Tort Trustee Opposes Fund Release Motions

By Walter F. Roche Jr.

The trustee of the $200 million victims' fund in the fungal meningitis litigation is asking a judge to deny three motions that would, if granted, force the quick release of funds to victims within 30 days.
In a motion filed on the eve of a key hearing, Lynne Riley, the trustee, argued that approval of the motions would be counterproductive and could result in a smaller amount of money being available for victims.
"The requested relief would have the counterproductive effect of delaying (not expediting) distributions and could diminish tort trust assets available to plaintiffs," her motion states.
Riley said that were the money to be distributed immediately the victims' fund could be depleted by claims for damages from those who have liens against the trust.
"The tort trustee has efficiently and effectively supported the Plaintiffs' Steering Committee and lead counsels efforts to globally resolve the public and private liens and preserve opt out for claimants," the motion states.
The filing comes just ahead of tomorrow's hearing before U.S. District Judge Rya Zobel who has agreed to hear argument in her Boiston, Mass. courtroom for the release of funds to victims within 30 days.
Riley's arguments echoed concerns expressed by lead counsel for plaintiffs, who also have urged Zobel to deny the motions.
She also stated that some victims can still expect to get payments before the end of the month.
Lawyers for victims from Virginia, Tennessee, Indiana and Michigan filed the motions for immediate release citing the fact that victims have been waiting nearly four years for some compensation.
The outbreak caused by fungus laden steroids sickened 778 patients, killing 77 of them.
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Victims' Attorneys in Pre-Hearing Rift on Trust Funds

By Walter F. Roche Jr.

The lead attorneys for plaintiffs in the civil suit stemming from a deadly outbreak say victims will have to wait even longer for any payments if the judge orders the immediate release of money from a $200 million trust fund.
In a nine-page filing today attorneys Kristen Johnson and Thomas Sobol, representing the plaintiffs steering committee, said the motions filed by lawyers for victims in four states would be "counterproductive" and further delay payments for many months "to most if not all claimants."
The two are asking U.S. District Judge Rya Zobel to reject the move to force the immediate release of funds by a court appointed trustee presiding over a victims' compensation fund.
The open rift between lawyers representing victims of the 2012 fungal meningitis outbreak will play out Tuesday in a hearing in Zobel's Boston, Mass. courtroom. The two sides have also disagreed about whether the Tuesday session should be by phone or in Zobel's courtroom.
Zobel's latest order indicates it will be in the courtroom.
Zobel earlier this week told the lawyers seeking immediate payments that one of them could make a 15 minute presentation during next week's session.
The motions calling for prompt release of the funds came from lawyers representing victims in Virginia, Tennessee, Indiana and Michigan.
Citing the fact that the outbreak is approaching its fourth anniversary, they all argued that victims, at least those that are still alive, deserve relief.
Johnson's brief, however, defends the actions taken by the fund trustee Lynne Riley, including her requirement that claims for reimbursement by the federal government and private insurers be resolved prior to the release of any funds. She said federal law and prior orders set the mandatory standards required  prior to any payments.
She noted that a proposed agreement with the federal government has been approved by one agency but still is under U.S. Justice Department review.
She said many claimants can still expect to get payments by the end of this month "or soon thereafter."
According to her filing, letters are being sent out to those whose claims are not subject to Medicare or Medicaid liens, informing them that they can expect payments as long as they fill out certification forms which will be included in the mailing.
"We acknowledge, however, that most claims remain tied up with the CMS (Centers for Medicare and Medicaid Services) deal," the motion states.
She said those that can expect prompt payment were on a list of 1,199 victims, but she did not disclose the percentage getting payment notices.
The filing does question why CMS has refused to process the claims and provide lien information for victims who have decided to opt out of the so-called global settlement.
"We do not know the basis for CMS' s refusal to process individual claims," the motion states.
The trust fund was created in the bankruptcy of the New England Compounding Center, the company blamed for the outbreak which sickened 778 patients, killing 77 of them.
Contact: wfrochejr999@gmail.com

Conigliaros Seek Bar on Victims' Impact Statements

By Walter F. Roche Jr.


