Houston law firm wins big fees from Johnson & Johnson

An Arkansas state judge on Friday ordered Johnson & Johnson to pay $181 million to the Houston law firm Bailey Perrin Bailey for its work on a Medicare fraud case brought on behalf of the state of Arkansas.

Ten months earlier, a state judge awarded Arkansas $1.2 billion in a 2007 lawsuit in which the state, represented by Bailey Perrin, had claimed Johnson & Johnson downplayed the risks of the antipsychotic drug Risperdal.

The $181 million, ordered by Judge Tim Fox, represents a 15 percent contingency fee the Arkansas Attorney General's Office agreed to pay Bailey Perrin, according to court documents. According to the state, Bailey Perrin assigned up to 10 lawyers and five paralegals to the case.

Johnson & Johnson spokeswoman Teresa Mueller called the fee "excessive." Mueller said the company, which has already appealed the award to Arkansas, will also appeal the legal fees.

"The fee awarded represents about $19,700 per hour for each of the outside attorneys and staff who worked on the case for the state, based on our reconstruction of their actual time," Mueller said in a statement.

During a two-week trial, Arkansas alleged that Johnson & Johnson deceived thousands of doctors by marketing Risperdal for unapproved uses in children and the elderly. As a result, the state said, Arkansas' Medicaid insurance program greatly overpaid for the drug.

Ken Bailey, a name partner at the firm, declined comment, and two other firm leaders did not respond to requests for comment.

The 23-lawyer Bailey Perrin Bailey, which specializes in products liability, personal injury and defective drug claims, is also representing a New Mexico, Kentucky and Mississippi in lawsuits against Johnson & Johnson for Medicaid fraud.

Aaron Sadler, a spokesman for the Office of Attorney General Dustin McDaniel, said the ruling "has nothing whatsoever to do with reconstruction of time," but everything to do with the defendants' deceptive and illegal actions.

(Published by Reuters - February 1, 2013)