Thursday, September 6, 2007

NJ Supreme Court rejects Vioxx third-party payor class action

The New Jersey Supreme Court today ruled in favor of Merck in the appeal of the third-party payor class action involving Vioxx.  Here is the court's opinion in International Union of Operating Engineers Local No. 68 Welfare Fund v. Merck & Co., reversing the Appellate Division and holding class certification improper on grounds of predominance and superiority.

HME

September 6, 2007 in Class Actions, Vioxx | Permalink | Comments (0) | TrackBack (0)

Moore on the ALI Aggregate Litigation Draft

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Legal ethicist Nancy Moore of Boston University has posted a paper on SSRN entitled The ALI Draft Proposal to Bypass the Aggregate Settlement Rule: Do Mass Tort Individual Clients Need (or Want) Group Decision-Making, forthcoming in DePaul Law Review.  Here's the abstract:

The American Law Institute has recently undertaken an entirely new project - Principles of the Law of Aggregate Litigation. The bulk of the project is devoted to class actions; however, a number of sections address various forms of non-class aggregations, and there is an extensive discussion of non-class aggregate settlements, including the controversial “aggregate settlement rule”. Rule 1.8(g) of the ABA Model Rules of Professional Conduct limits the lawyer's ability to participate “in making an aggregate settlement of or against the clients” without the informed consent of each client, in which the clients have been advised of “the existence and nature of all the claims or pleas involved and of the participation of each person in the settlement.”

The ALI Reporters propose to bypass the aggregate settlement rule by creating two exceptions. The first exception applies when the total value of the aggregated claims is more than $5 million and the total number of claimants is 40 or more. In these cases, the proposal allows individual claimants, after consultation with counsel, to agree in advance to be bound to a proposed settlement when 75% of the claimants approve the settlement or, “if the settlement significantly distinguishes among different categories of claimants, a separate 75 [%] vote of each category of claimants” approves the settlement. Limited judicial review is available, but only if the challenge is brought within 90 days, and even then, the settlement will be unenforceable only if the challenger's waiver was not adequately informed or the 75%approval or 40 person/$5 million. The second exception applies when advance client waivers have not been obtained. Here the lawyer may seek approval for the fairness and adequacy of an aggregate settlement, but the proposal provides no guidelines for determining under what circumstances courts should agree to do so.

The reporters give two separate reasons for relaxing the aggregate settlement rule. First, they argue that the rule impedes multi-party settlement and is unnecessary to protect clients, given the 75% approval requirement. Second, they argue that waivers of important rights are routinely granted, and there is no reason not to honor such waivers to enable group decision-making. This article challenges the reporters' assumptions and argues in favor of maintaining the status quo. The author argues that the burden is on the reporters to justify change and that they have not met that burden with respect to either of the suggested rationales.

Moore, who served as chief reporter for the Ethics 2000 revision of the Model Rules of Professional Conduct, has been a leading advocate of retaining the aggregate settlement rule (the disclosure and informed consent requirement of RPC 1.8(g)) and applying it to mass tort cases, in contrast to Charles Silver and Lynn Baker, who have written in favor of allowing clients to consent in advance to be bound by an aggregate settlement.  I've blogged on the aggregate settlement rule and on versions of the ALI draft proposals here and here.  On the issue of whether to permit advanced consent to aggregate settlements, I fall squarely on Moore's side.

HME

September 6, 2007 in Ethics, Mass Tort Scholarship, Settlement | Permalink | Comments (0) | TrackBack (0)

Wednesday, September 5, 2007

Stapleton on U.S. Asbestos Doctrine

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Jane Stapleton of U. Texas, always a thoughtful observer of the U.S. tort system, has posted a paper on SSRN entitled Two Causal Fictions at the Heart of U.S. Asbestos Doctrine, published in Law Quarterly Review.  Here's the abstract:

The “elephantine mass of asbestos cases... defies customary judicial administration” (Ortiz v. Fibreboard Corp., 527 U.S. 815, 821 (1999)) and US courts have been forced to create novel handling techniques. This Note deals with two under-appreciated but dramatic accommodations US courts have made to causation doctrine in the asbestos area which are extraordinary to foreign eyes. Both stem from the decision in Borel v. Fibreboard Paper Prods. Corp., 493 F.2d 1076 (5th Cir. 1973), cert. denied, 419 U.S. 869 (1974). First, US courts since Borel have not generally made any distinction between the causal issue in asbestosis and in mesothelioma claims: regardless of which condition has been contracted, a US asbestos plaintiff is entitled to get to the jury on the issue of factual cause merely by showing a suitable exposure to asbestos by the defendant. As applied to mesothelioma and other asbestos cancers this “substantial factor” approach rests on the radical fiction that asbestos cancers have a threshold contraction mechanism. This extraordinary fiction has gone virtually unremarked: astonishingly even the Reporters of Restatement (Third) of Torts: Products Liability sanguinely state, with no reference to Borel's case or even to asbestos, that “traditional notions of causation retain their vitality in products liability” (88 Geo.L.J. 659). Even when it is acknowledged, as in Rutherford v. Owens-Illinois, Inc. 941 P.2d 1203 (Cal. 1997), little if any rationale for its adoption is provided. Under the second fiction the cumulative asbestos disease of asbestosis is treated as if it were dose-independent and accordingly the liability of asbestos defendants is held to be in solidum. For example, in Norfolk & Western Ry. Co. v. Ayers, 538 U.S. 135 at 143 (2003) one asbestosis plaintiff had been exposed by the defendant for only three months and had worked with asbestos elsewhere as a pipe fitter for 33 years. The defendant was held liable for his total condition. This is in stark contrast to the approach of the United Kingdom: see Holtby v. Brigham & Cowan (Hull) Ltd. [2000] 3 All ER 421 (CA). The Note then speculates about the reasons for the extreme departures from orthodoxy represented by the twin asbestos fictions in the US: their creation, their apparent continuing acceptance even by beleaguered defendants, the uncertainty of their boundaries and their general neglect by academic commentators.

