In 1999 American Home Products Corporation, the manufacturer of the diet drug fen-phen, agreed to pay $3.75 billion to settle thousands of lawsuits by the drug’s users. The drug was linked to heart valve disease. It was a stunning settlement that included payments of hundreds of thousands of dollars to plaintiffs who took the drug with no apparent ill-effects. Some plaintiffs recovered in the millions.
Many lawyers who signed up fen-phen cases like it was Krayoxx in the latest John Grisham novel (The Litigators) received millions in legal fees. In an extreme version of American Greed, lawyers in Kentucky stole settlement funds from their clients. They received lengthy prison sentences.
Last week in Jackson, Mississippi lawyer Herbert Lee partially won a lawsuit by his former clients that alleged that Lee kept too much of the plaintiffs’ fen-phen settlement. First, Hinds County Circuit Judge Jeff Weill ruled that Lee owes the two plaintiffs $600,000 based on a miscalculation of the clients’ share of an MDL refund.
According to the Clarion-Ledger’s article:
In allocating the refund, Lee retained 45 percent as his attorney’s fee and refunded each client a per capita share, rather than a pro rata share, of the remaining 55 percent.
As a result, each of Lee’s diet-drug clients receiving one-thirteenth of the refund instead of an amount based on a percentage of the total settlement, according to court records.
The article doesn’t say this, but I read this to mean that Lee over-paid some of his clients from the MDL refund and now has to make up the short-fall. That’s a lot different than what happened with the lawyers in Kentucky who stole from their clients.
Lee won a unanimous jury verdict on the plaintiffs’ claim that Lee’s fee should have been 40% of the recovery instead of 45%.
Ed Blackmon of Canton represented Herbert Lee. Lance Stevens of Jackson represented the plaintiffs.