July 09, 2012
NPR Interview with Ken Feinberg About His New Book
NPR has an extended interview with famed claims administrator Ken Feinberg about his new book, Who Gets What: Fair Compensation After Tragedy and Financial Upheaval.
July 9, 2012 in 9/11, Aggregate Litigation Procedures, Current Affairs, Informal Aggregation, Lawyers, Mass Disasters, Mass Tort Scholarship, Products Liability, Settlement | Permalink | Comments (0) | TrackBack
May 02, 2012
AALS Workshop on Torts, Environment & Disaster
In June, the Association of American Law Schools will host a major conference in Berkeley, CA, on environmental disasters. The sessions include such cheery topics as "History of Disaster," "Psychology of Disaster," "Disaster Federalism," and "Disaster Justice." Along the way, there will be sessions on tort law, environmental law, and regulatory perspectives on environmental disasters. The disputes arising out of 9/11, Katrina, and the Gulf oil spill leave no doubt that environmental catastrophes present some of the most challenging problems of mass tort litigation in the 21st century.
The speakers include many of the leading scholars in torts, environmental law, complex litigation, and related fields, including Tom Baker, David Dana, Daniel Farber, Sheila Foster, Myriam Gilles, Michael Green, Laura Hines, Keith Hylton, Gregory Keating, Douglas Kysar, Jonathan Masur, John Nagle, Adam Scales, Peter Schuck, Anthony Sebok, Catherine Sharkey, Jed Shugerman, Stephen Sugarman, and many others (and me!). I will speak on a panel about principles for compensation programs and mass settlements.
February 28, 2012
BP Today, Tomorrow and Into the Future
You don't need the Mass Tort Litigation Blog to tell you that the imminent BP trial has been stayed pending settlement talks. In the meantime, here are some thoughts from the ever relevant George Conk. Special shout out for his poetic references: Diving Into the Wreck: BP and Kenneth Feinberg's Gulf.
I was just at a wonderful conference at the Charleston School of Law on Mass Torts and the Federal Courts where Feinberg spoke. One of the key questions at the conference is the extent to which claims facilities (BP, 9/11, etc.) are unique and unlikely to be repeated or the wave of the future. The interesting thing about BP is that it shows the interaction between claims facilities and litigation - its not one or the other. Speakers mentioned how companies trying to get ahead of a litigation may well look to the BP model. Others questioned whether BP was really special because the company was prepared to admit liability (although not gross negligence).
I was especially interested by the remarks of Sheila Birnbaum, currently running the 9/11 Fund for first responders and who mediated settlements for the 94 families who chose not to participate in the 9/11 Victim Compensation Fund. Even the families who wanted a public trial to find out what happened ultimately settled because of the uncertainty of trial. This raises important questions about the purpose of litigation for individuals: is it ultimately to get compensation? How important is it to get to the "truth"? How important is vindication? Punishment? When people settle (or waive their right to litigate prior to filing suit), what kind of consent do we want and does money ultimately satisfy? Lynn Baker, who was at the conference, referred me to the following article that addresses some of these questions: Gillian Hadfield, Framing the Choice Between Cash and the Courthouse: Experiences with the 9/11 Victims Compensation Fund. This continues to be relevant, especially if Funds become a model rather than a one-off.
January 17, 2012
Zimmerman on Compensation Funds
Adam Zimmerman (St. John's) has a nice post on Prawfsblawg called "The Rise of Executive (Branch) Compensation" in which he discusses the historical antecedents and politics of compensation funds for mass disasters. It reminds us that not all worthy victims have been the beneficiaries of such funds and the reasons why some are picked (and others are not) are not always clear.
January 04, 2012
Zimmerman on 9/11
Adam Zimmerman (St. John's) has a two new posts up on Prawfsblawg that are worth reading. In one he analyzes the differences between the 9/11 Victim Compensation Fund and the new fund crated to compensate first responders. In the other he discusses an alternative to aggregation - "flash mob litigation" in small claims court. Both worth reading.
May 19, 2011
Birnbaum to work as Ground Zero Special Master
The Wall Street Journal reports that the Justice Department plans to appoint Sheila Birnbaum to run the $2.8 billion fund for Ground Zero workers. Here's an excerpt from the story:
The new fund was created late last year to provide compensation and health care for those who became ill after being exposed to the debris of World Trade Center rubble.
