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In re Vioxx Products Liability Litigation

United States District Court, E.D. Louisiana

September 26, 2018


         SECTION: L

          FALLON JUDGE.

          ORDER & REASONS


         Currently pending before the Court is a petition seeking attorneys' fees and costs for the common benefit services rendered in connection with the consumer class portion of this litigation. R. Doc. 65491. The Court has previously resolved the issue of reimbursement of expenses, R. Doc. 65422, and now determines the appropriate amount for the consumer common benefit fee.

         This is the second time this Court has focused on this issue. See R. Doc. 65537. On a previous occasion it reviewed various memoranda and supporting documentation provided by the parties, including numerous affidavits and declarations from individual attorneys who claimed to have performed common benefit work. It also reviewed reports submitted by Phillip Garrett, the Court-appointed certified public accountant (the “CPA”) who monitored the time and expenses the attorneys submitted for their common benefit work. On August 29, 2017, the Court issued an Order & Reasons setting an award of $4, 025, 000 for the common benefit work performed by the attorneys in the consumer portion of the case based on 9, 891.49 hours submitted to the CPA. Thereafter, it was advised that additional hours had been spent by other counsel on common benefit work that were not included in the material considered by the Court in fashioning the appropriate fee. Accordingly, the Court vacated its Order & Reasons, R. Doc. 65545, and instructed all interested counsel to submit their common benefit hours to the CPA to accurately account for all of the common benefit work performed on the consumer portion of this litigation. This Court is confident that the record now properly reflects all the hours submitted by all counsel who seek a common benefit fee. Once again all of the material previously filed was reviewed as well as the additional material more recently received regarding the additional submitted hours. Lastly, the Court has examined the procedural record of the entire litigation and applied its own knowledge of the case accumulated through its active involvement in this litigation since its inception more than twelve years ago. The Court is fully advised and is ready to rule.

         I. BACKGROUND

         To put this matter in perspective, a brief overview of this litigation is appropriate. This multidistrict litigation (“MDL”) involves the prescription drug Vioxx, known generically as Rofecoxib. Merck & Company, Inc. (“Merck”), a New Jersey corporation, researched, designed, manufactured, marketed, and distributed Vioxx to relieve pain and inflammation resulting from osteoarthritis, rheumatoid arthritis, menstrual pain, and migraine headaches. On May 20, 1999, the Food and Drug Administration (the “FDA”) approved Vioxx for sale in the United States. Vioxx remained publicly available until September 30, 2004, when Merck withdrew it from the market after data from a clinical trial known as APPROVe indicated that the use of Vioxx increased the risk of cardiovascular thrombotic events, such as myocardial infarctions (heart attacks) and ischemic strokes. Thereafter, thousands of individual suits and numerous class actions were filed against Merck in state and federal courts throughout the country alleging various products liability, tort, fraud, and warranty claims and seeking recovery for damages resulting from heart attacks and ischemic strokes. It is estimated that 105 million prescriptions for Vioxx were written in the United States between May 20, 1999, and September 30, 2004. Based on this estimate, it was thought that approximately 20 million patients have taken Vioxx in the United States.

         On February 16, 2005, the Judicial Panel on Multidistrict Litigation (the “JPML”) conferred MDL status on Vioxx lawsuits filed in federal court and transferred all such cases to this Court to coordinate discovery and consolidate pretrial matters pursuant to 28 U.S.C. § 1407. See In re Vioxx Prods. Liab. Litig., 360 F.Supp.2d 1352 (J.P.M.L. 2005). One month later, on March 18, 2005, this Court held the first status conference in the Vioxx MDL to consider strategies for moving forward with the proceedings. Shortly thereafter, the Court appointed a Plaintiffs' Steering Committee (“PSC”) and Defendant's Steering Committee to represent the parties and meet with the Court once every month to review the status of the litigation. Some suits filed in state court were removed to federal court and transferred to this Court. Others remained in state court due to lack of diversity. California was the first state to institute a consolidated state court proceeding on October 30, 2002. New Jersey and Texas soon followed suit. This Court coordinated the MDL proceeding with these state courts and worked closely with the state court judges.

