Cook County Record

Monday, March 30, 2020

Judge says Rockford doesn't have to reveal retainer agreement with big class action firm amid drug price lawsuit

Lawsuits

By Scott Holland | Mar 6, 2020

Rockford courthouse
Stan Roszkowski federal courthouse and BMO Harris Bank Center in downtown Rockford | Alexbaumgarner / CC BY-SA (https://creativecommons.org/licenses/by-sa/3.0)

ROCKFORD — A federal judge has ruled the city of Rockford can keep its retainer agreement with lawyers under wraps, rejecting an attempt by a pharmaceutical company to uncover the terms of the deal between the city and the lawyers it hired to pursue a lawsuit over the price of a hormone treatment drug.

Rockford is seeking to represent a massive nationwide class of every person and organization that has paid for Acthar, a drug made by Mallinckrodt, since 2007. The city claims the company overcharged for the drug, a hormone gel used to treat conditions including multiple sclerosis and infantile spasms.

Rockford is represented by the Philadelphia firm of Haviland Hughes, which also is litigating similar actions in other jurisdictions on behalf of clients who fall under the Rockford class definition. Mallinckrodt said the city’s retainer and fee agreements would reveal potential conflicts and overlapping class definitions.

In an opinion issued Feb. 26, Magistrate Judge Lisa Jensen denied Mallinckrodt’s motion to force Rockford to turn over the requested documents.

Jensen said Mallinckrodt “offered no evidence” of the conflicts it suggests, namely that “any agreement that would cede control over settlement” from Rockford to Haviland Hughes “would improperly impinge on (Rockford’s) independence and ability to protect the interests of the class.”

She also rejected Mallinckrodt’s suggestion that an agreement giving incentives to Rockford as a class representative, conditioned on its support for a settlement, “may create a conflict of interest between the class representatives and absent class members,” she wrote, emphasizing these were “merely examples of potential conflicts” Mallinckrodt offered.

During a hearing on the motion to compel, Jensen said, she pressed Mallinckrodt’s lawyers to support their arguments, but found the reasoning “speculative” and said the company’s case law citations were inapplicable.

Mallinckrodt referenced a 1985 Northern District of Illinois opinion in Epstein v. American Reserve Corp., but Jensen said in that case a judge forced disclosure of fee agreements with attorneys because they were “relevant to the ability of the named plaintiffs to protect the interest of potential class members. The court did not address any type of conflict of interest and instead specifically relied on a case that found such fee agreements relevant only to a plaintiff’s ability to adequately fund the lawsuit and to the award of attorneys’ fees.”

While Epstein wasn’t relevant because it didn’t address a conflict of interest, Jensen said Mallinckrodt also cited “several other cases from around the country to assert that retainer and fee agreements are relevant and discoverable” without explaining how those cases are relevant to conflict of interest as opposed to something else, such as a plaintiff’s ability to fund the lawsuit or the relationship of a nonparty to the underlying complaint.

For its part, Rockford offered cases in which judges agreed to protect retainer and fee agreements at the class certification stage, including those “supporting the proposition that when the nature of a potential conflict is speculative, retainer and fee agreements are not discoverable,” Jensen wrote.

Jensen dismissed the motion without prejudice.

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 RockfordWilliams & McCarthyArnold & Porter Kaye Scholer LLPMallinckrodt PharmaceuticalsU.S. District Court for the Northern District of Illinois Rockford DivisionHaviland Hughes