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From Antitrust Law Daily, September 21, 2018

Direct purchaser settlement in Lidoderm case gets final approval

By Thomas G. Wolfe, J.D.

In multi-district antitrust litigation, the federal district court in San Francisco granted final approval to separate settlements, totaling about $166 million, between the "Direct Purchaser Class Plaintiffs" that directly purchased brand or generic Lidoderm and three groups of pharmaceutical defendants: (1) Endo Pharmaceuticals Inc., (2) Teikoku Pharma USA, Inc. and Teikoku Seiyaku Co., Ltd., and (3) Actavis, Inc. (formerly known as Watson Pharmaceuticals, Inc.), Watson Laboratories, Inc., and Actavis plc. In entering a final judgment of dismissal of the claims against the pertinent defendants, subject to the settlements being finalized, the court determined that: the settlements were "fair, reasonable, and adequate;" the proposed Settlement Fund allocation and the proposed awards of attorneys’ fees and reimbursement of expenses to Class Counsel should be approved; and the proposed $100,000 incentive awards should be awarded to each of the Direct Purchaser Class Plaintiffs (In re Lidoderm Antitrust Litigation, September 20, 2018, Orrick, W.).

In keeping with its February 2017 order of class certification, the court defined the Direct Purchaser Class as "[a]ll persons or entities in the United States, including its territories, possessions, and the Commonwealth of Puerto Rico, who purchased brand or generic Lidoderm directly from any of the Defendants at any time during the period August 23, 2012 through May 1, 2014." The settling defendants and their respective officers, directors, management, employees, subsidiaries, or affiliates are excluded from the class. All federal governmental entities are excluded as well.

Order/judgment highlights. In noting that it held a hearing on the fairness, reasonableness, and adequacy of the collective settlement and that no objections have been raised by class members concerning either the settlement or the motion for reimbursement of costs, attorney fees, and incentive awards to the class representatives, the court determined that:

  • the respective settlements with the three groups of pharmaceutical defendants are in the best interests of the Direct Purchaser Class;
  • Class Counsel are awarded attorney fees in the amount of approximately $45 million, which represents 27.5 percent of the $163.64 million settlement, minus litigation expenses, plus 27.5 percent accrued interest on the Settlement Fund;
  • Class Counsel are to be reimbursed for reasonable litigation expenses of approximately $2.36 million incurred in the representing the Direct Purchaser Class;
  • the award of attorney fees and litigation expenses is to be allocated among Class Counsel by Co-Lead Counsel, and will be paid out of the Settlement Fund;
  • the settlements, as well as the court’s order and judgment, do not constitute evidence or an admission by any party that any acts of wrongdoing have been committed, nor do they create an inference that there is any liability;
  • the Class Representatives—American Sales Company, Drogueria Betances, and Rochester Drug—are each awarded $100,000, to be paid out of the Settlement Fund, for representing the Direct Purchaser Class; and
  • the court retains exclusive jurisdiction over the collective settlement.

The case is No. 3:14-md-02521-WHO.

Attorneys: Brian O. O'Mara (Robbins Geller Rudman & Dowd LLP) for United Food and Commercial Workers Local 1776 & Participating Employers Health and Welfare Fund. Lionel Z. Glancy (Glancy Prongay & Murray LLP) for Plumbers & Pipefitters Local 178 Health & Welfare Trust Fund. David S. Elkins (Squire Patton Boggs (US) LLP) for Teikoku Pharma USA. Brigid M. Carpenter (Baker, Donelson, Bearman, Caldwell & Berkowitz, PC) for Endo Pharmaceuticals, Inc. Allen Ruby (Skadden Arps Slate Meagher & Flom, LLP) for Watson Pharmaceuticals, Inc., Actavis PLC, Anda, Inc. and Valmed Pharmaceuticals, Inc.

Companies: Actavis, Inc.; Actavis plc; American Sales Company, LLC; Anda, Inc.; Drogueria Betances, Inc.; Endo Pharmaceuticals, Inc.; Plumbers & Pipefitters Local 178 Health & Welfare Trust Fund; Rochester Drug Co-Operative, Inc.; Teikoku Pharma USA, Inc.; Teikoku Seiyaku Co., Ltd.; United Food and Commercial Workers Local 1776 & Participating Employers Health and Welfare Fund; Valmed Pharmaceuticals, Inc.; Watson Laboratories, Inc.; Watson Pharmaceuticals, Inc.

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