Final hearing in Abbott Lab food pump class action set Dec. 12; Charity to get $6.7M, lawyers $3M and class zero

By Steve Korris | Nov 26, 2013


Abbott Laboratories and plaintiff lawyers seek final approval of a class action settlement providing $6.7 million for charity and zero for the class.

Both sides presume most class members have died, because the class consists of persons too weak to eat without Abbott food pumps in a period that ended 10 years ago.

The lawyers can’t readily identify class members anyway, because Abbott didn’t transact business with any of them.

The settlement provides $3.29 million for a national team of plaintiff lawyers including Robert Sprague of Belleville as local counsel.

The settlement provides $10,000 for the lead plaintiff, the estate of Elizabeth Rath.

A current notice in Reader’s Digest, Good Housekeeping and Woman’s Day gives class members nothing but a Dec. 5 deadline to exclude themselves or object.

Those who object in writing can speak at a final fairness hearing before St. Clair County Circuit Judge Andrew Gleeson on Dec. 12.

The $10 million settlement constitutes a thin remnant of the suit’s potential in 2004, when Rath’s estate filed it.

In 2003, Abbott had agreed to pay $600 million to settle charges that a subsidiary cheated Medicare by disguising the true costs of food pumps through distributors.

The U.S. attorney for the Southern District of Illinois had created a fake distribution company in Swansea to confirm Medicare’s suspicions.

Rath’s estate claimed Abbott cheated Medicare patients too, in proportion to Medicare’s 80 percent payment share and the class’s 20 percent copayment.

That proportion would have worked out to a $150 million class settlement.

In 2005, Abbott moved for transfer to a more convenient forum in Lake County, where the company operates its headquarters.

The estate amended the complaint, and Abbott again sought transfer.

Former circuit judge Michael O’Malley denied the motion in 2010, ruling that Abbott could not meet its burden.

“The purported scheme which is the basis for the civil action was discovered, investigated and presented in St. Clair County,” he wrote.
Abbott petitioned the Fifth District appellate court for leave to appeal, and the Fifth District denied the petition.

Abbott petitioned the Illinois Supreme Court for an order requiring the Fifth District to allow an appeal, and the Supreme Court granted the order.

Abbott pleaded to the Fifth District that O’Malley’s order was inadequate, and Fifth District judges didn’t disagree.

“An inadequate record, however, is not itself a basis for reversal,” Justice Richard Goldenhersh wrote last year.

“The issue is not the detail of the underlying order, but whether the circuit court abused its discretion,” he wrote.“Regardless of which facts are likely to be disputed at trial, the genesis of plaintiff’s complaints in the investigation makes this a local controversy for St. Clair County.”

Justice Bruce Stewart concurred.

Justice Stephen Spomer reluctantly joined the opinion, writing that Illinois forum and venue law mandated his concurrence.

He wrote that the law “does not lend itself to uniform application and promotes long and costly litigation processes, as is illustrated by the procedural history of the case at bar.”

“My hope for the future is that an amendment to current law would limit venue to the county or counties where the accident or transaction giving rise to the cause of action occurred, which would eradicate the practice of forum shopping and eliminate the need for costly forum non conveniens litigation completely,” he wrote.

“If the defendant had requested transfer to Jackson County, where the plaintiff was allegedly defrauded, I would more likely find that this factor strongly favored Jackson County.”

When the case returned to St. Clair County, O’Malley had left the bench for private practice and Circuit Judge Andrew Gleeson had taken the case.

Gleeson set a class certification hearing for this March, and delayed it twice while negotiations advanced.

Abbott and plaintiff lawyers executed an agreement in August, with Abbott pledging to donate $6.7 million worth of Ensure or Glucerna food products over three years.

Sprague signed the agreement for the estate, as did Dale Aschemann of Marion.

Randy Patchett, Timothy Keller, and Jay Schafer, all of Marion, also represented the estate, as did Charles Barrett and Patrick Barrett of Nashville, Tenn., and David Stellings and Rachel German of New York City.

David Dahlquist of Chicago signed for Abbott.

George Lombardi of Chicago also represented Abbott, along with Larry Hepler and Jason Rankin of Edwardsville.

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