Attorneys have proposed a new claims processing facility with its own $1.275 billion fund to resolve the most contentious claims facing the potentially insolvent American Home Products Corp. (AHP) Settlement Trust on a pro rata basis.
A proposed Seventh Amendment to the AHP National Settlement, negotiated by attorneys for the AHP settlement class and claimants against the settlement, would absorb matrix level I and II claims not yet processed by the trust. The claims are for the less serious injury categories and the ones Wyeth and the trust allege are most frequently subject to abuse. The claims would be processed by an "Alternate Facility" headed by a claims administrator, reviewed by board-certified cardiologists employed by the Alternate Facility and separated 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 42,200 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. An attorney familiar with the process told Mealey Publications that claim could have been worth $400,000 under the existing matrix.
A source told Mealey Publications that approximately 150 law firms have signed the proposed amendment. If "sufficient support" emerges for the amendment, the trust would suspend processing of level I and II claims and elements of its operations programs aimed at those claims, such as the Claims Integrity Program.
Class members will have 60 days to object to the Seventh Amendment at an approval hearing or opt out of the Seventh Amendment and proceed through the existing settlement. Opt outs would give up the fight to guaranteed payments for progression, including level III surgery benefits or benefits for more serious levels of disease.
Wyeth, successor to AHP, would also 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 and not solicit representation of claimants who have opted out or objected to it.
The proposed amendment requires Fleming & Associates of Houston to withdraw 10 appeals before the Third Circuit U.S. Court of Appeals, but not an appeal regarding the evidentiary rights of opt-out plaintiffs.
04/30/04
