Monday, May 3, 2010
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.
Thursday, April 15, 2010
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.
Friday, March 26, 2010
Our own Howard Erichson is quoted at length in a recent New York Law Journal article on Judge Hellerstein's rejection of the 9/11 first responders settlement.
I can't access the article, but here is a taste.
Saturday, March 20, 2010
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.
Tuesday, March 16, 2010
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):http://www.nbrlawfirm.com/blog/read_blog/213/wtc-respiratory-illness-law
Monday, March 15, 2010
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.
Thursday, March 11, 2010
The New York Times reports that In Re World Trade Center Disaster Site Litigation in the Southern District of New York has settled. The case involved nearly 10,000 plaintiffs and at least 90 defendants.
The parties agreed that if 95% of the plaintiffs sign on to the litigation, then the settlement will go forward at $575 million. If 100% agree, then the settlement will go forward at $654.5 million. This looks a lot like the Vioxx settlement in that sense. It sets aside a $23.4 million "insurance fund" to cover future claims - those plaintiffs whose illnesses have yet to develop.
The amounts allocated to each plaintiff will be based on a points chart that will be administered by a neutral claims administrator on the model of the Sept. 11th Victims Compensation Fund. The points will be based on illness severity and, according to the Times, "Other factors that will be considered include evidence of a link to ground zero and adjustments for age, pre-existing conditions, time of diagnosis and smoking history. The process could take up to a year." The process is set up to weed out fraudulent claims.
The lawyers will get up to a third in fees, and the insurer that will fund this settlement has already paid over $200 million in fees to defend the litigation.
How will they value the cases? They haven't held any bellwether trials (and they won't now) so it will be interesting to see what the basis of calculations will be. A study of the Sept. 11th Victims Compensation Fund found that most people who disputed the forensic economists findings got higher compensation; and the judge has said that the amounts individuals get must be individualized and subject to his review even though the case is not certified as a class action. See Tinari et al, Did the 9/11 Victim Compensation Fund Accurately Assess Economic Losses?
I urge any readers with ideas or insights into this question to contact me via email.
Tuesday, March 2, 2010
Following on Prof. Erichson's footsteps, I have just posted a draft article entitled "Rough Justice and the Problem of Value in Tort Law." You can find it on SSRN and bepress.
This article can be read in dialogue with Erichson and Zipursky's argument against lawyer empowerment in the mass tort context (see their article "Consent versus Closure" described in the post below). Their baseline is the individual case which ostensibly is run by the litigant as compared to the mass tort context in which lawyers are empowered to determine outcomes. I demonstrate that in the individual case lawyers are setting the price of settlement with reference to other cases without rigorous methodology, leading to inequity. In the mass tort context, we have the possibility to adopt transparent, rigorous methods that ensure horizontal equity, a central principle of procedural justice.
This article is also a response to concerns about variability in jury verdicts. I have blogged about these issues here and here and refer readers to Tim Lytton's post on Tort Profs Blog and Byron Stier's work on "Jackpot Justice." We have very different views on what variability in tort verdicts really means!
Below is the abstract of my piece. If you read the draft and have comments, please send them along.
This Essay argues the counterintuitive position that in our tort system, individual justice is rougher than justice on a mass scale. The reason for this is that mass tort cases can be resolved collectively using rigorous transparent social science methods that can ensure equal treatment of similarly situated litigants. Individual justice, by contrast, allows cases to be resolved in a largely hidden system of comparative valuation using loose methods that are unlikely to result in like cases being treated alike. To do justice courts must use rigorous, transparent methods of case valuation.
In addition to this key insight, this Essay makes two contributions. First, it demonstrates a pragmatic way of thinking about procedural justice by measuring existing procedures against widely recognized principles. In this case, I compare sampling procedures with principles of equality, fairness and distributive justice. Second, it uncovers a pernicious assumption that has been heretofore ignored by scholars: contrary to popular belief, there is no objective way to monetize injuries. All justice in tort cases is rough justice. This is the problem of value in tort law. The solution to this problem is properly administered sampling procedures.
