Monday, March 24, 2008

Interview with Richard Nagareda on Mass Torts in a World of Settlement

This blog has featured Richard Nagareda (Vanderbilt)'s new book Mass Torts in a World of Settlement in a previous post.  Here is an interview of Nagareda sent to me by Rodger Citron (Touro) that may interest our readers:

Vanderbilt Law School Professor Richard A. Nagareda became interested in mass torts litigation while he was a student at Harvard law School, worked in private practice on an important class action that attempted to resolve the asbestos litigation – the case, Amchem Products, Inc. v. Windsor, eventually went to the Supreme Court – and now has written Mass Torts in a World of Settlement (University of Chicago Press 2007), which makes the case for rethinking the legal system’s current approach to resolving certain types of mass torts lawsuits.  In his book, Nagareda addresses litigation over a mass-marketed product that involves claims of injury to large numbers of people and a delay in the time between a person’s exposure to a harmful product and that person’s development of an injury.  The numerous lawsuits generated by claims of exposure to asbestos are representative of the cases studied by Nagareda.

Nagareda says that there are two fundamental flaws in the resolution of mass torts claim in the current legal system.  First, settlements in mass torts cases often do not sufficiently protect future claimants – those individuals who have been exposed to the defective product but do not yet show signs of injury.  Nagareda argues that this lack of protection results, in large part, a related problem in the resolution of mass torts cases.  Currently the settlement of such cases is seen as raising only litigation-related questions.  However, such settlements also – even primarily – implicate questions of governance and administration, according to Nagareda.  In his book, he outlines a number of suggestions for improving the legal system’s approach to resolving mass torts lawsuits.   On November 30, 2007, Rodger D. Citron interviewed Nagareda at a conference at the University of Pennsylvania Law School.  An edited transcript of their conversation follows:

Q:    Is the recent settlement in the Vioxx litigation against Merck the type of case that you address in your book?
RN:      It is actually in a kind of grey area. . . .  [I]t’s very close to what I talk about in the book because it’s clearly dealing with a pharmaceutical product mass-marketed and in that sense presented some of the same coordination problems.  [However, t]he temporal dispersion problem was less of a problem at least when it came to the point of designing a comprehensive settlement.  That is because of the particulars of the underlying science surrounding Vioxx.  My understanding is that of the sorts of people who have even colorable claims of a connection between taking Vioxx and suffering a heart attack are people, who have, at least by now, suffered the heart attack. 

Q:      Can you describe what occurs in the litigation and then resolution of mass torts cases in the current system?
RN:      [V]iewing things in the prism of litigation has an obvious truth to it but it is also somewhat misleading and doesn’t really describe what is going on in these kinds of litigations right now. . . .  [L]itigation is in one way or another simply a prelude . . . to some effort through some mechanism – whether we could call it a class action or a reorganization bankruptcy or a multi-district litigation proceeding as in Vioxx – to some effort to make and enforce a comprehensive peace to set the terms for the resolution of these claims.  Once you move from litigation to this peacemaking process, what the peacemaking process involves is a kind of administration.  You set up a grid that defines, in very simplified way the characteristics of the claims that you are going to pay, and you set up some framework, typically with specific dollar amounts saying what you are going to pay for those kinds of claims.  My book is about this process of moving from litigation, as we conventionally think about it, to this kind of administration and the role that lawyers and judges play in that process.

Q:       In the current legal system, what problems arise in the transition from initial lawsuit to the peacemaking process you describe? 
RN:      [I]n the most immediate sense, lawyers, particularly lawyers on the plaintiffs’ side, are actually functioning in a different way then we conventionally think about a lawyer functioning for a client. . . .  [W]hat is going on in these sorts of settlements is a kind of leveraging.  What the plaintiffs’ lawyer is doing is leveraging their current, what’s called ‘inventory of claims’, into the ability to not only . . . obtain compensation for those claimants, but also [using that inventory of claims] as the basis for those lawyers asserting a much broader power that goes beyond the strict lawyer-client relationships that they have with their existing clients.  And that is the power to set the terms in one way or another under which people who are not currently their clients and may never become their clients will get paid.  I think we need to move away from a litigation-based or client-based conception of what’s going on to something that does have a more kind of administrative tinge to it, where the relationships, where the power that’s being exercised is not the byproduct of some contract [i.e.] a lawyer-client retention agreement. 

