Federal Judge Awards $117 Million to Class Counsel in Hillenbrand Industries’ $468 Million Antitrust Settlement With Hospitals and Nursing Homes
(Washington, D.C.) – Following the June 2006 approval of a $468 million settlement of a class action lawsuit against hospital equipment provider Hillenbrand Industries, Inc. and its subsidiaries Hill-Rom, Inc. and Hill-Rom Company, Inc., a federal judge in Spartanburg, S.C., has awarded the five law firms representing a class of hospitals, nursing homes and other customers a total of more than $117 million in legal fees.
The fee award, equivalent to 25 percent of the value of the settlement, was granted on August 15 by Judge Henry F. Floyd of the U.S. District Court for the District of South Carolina, Spartanburg Division. The award was granted to the three lead class counsel firms: Akin Gump Strauss Hauer & Feld LLP; Ball & Scott; and Felder & McGee, LLP; and two co-class counsel firms: McGowan, Hood, Felder & Johnson and Johnson Toal & Battiste PA.
In his ruling Judge Floyd said that the results obtained for the class were “exceptional,” the cash portion of the settlement was “at the high end of the spectrum for cash awards paid in any antitrust case,” and the non-cash portion of the settlement conferred $152.3 million in value to the class. Judge Floyd noted that the settlement will benefit over 6,000 hospitals, 16,200 nursing homes and thousands of individual customers. He also found that, “Lead and Co-Class Counsel demonstrated substantial skill and ability in obtaining a settlement agreement, [which] was probably the most efficient remedy for the class…”
The fee award was based on the settlement reached in late 2005 between the Spartanburg Regional Healthcare System, on behalf of a class of Hillenbrand customers, and defendant Hillenbrand. At issue was the controversial and prevalent practice of price-bundling. In the health care industry, certain dominant manufacturers of medical supplies require customers to buy products in packages or become subject to higher a la carte prices on products critical to their operations. The settlement requires the defendants to continue to refrain from certain pricing practices consistent with policies put in place by Hill-Rom in 2002 and to pay $316 million in cash to the members of the settlement class. The settlement proceeds will be distributed to North American purchasers or renters of Hill-Rom products from 1990 through the present.
Akin Gump partner Laurence Macon, co-lead counsel for the class, said, “We are gratified by the outcome and we believe that the net result of pursuing this litigation and its settlement will be a more competitive marketplace for the sale of critical health care products.”
Founded in 1945, Akin Gump Strauss Hauer & Feld LLP, a leading international law firm, numbers more than 900 lawyers with offices in Austin, Brussels, Dallas, Dubai, Houston, London, Los Angeles, Moscow, New York, Philadelphia, San Antonio, San Francisco, Silicon Valley, Taipei and Washington. The firm has a diversified practice and represents regional, national and international clients in a wide range of areas, including antitrust; appellate; banking and finance; capital markets; communications and information technology; corporate and securities; corporate governance; employee benefits; energy; entertainment and media; environmental; estate planning, wealth transfer and probate; financial restructuring; global security; government contracts; health; insurance; intellectual property; international trade; investment funds; labor and employment; land use; litigation; mergers and acquisitions; private equity; privatization; project development and finance; public law and policy; real estate development and finance; Russia/CIS; tax; and technology.
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