Shrager, Spivey & Sachs

Partner Spivey Key to New Settlement of Opt-Out Diet Drug Cases with Wyeth

The Claims Facilitating Committee – CFC – announced that lawyers representing nearly half of all claimants who have pending lawsuits against Wyeth related to the ingestion of diet drugs have agreed to recommend that their clients participate in the settlement process negotiated between Wyeth and the CFC. The settlement process was presented to the federal judge overseeing all class members in the diet drug litigation, and the process is designed to facilitate the resolution of lawsuits filed against Wyeth.

“It is simply amazing that within less than 30 days, well of 100 law firms who represent thousands of diet drug claimants have committed to recommend this settlement process to their clients. The response has been overwhelming. Moreover, lawyers representing thousands of claimants who haven’t yet committed are seriously considering the deal,” said Jerry Alexander, a member of the CFC.

The proposed settlement would pay substantial amounts to claimants who have evidence of heart valve leakage based on their age at the time of diagnosis and the extent of valvular leakage. More serious cases involving heart valve surgery and primary pulmonary hypertension would be separately negotiated with Wyeth in an effort to fairly resolve such claims.

“Settlements under this process would end years of litigation between diet drug users and Wyeth. Attorneys representing as few as one client and as many as thousands have agreed to recommend this deal, which illustrates its fairness,” said Ellen Presby, another member of the CFC.

“We have begun the process of working with numerous courts around the country to cancel trial settings in these cases so that we can work with Wyeth to bring these cases to closure,” said Wayne Spivey, a member of the CFC and a partner with Shrager, Spivey & Sachs. “All of the judges whom we have met with have been very supportive of this process.”

Lawyers Ask for Stay of Litigation in Diet Drug Litigation

Wyeth and certain lawyers representing thousands of filed lawsuits have jointly asked the Philadelphia Federal District Court to approve a stay of litigation to allow the parties to move forward with a settlement process that is expected to resolve thousands of lawsuits. The stay which has been requested will only apply to those plaintiffs who wish to participate in the process and can be automatically lifted if the settlement process does not result in a final settlement.

According to the documents which have been filed, Wyeth will negotiate with individual law firms to resolve their cases using one of two models: either an expedited pay option, which requires less documentation and is designed to result in quicker payments; or a methodology using a settlement grid which characterizes medical conditions by age and nature of injury, which allows for payments accordingly. Joining Wyeth in making this motion is Wayne R. Spivey, a partner with Shrager, Spivey & Sachs, who is counsel for several thousand plaintiffs to whom he intends to recommend the settlement.

“The two settlement vehicles which have been negotiated represent a fair resolution to what has been very contentious litigation,” said Attorney Spivey. “Law firms representing thousands of claimants have already indicated a desire to participate and we expect many more will make this election by the deadline. Except for cases which are immediately set for trial, Wyeth has shown little interest in resolving cases using any other procedure.”

“I think this is a reasonable compromise of difficult litigation and will allow thousands of people and Wyeth to avoid the uncertainties of trying to resolve this many lawsuits,” said Kip Pertoff. “I intend to recommend this to all of my clients.” Jim Morris of the Provost & Umphrey law firm in Texas said, “I am pleased that a resolution is occurring that provides fair compensation for all of our clients.”

Wyeth recently committed to contributing an additional $1.275 billion to the original national diet drug settlement separately funding a payment vehicle referred to as the Seventh Amendment. A hearing with respect to the fairness of the Seventh Amendment is scheduled, and it is widely expected that the judge will approve it. Together with the initiation of the settlement process, the Seventh Amendment judgment may be a significant step in bringing the diet drug litigation to a conclusion.

Lawyers Ask for Stay Processing and Payment of Least Serious Diet Drug Claims

In a joint motion, Wyeth, National Class Counsel and counsel for a number of individual class members in the national diet drug settlement – including Shrager, Spivey & Sachs partner Wayne R. Spivey – moved to stay for 60 days the processing and payment of the least serious but most numerous claims – those designated Matrix Level I or II claims. The proposed stay would provide the parties with an opportunity to draft and submit to the court a Seventh Amendment to the settlement agreement that would create a new claims processing structure, funding arrangement and payment schedule for less serious claims. The proposed amendment would require the court’s approval as well as final agreement by Wyeth. If finalized and approved, the proposed Seventh Amendment would include the following key terms:

• The Amendment would create an alternate claims facility to process the least serious claims – designated Matrix Level I or II claims – under the national diet drug settlement. The national settlement is administered by the AHP Settlement Trust, which is a separate legal entity and operates independently of Wyeth.
• Following final approval by Wyeth and the courts, Wyeth would ultimately deposit $1.275 billion into the alternative claims facility, which would be run by a claims administrator approved by the court. All current Matrix Level I and II claimants who pass medical review would receive a pro rata share of this amount, which would vary depending upon the number of claimants, the nature of their claims, their age and other factors.
• Class members would have the right to opt out of the Seventh Amendment and to remain bound by the terms of the existing national settlement. Wyether, however, would have the right to withdraw from the Seventh Amendment if participation by class members is inadequate for other reasons. All class members who participate in the Seventh Amendment would give up any further opt-out rights.

According to Lawrence V. Stein, Senior Vice President and general counsel for Wyeth, “If the Seventh Amendment is finalized and approved by the court, and if there is full participation by class members, the amendment would expedite payments and could provide a degree of certainty for Wyeth regarding the ultimate resolution of Matrix Level I and II claims. More importantly, the Seventh Amendment would increase the likelihood that class members with approved claims will receive compensation within the national settlement.”