Copy of settlement agreement in Adobe Acrobat

112 Pages·2003·3.52 MB·English

SETTLEMENTAGREEMENTBYAND AMONG PLAINTIFF STATES STATELAW
PLAINTIFFS, AVENTIS,CARDERM CAPITALL.P.,AND ANDRX
ThisSettlementAgreement ismadeandenteredintothis24`hdayofJanuary, 2003byandamong
the undersigned states and commonwealths, byandthroughtheirrespectiveAttorneys General, andthe
DistrictofColumbia, byandthrough its Corporation Counsel(collectively, the "PlaintiffStates");the
State Law Plaintiffs (as defined below), onbehalfofthemselves and in theirrespective capacitiesas
representatives of the Settlement Class (as defined below) (collectively with the Plaintiff States,
"Plaintiffs");andAventis PharmaceuticalsInc.,CardermCapital L.P.,and AndrxCorporation,byand
through theirundersignedcounsel.
WITNESSETH:
WHEREAS,beginning onAugust20, 1998,certainconsumers and ThirdPartyPayers (as
definedbelow) filedseveral lawsuitsinstatecourts aroundthe country allegingthatDefendants
monopolized, attemptedtomonopolize, conspired tomonopolize, andentered intoagreementsthat
unreasonablyrestrainedtradeintheUnited States (includingPuertoRico)marketforCardizem CD
and itsgeneric bioequivalents. Various plaintiffsallegedintheseactions thatDefendants' conduct
violatedthe antitrust,unfaircompetitionand/orconsumer protectionstatutesandthe common lawof
several states. OnJune 11, 1999,afterthe caseshadbeenremovedtofederalcourts, theJudicial
PanelonMultidistnctLitigationconsolidated theseactions inthe United StatesDistrictCourtfor the
EasternDistrictofMichigan;and
WHEREAS,the StateLaw PlaintiffsonOctober 22, 1999filedtheirFirstAmended
Coordinated ClassAction ComplaintsagainstDefendantsinthe United StatesDistrictCourtforthe
EasternDistrictofMichiganallegingthatDefendantsmonopolized,attemptedtomonopolize, conspired
tomonopolize, and entered intoanagreement thatunreasonablyrestrainedtradeinthe marketfor
Cardizem®CDand itsgenericbioequivalents inviolationofvarious statetradepracticeslawsand
commonlawsprohibitingunjust enrichment, seekingdeclaratoryjudgments,restitutionforunjust
enrichment, damages,andotherequitablerelief;and
WHEREAS,onMay 14,2001,the LitigatingStates (asdefinedbelow) filedacomplaint
againstDefendantsintheUnited StatesDistrict Courtforthe EasternDistrictofMichigan ontheirown
behalf,onbehalfofcertain stateagencies, andthroughtheirstatutory,equitableorcommonlaw
authorityorasrepresentative oforparenspatriae onbehalfofnaturalperson citizensofthosestates,
allegingmonopolization,attemptedmonopolization, andagreement restraintoftradeinthe marketfor
Cardizem® CDandits,genericbioequivalents, inviolation offederalandstateantitrust,unfair
competitionand/orconsumerprotectionlawsandseeking injunctiverelief, civilpenalties,damages,
disgorgement, restitutionandotherequitable relief;and
WHEREAS, Plaintiffshaveconducted extensive economic andfactualinvestigationrelatingto
the claims, underlyingevents, andtransactions alleged inthe LitigatingStates' Complaintand the State
LawPlaintiffs' CoordinatedClassAction Complaints(collectively, the "Complaints'and the State
Actions (asdefinedbelow), inadditiontoconductingextensive legalresearch,and,asaresult;the
Plaintiffsare thoroughlyfamiliarwiththe liability anddamagesaspects ofthe claimstheyhaveassertedin
the Complaints andthe StateActions;and
WHEREAS,followingmotionpractice, classand merits discovery,classcertificationof
exemplarclasses ofcertainMichiganconsumers andthirdpartypayers, andbriefing andargument ofan
appeal, extensive arm's-lengthnegotiationshavetakenplacebetweencounselforPlaintiffsandcounsel
forDefendantsinreachingthetermsofthisSettlementAgreement withthe assistanceofaCourt