         Additionally, a number of state and local governments filed suits against Merck seeking to recover amounts paid for Vioxx prescriptions by their Medicaid programs. Finally, several thousand claims were filed pursuant to state consumer protection statutes seeking to recover amounts paid for Vioxx as well as any penalties allowed under the state consumer laws. Merck removed these cases to the appropriate federal district courts, where they remained briefly before being transferred to this Court by the JPML.

         Because of the large number of cases and the varied theories of recovery, it was necessary to prioritize the handling of this litigation. The Court first focused on the 50, 000 heart attack and stroke claims. Discovery began along several tracks. After the exchange of some nine million documents, several hundred depositions, and about one thousand discovery motions, this portion of the case was ready for trials. After six bellwether trials-as well as trials in state court proceedings in Alabama, California, Illinois, Florida, New Jersey, and Texas-the negotiating plaintiffs' counsel (“NPC”) and Merck's counsel engaged in protracted settlement discussions over the course of a year, conducting hundreds of in-person and telephone meetings. On November 9, 2007, two years after the commencement of the MDL proceeding, the parties announced a $4.85 billion master settlement agreement (“MSA”) that intended to-and actually did-resolve most Vioxx-related heart attack and ischemic claims through a resolution program. In its recitals, the MSA expressly states its purpose was to “establish a pre-funded, structured private ‘opt-in' settlement program . . . to resolve . . . claims against Merck involving heart attacks, ischemic strokes and sudden cardiac deaths.”

         Having settled a large majority of the personal injury cases within this MDL, the Court turned its attention to government actions filed against Merck. Several government entities had pending litigation in this MDL, including suits brought on behalf of various states, including but not limited to Alaska, Colorado, Florida, Louisiana, Mississippi, Montana, Pennsylvania, Utah, Oklahoma, and South Carolina. These suits sought damages for monies paid by the state for Vioxx through the state's Medicaid program. These suits were based on similar claims, namely that each respective state would not have approved payment for Vioxx through its Medicaid program had it known of the drug's cardiovascular risks. After one bellwether trial, the vast majority of these “government action” cases were either settled or remanded.

         Finally, the Court turned its attention to the consumer claims. On August 2, 2005, the PSC filed a Purchase Claims Master Class Action Complaint (“Purchase Claims Complaint”) naming individual consumers who purchased Vioxx for themselves. R. Doc. 790. The Purchase Claims Complaint sought relief under myriad laws, including state consumer protection statutes. Id. at 60-75. Plaintiffs in the Purchase Claims complaint took Vioxx, but did not suffer any ill effects from the drug and, therefore, did not qualify for participation in the opt-in settlement program. Nonetheless, Class Members sought recovery for a return of the purchase price of the drug, as well as any medical expenses that were directly related to their Vioxx prescription. Class Members argued that, even though they were not injured, had they known about the drug's negative side effects, they would never have purchased Vioxx.

         After substantial settlement negotiations spanning several years, the parties reached a compromise regarding the Consumer Class claims in 2012. The Settlement Agreement allocates a common benefit fund of up to $23 million, from which Class Members may seek recovery for their total out-of-pocket provable costs for purchasing Vioxx and up to $75.00 in connection with post-withdrawal medical consultation related to Vioxx use or, in lieu thereof, a one-time payment of $50.00 with proof of a Vioxx prescription. Those amounts, however, were subject to a pro rata reduction if all claims, administrative, attorneys' fees, and other costs exceeded the $23 million cap.

         The Settlement Agreement called for the establishment of a settlement website, toll-free phone number, and post office box to serve as sites where Class Members could obtain or request detailed Notice. Settlement Agreement ¶¶ 5.3-5.5; R. Doc. 64487 at 10. Moreover, Kinsella Media, LLC (“Kinsella”) developed a Notice plan to alert the class to the settlement. This plan called for a direct mailing to all counsel for the putative consumer class and paid media advertising, including a mix of print, broadcast, and online media, and a comprehensive online media campaign. R. Doc. 64502-3 ¶¶ 16-29 Kinsella and BrownGreer, PLC (“BrownGreer”) worked together to implement the Notice plan. R. Doc. 64526.

