court is not confined to the initial class certification. The same problem of outlier courts can arise when the parties agree to "park" a class settlement for approval and, later, where a class member might mount a collateral attack on its binding effect. In the first instance, we look to see whether the forum for the class action was congressionally mandated or subject to strategic behavior by the parties.

The "what" question calls for a distinction between structural conflicts of interest in the class representation and other defects in the nature of bad deals for some or all of the class members. Only the former kind of defect bespeaks a proceeding illegitimate from its outset in a manner akin to the sorts of "jurisdictional" deficiencies thought to warrant collateral attacks on judgments in ordinary litigation.

The "how" question is one of proper preclusion for class settlements. The term "collateral attack" has been used sloppily to encompass everything from appeal to relief from the judgment to outright circumvention by filing anew in a different jurisdiction. In this section, we disentangle the various forms of procedural challenge to class action settlements and propose that the level of preclusion be conditioned by where the original suit was filed, how the challenge is presented, and what is the basis of the asserted challenge. Greater preclusion against collateral attack should flow from use of the congressionally preferred forum, as delineated by CAFA, as compared to the potentially anomalous court selected simply by settling counsel. The scope of preclusion should correspond, moreover, to the nature of the defect alleged in the class representation. Structural conflicts of interest warrant an approach that asks whether the rendering court considered and rejected the conflict in question, though not necessarily at the behest of the class member now the proponent of a collateral attack. Bad deals, by contrast, warrant an approach that would ask simply whether there was a full and fair opportunity to challenge the fairness of the settlement in the rendering court, in keeping with the broadened approach to standing in that setting in the Supreme Court's 2002 decision in Devlin v. Scardelletti.

HME

Settlement Announced in Ford Explorer Rollover Class Actions

The Associated Press reports that Ford has agreed to settle class action suits covering plaintiffs in California, Connecticut, Illinois and Texas arising out of claims that Ford Explorer SUVs were prone to rolling over.  It is reported that plaintiffs will get transferable vouchers to buy new Explorers or other Ford or Lincoln Mercury cars.  This apparently settles all the suits against Ford arising out of the rollover accidents linked to Ford Explorers and Bridgestone/Firestone tires.  The Associated Press article can be accessed here.  Because the cases were brought in California State Court, the CAFA limitations on coupon settlements do not apply. 

ADL

Sebok and Zipursky on Vioxx Settlement Ethics

Excellent FindLaw column today by Tony Sebok and Ben Zipursky -- Getting With the Program: The Vioxx Settlement Agreement.  One of their central points is that Vioxx plaintiffs need advice to decide whether to accept the Merck settlement offer, but it is hard for clients to trust their lawyers' advice when the lawyers have already agreed to recommend the settlement to every client.

HME

Perspectives on Asbestos Litigation Symposium at Southwestern Law School

On Friday, January 18, 2008, Southwestern Law School will present a symposium entitled, Perspectives on Asbestos Litigation.  Scheduled speakers and moderators include Judge Barbara Jacobs Rothstein (Federal Judicial Center, Director); Justice Helen Freedman (N.Y. Supreme Court); Deans Bryant Garth (Southwestern) and Gregory Keating (USC); Professors Ronald Aronovsky (Southwestern), Anita Bernstein (Brooklyn), Alan Calnan (Southwestern), Howard Erichson (Fordham (Visiting) & Seton Hall), James Fischer (Southwestern), Mark Geistfeld (NYU),  Michael Green (Wake Forest), Deborah Hensler (Stanford), Keith Hylton (Boston U.), Francis McGovern (Duke), Linda Mullenix (Texas), Richard Nagareda (Vanderbilt), David Owen (South Carolina), Joseph Sanders (Houston), Judy Sloan (Southwestern), and Neil Vidmar (Duke); and distinguished practitioners Marh Behrens (Shook, Hardy) and Steven Kazan (Kazan, McClain).

Professor Alan Calnan and I are serving as co-chairs for the conference, and I will also moderate a panel on Public and Private Law Perspectives.  The Southwestern University Law Review will subsequently publish an issue based on the symposium.  Hope you can join us for what promises to be an interesting and informative day.

