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In re Diet Drugs (Phentermine/ Fenfluramine/Dexfenfluramine) Products Liability Litigation

United States District Court, E.D. Pennsylvania

June 30, 2017

IN RE DIET DRUGS PHENTERMINE/ FENFLURAMINE/DEXFENFLURAMINE PRODUCTS LIABILITY LITIGATION
v.
AMERICAN HOME PRODUCTS CORPORATION THIS DOCUMENT RELATES TO SHEILA BROWN, No. 99-20593

          MEMORANDUM IN SUPPORT OF SEPARATE PRETRIAL ORDER NO. 9490

          Bartle, Judge

         Before the court is the petition of Levin Sedran & Berman ("Levin"), in its respective capacities as Plaintiffs' Liaison Counsel ("PLC"), Co-Lead Counsel for the Plaintiffs, and Class Counsel, for an award of attorneys' fees and expense reimbursements relating to work performed from January 1, 2016 through December 31, 2016. This court has previously awarded fees in Pretrial Order ("PTO") Nos. 7763A, 8516, 8646, 8869, 9102, 9294, 9398, and 9465.

         Levin seeks an aggregate award of attorneys' fees in the amount of $601, 400 from the AHP Settlement Trust (the "Trust") in accordance with the stipulation approved in PTO No. 92 97 between Wyeth and Class Counsel that described, among other things, the terms of funding of future awards and class-related fees.

         Additionally Levin requests an award of attorneys' fees in the amount of $601, 400 from the MDL 1203 Fee and Cost Account for MDL-related services performed during 2016.

         Finally Levin incurred a total of $18, 519.58 in litigation expenses during 2016. This court has already authorized payment of $14, 548.61 of expenses from the MDL 1203 Fee and Cost Account. Pursuant to PTO No. 7763, Levin seeks an order directing the Trust to reimburse $7, 274.31 to the MDL 1203 Fee and Cost Account. Levin petitions for reimbursement of the remaining $3, 970.97 in out-of-pocket expenses advanced by Levin to be allocated for payment to Levin as $1, 985.48 from the Trust related to class action work and $1, 985.49 from the MDL 1203 Fee and Cost Account.

         I.

         In February 2017 the court-appointed auditor, Alan B. Winikur, C.P.A., filed his Twelfth Audit Report setting forth the results of his audit of the professional time and expenses reported by counsel as eligible for payment or reimbursement for the period from January 1, 2016 through December 31, 2016. In this Report Mr. Winikur states that one law firm, Levin, has performed compensable "common benefit" work for the class during 2016. He reports that during 2016, Levin performed 955.5 hours of professional work. According to Mr. Winikur, the lodestar value of this work was $601, 4 00. The total amount of reimbursable expenses incurred by Levin during 2 016 was $18, 519.58. Mr. Winikur advises that the court has previously-authorized payment of bona fide common benefit expenses from the MDL Cost and Fee Account during 2 016 in the total amount of $14, 54 8.61. The amount of outstanding reimbursable expenses is $3, 970.97.

         On June 8, 2017 Mr. Winikur filed a supplement to the Twelfth Audit Report. In the supplement Mr. Winikur clarified the breakdown of the 955.5 hours of professional work performed by Levin into two categories: (1) the number of hours that were spent by Levin doing work related to the class action, and (2) the number of hours that were spent by Levin doing work related the MDL 1203. His report states that Levin performed 870.5 of the 955.5 hours on class action work and the remaining 8 5 hours on MDL-related work.

         We have previously noted that two funds exist for the purpose of paying attorneys' fees: (1) the consolidated Fund A Escrow Account to pay attorneys in connection with Fund A and Fund B benefits related to the class action, and (2) the MDL 12 03 Fee and Cost Account to pay for attorneys' fees and costs associated with the work of the Plaintiffs' Management Committee ("PMC"), PLC, and attorneys authorized by those two groups to work on behalf of the plaintiffs in the MDL 1203 or coordinated state proceedings. See In re Diet Drugs Prods. Liab. Litig., 2010 WL 3292787, at *2 (E.D. Pa. Aug. 19, 2010). The consolidated Fund A Escrow Account was created with an initial payment by Wyeth. As of January 31, 2014 the consolidated Fund A Escrow Account had a total balance of $1, 790.92. On June 17, 2014 this court authorized the termination of the consolidated Fund A Escrow Account and directed the Escrow Agent for that account to pay the funds therein to the Trust. See In re Diet Drugs Prods. Liab. Litig., 2014 WL 2767182, at *8 (E.D. Pa. June 17, 2014).

