In re Neurontin Marketing & Sales Practices Litigation, 58 F. Supp. 3d 167

Multi-district litigation over Pfizer’s marketing of Neurontin resulted in a $325 million common settlement fund for a nationwide class of third-party payors (TPPs) and a subclass of indirect purchasers.
Class representatives: Harden Manufacturing, Louisiana Health Service Indemnity Co., and ASEA/AFSCME Local 52; Subclass A represented by Blue Cross Blue Shield of Massachusetts.
Class Counsel requested 33 1/3% of the fund ($108.33M) for fees; litigation-related expenses totaled about $4.38M. Class members largely approved: one opt-out and one objector (not to fees).
The court applied the common-fund doctrine and the Goldberger factors to evaluate a percentage-of-fund fee award, and considered empirical data on "megafund" fee percentages in large class settlements.
The court found the litigation to be lengthy, complex, high-risk, and skillfully litigated, but concluded that 33 1/3% was too high given comparable awards, prior compensation tied to the related Kaiser trial, and incomplete lodestar detail.
Holding: the court awarded Class Counsel 28% of the common fund (inclusive of reasonable litigation expenses) and ordered $25,000 service awards for each named class/subclass representative listed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Appropriate percentage fee from $325M common fund	Seek 33 1/3% of fund ($108.33M) as reasonable given time, risk, and results	Implicitly argued that percentage should be reduced consistent with megafund trends and reasonableness	Court awarded 28% of fund (inclusive of expenses) — 33 1/3% reduced as excessive
Use of percentage method vs lodestar cross-check	Percentage requested; multiplier ~3.97 on counsel’s lodestar supports request	Court should cross-check with lodestar and market rates; lodestar details lacking	Court applied percentage method and reduced percentage to produce a lodestar multiplier (~3.32) it found reasonable
Consideration of prior compensation (Kaiser trial) and litigation risk	Counsel emphasize years and risks to justify higher fee	Court noted counsel already received compensation for Kaiser trial and that risk tied to that trial was partly accounted for elsewhere	Court discounted double-counting of risk and reduced fee accordingly
Payment of expenses and class representative awards	Fees request included expenses; also sought reasonable incentive awards	No significant opposition noted	Court ordered fees inclusive of reasonable litigation expenses and approved $25,000 service awards to each named representative

Boeing Co. v. Van Gemert, 444 U.S. 472 (establishing common fund doctrine for attorney fees)
Goldberger v. Integrated Res., Inc., 209 F.3d 43 (2d Cir. 2000) (factors for evaluating percentage fee awards)
In re Thirteen Appeals Arising out of San Juan Dupont Plaza Hotel Fire Litig., 56 F.3d 295 (1st Cir. 1995) (percentage or lodestar methods both permissible)
Harden v. Pfizer, 712 F.3d 60 (1st Cir. 2013) (background appellate decision in the MDL)
Kaiser v. Pfizer, 712 F.3d 21 (1st Cir. 2013) (background appellate decision tied to bellwether trial)
In re Synthroid Mktg. Litig., 264 F.3d 712 (7th Cir. 2001) (rejecting arbitrary percentage caps in large common-fund cases)
In re Prudential Ins. Co. of Am. Sales Practices Litig., 148 F.3d 283 (3rd Cir. 1998) (discussion of fee percentages in large class settlements)