March 20, 2010
9/11 First Responder's Settlement Rejected by Judge
On Friday Judge Hellerstein (SDNY) rejected the settlement that had been reached by lawyers in the 9/11 First Responders Litigation (otherwise known as In Re World Trade Center Disaster Litigation). He said the settlement was too obscure and that the lawyers were probably being paid too much at 30%.
The New York Times coverage is here: Judge Rejects Deal on Health Claims of Workers at Ground Zero.
The Times reports that the Judge said he would oversee further negotiations and would take "judicial control" over the matter. "There has to be additional negotiations to come up with a better and fair settlement. I will not preside over a settlement based on fear or ignorance." He said. "I want transparency. I want accountability. I want judicial control over this process. They've got to come up with an agreement under judicial supervision that will make us all proud."
The judge also said he would hear from plaintiffs directly about the settlement when the time came, not from their lawyers. I recommended that judges do this in an article called The Law and Large Numbers - if you're looking for other similar suggestions, read the last few pages of that piece.
Now for some law. The judge does not have formal veto over the settlement the way that he would had this case been certified as a class action (basically impossible now after Amchem). And the right of a judge to reject a settlement like this has never been tested on appeal. (Richard Nagareda is quoted in the Times saying this - and he will be posting on Torts Prof Blog Monday so you can read his views on aggregation there).
The ALI Aggregate Litigation Project has proposed letting judges oversee aggregate settlements in the way Judge Hellerstein is doing but as a formal matter. What the judge is doing now is not a formal requirement, but a use of discretion. Of course, once the judge opines that the settlement isn't good whether he has a formal veto or not doesn't matter because there is no way the 95% of the plaintiffs required for the settlement to go forward will agree to accept its terms. So as a matter of practice it looks like the ALI model is being adopted informally.
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Great for the Judge - too bad he did not preside over the Vioxx Litigation. Virtually everything that he was worried about ACTUALLY happened in the Vioxx "settlement" - which was not a "settlement", it was a PURE sham. Examples abound - try this for starters... (AND THIS IS ONLY STARTERS!)...
'deal" "didn't contain enough money.
THE AVERAGE VIOXX LITIGANT RECEIVED A GROSS OF APPROXIMATELY $100,000. IMAGINE $100,000 FOR A HEART ATTACK OR A STROKE - HOW IN THE WORLD CAN ANYONE THINK THAT THERE WAS A "NEGOTIATION"? NOPE NO NEGOTIATION, MERELY AS MANY WOULD ALLEGE...
There was no real "negotiation", merely a corporation who's survival was at risk, large law firms who had gathered in many, many litigants - insisting cases were very strong and then merely discarding the ligitants if they did not fit the artificial, Merck dominated view of the "Gates" or chose to "opt-OUT, and finally the courts who wished to clear the dockets of what was considered "nuisance lawsuits". - All parties knew that they needed to settle by late 2007 or Merck's stance would get weaker and weaker and its leverage would be damaged.
"being pushed into signing a deal few of them understood."
CREDIBLE ESTIMATES ARE THAT THIS HAPPENED TO ABOUT 90% of VIOXX LITIGANTS. THEY WERE NO LESS THAN TOLD - "TAKE THIS "SETTLEMENT" OR WE WILL DROP YOU". FURTHER, THE COURT, IN TANDEM, CREATED A LONE PINE HURDLE SO BIG THAT THE LITIGANTS WERE PUMMELED INTO SUBMISSION BY THE THREAT OF BEING DROPPED, AS WELL AS THE FACT THAT YEARS HAD GONE BY SO GAINING LONE PINE (EXPERT WITNESS) WAS UNDULY (AND UNFAIRLY) DIFFICULT AND RISKY. THIS WAS PLANNED EXECUTED BY THOSE THAT CREATED, SANCTIONED, AND EXECUTED THIS MONSTER OF A "SETTLEMENT".
"complicated enough to make a Talmudic scholar's head spin."
EXPERIENCE PROVED, AND THERE ARE MANY EXAMPLES, THAT THE ATTORNEYS DID NOT BOTHER TO ATTEMPT TO UNDERSTAND THE MSA ("SETTLEMENT") IN ANY DETAIL ENOUGH TO ADVISE THE BEST INTERESTS OF THE CLIENTS. WHY SHOULD THEY? - THEY NEVER INTENDED TO PROPERLY ADVISE THEIR CLIENTS. THE CLUELESSNESS OF MOST (SOME WERE OK) ATTORNEYS BECAME OBVIOUS AS LITIGANTS AFTER LITIGANT WAS BULLIED AND BROWBEATEN BY THEIR ATTORNEYS.
""I will not preside over a settlement that is based on fear or ignorance," he said.
THE VIOXX "SETTLEMENT" AND ITS EXECUTION WERE ABSOLUTELY BASED UPON FEAR AND IGNORANCE. FEAR/IGNORANCE BECAME A TOOL OF THE COLLUSIVE PARTIES TO TRICK AND POUND THEIR CLIENTS INTO SUBMISSION.
"deal should be richer. Too much of it would be eaten up by
legal fees," he said.