         Following the termination of the consolidated Fund A Escrow Account, the court approved on June 18, 2014 the "Stipulation between Wyeth and Class Counsel with Regard to the Funding of Future Awards of Class-Related Fees" in PTO No. 9297. This PTO ordered Wyeth to provide funding for payments of up to $4 million of class counsel fees in connection with class action work. As of June 29, 2017, $2, 930, 125 has been paid by Wyeth and $1, 069, 875 remains available to fund the payment of attorneys' fees for class action related work.

         The MDL 1203 Fee and Cost Account contains assessments of a percentage of any recoveries by plaintiffs whose actions are transferred to the MDL 12 03 action and of recoveries by plaintiffs in the coordinated state proceedings. As of December 22, 2016 the MDL 1203 Fee and Cost Account had a balance of $2, 629, 545.92. This balance represents the addition of $96, 204 in new assessments deposited into the account and the dispersal of $1, 862, 750 in claim payments made during 2016.[1]

         II.

         Although there have been no objections to this petition, we must conduct a "thorough judicial review" of the requested fee award as "required in all class action settlements." In re Gen. Motors Corp. Pick-Up Truck Fuel Tank Prods. Liab. Litig., 55 F.3d 768, 819 (3d Cir. 1995). We have previously noted the standard of review that our Court of Appeals requires a district court to employ, which includes consideration of the following ten factors:

(1) the size of the fund created and the number of beneficiaries, (2) the presence or absence of substantial objections by members of the class to the settlement terms and/or fees requested by counsel, (3) the skill and efficiency of the attorneys involved, (4) the complexity and duration of the litigation, (5) the risk of nonpayment, (6) the amount of time devoted to the case by plaintiffs' counsel, (7) the awards in similar cases, (8) the value of benefits attributable to the efforts of class counsel relative to the efforts of other groups, such as government agencies conducting investigations, (9) the percentage fee that would have been negotiated had the case been subject to a private contingent fee arrangement at the time counsel was retained, and (10) any innovative terms of settlement.

See, e.g., In re Diet Drugs Prods. Liab. Litig., 2013 WL 3326480, at *3 (E.D. Pa. June 28, 2013) (citing Gunter v. Ridgewood Energy Corp., 223 F.3d 190, 195 (3d Cir. 2000)). We do not apply these factors in a "formulaic way" and recognize that one factor may outweigh others. Id. Our Court of Appeals has emphasized that "what is important is that the district court evaluate what class counsel actually did and how it benefitted the class." In re AT&T Corp. Sec. Litig., 455 F.3d 160, 165-66 (3d Cir. 2006) .

         A. SIZE OF FUND CREATED AND NUMBER OF PERSONS BENEFITTED

         We have previously noted the size of the Class Action Settlement Fund to be approximately $6.44 billion. In re Diet Drugs Prods. Liab. Litig., 553 F.Supp.2d 442, 472 (E.D. Pa. 2008). During 2016, Class Members received benefits totaling $8, 353, 167 pursuant to the terms of the Settlement Agreement.

         This total includes the following awards:

• seventeen Class Members received Matrix payments totaling $5, 854, 869; and
• the Settlement Fund has paid a total of $2, 498, 298 to administer the terms of the Settlement Agreement to provide settlement benefits to Class Members.

         We have previously recognized the "immense size of the Fund created and the thousands of people" who have benefitted since this court first approved the Settlement Agreement on August 28, 2000. Diet Drugs, 2010 WL 3292787, at *9. This factor weighs in favor of granting Levin a fee award for its class action work.

         B. PRESENCE OR ABSENCE OF SUBSTANTIAL OBJECTIONS

         We must next consider the "presence or absence of substantial objections by members of the class to the settlement terms and/or fees requested by counsel." Gunter, 223 F.3d at 195 n.l. Less than thirty objections were filed in response to the 2007 petition for fees and costs. Diet Drugs, 553 F.Supp.2d at 473. All of these objections were overruled by this court. Id. Several of our orders were appealed to the Court of Appeals for the Third Circuit and affirmed, while other appeals were discontinued with prejudice. In re Diet Drugs Prods. Liab. Litig., 93 F.App'x 338 (3d Cir. 2004); In re Diet Drugs Prods. Liab. Litig., 385 F.3d 386 (3d Cir. 2004); In re Diet Drugs Prods. Liab. Litig., 226 F.R.D. 498 (E.D. Pa. ...


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