Q:      How would you change the current system?
RN:      Well, first, I think the main point of the book is, simply for people to start from an accurate descriptive account of what is going on.  Because I think we can certainly debate what the right approaches would be, but I think we need to start with an accurate and un-romanticized picture of what’s going on.  [I]f we proceed from a more accurate picture, then I think the fundamental challenge for the law is not to think of these peace-making mechanisms in their various procedural categories . . . .  [Instead t]he fundamental problem is how do we achieve closure in a way that gives us confidence that the process . . . is such that future claimants will be adequately provided for?  The pervasive problem . . . is that we see the same kind of problem cropping up again and again.  And that is resources are over-consumed by present day claimants and ultimately to the financial benefit of their lawyers, and future claimants are not adequately provided for.  What I say in the book is . . . we cannot rely on the individual claimants, realistically, to police this process. 

Q:    What are the obstacles in the current legal system to your approach? 
RN:    Current law really inhibits us from getting there . . . because its starts from the notion that it’s a conflict of interest for lawyers to have an existing inventory of clients and then to try and represent in some negotiation future claimants. 

Q:     In your book, you discuss the Supreme Court’s decision in the Amchem case as representative of the current legal system’s views on conflicts of interest in these cases.  Is the Amchem decision a cause or a symptom of the problems you describe?
RN:      Amchem flows from things that are much more deeply ingrained than our class action rules or even civil procedure thinking. . . .  [W]hat I think that was missing in Amchem is both a recognition of this leveraging that’s going on the part of plaintiff’s lawyers, and what’s also missing in our broader thinking about this is the degree to which we need to get away form conventional thinking in terms of lawyer-client relations and conventional thinking in terms of regarding mass torts as purely a litigation problem.   It’s not a purely a litigation problem; it’s a problem of administration, it’s a problem of governance, and once you make that shift I think we come to a very different kind of understanding of conflicts of interest.  When we think about representation in more public or political processes, in legislatures and other public mechanisms, there is not this fastidious obsession with avoiding conflicts of interest.  We regard representation as actually a good thing when it encompasses a broad array of interests.  But we also with that impose various sorts of constraints.  Political representatives have to stand for re-election and that’s because they have this sort of ongoing relationship [with their constituents].  Part of what one can see my proposal as doing is trying to move us from the fee mechanism to something like a kind of ongoing relationship that gets away from the current situation where the attorneys can make peace, it’s a one-shot deal, they walk away, they get their money, the defendant may well get some benefits from the settlement but future claimants really are short changed.

Q:    It seems to me that under the current system, there are principally three players:  the plaintiffs’ counsel, the defense counsel, and the judge managing the litigation.  What’s in it for them to change from the current system to your approach?
RN:      I think that my proposal is a proposal that is not going to be palatable to lawyers, because both lawyers on the plaintiffs’ side and lawyers on the defense side understand very well how the existing systems work and can work its dysfunctional features for the benefit of their particular interests.  Courts, I think, are beginning to understand the sort of magnitude of the problem but they are of course quite rightly limited by existing law, and existing procedures.  I think ultimately there has to be some sort of legislative type of push.  Now the important thing that I would say about my proposal is that one, you don’t have to change the entire world, and two, you don’t have to have the federal government dictating the terms of the deal.  What I mean by not changing the entire world is . . . there are particular areas in which we have an existing administrative apparatus. . . .  [P]art of the debate should also involve what responsibilities the agency might have or what role it can in better structuring this bargaining process and that leads to my second point.  That is, I really have a respect for the creativity of attorneys here.  These are complex business deals fundamentally, and I certainly do not think that the government has any business or any real expertise in dictating the precise terms of those deals.  But I do think there is an appropriate role for setting up the bargaining process in a way that gives us much more confidence that the deal making savvy of lawyers will be directed in a way that we would find more socially desirable.

Rodger D. Citron is an assistant professor of law at Touro Law Center.  ADL

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