Saturday, 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.



March 20, 2010 in 9/11, Aggregate Litigation Procedures, Settlement | Permalink | Comments (2) | TrackBack (0)

Friday, March 19, 2010

Florida's Third District Court of Appeals Upholds $24 Million Tobacco Verdict

The Third District Court of Appeal in Florida unanimously upheld a $24.8 million verdict against Phillip Morris USA, Brown & Williamson, and Liggett Group.  It's the first appellate ruling upholding a verdict since the Florida Supreme Court dismantled the Engle class action.  (The appeal to the Eleventh Circuit in Engle is still pending.)

Here's an excerpt from The Daily Business Review's article on the case:

With Lukacs dying, his attorneys sued and pushed for a quick trial in 2002 instead of forcing their cancer-ridden client to wait for the Supreme Court ruling. 

"He wanted his day in court, and the only way to obtain his day in court was to try the case before the Florida Supreme Court made its decision," said Alters Boldt Brown Rash special counsel Bruce Rogow, who argued the appeal for Lukacs' family. 

The jury awarded Lukacs' widow, Yolanda, a total of $37.5 million in 2002. The award was later reduced to $24.8 million. 

Tobacco attorneys appealed, challenging trial decisions and insisting smoker trials could not proceed without a Supreme Court directive. 

The 3rd DCA decision cited the Supreme Court ruling, which allowed smokers to pursue individual lawsuits and offer the original jury's findings as fact. New juries are advised to accept that smoking causes cancer and other illnesses, cigarettes are addictive and tobacco companies defrauded consumers by misleading them. 

"It sends a clear message that Engle is the guiding light in Florida tobacco litigation," Rogow said.


March 19, 2010 in Tobacco | Permalink | Comments (0) | TrackBack (0)

Taxing Punitive Damages

Dan Markel and Greg Polsky (both of Florida State) have posted "Taxing Punitive Damages" on SSRN.  Here is the abstract:

There is a curious anomaly in the law of punitive damages. Jurors assess punitive damages in an amount that they believe will best “punish” the defendant. But, in fact, defendants are not always punished to the degree that the jury intends. Under the Internal Revenue Code, punitive damages paid by business defendants are tax deductible and, as a result, these defendants often pay (in real dollars) far less than the jury believed they deserved to pay.

To solve this problem of under-punishment, many scholars and policymakers, including President Obama, have proposed making punitive damages nondeductible in all cases. In our view, however, such a blanket nondeductibility rule would, notwithstanding its theoretical elegance, be ineffective in solving the under-punishment problem. In particular, defendants could easily circumvent the nondeductibility rule by disguising punitive damages as compensatory damages in pre-trial settlements.

Instead, the under-punishment problem is best addressed at the state level by making juries “tax aware.” Tax-aware juries would adjust the amount of punitive damages to impose the desired after-tax cost to the defendant. As we explain, the effect of tax awareness cannot be circumvented by defendants through pre-trial settlements. For this and a number of other reasons, tax awareness would best solve the under-punishment problem even though it does come at the cost of enlarging plaintiff windfalls. Given the defendant-focused features of current punitive damages doctrine, this cost is not particularly troubling. Nonetheless, a related paper of ours furnishes a strategy for overcoming this tradeoff through some basic reforms to punitive damages law.


March 19, 2010 in Mass Tort Scholarship, Punitive Damages | Permalink | Comments (0) | TrackBack (0)

Wednesday, March 17, 2010

ASLCH Annual Conference and Presentation on "Examining Litigant Autonomy in Mass Torts: Insights from the Individualism of Ayn Rand"

On Saturday, March 20, I'll be speaking as part of a panel on "Pluralism in Tort Law and Litigation" at the annual meeting of the Association for the Study of Law, Culture, and Humanities, at Brown University in Rhode Island.  The panel will be moderated by Professor Alan Calnan (Southwestern), and other presenting panelists are Professors Christopher Robinette (Widener) and Sheila Scheuerman (Charleston). A podcast of the panel may later be posted on this blog.  Given the conference's focus on culture and humanities, my talk draws upon literature and political theory.  Here's the abstract for my talk:

Byron Stier -- "Examining Litigant Autonomy in Mass Torts: Insights from the Individualism of Ayn Rand"

Class actions and other aggregate procedural methods raise questions about the relationship of the individual to the group.  Litigant autonomy -- the litigant's interest in controlling his or her lawsuit -- has generally been considered merely one value among others in mass tort litigation, and only recently has a robust commitment to litigant autonomy been seen to call into question the entire structure of class action practice.  In looking for insight into the proper place for litigant autonomy in class actions or other management methods, we might fruitfully turn to political debates concerning the relationship of the citizen to the state, for both settings examine the rights of the individual against the perceived needs of the group or collective.  For discussion of that political question, I look to an unusual source -- outside law, to the literature of one known for her radical political individualism, Ayn Rand.  Her novel, "We The Living," which was published in 1936 and is set in the aftermath of the communist revolution in Russia, puts forth a moral argument for individualism stemming from the sanctity of one's own life, and of one's control of one's own life, for one's own ends, not the group's; she also argues that personal tragedy and systemic corruption accompany an approach that fails to respect individuals' lives and choices.  Turning back to mass tort litigation, I suggest that our notion of litigant autonomy can be informed by Rand's themes and that current class action rules show flaws similar to the collectivism that Rand critiques. Viewing litigant autonomy not merely as one value among others, but instead as an organizing principle that must be respected as a core right, I suggest that current class action rules regarding notice, opt-out, and settlement are problematic because they do not allow adequate expression of individual preference and they blunt each class member's individuality.  In addition, by avoiding individual control, the current class action rules create fertile ground for corruption and collusive settlements.