BGS

Concern Over Plaintiff Counsel Ethics in Vioxx Settlement

Article in the Wall Street Journal -- Vioxx Plaintiffs' Choice: Settle or Lose Their Lawyer, by Nathan Koppel.  Here's an excerpt:

Plaintiffs in litigation over the painkiller Vioxx are supposed to be able to decide whether to enroll in the übersettlement announced last week or take their cases to court. But due in part to what lawyers say is an unusual provision in the settlement agreement, many plaintiffs in effect may have little choice but to accept the deal.

The provision, agreed to by Merck & Co. and the lead lawyers in the case, requires that if one client of an attorney enrolls in the settlement, then the attorney must recommend the deal to all other clients. If a client decides not to take part in the settlement, then the lawyer, according to the deal, must take "all necessary steps" to withdraw from representing that client. It is relatively rare for a settlement to require lawyers to cut ties with clients, but it appears to be happening more often, lawyers say.

Some find the development problematic. The provision improperly "stacks the choice for the client," says Deborah Rhode, an ethics professor at Stanford Law School. "If the price of exercising what should be their right to reject the settlement means they have to forfeit their representation from the lawyer actually familiar with the case, it's not exactly an uncoerced choice."

Merck pulled the widely used painkiller Vioxx from the market in September 2004 because it was tied to a higher risk of heart attack and stroke. Thousands of lawsuits ensued, and after three years, Merck and the lead plaintiffs lawyers negotiated a $4.85 billion settlement, announced Friday.

BGS

The Vioxx Settlement

What does the Vioxx settlement tell us about mass tort strategy, procedure, and ethics?  Merck's mass aggregate settlement, which weighs in at $4.85 billion and up to 47,000 plaintiffs, matters not only to its many participants, but also to anyone interested in understanding how mass tort litigation works.

THE PARTICIPANTS.  Before turning to the deal's broader implications, let's talk about its significance to the five major sets of participants -- Merck, plaintiffs, plaintiffs' counsel, judges, and defense counsel.  Assuming the settlement goes through (the deal is subject to several conditions, including an 85% walkaway clause), it's happy news for most of them.

• For Merck, the settlement allows the company to take its hit, slash its litigation expenses, limit its remaining exposure, and get back to business.  That's why Merck's stock was up sharply yesterday despite a down day in the market.  The first time I saw a stock price go up after a company announced a massive settlement, I found it odd (this is, after all, a multi-billion dollar expense); now I expect it.
• For most plaintiffs, the settlement provides compensation rather than the delay and uncertainty of litigation.  Many participating plaintiffs will be disappointed with the amount of compensation they receive, but that's the nature of settlement.  It's a compromise.
• For participating plaintiffs' counsel, the settlement offers a signficant payday after several years of unpaid Vioxx work and significant expenditure of resources.  It also offers lawyers the chance to get out of Vioxx and to move on to the next mass tort or other litigation opportunity.  And for the lawyers involved in negotiating the deal, such as Russ Herman, Chris Seeger, Andy Birchfield, and Arnold Levin, yesterday's announcement represents a satisfying accomplishment and the sort of attention-generating event that cannot be bad for business.
• For the judges -- particularly Judges Eldon Fallon (overseeing the MDL in E.D. La.), Carol Higbee (NJ), Victoria Chaney (CA), and Randy Wilson (TX) -- the settlement clears away a huge number of docket-clogging cases.  For some of the judges, the settlement also reflect a personal victory, a professional accomplishment, and, one hopes, a sense of getting justice done.  Judge Fallon, in particular, had announced early on in the litigation his desire to drive the parties toward a large-scale settlement.  To whatever extent he may have experienced Merck's ongoing refusal to settle as a source of frustration and embarrassment, yesterday's announcement surely brought relief, satisfaction, and some vindication of his handling of the litigation.
• Of the major participants, the only apparent losers are Merck's outside counsel, who lose an important revenue stream.  But that's taking an unnecessarily grudging view of defense counsel's position.  For lead counsel Theodore Mayer of Hughes Hubbard & Reed, a settlement like this caps an overall successful defense strategy, and for other lawyers involved in negotiating the deal, including Doug Marvin of Williams & Connolly, John Beisner of O'Melveny & Myers, and Adam Hoeflich of Bartlitt Beck, the deal represents a professional accomplishment and a business-generating news event.  A satisfied client is always good news.  Except perhaps for local defense counsel, who experience a loss in revenue from upcoming trials that won't happen, but who may get little attention or client gratitude.

