In Re Namenda Direct Purchaser Antitrust Litigation

Background

The case was a direct-purchaser antitrust class action involving allegations that the defendants abused the generic-drug approval process under the Hatch-Waxman Act. The court had preliminarily approved a $750 million settlement between the class and Forest. The case settled on October 28, 2019, shortly before trial.

Class counsel initially sought 27.5% of the common settlement fund, then reduced the request to 21%, or $157.5 million. Counsel also sought reimbursement of $5,823,928.91 in expenses and incentive awards of $150,000 for each of the two representative plaintiffs. A common fund is money created by a settlement for distribution to class members and related payments.

The National Wholesalers objected to the requested attorney-fee amount and sought additional proceedings concerning counsel’s time records and expert evidence. They did not object to the settlement, the expense request, or the incentive awards. The objection was later withdrawn after an agreement under which the National Wholesalers supported the 21% fee request.

Court’s Analysis

The court granted the request for expenses because there had been no objection and the expenses were itemized. It found that $5,823,928.91 in costs and expenses was reasonable and necessary to the result.

The court reduced the requested incentive awards to $75,000 for each representative plaintiff. Although the requested $150,000 awards had not been opposed and similar awards had been made in other cases, the court found that the representatives’ contributions were minimal because each mainly sat for a deposition.

The court rejected the requested $157.5 million attorney-fee award as neither fair nor reasonable. Counsel’s stated lodestar—the value of the recorded attorney hours at the billed hourly rates—was $34,769,008.35. The court criticized counsel for initially submitting only general affidavits rather than detailed contemporaneous time records. After reviewing the records in private, the court found repeated duplicative, triplicative, and quadruplicative work by lawyers from multiple firms, as well as inefficient discovery litigation and block billing.

The court also concluded that the legal issues were complex but largely familiar to counsel, who had repeatedly litigated similar “pay-for-delay” cases. Rather than reduce individual hours, the court left the lodestar unchanged and applied a multiplier of two. A multiplier increases or decreases a lodestar-based fee to account for factors such as the result and litigation risk.

Ruling

The court granted the motion for fees, expenses, and incentive awards in part. It awarded class counsel $69,538,016.70 in attorney’s fees from the common settlement fund, reimbursed $5,823,928.91 in expenses, and awarded $75,000 to each class representative. The clerk was directed to close the motion at Docket Number 925.