In re Lupron Marketing and Sales Practices Lit., MDL 1430.
| Decision Date | 24 November 2004 |
| Docket Number | Master File No. 01-CV-10861-RGS.,No. MDL 1430.,MDL 1430. |
| Citation | 345 F.Supp.2d 135 |
| Parties | In re: LUPRON® MARKETING AND SALES PRACTICES LITIGATION |
| Court | U.S. District Court — District of Massachusetts |
Stephen D. Annand, Cohen, Milstein, Hausfeld & Toll, Washington, DC, for William M. Porter, Plaintiff.
Anita B. Bapooji, Testa, Hurwitz & Thibeault, LLP, Boston, MA, for TAP Pharmaceutical Products, Inc., Defendant.
Deborah S. Birnbach, Testa, Hurwitz & Thibeault, LLP, Boston, MA, for TAP Pharmaceutical Products, Inc., Defendant.
Richard W. Cohen, Lowey Dannenberg Bemporad & Slelinger, P.C., White Plains, NY, for Cobalt Corp., Plaintiff.
Laura D. Cullison, Winston & Strawn, Chicago, IL, for Abbott Laboratories, Defendant.
Daniel A. Curto, McDermott, Will & Emery LLP, Boston, MA, for Abbott Laboratories, Defendant.
James R. Daly, Jones, Day, Chicago, IL, for TAP Pharmaceutical Products, Inc., Defendant.
Michael J. Flannery, The David Danis Law Firm, P.C., St. Louis, MO, for William M. Porter, Plaintiff.
Monica Meier Franceschini, Testa, Hurwitz & Thibeault, LLP, Boston, MA, for TAP Pharmaceutical Products, Inc., Defendant.
Donald R. Frederico, McDermott, Will & Emery, Boston, MA, for Abbott Laboratories, Defendant.
Marlene F. Gibbons, Cohen Milstein Hasufeld & Toll, Washington, DC, for William M. Porter, Plaintiff.
Michael D. Hausfeld, Cohen, Milstein, Hausfeld & Toll, Washington, DC, for William M. Porter, Plaintiff.
Donald E. Haviland, Kline & Specter, Philadelphia, PA, for Milton Greene, Valerie Samsell, Intervenor Plaintiffs.
Joseph D. Jackson, Jr., Baxley, Dillard, Dauphin, McKnight & Barclift, Birmingham, AL, for Liberty National Life Ins. Co., United American Ins. Co., Plaintiffs.
Jeffrey L. Kodroff, Spector & Roseman, Philadelphia, PA, for William M. Porter, Plaintiff.
George Lombardi, Winston & Strawn, Chicago, IL, for Abbott Laboratories, Defendant.
Lisa M. Mezzetti, Cohen, Milstein, Hausfeld & Toll, Washington, DC, for William M. Porter, Plaintiff.
Martin F. Murphy, Bingham McCutchen LLP, Boston, MA, for Takeda Chemical Industries, Defendant.
Ronald J. Ranta, Beverly, MA, for Milton Greene, Valerie Samsell, Intervenor Plaintiffs.
Rheba Rutkowski, Bingham McCutchen LLP, Boston, MA, for Takeda Chemical Industries, Defendant.
Joseph F. Savage, Jr., Testa, Hurwitz & Thibeault, LLP, Boston, MA, for TAP Pharmaceutical Products, Inc., Abbott Laboratories, Takeda Chemical Industries, Defendants.
Todd A. Seaver, Berman DeValerio Pease Tabacco Burt & Pucillo, Boston, MA, for Cobalt Corp., Plaintiff.
Thomas G. Shapiro, Shapiro Haber & Urmy LLP, Boston, MA, for William M. Porter, Plaintiff.
Eric W. Snapp, Winston & Strawn, LLP, Chicago, IL, for Abbott Laboratories, Defendant.
Thomas M. Sobol, Hagens Berman LLP, Boston, MA, for William M. Porter, Plaintiff.
Donna F. Solen, Cohen, Milstein, Hausfeld & Toll, Washington, DC, for William M. Porter, Plaintiff.
Fiona S. Trevelyan, Bingham McCutchen LLP, Boston, MA, for Takeda Chemical Industries, Defendant.
Matthew A. Wolfman, Testa, Hurwitz & Thibeault, LLP, Boston, MA, for TAP Pharmaceutical Products, Inc., Defendant.
ORDER GRANTING PRELIMINARY APPROVAL OF SETTLEMENT, CERTIFYING CLASS FOR PURPOSES OF SETTLEMENT, DIRECTING NOTICE TO THE CLASS AND SCHEDULING FAIRNESS HEARING
This litigation was instituted by a consortium of patients, health care plans, and insurers seeking damages arising from an alleged scheme orchestrated by TAP Pharmaceutical Products, Inc. (TAP) to artificially inflate the price to consumers of the drug Lupron®.1 The plaintiffs' Consolidated Class Action Complaint is grounded on the civil provisions of the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § 1962.2 Plaintiffs also assert claims under state consumer protection statutes.3
This matter is now before the court pursuant to a Joint Motion for Preliminary Approval of Proposed Settlement, Certification of Class for Purposes of Settlement, and Approval of Form and Manner of Notice (the "Motion"). As I indicated would be likely at the conclusion of yesterday's hearing, I am allowing the Motion. I am also adopting the MDL parties' proposed Order.4 I add this brief introduction to explain my reasons for doing so.