STRATEGY.  Nearly all the commentary on the settlement emphasizes the success of Merck's defense strategy in the VIoxx litigation, with lots of comments suggesting that future mass tort defendants should take a page from Merck's playbook.  I agree that the settlement reflects the culmination of a successful strategy for Merck, but before assuming the same thing will work for other defendants, you have to look at the confluence of factors that made the strategy work in Vioxx.

Merck took an aggressive approach, fighting each case individually.  This strategy had three main components:  refusing to settle either wholesale or retail, opposing trial aggregation, and pouring resources into litigating each individual case on the merits.  Although early on Merck suggested that it would settle cases involving over 18 months exposure, it quickly backed off and pursued a strong no-settlement strategy.  On aggregation, Merck accepted and even embraced aggregated pretrial handling (MDL and statewide consolidations), but staunchly resisted class certification and any form of joint trial.  And in each plaintiff's case, Merck fought hard on specific causation and every other contestable issue.  Merck could have settled many of those cases more cheaply than going to trial, but by refusing to settle Merck sent a powerful message to plaintiffs' counsel:  there's no easy money to be had here.

The no-settlement, individual-trial strategy worked in the Vioxx litigation because several critical factors came together:

• First, Vioxx was off the market.  This is often the case, as product recalls are a common triggering event for mass tort litigation, but not always.  Plenty of mass tort litigation involves products that remain available.  Think Zyprexa, Oxycontin, tobacco, guns.  And lots of other mass tort litigation involves products that, while no longer on the market, present an ongoing risk of exposure -- lead paint, asbestos, certain medical devices.  Because Vioxx was no longer available, Merck did not have to worry about a never-ending stream of potential plaintiffs, and could get some finality with a mass aggregate settlement.  Also, with the product off the market, Merck could focus on litigation strategy without worrying about protecting the Vioxx brand and its ongoing prescribability by physicians, in contrast with, for example, Eli Lilly's position on Zyprexa.
• Second, Vioxx did not raise significant problems of latent disease.  In some mass torts, such as asbestos and tobacco, latency creates enormous settlement difficulties.  How can a defendant get peace without binding future claimants?  This was the driving factor behind the Amchem and Ortiz asbestos settlement class actions, and an important cause of their failure.  It was the primary reason for the multiple back-end opt-outs in the fen-phen nationwide settlement class action, which later proved so problematic.  When I worked on the American College of Trial Lawyers Mass Tort Litigation Manual, asbestos and fen-phen were front and center, and we took time-dispersed disease manifestation as a defining characteristic of mass torts.  So did Richard Nagareda in Mass Torts in a World of Settlement.  Vioxx, by contrast, did not involve such significant latency problems.  Latency was a disputed issue in the litigation, but the settlement reflects a willingness on the part of plaintiffs' counsel to let go of claims by persons who experience heart attacks or strokes long after their exposure to Vioxx.  This, combined with the fact that Vioxx was off the market, and the statute of limitations, allowed Merck to seek peace in the litigation without worrying much about future claimants.
• Third, Merck had stronger individual defenses than general defenses.  Like tobacco defendants, who always try to focus attention on the individual smoker, Merck focused on each individual plaintiff.  In the case of tobacco, it's more about personal responsibility; with Vioxx, it's all about individual causation.  Compare this with Bendectin, silicone gel breast implants, or Agent Orange, where the defendants had strong scientific defenses on general causation.  In Bendectin, Merrell favored (and won) a mass aggregated trial in which it could present its scientific argument on general causation without the jury hearing from individual plaintiffs.  Merck did not think it had a strong enough chance to defeat liability on a wholesale basis to be worth the risk, so it preferred to take a series of wins and losses in individual trials.
• Fourth, the issues were sufficiently individualized that Merck was able to defeat efforts at class certification and mass trials.  On class certification, Vioxx is no different from most other mass tort personal injury cases (and post-CAFA, defendants have even greater confidence that mass tort class cert will usually be denied), but it differs markedly from other types of mass litigation.  Aside from class cert, Merck was able to avoid large-scale joint trials.  Even Judge Higbee's relatively modest effort at a ten-plaintiff consolidated trial in New Jersey fizzled.  In other mass torts, even if defendants defeat class cert, they won't always have Merck's success at avoiding large multi-plaintiff trials.
• Fifth, and most important, Merck mostly won.  That's because individual causation was hard for Vioxx plaintiffs to prove.  Heart attacks and strokes are common.  They are especially common among older people, who were Vioxx's primary consumers.  So it's hard to show by a preponderance of the evidence that a particular person's heart attack or stroke was caused by Vioxx.  Compare this with mesothelioma and asbestos, or PPH and fen-phen, or lung cancer and tobacco, or rhabdo and Baycol.  Because of the difficulty establishing specific causation, Merck was able to win most of the individual cases that went to trial.  Defense wins drive down settlement values, pure and simple.  Had Merck lost several more of the individual trials, it would have cost a lot more than $4.85 billion to settle this.

