Final fairness hearing set in disputed PPO class action settlement

Amelia Flood Aug. 20, 2009, 5:26am



A third and final fairness hearing is scheduled for Aug. 25 in Madison County over a disputed class action settlement against an insurer that allegedly operated a "silent" Preferred Provider Organization (PPO) that deprived health care providers of monies.

The settlement pits former law firm members Robert Schmieder II of LakinChapman in Wood River and Richard Burke of St. Louis against one another.

Schmieder is acting as class counsel in Shipley, Coy v. First Health in Madison County. Burke represents Kathleen Roche, a Swansea chiropractor, who has objected to the proposed settlement.

Burke used to be a member of the Lakin Law Firm, as it was formerly known.

Roche, who has a nearly identical suit pending in St. Clair County, contends the settlement does not financially compensate class members and that First Health engaged in settlement talks about the St. Clair case while concluding negotiations in Madison County that would scuttle it.

First Health's attorney Eric Brandfonbrener denies that charge.

The Madison County case was brought by chiropractors Lawrence Shipley and Richard Coy over what they claimed were improper PPO adjustments. The pair, acting as class representatives, sued the company for unjust enrichment among other charges.

Under the proposed settlement, each class representative would receive $10,000, the LakinChapman law firm would receive over $600,000 in legal fees and $1.2 million would be given to non-profit groups to further medical education.

The first Madison County fairness hearing in the case took over three hours in May, with Circuit Judge Daniel Stack continuing the matter after admonishing the attorneys present for not scheduling enough time.

A second hearing in July was postponed when Stack's asbestos docket took precedence.

The new fairness hearing is set for 9 a.m.

The case is Madison case number 04-L-1055.

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