Judge Cuts Legal Fees Sought in Pfizer Case

A federal judge reduced by $16.5 million a fee request by plaintiffs’ lawyers in a class-action settlement with Pfizer Inc., saying their work “is not even remotely commensurate” with the amount sought.

The unusually large reduction, which halved the fee request in the defective heart-valve case, could accelerate a recent trend by judges to reduce attorney awards in such lawsuits, legal experts said.

U.S. District Judge John Nangle of Cincinnati awarded $16.5 million in plaintiffs’ legal fees in a settlement that could eventually be worth $500 million to 41,000 eligible Pfizer customers who were sold broken heart valves.

Attorneys led by Stanley Chesley of Cincinnati sought $33 million, or 20%, of the $165 million that is to be paid to plaintiffs during the next nine years. The lawyers were granted 10% of this amount.

“The value of counsel’s services, while not insubstantial, is not even remotely commensurate with their fee request,” Nangle wrote Feb. 29 in an opinion made public Thursday. Nangle is a federal judge in Savannah, Ga., who was appointed by U.S. Chief Justice William Rehnquist to handle this part of the Cincinnati case.

New York-based Pfizer, a drug and hospital products maker, reserved $500 million for the open-ended settlement, of which $165 million is to be paid through 2005. The remainder is to be paid to class members who file caims with a claims administrator into the indefinite future. About 22,000 of the 41,000 eligible class members have filed claims thus far, Chesley said.

“We did a competent, excellent job with huge benefit to the claimants,” said Chesley of the Waite, Schneider, Bayless & Chesley law firm.

The judge’s 61-page order, first reported in the Washington Post, acknowledges that the lawyers’ skill “is very high” and that the settlement “offers substantial and valuable benefits” to the class.

But he said plaintiffs’ lawyers have earned only $5 million thus far, based on billable hours. The value of their future work, although impossible to determine with certainty, is not likely to justify $33 million in fees, the judge wrote.

The judge also rejected the lawyers’ contention that the case was undesirable for them to take, and said there is no risk involved in their future work on the case.

“There were many lawyers around the country and around the world willing to take these cases,” he wrote.

Legal experts say the 10% award to Chesley’s firm was unusually small, as judges typically provide plaintiff attorney fees of between 20% and 33%.

“This is another example of courts becoming increasingly skeptical of attorney fees in light of the amount of time spent on the case, the risks taken and the skills brought to bear,” Vanderbilt University law professor Donald Langevoort said. “The problem of predatory class-action lawyers has become quite prevalent.”

A Pfizer spokesman declined to comment on the fee award but said: “We continue to support the settlement.”

Pfizer’s stock was down $1.50 to $66 on the New York Stock Exchange.