Wednesday, March 18, 2009
A new article on managing mass tort multidistrict litigations -- Charles Silver and Geoffrey Miller, The Quasi-Class Action Method of Managing Multidistrict Litigation -- has just been posted on SSRN. If any mass tort lawyers reading this blog have a chance to look at the article, I'd be very interested in your responses to the proposals therein. Is their diagnosis of the problem correct? What do you think of their proposal to solve it? What are the unforseen results this proposal might cause?
Here is the abstract:
article uses three recent multi-district litigations (MDLs) that
produced massive settlements -- Guidant ($240 million), Vioxx ($4.85
billion), and Zyprexa ($700 million) -- to study the emerging
quasi-class action approach to MDL management. The approach has four
components: (1) judicial selection of lead attorneys; (2) judicial
control of lead attorneys' compensation; (3) forced fee transfers from
non-lead lawyers to cover lead attorneys' fees; and (4) judicial
reduction of non-lead lawyers' fees to save claimants money. These
widely used procedures have serious downsides. They make lawyers
financially dependent on judges and, therefore, loyal to judges rather
than clients. They compromise judges' independence by involving them
heavily on the plaintiffs' side and making them responsible for
plaintiffs' success. They allocate monies in ways that likely
over-compensate some attorneys and under-pay others, with predictable
impacts on service levels. They also lack needed grounding in
substantive law because the common fund doctrine, which supports fee
awards in class actions, does not apply in MDLs. Academics have not
previously noted these shortcomings; this is the first scholarly
assessment of the quasi-class action approach.
This article also proposes an alternative method of MDL management. It recommends the creation a plaintiffs' management committee (PMC) composed of the attorney or attorney-group with the most valuable client inventory, as determined objectively by the trial judge. The PMC, which would have a large interest in the success of an MDL, would then select and retain other lawyers to perform common benefit work (CBW) for all claimants and monitor the lawyers' performance. The new approach would thus use micro-incentives to organize the production of CBW in MDLs rather than judicial control and oversight. The court would stand back from the process, exercising only a limited backup authority to prevent abuses. If enacted as a statute, the proposal would restore judges' independence, preserve lawyers' loyalties, provide the requisite legal foundation for fee awards, and encourage the fairer, more efficient, and more appropriate representation of claimants in MDLs.