appointed mediatorandeconomicexperts,and Plaintiffs' counsel haveconcluded,afterextensive
discovery andinvestigationofthe factsandaftercarefullyconsidering the circumstances ofthislitigation,
including the claimsassertedinthe Complaintsandthe StateActions and thepossiblelegalandfactual
defenses thereto, thatitwouldbeinthebestinterests ofthe Plaintiffsandthe members ofthe Settlement
Classtoenterintothis SettlementAgreementtoavoidtheuncertainties ofthisparticularlycomplex
litigationand toassure abenefittothoserepresentedbythePlaintiffsand tothemembers ofthe
SettlementClass, andfurther, thatPlaintiffs' counsel consider the settlementsetforthhereintobefair,
reasonable, andadequateandinthebestinterestsofthe Plaintiffsandthemembers ofthe Settlement
Class;and
WHEREAS,Defendants, whilecontinuingtodenythe allegations, anyviolationoflaw or
wrongdoing, andanyliabilitywithrespecttoany andall claimsassertedinthe Complaintsand the State
Actions, haveconcludedthattheywillenterintothisSettlementAgreementtoavoidthe further expense,
(cid:9)
inconvenience,and burdenofthisprotractedlitigation, andthe distractionanddiversionoftheir
personnel andresources,andtoavoidtherisksinherentinuncertain,complex litigation; and
WHEREAS, DefendantsdenyeachandeveryoneofPlaintiffs' allegationsofunlawfuland
inequitableconductandPlaintiffs' entitlementtodamages, restitutionorany otherlegalorequitablerelief
inconnectionwithPlaintiffs' claimsarisingtherefrom andhaveassertedanumberofdefensesto
Plaintiffs' claims whichDefendantsbelieve tobemeritorious;and
WHEREAS,theundersigned haveeachdeterminedittobeintheirrespectivebestinterests and
inthe bestinterests ofthosewhomtheyrepresenttoresolvethisdispute andtoenterintothisSettlement
Agreement.
NOW,THEREFORE,inconsiderationofthe mutualcovenantsand agreementscontained
herein, the Parties agreeasfollows:
I. DEFINITIONS
All termsdefinedinthe preamble tothisSettlementAgreement.shallbesodefinedwhenused
anywhereinthisSettlementAgreement. Additionally, asusedanywhere inthisSettlementAgreement:
A. "Aggregate SettlementFund" meansthesumofEighty Million andno/100 Dollars
($80,000,000.00)thatDefendantscollectively willpayintoanEscrow Accountpursuanttotheterms
and conditionsofthe EscrowAgreement,inaproportiontowhichtheyhaveagreed andwhichshallbe
disclosed onlytothe EscrowAgent(inaccordancewithSectionsW.A.1.,IV.A.2andVII.A.2(d)) )
(cid:9)(cid:9)(cid:9)
and to no one else inaconfidential side letterfrom Defendants, plusanyinterest, dividends and other
distributions andpayments earnedon that sum.
B. "Andrx" meansDefendant AndrxCorporation and itspast, presentand future
directors, officers, employees,shareholders, affiliates, divisions, predecessors, parents, subsidiaries,
other organizationalunits ofany kind,general orlimitedpartners, successors, andassigns; andthepast,
presentandfuture agents, representatives, attorneys, heirs,executors, administrators, and other persons
actingon behalfofanyofthem.
C. "Aventis" meansDefendantsAventis Pharmaceuticals Inc. (formerlyknownas
Hoechst MarionRoussel, Inc.), Carderm Capital L.P., andtheirrespective past, presentand future
directors, officers, employees, shareholders, affiliates, divisions, predecessors, parents (including,
withoutlimitation, Aventis S.A. and HoechstAG), subsidiaries, otherorganizational units ofany kind,
general orlimitedpartners, successors, andassigns; andthepast, present and futureagents,
representatives, attorneys,heirs, executors, administrators, and otherpersons acting onbehalfofanyof
D. "Cardizern® CDProducts"meansCardizemOCD and/oritsAB3-rated
equivalents.
