Lawsuit Details Remain Secret: Parties in Paxil Case Mum on Payments
By Brian Brueggemann, Belleville News-Democrat, Ill.
Oct. 21–EDWARDSVILLE — When plaintiff attorneys were trying to get a Madison County judge to approve a settlement in a class-action lawsuit against the maker of Paxil, they touted that the company would have to pay up to $63.8 million.
How much did consumers actually get? The parties aren’t saying — and they’ll never have to.
According to the settlement, any money that didn’t get claimed by consumers goes back to GlaxoSmithKline, the maker of Paxil, which is used to treat depression. And the attorneys for both sides, as well as the company that was hired to handle consumers’ claims, are not required give the court a report on how many people made claims or how much money was actually paid to them.
But one payout is certain: The plaintiff attorneys got $16.5 million.
The plaintiff class was represented by Steve Tillery of Swansea and his KoreinTillery law firm, and the Chicago law firm of Swedlow & Associates. Tillery and Stephen Swedlow of Swedlow & Associates could not be reached for comment.
Provisions such as those in the Paxil settlement — known as a reversionary settlement because the leftover money goes back to the defendant — are common in Madison County class actions. Critics argue that those types of arrangements prevent consumers from ever really knowing a settlement’s value.
“It’s common all over the country,” said Brian Wolfman, director of the litigation group at Public Citizen, a consumer advocacy group based in Washington, D.C. “It’s an endemic problem in class actions. It’s something that we’ve been very concerned about.”
The settlement was approved in April by Madison County Associate Judge Ralph Mendelsohn on behalf of all U.S. consumers who bought Paxil or Paxil CR for a person younger than 18. The suit claimed GlaxoSmithKline withheld negative information about the medicine, but under the settlement, the company did not admit any wrongdoing. The suit alleged that people paid too much for the medicine, not that anyone was physically harmed.
The settlement allowed consumers to get full reimbursement for Paxil purchases if they had supporting documentation, such as receipts or pharmacy records. Consumers without documentation could get up to $100.
The deadline for making a claim was Aug. 31.
A GlaxoSmithKline spokeswoman said the company will not reveal how much it paid out in the case.
Wolfman said that in class actions, consumers are often unaware of the advertisements about how to make claims.
In the Paxil settlement, GlaxoSmithKline was required to establish a fund of $63.8 million, from which the plaintiff attorneys’ fees would be paid. After taking out legal fees and other costs, about $44.8 million was left for consumers.
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