Law Firms to Share $1.6 million +

By Walter F. Roche Jr.


Six law firms will share at least $1.6 million from the settlement of cases brought against a Nashville, Tenn. clinic in the aftermath of a deadly fungal meningitis outbreak.
In a series of motions filed today in U.S. District Court in Boston, Mass., the law firms are asking U.S. District Judge Rya W. Zobel to approve the fees but also to keep the amount of the payments secret.
Under the proposal the law firms will share 8 percent of the total awarded to victims. While that figure has never been disclosed, it is reported to be in excess of $20 million. The settlement resolves claims filed by 114 patients or their survivors who were injected with a fungus laden steroid in 2012 at the Saint Thomas Outpatient Neurosurgical Center.
The firms sharing the fees are Hagens, Berman, Branstetter Stranch and Jennings, Ellis and Rapacki, Lief Cabraser Heiman and Bernstein, Kinnard Clayton and Beveridge and Leader Bulso and Nolan.
"The 8 percent assessment has been the level of reasonable expectation of counsel and the claimants from the earliest stages of the multi-district litigation," the motion states.
"Significant good work was performed by many lawyers in pursuing claims asserted in the Saint Thomas cases," the filing states.
In a report filed earlier this week in the same court case, it was reported that checks  have been processed for 90 of the 114 victims who filed claims against Saint Thomas. The payments represent about 90 percent of the total each victim is expected to finally receive.
The payments from the Saint Thomas settlement are separate from payments victims are slated to get from a nation settlement fund established under the bankruptcy of the New England Compounding Center, the Massachusetts firm that shipped the tainted methylprednisolone acetate to health providers across the country.
Some of the same law firms are sharing $6.2 million from a separate legal action stemming from the 2012 outbreak. Those fees were detailed earlier this week in a report also filed in Boston.
Contact: wfrochejr999@gmail.com

Outbreak Fund Paid $37.8 Million to Victims, $6.2 Million to Lawyers

By Walter F. Roche Jr.

An annual report by the trustee of a fund to benefit victims of a deadly 2012 fungal meningitis outbreak shows some $37.8 million has been distributed to 2,022 victims while a nearly equal amount could be issued later this year.
The lengthy report from Lynne F. Riley was filed today in U.S. District Court in Boston, Mass. It covers the 12 month period ending on May 31 of this year.
Though the names of victims are not disclosed, the report shows the largest single payment to a victim or survivor of a victim was $142,692. The smallest was $649.61. The average payment was $18,694. Sixty of the victims collected $100,000 or more.
The fund was created under the bankruptcy of the New England Compounding Center, the now defunct firm blamed for the 2012 outbreak of fungal meningitis. According to federal officials some 778 patients were sickened by fungus infested methylprednisolone acetate from NECC. Seventy six of those patients died.
The checks issued to victims represent about half of what each victim is expected to ultimately receive when the next distributions are made. In prior reports the trustee indicated a third round of payments may come still later.
Riley also listed $6.2 million in disbursements to law firms from a so-called common benefit fund set up to pay lawyers who did work for the benefit of all victims.
The largest amount, $1.25 million, went to the lead plaintiff firm Hagen Berman Sobel and Shapiro. Ellis and Rapacki was paid $775,725, while Branstetter Stranch and Jennings was paid $730,146 and Janet Jenner and Suggs collected $518,912.
The law firms, like the victims, will be getting a second round of payments approximately equal to the first
Riley's report also provided details on additional payments made to victims who were treated at three facilities.
Payments totaling just under $2 million were made to 13 victims treated at a North Carolina clinic while $10.6 million went to 39 claimants at a New Jersey facility and $31.5 million went to 163 victims treated at a Virginia facility.
Additional expenses for the national fund include $293,611 paid to the Duane Morris law firm and Paul Moore, the post bankruptcy confirmation officer. The fund had $74.4 million on deposit as of the end of the 12 month period.
Riley reported that a total of 2,353 claims were filed for the national fund and 2,022 of those were fully or partially paid while 289 were fully denied. Forty were found invalid and two were withdrawn.
Contact: wfrochejr999@gmail.com

Nashville Outbreak Victims Getting Checks

By Walter F. Roche Jr.