THE 32% THAT THE LITIGANTS PAID WAS ABSOLUTELY ABSURD. THEIR ATTORNEYS SIMPLY WERE HIGHLY PAID CLERKS.... AND FRANKLY, THEY DID A LOUSY, SHAMEFUL JOB THAT VIRTUALLY ANY CLERK COULD HAVE EXCELLED AT. EVERYTHING POINTS TO CORRUPTION AND COLLUSION. THEY DID NOT CARE TO LEARN OR ADVISE THEIR CLIENTS PROPERLY NOR DID THEY CARE HOW WELL THEY EXECUTED THE "SETTLEMENT" FOR THE CLIENTS THAT THEY SUCCESSFULLY BROWBEAT (WHICH WAS MOST OF THEM). MERCK SIMPLY SHOULD HAVE BEEN FORCED TO PAY THE LEGAL FEES, AS WELL AS SUBROGATION (i.e. THE MEDICAL BILLS)!
He rejected the idea that a third or more of the money should go to the
plaintiffs' lawyers and said the" legal fees should be paid by the WTC Captive, not the workers."
THINK - THE AVERAGE GROSS OF $100,000 WOULD THEN BE ABOUT $68,000 BEFORE FEES OF NEAR $2,000 AND ANOTHER ONE PERCENT ($1,000) TACKED ON BY THE MDL AT THE LAST MOMENT. ADD SUBROGATION AND THE AVERAGE AMOUNT IS FURTHER REDUCED ANOTHER $10,000.
From the article. The amount they got would have been based on a complicated scoring system that ranks each illness by severity.
THAT IS EXACTLY WHAT HAPPENED IN THE VIOXX "settlement". IT IS COMPLICATED, NOT UNDERSTOOD BY LITIGANTS NOR THEIR ATTORNEYS, AND BECAME RIPE FOR ABUSE IN THE "AWARDED" AMOUNTS AND DEDUCTIONS WHICH INEXPLICABLY AND UNFAIRLY WERE ALMOST SEEMINGLY RANDOM. THE COMPLICATIONS OF THE SCORING BECAME A FERTILE GROUND RICH FOR EXPLOITATION TO MIMINIZE THE 'AWARD' AND TRICK THE LITIGANTS INTO ACCEPTING.
Posted by: Dennis Harrison | Mar 23, 2010 8:31:51 PM
In re to "public scrutiny" as suggested in the "Law and Large Numbers", it certainly does make sense not only for transparency but to have the public become knowledgeable of what has transpired in a "private settlement" since ultimately the public has a real life stake in how, over time, the success or non-success of private settlements. As mentioned above, transparency and accountability are also vital. Several litigants proposed such measures in quite a wide sweeping proposal seeking fairness in the VIOXX 'SETTLEMENT' - however, the court in New Orleans did not even recognize their view, and that view was served (as well as prior notice) appropriately to the court, the PSC, and Merck. The court did not even docket the very detailed proposals and cries for help. Certainly this was because of the alleged collusion between the parties to protect Merck at the major expense of the litigants. The litigants in the "private settlement" were simply pounded into submission, and there is much documentation to this effect. Cries for help continued to go unheard as litigant after litigant was essentially forced via undue coercision to cave in and agree to a horrible deal that they (mostly all from what we can see)did not wish to take part in. Lawyers, in an arrogant and callous manner, simply refused to advise their clients properly or merely even acknowdge their questions, as they marched on via the orders of the PSC and the Court to force their clients into signing a "blank check".
If one wishes to investigate what a private "settlement" SHOULD NOT LOOK LIKE, then one merely has to investigate what happened what happened in the Vioxx "settlement". This includes sampling a reasonable amount of the litigants as to what really happened. The Vioxx "settlement" represents a shameful time in American legal history.
Note that the Judge referred to above in fact wanted to hear from the litigants. Hooray for him, in fact he is right on in every manner that he suggests. Sadly, the exact opposite counterpart of him existed in the court in New Orleans which callously just did not care what one, not even one, litigant felt about the process. We have documentation of judicial and legal abuse of a vast and consistent nature in the Vioxx Plaintiff Education Group (VPEG).
In re to the author above suggesting that "judge opines that the settlement isn't good whether he has a formal veto or not doesn't matter because there is no way the 95% of the plaintiffs required for the settlement to go forward will agree to accept its terms" is incorrect.Unwillingly and under duress from many fronts, the Vioxx litigants merely caved in and that "settlement" received 99% partipation, with 85% "agreeing" up front. If the truth be known, the per cent "agreeing" willfully would have not even been 20% if honest cards were played and the litigant not been cornered like a rat.
Please, any suggestions that "private settlements" are the wave of the future.... OK if defined properly with active and PROPER JUDICIAL OVERSIGHT (also an HONEST COURT). but anyone that has influence, PLEASE look into the Vioxx Fiasco. This means getting input from the litigants, NOT their attorneys who merely became a conduit for the PSC and the Court in tandem with Merck. MUCH MORE can be said on this....
Posted by: Dennis Harrison | Mar 24, 2010 9:05:18 PM