Ground Zero workers, as well as nearby residents and office workers who also breathed in the dust of the site, are eligible for compensation if the special master concludes their injuries are the result of such exposure.
. . .
According to people involved in the process, the Obama administration is concerned the fund could be swamped with thousands of applications for compensation from people who were many blocks away and now claim they have suffered after having watching the planes strike the buildings.
"The real challenge here is going to be figuring out what is and isn't compensable,'' said lawyer Noah Kushlefsky, who represents Ground Zero workers. "This fund is going to be harder than the last one, because the last one largely focused on the people who had died.''
Justice Department lawyers have already begun working out those rules, but they won't be finalized until the summer. In October, the government plans to start accepting claims for compensation.
December 21, 2010
Senate Considers 9/11 First-Responder Health Bill
As this article on CNN notes, the United States Senate continues to consider the proposed 9/11 first-responder healthcare bill, championed particularly by Senator Schumer of New York.
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
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.
October 29, 2010
In Defense of the Litigation System
In an article by Jim Snyder on Bloomberg news, Kenneth Feinberg defends the legal system especially for ordinary cases:
“I happen to believe, in the run-of-the- mill, everyday life in America, the legal system works pretty well.”
August 23, 2010
Comparing the 9/11 Fund and the Oil Spill Fund
Michael Cooper has an article in the NYTimes about the two entitled "Spill Fund May Prove as Challenging as 9/11 Payments."
Richard Nagareda (Vanderbilt) is quoted as saying: "Although he had a very difficult time placing a dollar value on human life, in some way that was a more straightforward job than estimating the long-term harm to a shrimper’s business."
In both cases, I think, you have a situation where Feinberg is asked to monetize things that are very hard to monetize and about which people have strong and conflicting opinions - but that is what our tort system asks juries to do all the time. I've recently written on this issue in a piece called "Rough Justice" - an earlier draft is available on SSRN and I plan to post a revision soon.
The NYT article also raises the prospect of fraudulent claims. The 9/11 Fund was manageable in this regard because, as the paper quotes Feinberg “You’ve got verification of death."
August 09, 2010
NYTimes Article on Plaintiff Disappointment with 9/11 Settlement
The NY Times' Mireya Navarro has a long article today entitled "9/11 Settlements Bring Moment of Reckoning" about the disappointment of many plaintiffs in the WTC Disaster Site Litigation with the settlements they are being offered. The settlements take account both of the severity of the injury and the possibility that causation can be proven in court, leaving many with cancer or who have died of cancer getting less than they expected or hoped for.
A very important twist to the 95% agreement requirement in the settlement is the effect that is having on some plaintiff's decision to settle or not to settle. One is quoted as saying: "“It weighs heavy on one’s mind that your decision would impact the compensation of those who are sick, because if you don’t get 95 percent you’re not going to settle.”
Another interesting theme that comes out of the article is the expressive uses of the lawsuit for plaintiffs. One plaintiff who is taking a settlement of approximately $11,000, the article explained "To him, the legal battle was never about the money but about calling attention to the health consequences suffered by those “who stepped up to the plate” after the terrorist attacks."ADL
June 24, 2010
Judge Approves WTC Disaster Site Settlement
Yesterday Judge Hellerstein held what the media is calling a "fairness" (in scare quotes) hearing on Wednesday and approved the settlement proposed for resolving the cases in the WTC Disaster Site litigation. Everyone was supportive, including Ken Feinberg.
Here's an interesting twist:
Tom Hayes of the A/P reports that the judge appointed Roy Simon of Hofstra to monitor attorney-client communications on the plaintiffs' side: "The monitoring would, ostensibly, reduce the possibility that some clients could be bullied or frightened into accepting the deal, or misled about how much money they might stand to receive." See the article here on MSNBC.com
June 15, 2010
Social Networking and Class Actions
Both the ABA Journal and the Wall Street Journal have articles in today's news about the use of social networking as a legal tool. The ABA Journal notes that law firms' websites are "set up to resemble community forums or news boards." But a closer look at the forums shows that they're principally meant for client recruitment and information dissemination. For example, Sokolove Law's website Yaztalk.com has created a Facebook group (with an empty "discussion" board) where it poses questions as posts, such as "Do you know your clot risk." Its main website has a chat function and a form for requesting a free legal consultation. Thus, both the website and the Facebook page seem focused on client recruitment, not building communities. The Wall Street Journal's report confirms as much in this short excerpt: "'Young ladies spend a lot of their time online, socializing through social media,' said Michael Skoler, [Sokolove's] chief marketing officer. The YazTalk.com site, which includes a sign-up form for legal consultation, has netted hundreds of clients, he said. 'The folks who reach us through social media are twice as likely to become clients as those who would reach us through television or print."
