In re Actos (Pioglitazone) Prods. Liab. Litig.

• Citation: 274 F.Supp.3d 485
• Decision Date: 17 July 2017
• Docket Number: MDL No. 6:11–md–2299
• Parties: IN RE ACTOS (PIOGLITAZONE) PRODUCTS LIABILITY LITIGATION This Document Applies to: All Cases
• Court: U.S. District Court — Western District of Louisiana

274 F.Supp.3d 485

IN RE ACTOS (PIOGLITAZONE) PRODUCTS LIABILITY LITIGATION This Document Applies to: All Cases

MDL No. 6:11–md–2299

United States District Court, W.D. Louisiana.

Signed July 17, 2017

HONORABLE REBECCA F. DOHERTY, UNITED STATES DISTRICT JUDGE

CONTENTS

I. FACTUAL AND PROCEDURAL BACKGROUND ...488

A. Prior to Establishment of MDL 2299...488

B. Establishment of MDL 2299...489

C. State Court Proceedings...492

D. Procedural History Prior to Bellwether Trial...493

E. Discovery, Preparation for the Bellwether Trial, Allen v. Takeda ...495

F. The Master Settlement Agreement...502

G. Implementation of the Settlement...507

H. The Initial Hold–Back on Settlement Payments...510

I. Nationwide Settlements...511

J. Additional Comments on Common Benefit Efforts...511

II. COMMON BENEFIT FEE AND EXPENSE REVIEW PROCESS ...513

III. METHODOLOGY FOR CALCULATING AGGREGATE FEE AWARD ...517

A. Distinction between Reasonable Hourly Rates in Multidistrict Litigations and Class Actions...517

B. Calculating the Aggregate Fee Award...522

IV. REASONABLENESS ANALYSIS ...524

A. Valuation of the Benefit Obtained...524

B. Benchmark Percentage...524

C. Johnson Factors...526

1. Novelty and Difficulty of the Issues (Factor 2); The Skill Required to Perform the Legal Service Adequately (Factor 3); and The Experience, Reputation, and Ability of the Attorneys (Factor 9)...528

2. Time and Labor Required (Factor 1); Preclusion of Other Employment (Factor 4); Time Limitations Imposed by the Client or the Circumstances (Factor 7)...528

3. The Amount Involved and the Results Obtained (Factor 8)...530

4. Nature and Length of the Professional Relationship with the Client (Factor 11)...531

5. The Customary Fee for Similar Work in the Community (Factor 5), Whether the Fee is Fixed or Contingent (Factor 6), Awards in Similar Cases (Factor 12)...531

6. The Undesirability of the Case (Factor 10)...532

7. Conclusion: Johnson Factors...533

V. ALLOCATION OF COMMON BENEFIT FEES AND EXPENSES ...533

VI. CONCLUSION ...549

MEMORANDUM RULING

(Common Benefit Fees and Allocation)

Early in this MDL, and with the input of the plaintiffs' counsel and the Special Masters, this Court established a system to maintain ongoing records of all common benefit time and expense—i.e. , time and expense incurred for the benefit of all plaintiffs, rather than any individual plaintiff alone.¹ According to that protocol, only certain kinds of time and expense would be allowed to be incurred for the common benefit, and any attorney who wished to perform common benefit work was required to submit a request to do so to the Plaintiffs' Steering Committee, which, along with the Court, was vested with the authority to approve or deny such requests with the instruction of the Court that all otherwise qualified attorneys who desired to perform common benefit work be allowed to do so. Furthermore, any approved common benefit time or expense that was incurred, also, would be submitted to Deputy Special Master DeJean, who was tasked with reviewing all such submissions on an ongoing basis, and either approving them, rejecting them, or returning them to the submitter for clarification or to address any deficiencies in the submission. A Master Settlement Agreement ("MSA")² was executed on April 28, 2015, and provided, in part, that participating claimants and their counsel agreed to submit a portion of each of their recoveries to compensate the common benefit expense and fees incurred, respectively.³ On September 1, 2015, the Court entered a preliminary order setting aside a percentage of all recovery in anticipation of a final order establishing a common benefit fund and distribution.⁴ Thereafter, by Order dated August 7, 2015,⁵ this Court instructed Deputy Special Master DeJean to gather information relevant to this Court's decision of how best to allocate the common benefit fees generated as a result of the MSA and the Assessment Order, among Participating Counsel and the PSC,⁶ and to provide that information to the Court. Subsequently, on September 1, 2015, this Court issued a "Case Management Order: Holdback Order" [Rec. Doc. 5850], ordering that funds be withheld from settlement payments in order to compensate common benefit attorneys' fees and expenses and/or costs, should a common benefit fund prove necessary. For the reasons given below, this Court (1) finds that a common benefit fund is necessary, (2) finalizes the amounts provided in the Holdback Order and "Case Management Order: Assessment of Common Benefit Fees and Expenses and/or Costs" [Rec. Doc. 6238], and (3) determines the amounts that will be allocated among participating firms and attorneys. In order to comply with this Court's Order to provide it with the information necessary to make informed allocation decisions, Deputy Special Master DeJean has submitted a Report and Recommendation, which is attached to this Ruling (Attachment A). For the reasons that follow, this Court adopts and incorporates herein Deputy Special Master DeJean's Report and Recommendation, and issues the following ruling on common benefit fees, their necessity, and their allocation, as well as common benefit expenses.