Checks have been issued to 90 of 114 victims of the 2012 fungal meningitis outbreak who were injected with fungus tainted spinal steroids at a Nashville, Tenn. clinic, according to a report filed today in U.S. District Court in Boston, Mass.
The filings by attorneys for outbreak victims detail expenses that have been incurred in processing the claims and issuing the checks. The exact details of the settlement with the Saint Thomas Outpatient Neurosurgical Center and related parties have not been made public, but it is estimated at more than $20 million.
According to the report by Nashville attorney Benjamin Gastel, a global settlement of the case was reached in September of last year.
The initial payments to victims or their survivors are estimated to equal about 90 percent of the total each claimant is expected to eventually collect. The payments are separate from checks to victims from a national settlement reached in the bankruptcy of the New England Compounding Center.
NECC sold the tainted methylprednisolone to the Nashville clinic and dozens of other health facilities across the country. NECC's then president, Barry J. Cadden, was sentenced to a nine year prison sentence on Monday for his role in the outbreak.
The filing in the Saint Thomas action seeks the approval of U.S. District Judge Rya W. Zobel for payments totaling just under $100,000.
A payment of $60,000 is being requested for a Louisiana firm, Perry Dampf Dispute Solutions, which was hired as the administrator of the claims. The second request is for $39,375 to Epiq Systems, Inc., the firm hired to process and issue the individual checks. Epiq played a similar role in the national settlement.
Contact: wfrochejr999@gmail.com

Cadden Seeks Prison Close to Home

By Walter F. Roche Jr.




Barry Cadden, the former drug company president recently sentenced to a nine year prison term, is asking the judge who sentenced him to recommend he serve his sentence close to his Wrentham, Mass. home.
In a motion filed this week, Cadden's lawyers asked U.S. District Judge Richard G. Stearns  to recommend he be sent to the federal prison at Fort Devens, Mass., located in central Massachusetts.
Federal prosecutors, Cadden's lawyers acknowledged, oppose the request.
The Fort Devens facility is about 50 miles from Cadden's Wrentham home.
Cadden was given the nine year sentence on Monday following a lengthy hearing. He was convicted in late March on racketeering, conspiracy and mail fraud charges.
Cadden has been ordered to begin serving his sentence on Aug. 7. Under Stearns existing order it will be up to the federal Bureau of Prisons to determine where he will serve his sentence.
Stearns is also considering a motion by the U.S. Attorney to order Cadden to forfeit some $132.8 million.
During the Monday hearing Assistant U.S. Attorney Amanda Strachan stated that if the forfeiture order is granted, an effort would be made to distribute that money to the victims of the outbreak caused by contaminated drugs produced by Cadden's company, the New England Compounding Center.
Cadden's lawyers, however, have challenged the request charging that the forfeiture must be limited to the amount of money Cadden himself received as a result of the criminal acts he was convicted of.
"The government has not met its burden of proving the amount of proceeds Mr. Cadden obtained for the racketeering acts for which he was convicted," Cadden's filing states.
The $132.8 million figure claimed by prosecutors is the total amount NECC collected in revenue from 2006 to 2012.
Cadden, however, contends the forfeiture order should be limited to a little over $32,000, an amount based on the drugs specifically cited in the indictment.
The charges against Cadden stem from a two year federal probe of the 2012 fungal meningitis outbreak caused by contaminated drugs shipped by Cadden's company to health facilities across the country.
While Cadden was convicted on 57 counts, the jury acquitted him on 25 counts of second degree murder.
Contact: wfrochejr999@gmail.com

Cadden Gets Nine Year Sentence

By Walter F. Roche Jr.