As someone who has written extensively about the power of social media to connect claimants in nonclass aggregation, allow them to discuss the litigation's progress and their particular ends with one another, and, ultimately, to make decisions and exercise client control, I have mixed reactions to websites like Yaztalk.com.
On one hand, the sites do a nice job of educating the public on alleged drug risks. Similar sites such as bigspills.com keep the public abreast of news developments in the growing BP oil spill. Sites like these provide a notice function (albeit one that is largely one-sided), which is an admirable public service. Other sites like Napoli Bern's site for the First Responders' 9/11 litigation (www.877wtchero.com) provide litigation documents, legal news, transcripts of judicial hearings, frequently asked questions, and all of the pertinent settlement documents.
On the other hand, despite the Wall Street Journal's quote that "[w]ith sites like Facebook and Twitter, it has become easier for firms to 'build targeted communities and to network within those communities,'" I see little evidence of genuine community. But I also see tremendous potential. As I wrote recently in Litigating Together: Social, Moral, and Legal Obligations, "Technology has changed the way we interact with one another socially, but it has also provided a means for facilitating traditional face-to-face interaction. Plaintiffs might use these new communication media to set up regional face-to-face meetings, discuss key decisions, receive attorney updates and recent court documents, pose questions, tell their stories, and generally keep in touch with one another. In short, this kind of technology makes it easier for geographically dispersed plaintiffs to coordinate initial meetings and, subsequently, to communicate, deliberate, and bargain with each other." (at 32) Giving litigants a voice in the decision-making process (through communicating with one another and voting on major litigation decisions) furthers litigants' faith in the judicial system and makes it less likely that they'll collaterally attack the result.
So, while I applaud the use of technology, I do hope that it can be deployed in more meaningful ways that extend beyond client recruitment to allow claimants to communicate with each other. (Of course, to the extent that it includes privileged information, it would need to be password protected and include appropriate security measures.)
If you're interested in the use of technology in class actions, you might also take a look at an article by Bob Klonoff, Mark Herrman, and Brad Harrison titled "Making Class Actions Work: The Untapped Potential of the Internet."
(h/t Jason Solomon)
June 14, 2010
Proposal for Oil Spill Victim Compensation Fund
When the 9/11 Victim Compensation Fund was created it was widely considered a one time, unique institution responsive to the particular national tragedy (and the risk to the airline industry of catastrophic liability). It looks like the Obama administration is trying to negotiate the creation of a similar fund with BP to pay the victims of the oil spill.
It is still not clear whether the fund will happen, how much money will be available, and whether participants will have to give up their legal claims as the participants in the 9/11 Fund did. But some choice quotes from an AP report published today indicate that this is in the offing.
The NY Times also reports on the proposed fund. The Times reports that "Administration officials said that since last week, White House lawyers have been researching Mr. Obama’s legal authority to compel BP to set aside money for claims, based on the 1990 Oil Pollution Act." However, the President's authority is not clear. The desire for such a fund is driven by the concern about BP's 10+ billion dollar dividend. Joseph Grundfest (Stanford) is quoted in the Times: "“I’m not aware of any legal precedent that would give the government any authority that would preclude British Petroleum from paying dividends" especially because there isn't any evidence that BP lacks the funds to pay for the damages caused by the spill. The Times also quotes John Coffee (Columbia) stating that the courts may have the power to issue an injunction to prevent BP from paying the dividend under some circumstances.
June 02, 2010
Lawyers Reduce Fees in WTC Disaster Site Litigation
The lawyers have offered to cap their fees at 20% instead of 30%. But this does not solve all the issues identified by Judge Hellerstein, particularly the "pig in a poke" problem - claimants can't figure out what they will get before signing on.
This offer to reduce fees reminds me of the governmental attempt to reduce the bonuses AIG had contracted to give certain employees after its implosion. Not that the situation is the same, but it shares a theme. The theme: even when you have a signed contract there is the possibility to renegotiate (perhaps something more than a mere possibility in the case where a federal judge says your fees are too high) .