Without this confluence of factors, Merck's no-settlement, no-aggregation, try-every-case strategy could easily have backfired.  That's why in the future some mass tort defendants will continue to settle cases individually, others will seek early wholesale settlements whether by settlement class action or by non-class aggregate settlement, and others may even seek mass adjudication.

PROCEDURE.  The Vioxx litigation shows the successful use of informal bellwether trials to drive a mass aggregate settlement.  As a matter of procedural policy, the Vioxx litigation and settlement show mass tort litigation functioning reasonably well, as Byron Stier points out.  There have, of course, been enormous litigation costs, unpredictable and inconsistent results along the way, and a fair amount of unseemly forum-shopping and forum-fighting, but that's par for the course in mass tort litigation.  More significantly, look at what worked.  The vast majority of cases were consolidated, at least for pretrial handling, in a small number of courts.  Most of the cases were before Judge Higbee in New Jersey (cases were filed disproportionately in Merck's home state to make them non-removable under 28 U.S.C. 1441(b)); many others were before Judge Fallon in the multidistrict litigation, as well as in large statewide consolidations in California and Texas.  Class certification was appropriately rejected; these cases are too individualized to be suitable for representative litigation that binds non-parties.  Nor did courts employ formal bellwethers, in the sense of trials from which binding results could be extrapolated for other parties.  Rather, Judges Fallon, Higbee and others used informal bellwether trials.  That is, they scheduled cases for trial on steady basis, trying to get a range of representative cases, with the goal not only of resolving those particular actions but of providing enough data points to allow the parties to reach a widespread settlement.  It worked.

ETHICS.  Despite viewing the settlement mostly as good news for the participants and the litigation system, I have some concerns.  Mass aggregate settlements always raise troubling ethical issues, and this one is no exception. 

Here's the good news, ethically speaking.  The parties seem to understand clearly that acceptance of the settlement is up to the clients, not the lawyers, and that any participating plaintiff must give informed consent after adequate disclosure.  Also, the parties were wise to include a walkaway provision.  The deal is conditioned upon acceptance by 85% of the plaintiffs (actually, 85% of each of a number of plaintiff groups).  This provides Merck with adequate assurance of peace, while providing a safety valve so that not every plaintiff need accept the deal.  As I've commented before, all-or-nothing settlements are much more troubling than those with walkaway provisions.

Now the bad news.  The deal contains a term that requires each participating lawyer to recommend the settlement to 100% of the lawyer's eligible clients (paragraph 1.2.8.1 of the Settlement Agreement).  That's troubling.  A lawyer's duty of loyalty to each client cannot be bargained away to an adverse party.  Some Vioxx plaintiffs' lawyers represent hundreds or thousands of clients, and even if the lawyer thinks the settlement's terms are generally fair, that does not necessarily mean that acceptance is the right decision for each individual client.

Worse, the deal requires that any participating lawyer withdraw from representing any client who declines the settlement (paragraph 1.2.8.2) .  That's really troubling.  It makes it nearly impossible for a client to say no.  The paragraph tries to avoid ethical impropriety by adding "to the extent permitted by the equivalents to Rules 1.16 and 5.6 of the ABA Model Rules of Professional Conduct."  Withdrawing from the representation of clients under these circumstances may well violate both RPC 1.16 and RPC 5.6, but with this term in the Settlement Agreement, it is unrealistic to expect any of the plaintiffs' lawyers to continue representing Vioxx claimants. 