Boston, Mass. A 50-year-old pharmacist who once headed a thriving Framingham drug compounding firm was sentenced today to a nine year prison sentence following his conviction on racketeering and mail fraud charges.
The sentence was imposed today by U.S. District Judge Richard G. Stearns following a lengthy hearing in which victims of a deadly outbreak  caused by Cadden's company pleaded for the maximum possible sentence.
Stearns, however, rejected the call for a 35 year sentence from federal prosecutors and the plea for a three year sentence made by Cadden's lawyer.
Stearns said he would have imposed a more severe sentence had he been convinced that Cadden knew that the drugs being shipped by the New England Compounding Center were potentially lethal.
Stearns  also was critical of regulators who failed to act against Cadden's company sooner. Only the U.S. Centers for Disease Control and Prevention recognized the magnitude of the outbreak, he said
Cadden, a Wrentham resident, was one of 14 people indicted on Dec. 16, 2014 following a two year federal investigation of the 2012 fungal meningitis outbreak which sickened some 758 patients in 23 states killing 76 of them. Tennessee, Michigan, Virginia and Indiana were the hardest hit.
Cadden was found guilty on March 22 of this year following a 10-week marathon trial. He was convicted on 57 counts of racketeering, conspiracy and mail fraud, but cleared of 25 counts of second degree murder.
Cadden was president, part owner and chief pharmacist for the New England Compounding Center, the company blamed for a deadly 2012 fungal meningitis outbreak.
Prior to imposing the sentence, Stearns heard from more than 20 victims of the 2012 outbreak, including Patricia Martin of Nashville, Tenn., whose mother Mary Neal Martin died in the outbreak.
Describing her mother's death as "horrible," Martin said her mother was an active person cutting her own lawn and washing her own car until late September of 2012 when she was injected with a steroid from Cadden's company.
Stating that her mother put her trust in the medical establishment, Martin said, "Don't let my mother's death be in vain."
In a tearful presentation just before sentencing, Cadden, said it broke his heart to read and hear the statements of victims who suffered because of drugs shipped by his company.
With his voice breaking with emotion, Cadden said he was especially sorry for the toll the tragedy brought on his wife and sons.
In their sentencing memorandum in which they called for a 35-year prison sentence, prosecutors charged that Cadden displayed an "unconscionable disregard for the lives of the patients using his drugs."
And they cited a series of so-called aggravating circumstances that justified a harsher than normal sentence. Those included the fact that there were multiple vulnerable victims, that Cadden was an authority figure and his actions and inactions created a "substantial risk of death or bodily injury."
Cadden's legal team acknowledged that their client was not guiltless but insisted that he had no reason to believe the drugs being shipped by his company were not sterile. They asked Stearns to impose a sentence of three years or less.
Cadden's lawyers also cited what they described as comparable cases of other drug compounders who were charged criminally but never served any jail time. A Tennessee druggist, David Newbaker, was given a probationary sentence after being cited for many of the same violations as NECC.
In a Texas case, the druggist was charged with a misdemeanor, Cadden's lawyer Bruce Singal noted in a 60-page sentencing memo.
Singal wrote that none of the crimes his client was convicted of "comes anywhere close to warranting a life sentence."
Two other of Cadden's co-defendants, Douglas and Lisa Conigliaro, pleaded guilty to vastly reduced charges. Two others were acquitted of all charges. Glenn Chin, 48, of Canton is scheduled to go on trial in September and he, like Cadden has been charged with second degree murder.
Robert Ronzio, NECC's director of sales already has pleaded guilty to a conspiracy charge and awaits sentencing. He testified extensively during Cadden's trial delivering key testimony for prosecutors.
Following the sentencing victims expressed varying reactions. Martin said she was satisfied with the decision and appreciated the judge's explanation.
Other victims, however, said they were upset that their testimony appeared to have no impact.

Cadden Seeks Three Year Sentence

By Walter F. Roche Jr.


