The diet drug MDL court yesterday was asked to stay processing of 41,600 matrix level I and II claims in the American Home Products Corp. (AHP) diet drug settlement pending consideration of a new $1.275 billion settlement plan for those claims, details of which were first made public in an April 30 Mealey Publications e-mail bulletin.
"All agree that the present state of affairs is entirely unsatisfactory," Wyeth, attorneys representing the AHP National Settlement class and attorneys claiming to represent nearly three-quarters of the outstanding matrix level I and II claims against the settlement say in their May 4 joint motion. "Something should be done - soon - to resolve the many disputes that have already arisen and are pending before this Court, and the many more that can be foreseen, concerning the vast numbers of Matrix claims and the Trust's ability to process them."
The parties seek a 60-day stay of level I and II processing while they negotiate a proposed Seventh Amendment to the Settlement Agreement that would create a new fund and claims processing apparatus to resolve the most contentious claims facing the potentially insolvent AHP Settlement Trust.
The proposed Seventh Amendment, a copy of which is attached to the motion, would absorb level I and II claims not yet processed by the trust and create a new liaison committee consisting of a member of class counsel and five other attorneys and an "Alternate Facility" headed by a claims administrator. Board-certified cardiologists employed by the alternate facility would review claims and separate them into high-threshold and low-threshold claims based on medical criteria.
Payment would be prorated based on the number of class members who participate and qualify for payment, the claimant's injury level, duration of drug use and age at the time of diagnosis, according to the proposed amendment. It describes a hypothetical situation in which 90 percent of the claims before the trust assert injuries in the low threshold, with 45 percent of those claims passing medical review. A 50- to 54-year-old claimant in that scenario would receive $68,000. A high-threshold claim would be paid at approximately three times that rate.
The proposal recognizes that approval of the amendment will require notice to all relevant class members, a hearing and a right to opt out and proceed in the claims processing machinery of the Settlement Trust. Level III, IV and V claims - comprising the most serious injuries - will continue to be paid through the Settlement Trust, although according to the motion, Wyeth has made a commitment to fund those claims even if the trust runs out of money before they are paid.
Wyeth, successor to AHP, also would have a walk-away right at its sole discretion.
Law firms signing on to the Seventh Amendment would be required to support it before U.S. Judge Harvey Bartle III of the Eastern District of Pennsylvania, recommend that their clients opt in to it, not solicit representation of claimants who have opted out or objected to it and "take all lawful measures to withdraw from representing" opt-outs.
The proposed amendment requires Fleming & Associates of Houston to withdraw 10 appeals before the Third Circuit U.S. Court of Appeals related to the Sixth Amendment to the settlement, an order for audit of all matrix claims and the denial of a motion to discharge class counsel.
05/05/04