Paxil fairness hearing spills into second day as attorneys resolve money matters

Steve Gonzalez Apr. 26, 2007, 2:00am

Madison County Associate Judge Ralph Mendelsohn delayed a class action fairness hearing over a proposed $63.8 million settlement until Thursday morning so attorneys involved in the case could settle their differences over how the money would be distributed.

The nationwide class actions claims GlaxoSmithKline (GSK) promoted Paxil and Paxil CR to children under 18, while withholding information about Paxil's safety and effectiveness.

GSK agreed to allocate $63,833,148 and any obligations it may otherwise have to pay for legal notice to class members, the claims of the class, interest, costs of the administration of the settlement, and the costs of the suit including attorneys' fees.

If any taxes are due as a result of income earned by the settlement fund, GSK also will pay them.

In the event that federal or state income tax liability is assessed against and paid for by GSK as a result of income earned by the settlement fund, GSK is entitled to be reimbursed from the settlement fund.

"What we're talking about here is an issue of fairness," Belleville attorney Tom Keefe said on behalf of four law firms pursuing competing class actions in other jurisdictions across the country.

Keefe told Mendelsohn that it was unfair that Stephen Tillery could collect the $16.8 million attorney fees exclusively and argued his clients in the competing class actions should get a portion of the fees because of the work they performed prior to the settlement that was reached.

Tillery plans to petition for attorneys' fees and costs in an amount not to exceed 26 percent of the settlement fund.

His fee will be calculated based upon the total settlement fund, regardless of whether an individual class member claims their benefits.

GSK has agreed that it will not take a position, either publicly or in court, regarding Tillery's application for attorney fees and costs as long as payment of the fees comes solely from the settlement fund and does not require further payment.

Fees will be paid 10 days after Mendelsohn grants final approval.

GSK also waived its appellate rights to challenge or support any award of attorneys' fees.

Class members who submit pharmacy records or other sufficient medical records showing they purchased Paxil or Paxil CR for a person under the age of 18 will receive the total amount of money paid for out-of-pocket expenses.

Class members who cannot locate or obtain pharmacy records showing the purchase of Paxil will receive $15 if they submit an affidavit submitting to the jurisdiction of the court and swearing they purchased Paxil.

In the event undocumented claims exceeds $300,000, payment to class members with undocumented claims will be reduced pro-rata so that no more than a total of $300,000 is paid to class members with undocumented claims.

GSK's attorney, Dwight Davis of Atlanta, told Mendelsohn that the settlement was fair.

"It is undisputed that this is a fair and reasonable settlement," Davis said. "This is complex litigation and would have gone on for years."

Davis also told Mendelsohn that there has only been 19 people to opt-out of the class.

He also argued that Keefe was trying to disrupt the proceedings and not looking out for the best interest of the class.

The hearing will resume at 9 a.m. today.

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