May 04, 2010
Link to WTC Settlement
For readers interested, the WTC settlement and various documents can be conveniently found on the Napoli Bern Ripka LLC website here:http://www.nbrlawfirm.com/blog/read_blog/213/wtc-respiratory-illness-law
I think its a great public service that the firm is being transparent about the agreement and these motions by posting them online.
May 03, 2010
Profile of WTC Litigation Judge in the NYTimes
Mireya Navarro of the New York Times wrote an article published on Sunday about Judge Alvin Hellerstein who is overseeing the 9/11 World Trade Center Disaster Site litigation, and who now famously came out against the proposed settlement in that case. The article is called "Empathetic Judge in 9/11 Suits Seen By Some As Interfering."
The theme of the article is Judge Hellerstein's empathy for these special victims. Some legal experts, Navarro writes, say that he was acting outside of his judicial capacity -- "such intervention is not the norm outside the class action."
While Judge Hellerstein's actions in this case are very public and the subject of a great deal of interest, its not clear to me that there is a difference between what he did and what judges usually do. As I see it, the litigants here (or the lawyers more precisely) are trying to put together the kind of settlement that Merck and the plaintiffs lawyers were able to put together in Vioxx. In that case, the litigants sought Judge Fallon's approval for the settlement, which was controversial. Judge Fallon's approval - especially because he is a thoughtful, intelligent and well-respected federal judge - was critical to the success of that settlement. I asked him once why, if it wasn't a class action, his approval was needed. He replied in sum and substance that the parties wouldn't proceed without his approval.
The WTC lawyers wanted Judge Hellerstein's approval for the same reasons the Vioxx lawyers did - he is a thoughtful, intelligent and well respected federal judge. His approval of the settlement would give it gravitas; it would make plaintiffs whose lawyers weren't involved in drafting it want to sign on; it would make plaintiffs who had no way of knowing what they would get at the end of the day agree to buy a pig in a poke because they could trust the process. The lawyers didn't get the Judge's sign-on. It seems that with their appeal to the Second Circuit they are saying he acted beyond the scope of judicial power now that they got a response from the judge that they didn't like.
But how is this different than a settlement conference in an ordinary case when the judge opines that a settlement is not giving the plaintiff enough? After all, the parties came to Judge Hellerstein. They could settle the cases individually and dismiss them one after the other as settlement is reached. If they chose to dismiss their individual cases, its not clear to me that there is anything Judge Hellerstein could do other than to tell the client he thought that was a bad idea. But if the lawyers want an aggregate settlement and they want a Judge to give them legitimacy, then they have to face the reality that he will only legitimate a settlement he thinks is appropriate under the circumstances.
EDITED TO ADD: You can find the documents regarding the appeal on the Napoli Bern website.
April 15, 2010
City Turns to Circuit Court to Invalidate Judge Hellerstein's Role in WTC Litigation
The City has filed a notice of appeal from Judge Hellerstein's finding against the settlement in the WTC Disaster Site litigation and his role in policing the settlement. The NY Law Journal has the story. Mark Hamblett reports:
Attorneys for the city and its contractors, led by James Tyrrell Jr. of Patton Boggs, claim that Judge Hellerstein does not have the power to interfere with a settlement reached among private parties, although the money for the settlement will come from the $1.1 billion WTC Captive Insurance Co. established with federal funds to help meet insurance costs stemming from the response and cleanup of Ground Zero.\
Plaintiffs liaison counsel Paul Napoli of Worby Groner & Napoli Bern, whose interests are for once aligned with those of the city's, said he would weigh in at the circuit either as a respondent or with an amicus brief backing the appeal.
The sides are meeting with the experts in the case but haven't reached a new settlement so far. It appears the sticking point is future claims:
But the two sides have made no progress on the amount of money to be paid in the settlement, with the city, its major contractors and WTC Captive insisting that any more money paid to the plaintiffs today would jeopardize recovery for people who contract illnesses in the future.
Is the filing of the notice of appeal just posturing or is there really an issue here? It seems to me, if the lawyers want to settle the cases individually then they can still do it. But once they decide they want the judge's blessing on an aggregate settlement, well, then they should expect the judge to weigh in and be more than a rubber stamp. If futures are really the issue, they ought to raise that before the judge.