Klein v. O'Neal, Inc.

In 1983 and 1984, O’Neal, Inc. and other entities (collectively, O’Neal) (defendant) manufactured and distributed E-Ferol Aqueous Solution (E-Ferol), a vitamin E supplement for preventing vision impairments in premature babies. Several months after E-Ferol’s release, medical providers and regulators learned that patients who had been given E-Ferol were suffering kidney failure, liver failure, brain injury, and other severe negative consequences. An investigation revealed that an ingredient in E-Ferol was causing the negative reactions, and O’Neal was eventually criminally convicted for its role in distributing the dangerous E-Ferol product. Years later, Victoria Klein and over 360 others who were injured or otherwise negatively affected by E-Ferol (plaintiffs) brought a mass-tort class action against O’Neal, alleging claims for negligence, strict liability, and negligent misrepresentation. Following nearly five years of pretrial proceedings and motion practice, class representatives and O’Neal participated in 14 months of mediation. The parties ultimately reached a settlement agreement that called for a $110 million payment to the class. The settlement agreement divided class members into five categories depending on the severity of the member’s injury, with members in each category splitting a specific percentage of the total payout. The vast majority of class members asked the federal district court to approve the settlement, but one class member objected. The district court thus held a fairness hearing and received evidence and testimony presented by the class representatives, O’Neal, and the objecting class member. Both the class representatives and O’Neal presented expert testimony that the settlement was fair and reasonable and should be approved. The class representatives and O’Neal also presented evidence that prolonging the litigation would be a long and costly process involving the trial of extremely complex medical issues. The district court also received evidence that other plaintiffs had achieved favorable settlements in other E-Ferol lawsuits.