Vioxx Deal And Legal Ethics: Are They Compatible?
2 CommentsBy Ed Silverman // November 16th, 2007 // 8:03 am
You may recall we wrote about this last week when Merck announced its $4.85 billion deal with plaintiff’s lawyers. A key weakness pointed out by many legal experts, including Ben Zipursky of Fordham University’s Law School, is an unusual provision that requires an attorney to recommend the deal to all clients if one clients takes the deal. And if a client passes, then the lawyer must attempt to end representation.
The provision improperly “stacks the choice for the client,” Deborah Rhode, an ethics professor at Stanford Law School, tells The Wall Street Journal, which revisits the issue this morning. “If the price of exercising what should be their right to reject the settlement means they have to forfeit their representation from the lawyer actually familiar with the case, it’s not exactly an uncoerced choice.”
Howard Erichson of Seton Hall University’s Law School wrote on Mass Torts Blog several days ago that the provision is “troubling,” and may cause attorneys to violate American Bar Association rules governing professional conduct. “In a mass settlement, lawyers ideally should be able to say to their clients: ‘Here’s the settlement we negotiated with the defendant. Here are all the terms and conditions of the deal, and here’s where you fit in. I think it’s a good deal, and I recommend that you accept it. But you’re the client, and it’s your call. And if you decide not to accept the settlement, I’ll be right by your side and continue to represent you.’ ”
As reported, to ensure its liability beyond the $4.85 billion is limited, Merck has negotiated the right to back out if less than 85 percent of eligible claims are enrolled. The requirement that lawyers must cut ties with unwilling clients also helps to limit the number of potentially lucrative cases still percolating in court, and it aims to ensure that lawyers well versed in Vioxx litigation are locked in to the settlement and won’t keep litigating against the company, the paper notes.
Plaintiffs lawyers note that payments in the settlement will vary based on the severity of the injury and the strength of the claim, and that plaintiffs in some of the cases that went to trial had trouble proving that Vioxx - and not a health problem such as diabetes - was responsible for their heart attacks or strokes. Also, attorneys have invested millions of dollars and thousands of hours in their Vioxx cases, and the settlement, if it goes forward, will help ensure that they are paid back, the Journal writes.
Some experts see the provision on lawyer withdrawal as a reasonable part of a global settlement solution. “In mass torts, pure notions of individualized justice are totally unrealistic,” Richard Nagareda, a Vanderbilt University Law School professor, tells the Journal. Companies will be reluctant to offer a huge pool of settlement money if they can’t compel most of the plaintiffs, and their lawyers, to go along with the deal.
Wyeth, for example, in 1999 allotted $3.75 billion for a class-action settlement to resolve litigation over former diet drugs that were linked to heart-valve damage. But Wyeth’s ultimate costs have ballooned to more than $21 billion because some people opted out of the settlement and continued with litigation. That situation loomed in the backdrop of the Vioxx negotiations, say representatives for both sides.
The settlement of a 2005 lawsuit that alleges Purdue Pharma dishonestly marketed OxyContin by failing to disclose the painkiller’s addictive qualities also said plaintiffs lawyers had to agree to take steps to withdraw from representing clients who didn’t want to participate.
Paul Hanly Jr., one of the plaintiffs lawyers in the OxyContin case, says he is in the process of ending his relationship with some clients who have declined to participate in the settlement. “If we truly believe it is in a client’s best interest to settle and a client refuses, there is a perfectly appropriate legal basis to ask a court to be relieved of that representation,” he tells the Journal. A New York attorney who is also handling more than 200 Vioxx cases, Mr. Hanly says he plans to recommend the Vioxx settlement to his clients.
Tim Bannon, a special counsel for Purdue, says that while settlements are confidential, “the obligations of counsel under all of our settlement agreements are expressly conditioned on compliance with applicable ethical rules.” He denies the marketing claims raised in the OxyContin suit.
The lawyer-withdrawal rule was a negotiated point between Merck and the lead plaintiffs lawyers, and it was vetted by ethics professors, according to people involved in the discussions, the Journal reports. Ultimately, Merck included language saying that lawyers should withdraw from representing clients only to the extent allowed by applicable ethical rules. Whether essentially firing a client under these circumstances violates ethics rules is unclear, lawyers say. Withdrawals will be supervised by judges.
There are a number of cases that indicate “clients are entitled to counsel but not necessarily to a particular counsel,” Arnold Levin of Philadelphia, one of the plaintiffs negotiators, tells the paper. Yet, if experienced counsel are unavailable because other lawyers steeped in the case are tied to the settlement, then the client may in effect be losing the right to counsel.
“If it would be difficult for a client to get another lawyer and take a lot of work for that other lawyer to get up to speed on a case, then you can’t just drop and leave the client high and dry unless you have a good justification,” George Cohen, an ethics professor at the University of Virginia School of Law, tells the paper. Adds Kathryn Snapka, a Texas lawyer who is handling about 200 Vioxx cases, “It may be difficult to find a lawyer with the financial capability and background sufficient to handle complex pharmaceutical litigation, which is Merck’s goal.” She’s still studying the settlement.
What lawyers will actually do remains to be seen. Some maintain they will stick with the deal even if it means losing clients. “As they go through the settlement process one by one, it will not be difficult at all to recommend this to 100% of their clients,” Andy Birchfield, who represents thousands of Vioxx plaintiffs and helped craft the final settlement. “If a client chooses not to follow our advice” to accept the settlement,” he tells the Journal, “we will let the client know that we are terminating our representation.”
Mark Lanier, who has more than 1,000 Vioxx cases, plans to follow a similar course of action. “If a client says, ‘Lanier, I don’t want to take the settlement,’ ” he tells the paper, “I’ll say, ‘You need to find another lawyer to represent you.’ ”
But Perry Weitz of Weitz & Luxenberg, a New York firm with about 4,000 Vioxx cases, says he will stick with clients who reasonably oppose the settlement. “My personal representation of each client and the ethical duty I owe to them is my priority,” he wrote in an email to the Journal. “If Merck doesn’t accept that, then I’ll see them at trial!”
gina
would be intresting to discuss this if we could find out if it was upheld
Ed Silverman
Hi Gina,
I can direct you to these developments….
http://www.pharmalot.com/2008/01/vioxx-deal-amended-to-address-ethical-problems/
http://www.pharmalot.com/2008/01/lawyer-files-antitrust-objection-to-vioxx-deal/
Although I confess I don’t know anything further at the moment.
Regards
ed