"Cardizem Protective Order" means (1) the protectiveorderentered in MDLNo.
1278 (the "Cardizem Confidentiality Order"), and(2) paragraphs12 and 13ofCase Management
(cid:9)(cid:9)(cid:9)(cid:9)(cid:9)(cid:9)(cid:9)
Ordernumber 5 (the "Supplemental Confidentiality Order"), true andcorrectcopies ofwhichare
attachedhereto asAttachment K
F. "ConsumerDistribution Plan" meansthe planormethodofallocationofthe
ConsumerSettlement Fund,whichshall be submittedto the Courtfor approval, and which is annexed
hereto asAttachmentE,
G. "Consumer SettlementFund" meansthat portionoftheNet SettlementFund that
will be setasidetopay theadministrative costsofsuch fiendand the claimsofnatural personmembers
ofthe SettlementClass who paidUnited States (includingPuerto Rico)pharmaciesfor Cardizem® CD
Products and whofiletimelyandvalidproofsofclaim.
G(a). "Consumer Notice Administrator" meansthe entityorentitiesappointedbythe
Court to administerthe Notice Planand to publish theNotices ofSettlementand the SummaryNotices
ofSettlement with respectto the consumer members ofthe SettlementClass:
FL "Court" meansthe United States District Courtforthe Eastern DistrictofMichigan.
1. "Defendant" meanseitherAndrx orAventis. "Defendants" meansbothAndrx and
Aventis.
J. "Designated Governmental Agencies"means the Medicaidagencies in any state
andtheothergovernmental agencieslisted on Attachment A annexedhereto.
K. "Effective Date" meansthe dateonwhichall ofthe following conditions shallhave
been satisfied, at which time this SettlementAgreementwillbedeemedto have become "Effective":
(cid:9)(cid:9)(cid:9)(cid:9)(cid:9)(cid:9)(cid:9)(cid:9)
1. ReceiptbytheEscrowAgentoftheAggregateSettlementFundfrom
Defendants pursuant to SectionM.Aofthis SettlementAgreement;
2. CertificationbytheCourt, forsettlementpurposesonly,oftheSettlementClass
withoutanyMaterialChange;
3. Entryby theCourtofthePreliminaryApprovalOrderwithoutanyMaterial
Change,
4. ExpirationoftheOpt-OutDeadlines;
5. Notemiinationofthis SettlementAgreementby Defendants in anymanner
permittedandwithinthetimecontemplatedbythis SettlementAgreement
and/orRiderAhereto;
6. FinalapprovalbytheCourtofthis Settlement AgreementwithoutanyMaterial
Change;
7. EntrybytheCourtoftheFinalJudgmentandOrderwithoutanyMaterial
Change;
8. Either:
(a) 30 days having elapsedfollowingtheentrybytheCourtoftheFinal
JudgmentandOrder,ifno notice ofappealwithrespecttotheFinal
JudgmentandOrderhasbeentimelyfiledwiththeCourt;or
(cid:9)(cid:9)(cid:9)(cid:9)(cid:9)(cid:9)
(b) ifone ormorenotices ofappealare timelyfiledwiththe Court,
dismissalofallsuchappeals oraffirmanceofthe FinalJudgmentand
Orderand thisSettlementAgreement inall respectssubjecttono
futherrightofreview, and
9. Dismissal of the State Actions with prejudice without further subsequent
proceedings pursuant to Section V.F with such dismissal to occur within one
hundredeighty(180)calendardaysafterthelasttooccuroftheabove-enumerated
events.
L. "Escrow Agent" meansthe personorentitymutuallyagreedtoanddesignatedbythe
Parties inthe EscrowAgreement.
M. "Escrow Agreement"meanstheescrow agreement,pursuanttowhichthe Aggregate
SettlementFundshallbeadministered, without anyMaterial ChangetoAttachmentBannexed hereto.
N. "Final Judgment and Order" meanstheCourt's final,appealableorder,withoutany
MaterialChangetoAttachmentGannexedhereto.
