July 27, 2020 / 6:31 PM / 17 days ago

U.S. judge rejects imposing attorney fee levy on opioid lawsuit settlements

July 27 (Reuters) - A federal judge overseeing thousands of opioid lawsuits declined on Monday to grant a demand by plaintiffs attorneys for fees that could be worth billions of dollars, a request drug company defendants had said would jeopardize settlement talks.

In February, a committee of plaintiffs attorneys requested that U.S. District Judge Dan Polster in Cleveland order a 7% fee assessment against any settlement.

The request could amount to $3.3 billion, based on a $48 billion settlement proposal that five companies including Johnson & Johnson have been negotiating with various state attorneys general.

Polster said in Monday's order he expected any eventual resolution of the lawsuits to include a method for paying the attorneys, so a fee order was unnecessary at this time but he left open the possibility of revisiting the request.

Since the fee request was made, three distributors, McKesson Corp, AmerisourceBergen Corp and Cardinal Health Inc, have offered another $1.2 billion to the proposed settlement to cover attorneys fees.

The lawsuits consolidated before Polster accuse drugmakers, distributors and pharmacy chains of fueling an opioid crisis blamed for 400,000 U.S. overdose deaths since 1999.

The companies have denied the allegations, although the distributors and drugmaker Teva Pharmaceutical Industries Ltd reached a settlement with two Ohio counties last year to avoid a trial.

The lawsuits were filed by cities, counties and other local and tribal governments.

The committee of plaintiffs lawyers had argued that a "default levy" on settlement proceeds was needed in case the parties failed to agree on a method for paying attorneys' fees.

The fee request was opposed by the defendants as well as state attorneys general, who brought their own opioid cases that are not before Polster. They also said the fee could disrupt settlement talks. (Reporting by Tom Hals in Wilmington, Delaware and Nate Raymond in Boston Editing by Noeleen Walder and David Gregorio)

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