The two defendants in the drug compounding criminal case who recently pled guilty to charges they violated a law governing bank account withdrawals are asking a federal judge to bar the use of victims' impact statements at their November sentencing.
The lawyer for Douglas and Carla Conigliaro filed a motion Thursday charging that use of impact statements from victims of the 2012 fungal meningitis outbreak was totally unjustified based on the crimes his clients were charged with.
"There is no basis legally, factually, procedurally or otherwise for the court to consider such statements at the Conigliaros' sentencing hearing," the filing states.
The two pled guilty to structuring bank account withdrawals to avoid triggering a federal law requiring the reporting of transactions exceeding $10,000.
In the 10-page motion filed by the Conigliaros' attorney, David Meier, said he heard for the first time when his clients submitted their guilty pleas that the government was planning to use victims' impact statements at the November sentencing hearing.
Stating that the charges against his clients were "in sharp contrast" to the charges pending against the other defendants, all with connections to the New England Compounding Center, the firm blamed for the 2012 fungal meningitis outbreak. The outbreak sickened 778 patients, killing 77 of them.
NECC, state and federal regulators have concluded, shipped thousands of vials of fungus laden steroids that were then shipped to health care facilities across the country.
"The approximately $124,000 in cash withdrawals that the Conigliaros structured was legitimately earned income that had been lawfully deposited into their neighborhood family bank accounts," the motion states.
Carla Conigliaro was the majority owner of NECC and Douglas headed an affiliated drug sales company. They were among 14 indicated in late 2014 by a federal grand jury probing the meningitis outbreak.
The other defendants face charges ranging from second degree murder to racketeering and mail and wire fraud. They have all entered not guilty pleas
The two facing second degree murder charges, Barry Cadden and Glen Chin, are scheduled to go on trial Jan. 5, 2017.
"Carla Conigliaro and Douglas Conigliaro had nothing to do with the day-to-day operations or management of NECC or with any criminal activity that may have occurred there," the Thursday motion states.
The motion noted that U.S. District Judge Richard Stearns, prior to the plea agreement, had dismissed many of the charges, including 18 counts of criminal contempt, brought against his clients in the 2014 indictment.
"In short, at no time throughout the pendency of this case has the government alleged that Carla and Douglas Conigliaro played any role in (or had any knowledge of) of the alleged criminal activity at NECC," the filing concludes

Judge Will Hear Distribution Pleas

By Walter F. Roche Jr.

A federal judge ruled today that lawyers can present arguments for quick distribution of payments from a $200 million trust fund to victims of a 2012 fungal meningitis outbreak.
In a brief one-page order U.S. District Judge Rya Zobel said she will hear arguments for the fund distribution at a previously scheduled Tuesday hearing in her Boston, Mass. courtroom.
Lawyers representing victims from Virginia, Tennessee, Indiana and Michigan recently filed motions calling for the trustee overseeing the victims' fund to begin making payments within 30 days.
In her order, Zobel said that she will allow one attorney to speak for all three motions for a total of 15 minutes.
While her order does not specifically address the issue, it does indicate that she expects to conduct a formal hearing in her courtroom. Another recent emergency motion had requested that the Tuesday hearing be conducted only by phone.
Distribution of funds from the victims' trust fund has been delayed by negotiations with the Centers for Medicare and Medicaid Services (CMS) and U.S. Justice Department lawyers over the amount of the $200 million that will go to CMS as reimbursement for medical bills the agency paid in behalf of the victims.
As Zobel noted, a proposed settlement with CMS is already on the agenda for the Tuesday court session.
Contact: wfrochejr999@gmail.com

Saint Thomas Settlement Talks Hit a Snag?

By Walter F. Roche Jr.

