Healthy Skepticism Library item: 9264

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Publication type: news

Swiatek J.
Ruling to Benefit Plaintiffs in Zyprexa Suits
The Indianapolis Star 2007 Apr 7
http://www.redorbit.com/news/health/462914/ruling_to_benefit_plaintiffs_in_zyprexa_suits/index.html

Full text:

A judge has scaled back the fees that plaintiffs’ attorneys proposed for themselves in Eli Lilly and Co.‘s $700 million Zyprexa settlement.

The ruling means millions of dollars more in settlement cash will end up in the pockets of 8,000 patients who filed claims with Lilly, rather than in the bank accounts of their lawyers.

Even so, the settlement still will be a bonanza for plaintiffs’ attorneys, whose collective fees in the huge settlement stand to top $100 million.

Federal Judge Jack B. Weinstein, who is presiding over Lilly’s privately arranged deal with trial lawyers in his Brooklyn, N.Y., court, has capped legal fees at 35 percent for all variable awards to claimants, slightly lower than the proposed 37.5 percent cap.

Weinstein gave four “special masters” who are overseeing the payouts the power to reduce fees even further, to as low as 30 percent, or to increase them to 37.5 percent, “on the basis of individual circumstances.”

The settlement also will pay a flat rate of $5,000 to claimants whose damages are the least serious and easily assessed. For those non-negotiated payouts, the judge capped the legal fee at 20 percent.

The Indianapolis drug maker negotiated the settlement last year as a way of compensating, in one fell swoop, thousands of patients who say they suffered diabetes-related ill effects, such as weight gain and high blood-sugar levels, from using the company’s best-selling drug Zyprexa, which treats schizophrenia and manic depression. Many of the claimants sued Lilly, and others had retained attorneys with the intent of suing.

Payouts should start to be mailed around June, said Nancy Hersh, a San Francisco attorney whose firm represents hundreds of claimants. Lilly made the deal contingent on at least 90 percent of the 8,000 plaintiffs accepting it.

“I’m certain . . . the threshold has been met,” Hersh said. “That’s very good news to all the people who have been waiting patiently to be compensated.”

By the time all the claims are paid, attorneys’ fees easily could top $100 million. Weinstein acknowledged his ruling will result in “substantial” fees being paid to “only a handful” of law firms that represent the bulk of the claimants.

Weinstein said it’s important for the court to set fees because “many of the individual plaintiffs are both mentally and physically ill and are largely without power or knowledge to negotiate fair fees.”