Philadelphia, PA — The sprawling legal battle over Risperdal, once involving over 7,000 cases, has largely concluded with settlements that encompass a total of up to $1.1 billion. The litigation revolved around allegations that the drug, often prescribed off-label, led to the development of gynecomastia in young men and boys, a condition characterized by the growth of breast tissue.
The resolution of these cases marked a significant moment in the city’s Complex Litigation Center, noted for handling one of the largest mass torts in its history. This litigation was notable not only for its size but also for the ground-breaking $8 billion jury award, a figure that was later reduced significantly during the settlement phase.
Records indicate that this decline in pending cases over the past two years came after primary defendants and major law firms representing the bulk of the claimants chose to settle. The accord notably included a 30% holdback fund designed to cover litigation costs and act as a financial buffer ensuring the sufficiency of funds for all eligible claims.
Distinct from similar large-scale litigations, the Risperdal settlement did not allocate separate funds for common benefit fees for the attorneys. Instead, attorney fees, potentially absorbing up to 40% of individual settlements, were sourced directly from claimants’ awards as per contingent fee agreements.
The handling of the settlement has been managed by Arnold & Itkin, a Houston-based law firm, in collaboration with Philadelphia’s Kline & Specter and Sheller PC. The responsible attorneys reported that over 5,600 clients have accepted the terms of their individual settlement offers.
In their statement, attorneys Thomas R. Kline and Jason Itkin highlighted the complexity of managing such a large settlement, which involved special masters, a supervising judge, and multiple protective layers ensuring equitable compensation. They described the settlement as a “unprecedented success story” in mass tort settlements, providing significant redress to thousands after protracted litigation.
Janssen Pharmaceuticals, a subsidiary of Johnson & Johnson and the main defendant in the case, has chosen not to comment on the settlements.
As the settlements are executed, they are divided into several groups, allowing for systematic processing and finalization of claims. Notably, each group’s money allocation includes a predetermined percentage directed towards the holdback fund, with the remaining sum distributed among claimants before legal costs are applied.
In the Risperdal settlements, amounts disbursed varied considerably, with some claimants receiving settlements exceeding $100,000 before deductions, while others received less than $75,000.
A requirement set by the defendants mandated that 90% of litigants agree to the settlement offers for the disbursements to proceed. According to spokespeople from the administering law firms, the vast majority of claimants have opted into the settlement.
The complexity and emotional impact of the Risperdal cases, often associated with psychological harm such as humiliation or indirect consequences like bullying, make it a distinctive chapter in mass tort litigation, different in scope and nature from litigation centered on physical injuries.
This mass tort settlement’s approach, primarily the use of a substantial holdback fund, mirrors strategies employed in other large-scale litigations to ensure all claimants receive fair treatment and to safeguard against the premature depletion of funds before all claims are settled. According to experts in the field, this prudent financial strategy is vital in managing the uncertainties inherent in mass litigation contexts.