O. "GovernmentCompensationPlan" meanstheplanormethod ofallocationofthe
StateSettlementFund,whichshallbesubmittedto the Courtforapproval, andwhichisadoptedand
approved bythe courtwithout anyMaterialChangetoAttachmentDannexedhereto.
(cid:9)(cid:9)
P. "Legal Public Holiday"meansanydayon which theoffices oftheEscrow Agent are
closed for the transactionofpublic businessordesignatedasa"legalholiday" pursuant to Fed. R Civ.
P. 6(a), asamended, orany successor to that rule.
Q. "Litigating States"meansthe States and Commonwealths ofAlaska, Arizona,
Arkansas, California, Connecticut,the DistrictofColumbia, Hawaii, Idaho,Indiana, Iowa,Kansas,
Maine, Michigan, Minnesota,Nevada, NewMexico, New York,North Carolina, North Dakota,
Oklahoma, Puerto Rico, Rhode Island, South Carolina, Utah, Vermont, Washington,WestVirginia,
Wisconsinand Wyoming.
"Material Change"means(a) modificationinanymannerwhatsoeverto anything
contained in any ofthe following sections ofthis Settlement Agreement: SectionsI.A throughI.VV,
inclusive; SectionsII.AthroughILE, inclusive;Sections III.A, M.B, M.C, andIII.D.3; SectionsIV.A
and IV.B; Sections V.B, V.C, V.D, andV.F; SectionsVI.A,VI.D andVI.E; Sections VII.A. and
VII.B; Sections VIII.A andVIII.B; Section IX;Sections X.AthroughYD, inclusive; and Sections
XI.B, XI.C, XI.H, XI.J andXI.K, RiderA and Attachments B, C, D, G, H, I,and K;or(b) any
modificationofanythingelseinthis SettlementAgreement that affects the termsand scope ofthe
releases, covenants nottosue and ReleasedClaims set forthinSections I.CC, I.FFI.MM, I.NN, II.A
andILB orthe StateLaw Releasees' abilityto assert thereleases; or(c) anymodificationofanything
else inthis SettlementAgreementthat affects eitherthe amountofmoneypaidby the StateLaw
Releasees pursuant to this SettlementAgreement orany SettlementReduction setforthin SectionIV.A
(cid:9)(cid:9)(cid:9)(cid:9)
and RiderA ortheamountofanyTermination Refund in SectionX;or(d) anymaterial modificationof
anythingelseinthis SettlementAgreement
S. "MDL No. 1278" meansthe litigation captionedIn Re: CardizemCDAntitrust
Litigation, Master FileNo. 99-MD-1278, plusany and all relatedcases andactionsconsolidatedor
coordinatedwith thatlitigationfordiscoveryorother purposes
T. "MMME Plaintiffs"meansBlue CrossBlue Shield ofMichigan, Blue CrossBlue
Shield ofMinnesota,Blue Cross and Blue ShieldofMassachusetts, Inc., andExcellus Health Plan, Inc.,
the entitiesthat filed suitagainst Defendantsin theUnited States DistrictCourtforthe EastemDistrict of
MichiganonJuly26, 2001.
U. "MMME SetOff" meansthepro rata share ofthe ThirdPartyPayerSettlement
Fund to whichany MviMEPlaintiffthattimelyand validlyopts outofthe SettlementClass wouldhave
beenentitledtoreceiveifithad filedtimelyandvalidproofs ofclaim.
V. "NetSettlement Fund" meanstheAggregate SettlementFundless: (1) attorneys'
fees, out-of-pocketexpenses, and otheramounts awardedbythe Courtto StateLaw Plaintiffs and/or
theircounsel; (2) Courtapproved costsofnotice; (3) settlementadministration fees andcostswith
respect to the Aggregate Settlement Fund thataredue andpayabletothe Escrow Agent pursuanttothe
EscrowAgreement; and(4) theStateSettlementFund Administrativecostsforeach ofthe Settlement
Fundswillbe allocatedtothe respectiveSettlementFundandwillnot be deductedfrom theAggregate
SettlementFund
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