November 20, 2010
Other-Regarding Preferences in the 9/11 Workers Settlement
Reading yesterday’s New York Times article on the 9/11 Workers Settlement, I couldn’t help but think of the other-regarding preferences and psychological influences that played a role in garnering the requisite 95.1% agreement. The two claimants quoted in the article, Jennifer McNamara (whose firefighter husband died of colon cancer last year) and Kenny Specht, a retired firefighter with thyroid cancer, both framed their ultimate decision to participate in the settlement in terms of helping others within the community of plaintiffs. As described by the N.Y. Times, McNamara “explained to friends in a letter that she did not want to delay the settlement for the many plaintiffs who needed it to pay mortgages and medical bills.” Specht said, “I am not sure that holding out for a better offer will ever be something that is attainable.”
I’ve written about this internal group pressure in the past and how claimants might be able to use it to their benefit as opposed to lawyers using it for theirs. It does appear that Napoli Bern Ripka LLP held at least one town hall meeting (video footage available below), but I’m not sure whether claimants were encouraged or given opportunities to discuss the deal with one another or whether the lawyers did most of the talking. Given the claimants geographical proximity to one another in the 9/11 Workers Settlement as well as the closeness of the firefighting and police officers’ communities, it appears that altruism, reciprocity, and a concern for others' well-being within their community played a significant role in members’ decision to approve the settlement (though the settlement did not receive the 100% approval rate that would have paid out $712 million). Others simply appeared to be exhausted by the protracted litigation and wanted finality. Still others, at least 520 of them, opted out (or did not respond by the deadline). A New York Times article last August described several plaintiffs' difficult decision-making process.
Although the House of Representatives has approved a bill that would reopen the 9/11 Victim’s Compensation Fund, the Senate has yet to approve it and those who have signed on to the 9/11 Workers Settlement will be ineligible for compensation.
Here's a link to Napoli Bern's press release (with the percentage of claimants signing-on in each tier).
November 19, 2010
Each year the Civil Procedure Section of the AALS prepares a newsletter that aggregates various bits of information for the benefit of Civil Procedure teachers and scholars. One regular feature of that newsletter is “Upcoming Conferences.” If you have planned (or are otherwise aware of) a conference for calendar year 2011 and would like this newsletter to list the event, please send us the details—web links, calls for papers, etc. Even conferences with tentative plans and dates can be listed. Please send the details by December 5 to Thom Main at firstname.lastname@example.org.
9/11 Settlement Report
The allocation neutral in the World Trade Center litigation reported today that 10,043 claimants have agreed to participate in the settlement. This number, which constitutes 95.1% of the 10,563 eligible claimants, apparently meets (just barely) the 95 percent threshold required under the terms of the settlement agreement. But the settlement agreement also required at least 90% participation and 95% participation by particular categories of claimants. The report filed today states that 87.4% eligible "Tier 1" claimants (2383 out of 2726) signed on. Does this mean that the settlement fails? Media reports suggest that the settlement is going forward, but I will be interested to find out whether all of the participation requirements were met.
In general, it comes as no surprise when a mass tort settlement meets a participation threshold, given that clients overwhelmingly follow their lawyers' advice to participate in a settlement. But the WTC litigation -- and particularly Judge Hellerstein's rejection of an earlier settlement proposal amid questions about whether a judge in a non-class action has any business "approving" or "disapproving" a settlement -- generated enough notoriety that reasonable observers might have wondered how claimants would react.
UPDATE/CLARIFICATION: The settlement agreement requires 90% participation by each category of claimants with "qualifying injuries" but does not require a specified percentage of participation by claimants with no qualifying injury. Tier 1 consists of claimants with no qualifying injury. Therefore, the participation levels do meet the requirement under the terms of the agreement.
November 18, 2010
WTC Disaster Site Litigation Settlement - Results Announced Tomorrow
The results of how many plaintiffs signed on to the WTC Disaster Site Litigation Settlement, which required that 95% of the plaintiffs sign on for the settlement to go forward, will be announced at 1 PM tomorrow. Click here to see docket & documents online.
Interestingly, the allocation neutral overseeing this aspect of the settlement adminsitration is from Ohio - Matthew Garretson. His profile can be found here. Here is the description of the firm's work on allocating settlement proceedings to claimants:
Perhaps the hallmark of our settlement allocation service, GFRG helps ensure that similarly-situated claimants are treated the same under the methodology developed to allocate the settlement proceeds and to help ensure that every claimant is allocated a fair and equitable share of the settlement proceeds (taking into account the terms/conditions of the Settlement Agreement, the severity of the injury and the proof available).
The question of course is whether the terms of the settlement agreement - i.e. the matrix developed by the lawyers - fairly allocates funds and what data is used to make those determinations.
h/t Fred Mogul, WNYC.
November 16, 2010
Brunet on AT&T (and the NYTimes Coverage of the case)
Edward Brunet, an eminent civil procedure scholar and expert on arbitration, sent the following to me regarding the recent NY Times coverage of the AT&T Mobility case:
Adam Liptak’s excellent treatment of the AT&T Mobility oral argument would have been even better if he had just used this word: FEDERALISM..
The case and context of this case scream out unforgivable breaches of federalism policy. Both the Times coverage and oral argument undervalue federalism theory
The dispute is not one about state regulation of class action arbitration. Rather, the case concerns a dispute of state contract interpretation and asks simply whether the cell phone contract’s ban on class actions is unconscionable. This is a state contract law issue, traditionally left to the state because of respect for state common law regulation. There is very little federal contract law. Alternatively, the issue presented is one of consumer protection, a subject matter also left to state regulation. This litigation involves a double dose of federalism deference to the states based on questions of contract law and consumer protection
This analysis appears to have been understood by Justice Scalia who nicely asked whether the Supreme Court would “tell the State of California what it has to consider unconscionable?”
There exists a textual basis to reach the same result for the respondent. Under section 2 of the FAA the courts are to treat arbitration agreements as enforceable, except when matters of state contract law require a contrary result. The end of the prior sentence, termed the “savings clause of the FAA,” should control this case. Essentially section 2 requires that a court enforce as written agreements to arbitrate unless some rule of state contract doctrine(e.g., adhesion , covenant of good faith and fair dealing, unconscionablity, or lack of mutuality) requires the opposite result. Here the California Supreme Court offered what should have been the last word on the subject Its ability to do so advances federalism values in a collaborative manner not unlike the interactive federalism notions set forth by Professor Robert Shapiro.
This case has nothing to do with preemption despite the efforts of AT&T”S counsel to twist the case out of context. There is no difference between California’s law of unconcionability and federal law presented. Indeed, there is no relevant federal conflicting norm involving unconscionability. That should have been the end of the matter but kudos to AT&T counsel for a great job of (mis)framing the issue here to try to take advantage of a lame and disappointing group of arbitration preemption decisions. The Casarotto opinion of Justice Ginsburg used a strange preemption approach by asking whether arbitration had been “singled out” for special treatment and failed to follow a more conventional “obstacle” test used several years earlier by Chief Justice Rehnquist in the Volt decision. Under either test the respondent should prevail here The interpretation of the contract ban on class actions fails to single out arbitration and represents little threat to the FAA.
Readers who want more should consult the following: Brunet, The Minimal Role of Federalism and State Law in Arbitration, 8 Nev. L.J. 326 (2007) (arbitration symposium), Brunet, Speidel, Sternlight & Ware, Arbitration Law in America: A Critical Appraisal (Cambridge 2007); Robert Schapiro, Monophonic Preemption, 102 Nw. L. Rev.(2007).
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I am a big fan of both Brunet and Schapiro's work. ADL