Welcome to Critical Mass, Law.com’s weekly briefing on class actions and mass torts. Here’s what’s happening: Merck made its case for federal preemption before the U.S. Supreme Court. A fee fight has erupted in the Pinnacle hip implant MDL. And find out where Johnson & Johnson will face the first talc trials of 2019.
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SCOTUS Reads the Drug Label in Preemption Case
The first case heard by the U.S. Supreme Court in this calendar year involved a key issue in federal preemption involving drug labeling. Merck Sharp & Dohme v. Albrecht asks the justices to clarify what the high court meant in Wyeth v. Levine when it said a drug manufacturer could assert federal preemption if there was “clear evidence” the FDA would have rejected its proposed warning label. Here’s a backgrounder on the case, in which Merck sought to reverse a 2017 decision by the Third Circuit reinstating 500 cases filed over its osteoporosis drug Fosamax.
About the case: Merck lawyer Shay Dvoretzky (Jones Day) said his client couldn’t have warned about stress fracture risks in Fosamax because the FDA had rejected its proposed label in a letter. Plaintiffs lawyer David Frederick (Kellogg Hansen) countered that the FDA rejected the warning’s language. And Deputy Solicitor General Malcolm Stewart weighed in on what the FDA might have been thinking when it rejected Merck’s proposed warning label.
Michelle Bufano (Patterson Belknap) told me what she thought about Monday's oral arguments. She said the court was clearly split. I asked her: Do you think the court will clarify Wyeth v. Levine’s “clear evidence” standard?
“I would like the court to resolve it globally as to what is clear and convincing evidence, but I think that this case is very fact specific. There’s definitely factual inquiries that have to be made here in terms of whether or not the letter was ambiguous or not.”
Fee Fights Reaches the Pinnacle
A fee feud has broken out in the Pinnacle hip implant multidistrict litigation. According to my colleague Max Mitchell’s report, dozens of law firms have objected to lead plaintiffs’ counsel’s request to increase the holdback -- the percentage of settlement awards that goes toward their fees. U.S. District Judge Ed Kinkeadeincreased the holdback from 10% to 25% after about 3,000 of the cases settled (a third of the total docket). Even the defendant, DePuy Orthopaedics, opposed the hike, which as brought settlement efforts “to a screeching halt.”
But lead counsel Mark Lanier (The Lanier Law Firm) had an interesting counterpoint: The holdback must go higher since the settlement values were coming in so low. Max told me Lanier referenced a Bloomberg report last month that estimated DePuy parent Johnson & Johnson was offering $400 million to settle the cases. That’s about $125,000 per case -- quite a bit less than Lanier’s stunning verdicts of $247 million, $502 million and $1.04 billion. Max told me:
“His filing stressed that this is only a holdback, rather than a final assessment, and said several times that, using some media reports about the estimated size of the settlements, the current holdback would actually produce a ‘negative lodestar multiplier.’”
Who Got the Work
The first trials of 2019 over Johnson & Johnson’s baby powder are set to begin this month--but in fresh venues. Opening statements were made this week in the first talc trial for California’s Alameda County Superior Court. Plaintiffs' lawyers in that case are Kazan McClain’s Joseph Satterley and Denyse Clancy, along with Moshe Maimon of Levy Konigsberg. Meanwhile, Nelson Mullins partners Michael Brownand Scott Richman along with Orrick partner Matt Ashby are representing Johnson & Johnson. In New York Asbestos Litigation court, four trials are planned this month, according to this Law.com story. Plaintiffs’ lawyer Jerome Block of Levy Konigsberg is up against Thomas Kurland and John Winter of Patterson Belknap for Johnson & Johnson.
Here's what else you need to know:
Fee Bushel: Who should get how much of a $503 million award in attorney fees? That’s what a federal judge had to decide in the $1.5 billion class action settlement with Syngenta over economic losses tied to GMO corn seed, as I reported last week. Kansas U.S. District Judge John Lungstrum largely approved a special master’s report and recommendation on how to disperse the fees. But one lawyer, Mikal Watts (Watts Guerra), isn’t happy with his share and said he plans to appeal the order.
New Leadership: Berger Montague has named a new chairman: Eric Cramer. Law.com reported that Cramer, an antitrust lawyer who obtained a $190 million class action settlement last year over alleged price fixing of domestic drywall, is the third person to play that role for the Philadelphia firm in the last three years. Labaton Sucharow, meanwhile, has named Christopher Keller as sole chairman. Keller has been co-chair with longtime leader of the New York firm, Lawrence Sucharow for the past year, according to a Law.com story.
Milberg Mess: Former Milberg Weiss Bershad & Schulman partner Steve Schulman has filed a $15 million suit against his old firm, alleging that its new name was part of a “fraudulent scheme” to evade creditors such as himself, according to Law.com. Schulman was convicted and sentenced to six months in federal prison as part of a criminal investigation that found Milberg and several of its partners, including founders Melvyn Weiss and Bill Lerach, paid kickbacks to lead plaintiffs to bring securities class actions. Schulman, who was released in 2009, claims he was getting monthly payments from a court judgment until last August, one year after a merger created what is now Milberg Tadler Phillips Grossman.
That’s all for now. Thanks for reading Critical Mass, and I’ll see you next week!