Cook County Record

Wednesday, April 1, 2020

Drug maker Mallinckrodt demands Rockford disclose attorney's fee arrangement, arguing conflict of interest; Rockford says can keep secret

Federal Court

By D.M. Herra | Feb 20, 2020

Dirksen flamingo federal

Pharmaceutical maker Mallinckrodt, suspecting an attorney conflict of interest, is demanding to know the details of the city of Rockford’s contract with the lawyers it hired to lead a class-action lawsuit the city is heading against the company.

Rockford and its lawyers, however, are fighting to keep those arrangements secret.

Rockford seeks to represent a massive nationwide class of every person, employer, nonprofit, insurance company or government agency that has paid for Mallinckrodt’s drug Acthar since 2007. The city claims the drug maker charged too much for Acthar, a hormone gel used to treat conditions including multiple sclerosis and infantile spasms.

Last year, Mallinckrodt settled a $15.4 million federal lawsuit that accused it of illegally subsidizing Medicare copays for Acthar and raising the drug’s list price by 85,000 percent. In settling the suit, the Irish drug maker claimed most of those price hikes occurred before it acquired Acthar’s original owner, Questcor Pharma. Questcor became part of Mallinckrodt in 2014.

In this litigation, Rockford is represented by the firm of Haviland Hughes, of Philadelphia, which is also litigating similar actions in other jurisdictions on behalf of clients who fall under the Rockford class definition. At least two of those other clients are trying to certify their own classes, Mallinckrodt said.

Plaintiffs in the various actions have said their proposed classes do not overlap, a claim Mallinckrodt disputes. It asked Rockford to disclose the retainer and fee agreements it has with its counsel, along with any related materials, to uncover any potential conflicts. The city refused, claiming the documents are privileged and irrelevant.

“To represent a class, a plaintiff must establish among other things that the representative parties will fairly and adequately protect the interests of the class,” Mallinckrodt said. “The fact that Rockford’s counsel represents clients in potentially overlapping class and individual actions justifies [making retainer and fee agreements discoverable]. …Because Rockford’s counsel represents absent members of the Rockford class in other actions, the potential conflicts here are numerous.”

Mallinckrodt argues attorney fees are not privileged information because payment of fees is not a confidential communication between attorney and client.

In response to Rockford’s request that Mallinckrodt also produce letters of engagement between itself and its attorneys, the defendant said that as it is not seeking to represent a class, the adequacy of its representation is not in question.

Like other drug makers, Mallinckrodt is currently buried under an avalanche of lawsuits being brought by state and local governments over its products and practices. The opioid crisis has led to more than 35,000 government agencies and insurance companies bringing action against the likes of Mallinckrodt, Purdue Pharma, and Johnson & Johnson. Many of the cases are being folded into a single, massive action making its way through the courts in Ohio, but local units of government, afraid they won’t see any settlement money paid out to state governments, are fighting to keep their lawsuits personalized and local.

In the Acthar case, Mallinckrodt is represented by attorneys Scott Collins Sullivan, of Williams McCarthy LLP in Rockford; Matthew M. Wolf, Laura S. Shores, Sonia K. Pfaffenroth, Michael B. Bernstein, Ryan Z. Watts and Adam M. Pergament, of Arnold & Porter Kay Scholer LLP of Washington, D.C.; and Jan. H. Ohlander, of Reno & Zahm LLP, of Rockford. Attorneys Eric C. Lyttle, Michael D. Bonnano, Ethan C. Glass, Meghan A. McCaffrey, Brian H. Rowe and Kirk Goza of the Washington, D.C., law firm Quinn Emanuel Urquhart & Sullivan LLP, are representing the company pro hac vice.

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Organizations in this Story

City of RockfordU.S. District Court for the Northern District of IllinoisMallinckrodtHaviland Hughes