Federal prosecutors are asking a judge to issue a 35 year prison sentence to the former head of a drug compounding firm, while the defendant is asking for only a three year sentence following his conviction on racketeering and mail fraud charges.
The widely divergent recommendations for Barry J. Cadden were filed this week in advance of a scheduled Monday sentencing session before U.S. District Judge Richard G. Stearns.
Stearns, meanwhile,  denied Cadden's motion for acquittal In a 20-page order issued Thursday, Stearns concluded that prosecutors presented ample evidence for the 12 member jury to reach its conclusion, convicting him on 57 counts. They acquitted the 50-year-old on 25 counts of second degree murder.
Cadden was the president and part owner of the New England Compounding Center, the company blamed for the 2012 fungal meningitis outbreak. The company shipped out thousands of vials of a steroid that were loaded with a deadly fungus. As prosecutors noted, at least 76 patients died while over 700 were sickened in  the worst ever outbreak to be caused by a pharmaceutical product.
Prosecutors, in their 50-page sentencing memorandum, said Cadden was responsible for "an unprecedented public health crisis" and displayed "an unconscionable disregard for the lives of the patients using his drugs."
Stating that Cadden deserves a "severe punishment for his crimes," prosecutors repeatedly cited evidence from his 10-week trial showing Cadden knew that NECC was not properly testing the products it was shipping all over the country.
In seeking a lengthy prison sentence, they charged  there were multiple vulnerable victims and Cadden's crimes "involved a substantial risk of death or bodily injury." They also cited his role as the leader of what jurors concluded was a criminal enterprise
Cadden's attorneys, however, argued that their client had "every reason to believe" that the products NECC produced were sterile.
They acknowledged, however, that Cadden was not blameless.
"He did things and particularly failed to do things that in hindsight he truly regrets," Cadden's lawyers wrote in a 60-page sentencing memorandum.
His lawyers stressed that the jury cleared him of the second degree murder charges.
"As the jury found, Mr. Cadden is not a murderer," the memo states.
In a lengthy history of NECC, Cadden's lawyers disclosed that he collected $8.2 million in profits from NECC during the six years preceding the 2012 shutdown of the Framingham, Mass. facility.
In addition he collected $53 million from a sister company called Ameridose. It too was shuttered in the aftermath of the outbreak.
According to the memorandum it was a brother-in-law of Cadden's, Douglas Conigliaro, who came up with the idea of starting a drug compounding business. Prior to that Cadden had been following in his father's footsteps, working in a local pharmacy.
Prosecutors noted that despite the acquittal on the second degree murder charges, the voting tally sheets showed that a majority of the panel voted to convict Cadden on 21 of the 25 second degree murder counts.
Citing the statements of investigators from the U.S. Centers for Disease Control and Prevention and the U.S. Food and Drug Administration, prosecutors wrote that Cadden had been warned years earlier that NECC was not following proper procedures.

Judge Denies Cadden Acquittal Motion

By Walter F. Roche Jr.

A federal judge today rejected an acquittal motion filed by a former drug company president convicted by a jury in March on 57 counts of racketeering, conspiracy and mail fraud.
In a 20-page decision issued in Boston, Mass. U.S. District Judge Richard G. Stearns also rejected Barry J. Cadden's request for a new trial.
While upholding the jury verdict, Stearns did fault federal prosecutors for being "less than forthright" about a binder of government exhibits that was in fact delivered to the jury room.
Rejected by Stearns, however, were claims of prosecutorial misconduct and insufficient evidence to back the 57 counts on which Cadden was convicted.
Stearns had high praise for the jurors who sat through 10 weeks of testimony before delivering their verdict on March 22. Stearns called the jury "one of the hardest working and most conscientious juries I have had the privilege to work with.
As he noted the jury acquitted Cadden on 25 counts of second degree murder.
Cadden, one of 14 indicted in late 2014 by a federal grand jury, is scheduled to appear before Stearns on Monday for sentencing.
The charges stem from a deadly 2012 fungal meningitis outbreak caused by drugs shipped from the company Cadden headed, the New England Compounding Center. NECC has been blamed for the outbreak triggered by fungus laden steroids shipped to health facilities in 20 states. Some 778 patients were sickened and 77 of them died.
In his decision Stearns rejected claims by Cadden that he did not know of insanitary conditions in the clean rooms where the deadly steroids were prepared.
"Cadden was a licensed pharmacist with years of practitioner's experience," Stearn wrote, concluding that there was "considerable evidence" Cadden knew of serious problems.
He also concluded there was ample evidence of a conspiracy between Cadden and others at NECC.
"The record is replete with evidence among the alleged conspirators discussing the improper use of labels, the shipping of untested drugs and drugs with expired ingredients as well as unremediated insanitary conditions," the ruling states.
Stearns did fault prosecutors for  presenting testimony from a clinic employee that gave the impression that Cadden knew of problems with the steroids five days before a recall was initiated.
He said the government's persistence in defending that testimony was "perplexing at best and at worse inconsistent with the obligation of the government to serve the higher interests of justice."
But, Stearns continued, the jury ultimately rejected the second degree murder charges.
"As no prejudice resulted, there is nothing for the court to rectify," he wrote.
The ruling also faults Assistant U.S. Attorney George Varghese for failing to disclose that a binder containing government exhibits had been sent to the jury during its deliberations.
Stearns acknowledged that he mistakenly assured Cadden's lawyer, Bruce Singal, that the binder was not in the jury room.
"There is plenty of fault to share for the mistake," Stearns wrote, citing "the government for not being more forthright."
Nonetheless he concluded that the mistake "was not so prejudicial as to merit the harsh result of overturning even a portion of the verdict."
In fact, he wrote, that had the government offered the binder as a formal exhibit he would have admitted it.