HME

September 5, 2007 in Asbestos, Mass Tort Scholarship | Permalink | Comments (0) | TrackBack (1)

Rhode Island Nightclub Fire Litigation: Possible Settlement

There's a possible aggregate settlement in the works regarding the 2003 nightclub fire in West Warwick, Rhode Island.  Here's an excerpt from today's AP story on nytimes.com:

Several defendants being sued by relatives of the 100 people killed in a 2003 nightclub fire have tentatively agreed to a $13.5 million settlement, a lawyer for one family in the case told The Associated Press on Wednesday.

The settlements, if approved by a judge, would be the first in what the plaintiffs hope will be several agreements with dozens of defendants in the lawsuits stemming from the Feb. 20, 2003, fire at the Station nightclub in West Warwick. The fire also injured 200 people.

The fire resulted from the pyrotechnic display for the band Great White, which ignited flammable foam that the club had installed on the walls for sound-absorbtion.  The defendants involved in the settlement reportedly include Triton Realty (which leased the building to the club's owners), Celotex (soundproofing board manufacturer, and no stranger to mass litigation from its asbestos days), Luna Tech and High Tech Special Effects (maker and seller of pyrotechnics), and an alarm company.  Numerous additional defendants are not included in this settlement.

According to the news report, the settlement depends upon the appointment of a special master to oversee the distribution.  The lawyers have recommended Francis McGovern, a Duke Law School professor who has served as special master in numerous mass tort cases.

HME

September 5, 2007 in Mass Disasters, Settlement | Permalink | Comments (1) | TrackBack (0)

Tuesday, September 4, 2007

September 11 Lawsuits Heading to Trial

Today's New York Times contains a front-page article about the 9/11 tort litigation, offering an interesting description of the plaintiffs as well as news about upcoming trials before Judge Alvin Hellerstein in the Southern District of New York.

Perhaps the most striking feature of the 9/11 litigation is the self-selected nature of the plaintiff group.  Each of these plaintiffs, in contrast to the vast majority of 9/11 victims' families, declined the compensation offered by the federal September 11th Victim Compensation Fund.  By passing up guaranteed and generous compensation and electing to sue defendants such as American Airlines, United Airlines, Boeing, and airline security companies, these plaintiffs demonstrated an uncommonly strong desire to impose accountability through a public process.

The nature of these plaintiffs -- reporter Anemona Hartocollis calls them an "angry, stubborn, sorrowful and stalwart group" -- makes the court's procedural choice about the upcoming trials particularly surprising.  Judge Hellerstein has set a first trial date of Sept. 24, and the Times describes the trial process as follows:

In a reversal of the usual legal procedure, Judge Hellerstein has ordered six trials for damages to take place before any trial for liability, in the hope, he said, that both sides may use those figures as a road map toward settlement.

In other words, the court plans to conduct bellwether trials using reverse bifurcation.  It is not uncommon in mass torts for judges to use bellwether trials to provide the parties sufficient information about likely outcomes to enable settlement.  Nor is reverse bifurcation rare in mass torts.  "Reverse bifurcation" refers to phased trials in which damages are tried before liability.  They have proved useful in asbestos litigation where liability was not seriously contested and where verdicts on individual damages could produce settlements.  Reverse bifurcation also was used in the Prempro litigation.

I have to wonder, however, whether either bellwether trials or reverse bifurcation makes sense for lawsuits involving the September 11 tragedy.  If these plaintiffs were looking for compensation, the Victim Compensation Fund offered a more appealing option than litigation with its risks, costs, and delays.  Although the Times article emphasizes that many of these plaintiffs would have received awards at the lower end of the fund's payout scale, the fund nonetheless offered guaranteed payments in sharp contrast with the uncertainties of litigation.  Those who opted for litigation presumably are seeking something more.  If they are seeking their day in court, the majority of the plaintiffs may be left unsatisfied by bellwether trials that allow only the bellwether plaintiffs to tell their stories in a public forum.  Moreover, even the bellwether plaintiffs may be unsatisfied by a reverse-bifurcated phased trial process that allows them to describe their own grief but gives them no opportunity to hold the defendants accountable.  If I am correct about what distinguishes these plaintiffs from the vast majority of the victims' families, then Judge Hellerstein may find that phased bellwether trials -- often effective devices for encouraging mass tort settlements -- do less to promote settlement in the uncommon context of the 9/11 litigation.