I. FACTUAL AND PROCEDURAL BACKGROUND

A. Prior to Establishment of MDL 2299

This multidistrict litigation concerns Pioglitazone (marketed in several formulations and under several brand names, but known by the commercial name and referred to herein as Actos®), which was approved for sale in the United States in 1999.⁷ Actos® was developed and produced by Takeda Pharmaceutical Company Ltd. (a Japanese company with several subsidiaries in the United States, which, here, will be referred to collectively as "Takeda") and was marketed in the United States for a portion of time by Eli Lilly and Company ("Eli Lilly"); Actos® was available in the United States as early as 1999.⁸ The plaintiffs allege that in June, 2011, regulators in Europe, Canada, and the U.S. took action to warn the public that Actos ® might increase the risk of bladder cancer in humans.⁹ According to the first Motion to Transfer filed with the Judicial Panel on Multidistrict Litigation ("JPML"), as of August 31, 2011, there were at least eleven (11) actions pending in eight (8) district courts alleging injury from usage of Actos ® and seeking recovery from Takeda and Eli Lilly.¹⁰

Shortly after certain governmental warnings were issued, attorneys who would eventually become Lead Counsel, members of the Plaintiffs' Steering Committee ("PSC"), and other Participating Counsel¹¹ began to file actions and to coordinate with one another, not only for the protection of their own individual clients, but with an eye towards the advancement and protection of the common and collective interests of others who were likely to become litigants at some point in the future.

Attorneys, many of whom ultimately became members of the PSC, performed extensive legal and factual research in an effort to evaluate potential MDL locations and to prepare to litigate these matters. Counsel, also, poured a great deal of effort, time, and expertise into the extensive and challenging organization required to mount a complex and large, collective of cases, including case and leadership strategy, identification of potential experts, researching case-related science, and documenting potential injuries allegedly associated with the use of Actos ®. A group of litigation leaders ultimately stepped forward and made multiple presentations throughout the country to educate and inform other already involved attorneys about Actos ® and their theory of causation. As the cases were filed and were being brought to the attention of the JPML, these case leaders engaged in extensive coordination and communication with involved attorneys throughout the country. Thus, the organization and administration skill of the leadership proved of exceptional value to the litigation.

In the meantime, these attorneys, also, had begun the daunting task of learning the complex and extensive science underlying these claims and finding and hiring experts in the scientific, regulatory, and clinical arenas to educate, inform, and in some instances possibly testify on behalf of all plaintiffs. As described below, developing an understanding of the complex scientific aspect of the plaintiffs' theory of the cases required an intensive investment of time, expertise, and effort, on the part of counsel, especially given the very short time frame this MDL followed. Due to the heavy reliance on sophisticated scientific knowledge required to move this litigation forward, those attorneys and firms, who provided the requisite expertise in the sciences, came to provide exceptional value to the PSC.

B. Establishment of MDL 2299

Once lawsuits began being filed throughout the country, a number of plaintiffs, through their counsel, together with the defendants, through their counsel, moved to have the JPML consolidate the Actos ®-related lawsuits into an MDL; the JPML consolidated the Actos ® cases and selected the Western District of Louisiana, Lafayette Division, and Judge Rebecca F. Doherty, to handle all pre-trial matters. The order establishing MDL 2299 ("In Re: Actos® (Pioglitazone) Products Liability Litigation") was issued by the JPML on December 29, 2011.¹² Just over two years later—on January 27, 2014—jury selection began in the first, and what ultimately would become the only, bellwether trial conducted in these proceedings. The intervening two years were an incredibly active time for involved counsel and the Court.

On April 11, 2012, this Court appointed a Special Master and two Deputy Special Masters to assist in managing these proceedings, each with his or her specific responsibilities, all designed to avoid any unnecessary overlap of effort or duties.

Special Master Gary Russo was appointed with overall responsibility over case management in the MDL; Deputy Special Master Kenneth DeJean was appointed to manage and oversee matters related to the PSC, especially to oversee the...