         Despite Herculean efforts, the number of filed claims remained low, with only 3, 137 claims filed by February 16, 2014 for an average of 131 claims filed per week. To boost the number of filed claims, at the suggestion of the Court, the parties authorized BrownGreer to implement a Courtesy Reminder Campaign on February 12, 2014. Pursuant to this campaign, BrownGreer contacted claimants who previously indicated that they might be potential consumer claimants. These efforts included direct mailings to claimants; emails to law firms who represented claimants; emails to claimants who had started the electronic form, but had failed to complete the form; emails to claimants who had registered for Secure Claims Portal access, but had not started a Claim Form; and direct mailing to claimants who had requested and were sent a hard copy of the form, but had not completed a Claim Form. Moreover, BrownGreer enhanced the call center by offering live operator call-backs, Spanish recorded messages, and Spanish-speaking representatives. Finally, BrownGreer augmented the website's capabilities by adding an electronic Claim Form and a mailed Claim Form request on the homepage; a “Do I Qualify for Payment” feature, which would ask potential claimants pointed questions to determine their eligibility; a Spanish Claim Form; and offering a Spanish version of the website.

         These efforts were largely successful. The average number of claims per week increased from 131 per week to 312 per week. By the time the claims period concluded on May 6, 2014, a total of 8, 757 claims had been filed, with 5, 620 claims having been filed after the implementation of the Courtesy Reminder Campaign.

         Of the 8, 757 claims filed, BrownGreer deemed 2, 284 claims to be ineligible. These determinations broke down as follows: 308 claimants provided no documents, 238 claimants included invalid documents, 314 claimants submitted an incomplete claim form, 916 were determined ineligible for multiple reasons, 110 were excluded, and 398 were found to be duplicates-they had filed more than one claim form. During Orran Brown, Sr.'s presentation to the Court on December 16, 2014, Mr. Brown explained that most of those claims deemed “excluded” had either signed a release form in the Vioxx Personal Injury Settlement or were Missouri residents and, therefore, excluded from the Consumer Class by agreement of the parties.

         In an effort to cure the ineligible claimant's problematic documentation and forms, BrownGreer issued a notice to those claimants. BrownGreer sent emails to the claimants who had filed electronically and paper notices to claimants who had submitted hard copy claims. The notices instructed the ineligible claimants to submit the missing documentation and/or forms within thirty days and included an email address and toll free number to contact if the ineligible claimants had questions.

         BrownGreer issued the first notice on August 22, 2014 and received 690 responses, a 29% response rate, of which 83% cured their problematic claims. The second notice went out on October 23, 2014, and BrownGreer received 344 responses, constituting a 20% response rate. Eighty-four percent of those responses cured their ineligible claims.

         The final period to cure any deficient claims has closed. According to BrownGreer, there are 7, 366 payable claims, 988 ineligible claims, and 403 duplicate claims. The final number of claims totals 8, 757. At this stage in the litigation, Plaintiffs agree Merck has met all of its obligations under the Settlement Agreement, and all claimants have been paid. Consumer Class counsel spent $1, 667, 140.09 on Kinsella Media Notice Costs and $1, 552, 595.62 on claims administration fees and expenses. Law firms who worked on the Consumer Class claims were reimbursed $185, 580.91 for expenses. The total amount paid to eligible claimants was $698, 767.22. It is now appropriate to determine a fair fee for the attorneys who performed common benefit work.

         Section 14 of the Settlement Agreement sets forth fees and expenses of Class Counsel and other counsel for the consumer class settlement. R. Doc. 64501-3 at 21-22. Pursuant to that section,

Counsel for the Settlement Class, and any other counsel with a basis to seek the payment of fees and litigation expenses incurred in connection with the litigation of the consumer claims and related putative consumer class action cases involving Vioxx, may apply to the Court for an award of fees and expenses to be paid from the Common Fund in a total aggregate amount for all such counsel not to exceed 32% of the maximum of up to $23 million Settlement Amount (or an aggregate maximum amount of up to $7, 360, 000) . . . . The actual award of fees and litigation expenses to Class Counsel or to any other ...

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