Blogger: Weitz & Luxenberg got $92.5 ml pot for Seroquel clients

By Alison Frankel
August 17, 2011

AstraZeneca’s approach to the 28,000-case litigation over its antipsychotic Seroquel has been notable for two things. First, the pharma company was incredibly successful in court. It won pre-trial dismissal of hundreds of state and federal suits blaming Seroquel for causing diabetes and more serious injuries and got a defense verdict in the one Seroquel case that made it to trial. Second, AZ has been notoriously secretive about settling the remaining cases. AZ reached private deals with plaintiffs firms that controlled big Seroquel dockets, offering token amounts of money to plaintiffs in exchange for their lawyers agreeing to drop out of the litigation. The company disclosed settlements in blocks, finally announcing in late July that it had reached agreements in principle to resolve all but 250 Seroquel suits for a total of $647 million — a small fraction of what plaintiffs lawyers once hoped they’d get.

The last big holdout on the plaintiffs side of the litigation was Weitz & Luxenberg, an asbestos powerhouse that had one of the biggest Seroquel dockets in the country. Weitz fought harder and sank more resources into Seroquel cases than any other firm; partner Paul Pennock was still insisting the cases would yield big settlements even after he lost the first (and, as it turns out, only) Seroquel trial, a New Jersey state court case that went to a defense verdict in March 2010.

Weitz apparently capitulated earlier this summer, agreeing to settle its 2,300 remaining cases. And last week, the Seroquel Lawsuit blog posted what purports to be the letter Weitz & Luxenberg sent to its Seroquel clients, announcing the group settlement and explaining the allocation process. According to the letter, AZ offered Weitz & Luxenberg a $92.25 million pot to divide amongst its clients. Clients were given three options: they could sign up for a quick $12,000 payment; they could present the facts of their case to a special master for an individualized payment that could be less than $12,000; or they could reject the offer and endanger the entire settlement, which depends on the participation of 98 percent of Weitz & Luxenberg’s clients.

“We strongly believe [the framework] is fair and reasonable and offers each of our clients the best possible outcome under the circumstances of this litigation,” the posted document said. “Based on public reports regarding settlement programs reached with other plaintiff law firms we are confident that the settlement program outlined below has more favorable terms and for this reason we are recommending your participation.”

I should say up front that Paul Pennock of Weitz & Luxenberg told me the posted letter is not a scanned or photocopied version of the letter his firm sent its Seroquel clients. He also said the posted letter “makes characterizations that are completely inaccurate,” though he said he could not address specifics because he is bound by a confidentiality agreement. “[The letter] is not describing what is happening in our resolution,” Pennock said.

I also, however, spoke with the Seroquel Lawsuit blogger, who insisted on anonymity. He is not a Weitz & Luxenberg client, he said, but received the purported W&L letter from a Weitz client who e-mailed the blogger that he was “disgusted” with the settlement offer.

The blogger told me he developed diabetes and experienced other side effects after he was prescribed Seroquel for “situational depression.” He has been urging Seroquel plaintiffs to reject settlement offers and push ahead with litigation against AstraZeneca because he believes plaintiffs lawyers haven’t adequately represented victims’ interests. “Who are they working for? They’re not working for their clients. That’s a miscarriage of justice,” he said. In his own case, he told me, he signed a retainer agreement with a firm that advertised for Seroquel clients, but then turned those clients’ files over to another firm that handled the litigation. He said he has struggled to obtain information from the second firm, which hasn’t responded to his questions about his own case. “That’s a bad model,” he said. “It encourages this kind of stuff.”

AstraZeneca, meanwhile, didn’t offer a direct response to my question about the authenticity of the posted letter. Spokesman Tony Jewell sent this e-mail comment: “We cannot comment on the financial terms of the settlement as they are confidential.”

The letter certainly reads like it was drafted by lawyers who’ve spent long years litigating Seroquel claims, to little avail. “As you know, we have engaged in a long legal battle with AstraZeneca over the past 6 years,” it said. “Weitz & Luxenberg led the charge for the plaintiffs around the country. AstraZeneca put up a tremendous and expensive defense and they successfully were able to get a large number of cases to be permanently dismissed by the court. Weitz & Luxenberg is the only firm who took a case to trial anywhere in the country As a direct result of the endless and consistent pressure applied by the attorneys at Weitz & Luxenberg, we are happy to report that AstraZeneca has now agreed to participate in a favorable settlement program.”

After detailing the two possible tracks for claimants — fast track to $12,000 and individualized special master track in which payouts will depend on the number of claimants — the letter notes that Weitz will be collecting attorneys fees on the settlements. “The terms of your signed contingency fee agreement will be in effect,” it said.

In a separate post Tuesday, the Seroquel Lawsuit blogger added commentary deriding the letter, Weitz & Luxenberg, and the “secret backroom dealings” in which the firm’s lawyers “were selling our clients down the river.”

“REJECT AstraZeneca’s disgraceful Seroquel settlement offer-demand justice, fairness, and accountability,” the blogger wrote.

Pennock of Weitz & Luxenberg said in response that it’s “a shame. Someone who isn’t even a client is trying to derail something that’s going to make a real difference in people’s lives. I don’t think that’s right.”

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