In a mass settlement, lawyers ideally should be able to say to their clients:  "Here's the settlement we negotiated with the defendant.  Here are all the terms and conditions of the deal, and here's where you fit in.  I think it's a good deal, and I recommend that you accept it.  But you're the client, and it's your call.  And if you decide not to accept the settlement, I'll be right by your side and continue to represent you." 

Compromise is one thing.  The lawyer-client relationship is another.  The problem, of course, is that in mass aggregate settlements, the interests of the defendant, plaintiffs' counsel, and judges align, and don't necessarily correspond with the interests of individual plaintiffs.  Merck, with its $4.85 billion, expects to buy not only peace from tens of thousands of plaintiffs, but also peace from the law firms that have been the biggest thorns in its side.  The challenge, which the Vioxx settlement only partly surmounts, is to craft a settlement that accommodates the interests of the parties without unduly interfering with the lawyer's core duty of loyalty.

HME

Merck Vioxx Settlement Press Release

Here it is: Download merck_vioxx_settlement_agreement_press_release.pdf .

BGS

MERCK VIOXX SETTLEMENT

According to an article by Aaron Smith on cnn.com, Merck has agreed to settle pending Vioxx claims for a total of $4.85 billion.  The settlement is being accomplished not as a class action, but as merely an offer of settlement to individual plaintiffs, provided they can show "1) objective medical proof of either a heart attack of ischemic stroke; (2) documented receipt of at least 30 Vioxx pills; and (3) receipt of pills in sufficient number and proximity to the event to support a presumption that the patient was still taking the pills within 14 days before the heart attack or stroke."  See Legal Pad with Roger Parloff.  If 85% of the plaintiffs in each of the strongest categories do not accept the settlement, then the offer is void.

In my opinion, this is how mass tort litigation should work. Science triggers the lawsuits. The litigants fight individual cases and in so doing establish a market for the value of claims.  That narrows litigants expectations about how much their claims are worth, and makes easier the resolution of claims by far-reaching settlement.  Along the way, tort and procedural goals are satisfied -- multiple juries provide a better assessment of claim value than any one potentially outlier jury in a class action could do; both plaintiffs and defendants are able to present all of their individualized arguments in cases (unlike a class action); litigants retain their autonomy to either press to trial (day in court) or seek settlement; and ultimately the far-reaching settlement leads to vastly reduced transaction costs for society and a lessening of the burdens for courts. 

Here, Merck's $4.85 billion settlement, large as it seems, is far less than the threat of bankruptcy that was discussed when Vioxx was taken off the market.  (Cnn.com reports that some analysts put the Vioxx damages at $30 billion.)  Indeed, Merck's shares rose today.  All of this is because Merck went to the individual cases and was successful in winning, thus driving down the value of all pending claims.  It also waited to settle until the statute of limitations had run after its withdrawal of Vioxx (there is no long latency period alleged for the injuries), thus avoiding the flood of claims that can be triggered when word gets around that a defendant is settling.

Of course, we'll have to see if 85% of plaintiffs do in fact sign up for this settlement.  But likely Merck negotiated this settlement behind the scenes with the top plaintiffs lawyers who represent the majority of claimants.  (The difficult ethics of the plaintiffs' lawyers in negotiating such mass settlements for differently situated Vioxx clients is a topic for another day.)

It appears to be a tour de force performance for Merck throughout the litigation, which Merck seemed to recognize in July when it promoted its general counsel Ken Frazier to president for global human health.

BGS

State Farm Sues Mississippi Over Katrina Investigation

Here's an interesting twist on the complexities of handling parallel civil and criminal proceedings.  State Farm Insurance filed a lawsuit against Mississippi's attorney general, claiming that the AG reopened a criminal investigation in violation of an agreement to drop the inquiry in exchange for the company's reconsideration of thousands of policyholder's claims after Hurricane Katrina.

Victoria Pynchon wrote a provocative post on this at the IP ADR Blog -- State Farm v. State of Mississippi: Withdrawing Criminal Charges to Settle a Civil Action? -- raising ethical questions about the underlying agreement.  Pynchon, a copyright mediator, says that she often faces the question whether a plaintiff may agree to withdraw criminal charges in exchange for a settlement of civil claims.  She refers to an AP news report in the New York Times describing State Farm's lawsuit:

State Farm Insurance is suing Mississippi's attorney general, accusing him of violating an agreement to end a criminal investigation of the insurer’s handling of claims on the Gulf Coast after Hurricane Katrina, according to court papers unsealed Friday.