HME

September 4, 2007 in 9/11, Procedure | Permalink | Comments (4) | TrackBack (0)

Representative Sampling of Privilege Claims

Judge Fallon, who is presiding over the Vioxx MDL in Louisiana, issued an order on August 14 resolving the ongoing and onerous privilege disputes in those cases through sampling.  The procedure is very innovative (this may be the first time it has ever been done).  As Judge Fallon points out in his opinion, the enormity of discovery disputes in the electronic age requires innovative techniques.  I suspect we'll be seeing more use of sampling in discovery the future.  You can access a pdf of the Judge's carefully crafted order here.  One interesting thing to note: the sampling was not random.  Instead, the Special Master, and subsequently the court, reviewed a sample consisting of 2,000 documents chosen by Merck (and a smaller sample of 600 documents chosen by plaintiffs). 

ADL

September 4, 2007 in Procedure, Vioxx | Permalink | Comments (0) | TrackBack (0)

Monday, September 3, 2007

Welcome to New Mass Tort Litigation Blog Editor Professor Alexandra Lahav

We're delighted that Professor Alexandra Lahav of the University of Connecticut School of Law is joining the Mass Tort Litigation Blog as an additional editor.  Professor Lahav's scholarship and teaching involve mass torts and complex litigation, and we look forward to her contributions.

Welcome aboard!

BGS

September 3, 2007 | Permalink | Comments (0) | TrackBack (0)

Heart Stents and Incomplete Scientific Evidence

Article on cnn.com -- Study: Drug-Coated Heart Stents May Not Be So Bad After All, from Dow Jones.  Here's an excerpt:

On Sunday, James and colleagues from Sweden presented follow-up results from data reported in December at the FDA safety hearing, and later published in the New England Journal of Medicine. They said that at that time, based on three years of data, patients with drug-eluting stents had an 18% increased chance of dying compared to patients with bare metal stents.

With more patients included and an extra year of data, the numbers now tell a different story.

After four years of tracking patients with drug-lined stents, James said that there was now no significant difference between patients who received the drug stents versus those who received the bare metal ones: patients with drug stents had only a 1% increased chance of dying. Newer drug stents are also better than earlier versions, some of which had to be recalled.

Experts are not entirely sure what might explain the research reversal, but more selective stent use might help explain the change, they said.

In the last year, use of drug stents has dropped dramatically. James said that in Sweden, only about 15% of eligible patients were now receiving them, compared to nearly 60% in previous years. And in the U.S., use has dropped from about more than 90% of eligible heart patients to about 70 percent.

The article also notes that the drop in stent use following the initial study results lead manufacturer Johnson & Johnson to cut 5,000 jobs. 

The change in stent study results is a cautionary reminder of the need to make informed policy judgments based on a complete scientific record.   The most egregious example in mass tort litigation is the silicone breast implant litigation, which lead to the bankrupting of a major company, Dow Corning, based on an incomplete scientific record.  When the  final scientific verdict was in -- too late for Dow Corning and other defendants -- the Institute of Medicine issued a report rejecting the medical causation that underlay plaintiffs' claims. 

But how do we know when the new study finding danger is accurate or inaccurate (as a result of confounding, chance, or bias)?  Phenylpropanolamine (PPA), the ingredient in cough-cold medications and appetite suppressants, was one of the most used drugs in the United States for decades, but a single epidemiological study (based primarily on the findings involving a subset of only a handful of individuals suffering stroke who took PPA in appetite suppressants) lead to the FDA's requesting the drug be voluntarily withdrawn from the market.  (For a critique of the study, see Download stier_hennekens_ppa_and_hs_in_the_hsp_annals_of_epidemiology_2006.pdf.)  What's worse, removing a drug from the market based on an incomplete record likely forecloses further research, which leaves litigants with a necessarily incomplete scientific record on which to base their claims.

So what's a judge to do?  I would argue that judges should continue to adhere strictly to Daubert's dictates that only expert opinions based on reliable science pass through the gates -- even if further studies do not appear to be forthcoming.  Justice requires that liability be fixed and payments required only where there is a solid basis for the claim, which includes medical causation.  But where the underlying science meets Daubert evidentiary standards, but may be incomplete, defendants need to be ready not only to present any cogent criticisms of the study, but also to point to examples where the preliminary science was wrong.  A glaring one: when the New England Journal of Medicine in 1981 published an article finding that coffee drinking may have been producing more than half of the cases of pancreatic cancer in the U.S. -- later studies failed to confirm those findings.  Starbucks, I'm sure, is happy the scientific record didn't remain incomplete.

BGS

September 3, 2007 in FDA, Medical Devices - Misc. | Permalink | Comments (0) | TrackBack (0)