As the Manual for Complex Litigation Fourth (2004) notes, the certification of a settlement class can provide significant benefits to class members while enabling defendants to achieve an expedited and final resolution of multiple suits. At the same time, the nature of the settlement certification process can "sometimes make meaningful judicial review more difficult and more important." Id. at § 21.612. As the Manual observes, a case settled prematurely, without sufficient discovery or testing in an adversarial context, may be next to impossible to assess in terms of the strengths and weaknesses of the parties' claims and defenses, the appropriate definition of the class, and the adequacy of the proposed settlement.
A preliminary approval of a class settlement is a significant litigation event. As Judge Becker observes, "when the court finds that: (1) the negotiations occurred at arm's length; (2) there was sufficient discovery; (3) the proponents of the settlement are experienced in similar litigation; and (4) only a small fraction of the class objected," a presumption of fairness attaches to the court's determination. In re Gen. Motors Corp. Pick-Up Truck Fuel Tanks Products Liab. Litig., 55 F.3d 768, 785 (3d Cir.1995).
I am satisfied that the negotiations in this case have been conducted at arm's length and that the proposed settlement is free of any hint of collusion. Counsel involved on both sides of the MDL proceeding are honorable litigators devoted to the interests of their clients. The case has been vigorously contested from its inception, as evidenced by the number of decisions that have emanated from this court and the Court of Appeals addressing disputes over jurisdiction, discovery, and substantive law. Discovery has proceeded for three years and has involved at least two score depositions and the production and analysis of hundreds of thousands of pages of documents. Counsel are among the most experienced lawyers the national bar has to offer in the prosecution and defense of significant class actions.
Two groups of actual or potential class members have voted on the adequacy of the settlement, the Settling Health Plans and the Third Party Payers. These represent the vast majority of affected plaintiffs among their type. They are sophisticated entities who were separately represented by experienced counsel during the settlement negotiations. They have come to the collective conclusion that the settlement adequately compensates their own damages. What cannot be predicted with absolute certainty is the adequacy of the amount allocated for the compensation of individual purchasers of Lupron® (the consumer class). I see no practical way to ascertain the fairness of the proposed settlement to the consumer class other than by proceeding with conditional class certification and giving notice with the opportunity for its members to opt in or out of the settlement.
The proposed settlement has not, from the court's vantage point, materialized out of thin air. Shortly after the parties achieved the agreement in principle reflected in the October 11, 2004 Memorandum of Understanding, a copy was provided to the court. The court has since been regularly apprised of the progress of the negotiations.
As the attorneys for the Intervenors properly caution,5 the court owes absent class members, principally the members of the consumer class, a fiduciary responsibility to insure that their interests are adequately protected. For purposes of conditional certification, I am satisfied that with respect to the absent class members, the proposed settlement amount is sufficiently within the range of reasonableness. In this regard, I have considered the expert declaration of Raymond Hartman and the consensus of the TTP and SHP plaintiffs that the settlement amount (at least as to them) is adequate. I have further considered the fact that many of the members of the consumer class are ill and/or elderly and therefore have an interest in seeing the litigation concluded sooner rather than later. And finally, I have considered the candid assessment offered by the attorneys for the Intervenors that if the case were to be taken to trial, while there is a prospect of winning a larger award, there is also a 50 percent likelihood that the case will be lost in its entirety.
I stress that the certification is a conditional one. If the expectation that the proposed settlement is fair insofar as the consumer class is concerned proves unfounded, it is open to the court, after the scheduled fairness hearing, to reject it, or to impose conditions. As the Eight Circuit Court of Appeals observed in Liles v. Del Campo, 350 F.3d 742, 746 (8th Cir.2003), a preliminary approval of a settlement and a conditional certification of a settlement class does not dispose of the litigation as significant hurdles must be met and cleared if a final settlement is to be approved.
The terms of the Class Agreement dated November 15, 2004, including all attached Exhibits, are preliminary approved, subject to the court's further consideration at the Fairness Hearing. This Order incorporates the Class Agreement.6
I find that the Class Agreement between the plaintiffs and defendants was entered into at arm's-length by experienced counsel for the parties to the Class Agreement and only after extensive arm's-length negotiation with counsel for certain Third Party Payors who have executed a separate settlement agreement with defendants (the "SHP Group"). The court finds that the settlement embodied in the Class Agreement (the "Settlement") is sufficiently within the range of reasonableness so that notice of the Settlement should be given as subsequently set out...
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