State Farm’s lawsuit claims that the attorney general, Jim Hood, reopened a criminal investigation of the company and its employees “for the purpose of harassment” and to coerce the insurer into settling civil litigation spawned by the Aug. 29, 2005, hurricane.

State Farm says Mr. Hood agreed in January to end his office’s criminal inquiry as part of a settlement agreement that called for the company to reopen and possibly pay thousands of policyholder claims.

On Pynchon's reading, such an agreement would be unethical:

State Farm suing Mississippi for failing to honor an agreement to drop a criminal inquiry in exchange for the settlement of civil claims?  I must be missing something because the settlement sounds unethical and the lawsuit without merit because civil claims were settled in exchange for the termination of a criminal investigation.

The law is far from uniform on the ethics of using criminal charges to civil settlement negotiations.  In New York, following the Model Code of Professional Responsibility, DR 7-105 provides: "A lawyer shall not present, participate in presenting, or threaten to present criminal charges solely to obtain an advantage in a civil matter."  The ABA abandoned this rule when it adopted the Model Rules of Professional Conduct.  Pynchon cites ABA Ethics Op. 920-363 (1992) (allowing a lawyer to use a threat of a criminal referral to obtain advantage if the civil claim and criminal matter are related and well-founded).  Some states that adopted the Model Rules chose to retain the prohibition.  New Jersey's RPC 3.4(g), for example, provides: "A lawyer shall not ... present, participate in presenting, or threaten to present criminal charges to obtain an improper advantage in a civil matter."

I've always found this rule intriguing and a bit troubling.  First, the language of both DR 7-105 and NJ RPC 3.4(g) leaves open a possible distinction between bringing or threatening criminal charges and withdrawing or offering to withdraw charges, although as a matter of legal ethics and public policy it is hard to see why that distinction should matter.  Pynchon points to a California ethics opinion (Formal Op. 1991-124) extending the prohibition to dismissal of criminal charges.

More fundamentally, while the prohibition seems nice in theory, I wonder whether it really makes sense.  The theory, as I understand it, is that citizens ought to report crimes (or not) as a matter of civic responsibility, not for personal gain.  The criminal process, on this theory, should be reserved for its public purpose, not as a private tool in civil litigation.  But I wonder whether that idea hold up.  Criminal sanctions are supposed to encourage good behavior.  If fear of criminal punishment persuades a wrongdoer to make right a wrong, isn't that a good thing?  That, of course, assumes the legitimacy of the criminal charges and civil claims, but to the extent parties threaten illegitimate charges, couldn't we deal with that through the law of extortion or similar doctrines, rather than through an ethics rule that prohibits or chills consideration of criminal proceedings for civil advantage even in connection with legitimate claims?

Finally, even if we were to accept the theoretical justification for the prohibition, isn't it one of the least realistic rules in the book?  Any civil defendant accused of serious wrongs understands the possibility of criminal proceedings.  The implicit threat of such proceedings is present in the civil settlement dynamic, whether expressed openly or not.  The defendant knows that one of the advantages of resolving civil claims to the satisfaction of those who have been harmed is that satisfied claimants are less anxious to pursue other avenues to obtain justice.  Isn't that the reality, regardless of whether the ethics rules force lawyers to keep their mouths shut about it?  And if it is the reality, what's so bad about it?

In the State Farm case, by the way, it is not clear to me whether Pynchon fairly characterizes the deal as "an agreement to drop a criminal inquiry in exchange for the settlement of civil claims."  Did the company reopen policyholder claims as part of a civil settlement?  Is there a difference between plaintiffs' attorneys using criminal charges to drive a settlement of their clients' claims, versus the state using criminal charges to drive a settlement of citizens' claims?  The State Farm situation does not neatly fit the usual DR 7-105 scenario.  Keep in mind, in any event, that we're talking about third-hand info:  an agreement described in a lawsuit described in a newspaper article described in a blog.  In January I blogged on a failed earlier attempt at an agreement between State Farm and Mississippi (Birnbaum, Scruggs and the Katrina Settlement), but until now I had not continued to follow the saga.

