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George Cohen's letter to the FTC re the Vioxx settlement



George Cohen's letter to the FTC (reported in today's New York Times) asking for antitrust review of the Vioxx settlement, is somewhat shorter than one might expect, and essentially recounts what he said at AEI two weeks ago. I repost it in its entirety below the jump, and will have more to say about the letter (and about Adam Liptak's article) next week.

Subject: Vioxx Settlement

Date: Wed, 09 Jan 2008 11:58:32 -0500

From: George Cohen

To: antitrust@ftc.gov

Dear FTC:

I write to raise a potential antitrust issue concerning the recent Vioxx "Settlement" Agreement. This is not a class action but a completely private agreement that is designed to settle in an aggregate way claims related to Vioxx against Merck. No judicial approval or enforcement is contemplated. The Agreement contains a provision under which any lawyer who "enrolls" any one of his clients in the settlement Program must commit to recommend the deal to all of his clients and if any of those clients declines the settlement, the lawyer must withdraw from continuing to represent that client as well as commit not to represent the client of any other lawyer who has enrolled clients in the settlement. Effectively, Merck and the Negotiating Plaintiffs Counsel who signed the Agreement are trying to coerce claimants into joining the settlement even if they don't want to do so by depriving them of the ability to be represented by the best qualified lawyers should they choose to pursue their claims individually. In my view, this provision is a per se illegal group boycott (concerted refusal to deal) under the Superior Court Trial Lawyers case. I don't see any plausible state action or Noerr-Pennington defense here because the deal is purely private.

I'd be happy to discuss this matter further if you'd like.

Sincerely,
George Cohen

Professor Cohen is referring to FTC v. Superior Court Trial Lawyers Association, 493 U.S. 411 (1990), which does not strike me as quite on point: a horizontal agreement not to work unless prices are fixed higher is a different antitrust animal than a contingent vertical agreement to settle litigation and refuse to bring any more cases. For example, no one has ever suggested that the gigantic retainers many corporations pay Martin Lipton to ensure that he is ethically precluded from representing an opposing party in takeover litigation violate the antitrust laws.

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Isaac Gorodetski
Project Manager,
Center for Legal Policy at the
Manhattan Institute
igorodetski@manhattan-institute.org

Katherine Lazarski
Press Officer,
Manhattan Institute
klazarski@manhattan-institute.org

 

Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.