KPH Healthcare Services, Inc. v. Mylan N.V.

District Court, D. Kansas·Decided July 9, 2024·No. 2:20-cv-02065·Unknown

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF KANSAS

KPH HEALTHCARE SERVICES, INC., a/k/a KINNEY DRUGS INC., FWK HOLDINGS LLC, AND CÉSAR CASTILLO, LLC, individually and on behalf of all those similarly situated,

Plaintiffs,

v. Case No. 20-2065-DDC-TJJ

MYLAN, N.V., MYLAN PHARMACEUTICALS INC., MYLAN SPECIALTY L.P., PFIZER, INC., KING PHARMACEUTICALS LLC, and MERIDIAN MEDICAL TECHNOLOGIES, INC.,

Defendants.

ORDER GRANTING FINAL APPROVAL OF THE SETTLEMENT, AWARDING ATTORNEYS’ FEES, EXPENSES, AND SERVICE AWARDS, AND APPROVING PLAN OF ALLOCATION

This matter comes before the court on plaintiffs KPH Healthcare Services, Inc., FWK Holdings LLC, and César Castillo, LLC, on behalf of themselves and the certified Direct Purchaser Settlement Class’s (together “DPPs” or “plaintiffs”) motion seeking: (a) final approval of the Settlement; (b) for awards of attorneys’ fees and expenses; and (c) approval of the Plan of Allocation of the Settlement proceeds (together the “motion”) set forth in the DPPs’s Motion for Final Approval of Settlement, Approval of Plan of Allocation, and Award of Attorneys’ Fees, Expenses, and Service Awards1 (Doc. 403). Defendants Pfizer, Inc., King

1 Plaintiffs since have withdrawn their request for service awards for Plaintiff Class Representatives. See Doc. 409. The court discusses this development further, below. Pharmaceuticals LLC, and Meridian Medical Technologies, Inc. (collectively, “Pfizer”) have not opposed the motion and no Class Member has filed an objection to the motion. The court, after considering all papers filed and proceedings conducted in this action, and after finding that the Settlement of this Litigation against Pfizer is fair, reasonable, and adequate, and otherwise fully informed about this action, grants the motion.

IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that: 1. DPPs seek final approval of the Settlement.2 Rule 23(e) permits the parties to settle the claims of a certified class action, but “only with the court’s approval.” And, the court may approve a settlement only after conducting “a hearing” and finding that the settlement is “fair, reasonable, and adequate[.]” Fed. R. Civ. P. 23(e)(2). Also, the Rule includes several factors that courts should consider when deciding whether the settlement is “fair, reasonable, and adequate[.]” Id. These factors include whether: (A) the class representatives and class counsel have adequately represented the class; (B) the proposal was negotiated at arm’s length; (C) the relief provided for the class is adequate, taking into account: (i) the costs, risks, and delay of trial and appeal; (ii) the effectiveness of any proposed method of distributing relief to the class, including the method of processing class-member claims; (iii) the terms of any proposed award of attorney’s fees, including timing of payment; and (iv) any agreement required to be identified under Rule 23(e)(3); and (D) the proposal treats class members equitably relative to each other.

Id. Also, the Tenth Circuit has noted four factors that a district court must consider when assessing whether a proposed settlement is “fair, reasonable, and adequate”: (1) whether the proposed settlement was fairly and honestly negotiated;

2 This Order uses and incorporates by reference the definitions for defined terms used in the Settlement Agreement dated October 10, 2023 (Doc. 372-2). All capitalized terms used, but not defined in this Order, shall have the same meanings used in the Settlement Agreement. (2) whether serious questions of law and fact exist, placing the ultimate outcome of the litigation in doubt; (3) whether the value of an immediate recovery outweighs the mere possibility of future relief after protracted and expensive litigation; and (4) the judgment of the parties that the settlement is fair and reasonable.

Rutter & Wilbanks Corp. v. Shell Oil Co., 314 F.3d 1180, 1188 (10th Cir. 2002). The court previously granted preliminary approval of the Settlement, finding it “fair, reasonable, and adequate” as Fed. R. Civ. P. 23(e) requires. Doc. 394 at 4. Now, the court grants final approval of the Settlement under this Rule because DPPs have shown that each of the Rule 23(e)(2) and Tenth Circuit factors is met here. The Settlement satisfies each of the Rule 23(e)(2) factors. First, the court finds that DPPs and Co-Lead Counsel have represented the Class adequately. Plaintiff Class Representatives share the same interests and the same types of alleged injuries as other Class Members. They have participated in extensive discovery, and they have adequately represented the interests of the Class. Also, Co-Lead Counsel has represented the certified Class adequately by prosecuting their claims. Their work has involved investigating the claims, drafting the Complaints, defending Motions to Dismiss, reviewing written discovery, consulting with experts, successfully moving for class certification, and mediating the case to resolution. Counsel’s prosecution of the case has produced substantial relief to the certified Class through the negotiated Settlement. In sum, the court concludes that Co-Lead Counsel has represented the Class adequately. Thus, this first Rule 23(e)(2) factor favors approving the Settlement. Second, the Settlement is the product of an arm’s length negotiation. The parties engaged an experienced and skilled mediator who conducted mediation sessions with the Settling Parties and their counsel. Through that mediation process, the parties successfully negotiated the Settlement that DPPs ask the court to approve. The court finds that the second Rule 23(e)(2) factor favors approval. Third, the court finds that the relief provided to the Class through the Settlement is adequate. Continued litigation of the matter involves incurring additional costs, presents risk that Class Members might secure an unfavorable outcome, and guarantees DPPs continued

appeal of the case. Continued litigation thus will delay any recovery that Class Members may achieve in the future. As discussed in more detail below, the court finds that the proposed Plan of Allocation and the requested attorneys’ fees award is fair and adequate. And, DPPs represent that the Settling Parties have no other agreements that the court must consider under Rule 23(e)(2)(C)(iv). Thus, the court finds that the third Rule 23(e)(2) factor favors approving the Settlement. Fourth, and as discussed more fully below, the court finds that the Settlement and the Plan of Allocation treat Class Members equitably relative to one another. So, this fourth Rule 23(e)(2) factor also favors approval. In sum, all four Rule 23(e)(2) factors favor the court

granting final approval of the Settlement. Also, the court finds that the Settlement satisfies the Tenth Circuit’s test for assessing whether a proposed settlement is fair, reasonable, and adequate. First, and as just discussed, the court finds that the Settlement “was fairly and honestly negotiated[.]” Rutter, 314 F.3d at 1188. Second, the litigation involves “serious questions of law and fact” that place “the ultimate outcome of the litigation in doubt[.]” Id. The parties ardently have disputed issues of liability and damages. While the court granted Pfizer’s Motion to Dismiss, Doc. 241-1, DPPs appealed to the Tenth Circuit. See Doc. 349 (Notice of Interlocutory Appeal). Had the parties not settled, that appeal would continue until the court or a jury decides the matter, placing the ultimate outcome of the appeal—and thus the case—in doubt.

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KPH Healthcare Services, Inc. v. Mylan N.V., (D. Kan. 2024).

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