HME

Update:  Thanks to Ted Frank for pointing out David Rossmiller's post on the State Farm action at the Insurance Coverage Law Blog.  Rossmiller has links to the complaint and other documents, as well as an extensive post on the suit.  He also has a shorter post on the subject at Point of Law, calling this "the most unusual development yet" in Katrina litigation.

Coke Trying to Use Expected Guilty Plea by Lerach to Deny Class Status Based on Inadequate Representation

In Coke Tries New Defense: Firm Hopes to Use Plea in Lerach Case To Its Advantage, by Peter Latman, the Wall Street Journal reports Coca-Cola Co.'s attempt to use the impending criminal guilty plea by plaintiffs' lawyer William Lerach to deny class action status to a securities suit brought by Lerach while at the firm now called Coughlin Stoia.  The Journal reports that Lerach took the case with him when he left the firm.

In appointing class counsel, a federal court must under Rule 23(g) that the counsel may "fairly and adequately represent the interests in the class."  Moreover, Rule 23(g)(C)(ii) notes that the court may broadly consider "any other matter pertinent to counsel's ability to fairly and adequately represent the interests of the class."

Lerach, members of Lerach's former firm Milberg Weiss, and Milberg Weiss itself are all under indictment for their alleged roles in a scheme to pay class representatives -- the few plaintiffs who represent in court the interests of the thousands of absent class members whose claims are being adjudicated.  While any payment of class representatives would appear to have been done to keep them on standby for quick filing of lawsuits, those payments also have the capacity of undermining the independence of the class representatives and perpetrating a fraud on the court.

What's so interesting about Coke's move are its implications for other lawsuits.  Should all putatitve class actions brought by Lerach or Milberg Weiss be denied class certification on grounds of inadequate class counsel?  Here, I would argue that the presumption of innocence should apply to prevent the government from effectively destroying the business of a plaintiffs' firm by causing the denial of all class actions brought by the firm.  Of course, many would argue that the specter of the indictment alone destroys the accused firm -- but it is one thing for individuals to choose not to associate with an entity accused of a crime, but quite another thing for a court effectively to impose penalties based merely on an accusation.

What if the allegations against Lerach, Milberg Weiss, and certain Milberg partners are proven?  Indeed, Steven Schulman of Milberg has already pleaded guilty, as has Milberg partner David Bershad.  Then, denial of future class actions by the lawyer or firm on the basis of inadequacy seems more reasonable, at least until the bar decides whether the lawyers in question will be able to continue to practice. 

And what about any prior class actions resolved where class representatives were illegally paid?   That's a question with implications for perhaps hundreds of millions of dollars of recoveries.  The representation in those classes would likely be deemed inadeqate -- both by class counsel and by the class representatives.  And the inadequate representation could be seen as a violation of constitutional due process, which turns in class actions upon the adequacy of class representation.  One could imagine myriad actions for malpractice against the lawyers involved (if courts hold that absent class members have an attorney-client relationship with class counsel), as well as attempts by defendants to recoup settlement payments made under alleged fraud by class representatives and class counsel.  Interestingly, many defendants would probably rather not reopen settled class actions, for fear that courts would toll the statute of limitations against them and allow new class counsel to bring new actions against them based on the same alleged wrongs.  All in all, it would be a litigation meltdown worthy of a law school exam.   

BGS

Bristol-Myers Squibb Agrees to $515 Million Settlement With Government

Article from WCVB TV/DT Boston -- Company To Pay $515M To Settle Drug Marketing Probes: Bristol-Myers Squibb Agrees To Settlement.  Here's an excerpt:

Bristol-Myers Squibb Co. and a subsidiary have agreed to pay more than $515 million to settle federal and state investigations into their drug marketing and pricing practices, U.S. Attorney Michael Sullivan announced Friday.

Government investigators alleged that Bristol-Myers Squibb paid illegal remuneration from 2000 to 2003 in the form of consulting fees to induce doctors and other health care providers to buy the company's drugs.

Investigators also claimed that from 2002 to 2005, the New York-based drugmaker promoted the sale of Abilify, an anti-psychotic drug, for pediatric use and to treat dementia-related psychoses. Neither use is approved by the Food and Drug Administration

BGS