Settlement talks for more than a hundred Nashville, Tenn. area victims of the 2012 fungal meningitis outbreak have apparently stalled and the attorney for 17 of those victims is asking a federal judge to set a quick deadline.
In a two-page motion filed today in U.S. District Court in Boston, Mass. the attorney, William Leader of Nashville, stated that the parties "have conferred in good faith to resolve or narrow the issue presented in this motion but have been unable to reach an agreement."
The victims involved in the motion were all injected with fungus laden spinal steroids at Nashville's Saint Thomas Outpatient Neurosurgical Center. The center and related Saint Thomas entities along with the Howell Allen Clinic, also in Nashville, are defendants in the cases.
The motion asks U.S. District Judge Rya Zobel to "set an early deadline to conclude these actions."
Zobel had put the Nashville cases on hold for 90 days after getting word that settlement talks were proceeding. The 90 days runs out Aug. 22.
In a July 28 session in her court, Nashville attorney Mark Chalos reported that all parties had signed a memorandum of understanding that would settle some 110 cases.
"We remain hopeful," Chalos said during the hearing.
Leader is requesting that his motion be considered during a previously scheduled court session in Zobel's court on Aug. 24, two days after the expiration date of the existing stay.
Officials of Saint Thomas and their attorneys have declined requests for comment on the settlement talks.
Contact: wfrochejr999@gmail.com

Virginia Attorney Wants Key Hearing in Courtroom

By Walter F. Roche Jr.

Victims' lawyers are asking a federal judge to deny a motion to hold a key court session next week on distributions from a $200 million trust fund by telephone only.
In a three-page filing today a Virginia attorney representing victims of the 2012 fungal meningitis outbreak said that holding the Aug. 16 hearing in a Boston, Mass. courtroom would present no financial hardship.
J. Scott Sexton told Judge Rya Zobel he had already purchased a nonrefundable round trip plane ticket for $306 to attend the session.
He said he did so after being told by a court clerk that a motion he and other Virginia lawyers filed could be heard at the Tuesday session and could be argued either by telephone or in person.
The motion filed in behalf of 154 Virginia victims asks Zobel to issue an order freeing up a $200 million victims' trust fund so that distributions can be finally made to victims of the deadly outbreak. Similar motions have been filed in behalf of victims from Tennessee, Indiana and Michigan.
Earlier this week the lead attorney for plaintiffs in the case filed an emergency motion asking Zobel to require the session be held by telephone only. Thomas Sobol argued that  travel costs and schedule conflicts made a telephone conference the best choice.
Sobol also argued that allowing some parties to appear in person while others participated by phone might inadvertently leave the impression that those appearing in person held an advantage.
"No undue financial burden will come to the Virginia claimants as a result of appearing in court for the hearing Aug. 16," Sexton wrote in rebuttal, adding that his $306 plane ticket cannot be canceled.
Another key issue to be discussed at the Tuesday session is the status of a so-called global settlement of reimbursement claims by the federal agency running the Medicare and Medicaid programs. Sobol filed a copy of that proposal with the court last week.
The Centers for Medicare and Medicaid Services is seeking to recoup at least part of the costs it paid for the treatment of outbreak victims.

Key Hearing May Be By Phone

By Walter F. Roche Jr.

The lead attorney for victims of the 2012 fungal meningitis outbreak has filed an emergency motion requesting that a key hearing set for next week be held by phone and not in the judge's Boston, Mass. courtroom.
The Aug. 16 hearing will be focused on efforts to negotiate a global settlement of claims for reimbursement for the federally funded Medicare and Medicaid programs.
U.S. District Judge Rya Zobel has asked for representative of the U.S. Justice Department and the Centers for Medicare and Medicaid Services to participate in the session. CMS is seeking reimbursement for the money it paid to provide medical treatment to victims.
The agreement is a critical element in efforts to finally provide outbreak victims with payments from a $200 million trust fund. Without a settlement the trustee has stated that none of the $200 million can be released.
 In the motion filed today, lead attorney Thomas Sobol, citing travel costs, stated that vacations and other conflicts would make it difficult for all parties to attend.
"In lead counsel's view conducting the hearing on the 16th by telephone is the most efficient path forward," Sobol wrote.
"Permitting counsel to choose whether to attend in person may inadvertently suggest that appearance in person is preferable or advantageous," he added.
Meanwhile attorneys for victims in Virginia, Tennessee, Indiana and Michigan have filed motions in advance of the hearing asking Zobel to intervene and order the release of at least some of the money.
The trust fund was created in the bankruptcy of the New England Compounding Center, the firm blamed for the deadly outbreak.
State and federal regulators concluded that NECC shipped thousands of vials of fungus loaded steroids to health facilities around the country. The outbreak sickened some 778 patients, killing 77 of them.
Contact:wfrochejr999@gmail.com