March 17, 2010 in Aggregate Litigation Procedures, Class Actions, Conferences, Informal Aggregation, Lawyers, Mass Tort Scholarship, Procedure, Products Liability, Settlement | Permalink | Comments (0) | TrackBack (0)

What Should Plaintiffs In Aggregate Litigation Ask Their Lawyers?

What should plaintiffs in large-scale litigation that settles as an aggregate settlement -- like Vioxx or the WTC litigation -- ask their lawyers in trying to evaluate the settlement?  As a general matter, plaintiffs are trying to compare unknowns and this is really hard. 

If it were the case that a lawyer could tell her client "well, if you go to trial you will get X and if you settle you will get X minus 10 but will save transactions costs" this would be easy.  But nobody knows what will happen at trial, and sometimes settlements themselves can only offer ballpark predictions rather than actual numbers.  For example, the plaintiffs choosing to participate in the 9/11 victims compensation fund were taking a risk that they would get something different than what the tort system would provide and they did not know in advance what that number would be.  Most of them elected to participate in that administrative process rather than the tort system.  Those that did not eventually settled, but it took a lot longer.  Settling is not just about money and the risk of losing at trial or pretrial motions, but also time and the emotional costs of litigation.

Here are some ideas for questions - happy to add others as comments come in:

1. What are the weaknesses in my case? What are the strengths?

2. What are the chances we will lose before or at trial?

3. What are the costs to me of going to trial, in terms of money, time and emotions?

4. If we go to trial, how long will it take for me to eventually get paid? Are there likely to be appeals and how long will that take?

5. How does the amount I am being offered compare to what other, similarly situated plaintiffs are getting?

6. How does the amount I am being offered compare to what plaintiffs who have lesser harm/greater harm are getting?


March 17, 2010 in Aggregate Litigation Procedures, Settlement | Permalink | Comments (1) | TrackBack (0)

Tuesday, March 16, 2010

Albany Law Journal Symposium Issue on Off-Label Drug Prescription

Prempro Verdict Roundup










































March 16, 2010 in Prempro | Permalink | Comments (1) | TrackBack (0)

WTC Litigation Settlement Link

The WTC Settlement is now available online. I wasn't able to track it down until late last night. Here is the link, from the Bern Napoli website (that is the firm spearheading the settlement):


March 16, 2010 in 9/11, Settlement | Permalink | Comments (1) | TrackBack (0)

Monday, March 15, 2010

Walter Olson Attempts to Defuse the Toyota Panic

His article, Exorcising Toyota’s Demons, was published today in the National Review online.


March 15, 2010 in Lawyers, Products Liability, Regulation, Science, Travel, Vehicles | Permalink | Comments (0) | TrackBack (0)

9/11 First Responders Settlement - "Fairness Hearing" April 12

Judge Hellerstein has scheduled a "fairness hearing" in the 9/11 First Responders Settlement (the case is known as In re World Trade Center Disaster Site Litigation) to take place on April 12, the New York Times Reports.  Next Friday (3/19) he will meet with the parties to give them his impressions of the settlement.  The judge also said he may reduce attorneys fees awards to as low as 15% (from the 30% that most retainer agreements require). 

Kenneth Feinberg, the special master overseeing the 9/11 Victim's Compensation Fund is reported as saying that the only reason these workers weren't compensated under that fund was that they had not fallen ill when the fund closed in 2003.  I predict the compensation will try to mirror what that fund did.  Feinberg's dissatisfaction with that process, which he handled very well, is chronicled in his book What Is Life Worth?

I have it on good authority that the federal government was considering reopening the 9/11 fund to deal with these cases, but the settlement has mooted that idea (and whether it would have actually come to pass is an open question). 

An unnamed tort management firm has already been appointed to handle the claims. The administrator in charge of evaluating cases and meting out awards will be appointed in a few weeks. 

The Times article can be found here: Hurdles Remain for Ground Zero Settlement.


March 15, 2010 in 9/11, Aggregate Litigation Procedures, Environmental Torts, Informal Aggregation, Lawyers, Mass Disasters, Settlement | Permalink | Comments (1) | TrackBack (0)

Toyota Defective Gas Pedal MDL On the Way?

BNA Law Week reports that the Judicial Panel on Multidistrict Litigation is considering whether to consolidate defective accelerator cases against Toyota on March 25 ((In re Toyota Motor Corp. Defective Gas Pedal Products Liability Litigation, J.P.M.L., MDL No. 2151, hearing scheduled 3/25/10).  The battle is between cases currently filed in California and those in Louisiana.

How should the MDL Panel decide where the lawsuits should go and if they all need to be in one place? In an article I wrote in 2008 called Recovering the Social Value of Jurisdictional Redundancy, I argued that the Panel should consider an interim measure - consolidating cases regionally rather than nationally in certain cases.  I suggested that the Panel look at the following factors in rendering its decision: (1) the extent of underlying substantive disagreement between circuits on the relevant law, (2) the costs of inconsistency, (3) the role of political power in the dispute.  In the Toyota case, I think all these factors militate in favor of consolidating the case in one forum rather than two or three regional fora.


March 15, 2010 | Permalink | Comments (0) | TrackBack (0)