Friday, February 19, 2010
Initially Judge Hellerstein had ordered six bellwether trials. Now apparently he is conducting 12. In the order naming the 12, I saw reference to a status conference in which the reasons for the number were apparently discussed. So I went down to 500 Pearl Street, where the Southern District of New York is located, to read the transcript of that conference. I learned some interesting things, but not why 12 instead of 6 (or 30 for that matter, which is the number of cases of the 9,000 or so in the litigation that are proceeding to trial readiness). The judge has also not yet decided whether cases will proceeding one after another or simultaneously before multiple judges, but he is against grouping cases together for trial.
The term sheet for the settlement is 70 some odd pages according to the judge. This means that the settlement discussions are quite advanced. The lead lawyers did not want to say anything about the discussions in open court. But one lawyer did complain that he wasn't involved in the discussions.
Also, although the judge was clear that this is not a class action and that he had refused to certify it has such, he is planning to hold a fairness hearing about the settlement, should one be reached. Here's what he says: "...because of the extraordinary public interest in this case and because of the limited nature of the funds that are available for settlement, that there will undoubtedly be fairness proceedings that will be part of the settlement. That means that what is fair and reasonable will have to be determined by the court, subject to the right of appeal."
Judge Hellerstein also stressed the importance of fairness to individual plaintiffs.
....my conception of fairness relates not only to the aggregate size of the settlement, but more to the individual settlements themselves. .... I regard the 9,000 cases as just those, 9,000 separate cases. Many of them are similar. Many of them can be ranked for convenience into categories, but in their fundamental aspects they have an individual plaintiff in each individual case, plus the possibility of additional family members. But they all revolve around one personal injury or one death, as they case may be.
So the fairness to individuals is an extremely important aspect of settlement. And I will be looking carefully, if and when there is a settlement at how individual members are treated.
If any readers know why 12 and not 6 (or 30) please contact me.
Thursday, February 4, 2010
The New York Times has published an article by Mireya Navarro entitled "Effort to Settle Sept. 11th Lawsuits". The article describes (albeit without much detail) the efforts to settle the lawsuits brought by first responders against various contractors and New York City in the aftermath of the terrorist attack of September 11th. Twelve cases have been scheduled to go to trial in May 16, ten thousand total have been brought against approximately 200 defendants. Apparently there is a 70 page settlement plan and the judge says that the parties have been working "very hard." The article also mentions a bill pending in Congress to compensate the workers at the disaster site, similar to that created to compensate the victims of the tragedy.
The judge is using a relatively sophisticated approach to sampling, first surveying the class and using a severity chart to pick cases for trial. The special masters that came up with it are both law professors and experts in mass torts: Aaron Twersky (Brooklyn) and James Henderson (Cornell).
The article quotes two law professor mass tort experts. Anthony Sebok (Cardozo) explains the difficulty of the causation issues: "“There’s not a lot of experience with this kind of risk, [i]t may be very difficult from a technical point of view to get testimony from experts.”
Richard Nagareda (Vanderbilt) explains “Ultimately, everybody understands there’s going to be some sort of comprehensive settlement. The question is, what is the price?”
I am working on a paper that attempts to answer this question - what is the best way to determine the price. I think holding some sample trials is the best way, but it sounds like the players in this litigation disagree and would prefer to reach a settlement prior to trial. The judge is prepared for this and apparently has suggested having multiple judges try the sample cases rather than trying them together.
Impending trials have a way of focusing the mind. I predict a settlement by May.
Friday, September 11, 2009
Tuesday, June 30, 2009
The Supreme Court yesterday denied certiorari in Burnett v. Al Baraka, in which plaintiffs sought to hold Saudi Arabia and the Saudi royal family liable for the September 11 terrorist attacks. The plaintiffs sought to establish liability by linking the Saudis to the financing of Al Qaeda. The Second Circuit held that the claims were barred by the Foreign Sovereign Immunities Act, reasoning that terrorism claims against a foreign government required a state department designation of that government as a supporter of terrorism.
Here's an excerpt from today's article in the Philadelphia Inquirer:
In a decision that creates broad immunity for Saudi Arabia in terrorism lawsuits, the Supreme Court yesterday let stand lower-court rulings that the desert kingdom and senior members of the Saudi royal family are not liable for the 9/11 attacks. ...
For the moment, the decision leaves untouched litigation against scores of Islamic charities, alleged terrorism financiers and financial institutions named as defendants in the case. But the Supreme Court's decision is a significant defeat for the 6,000 individual victims and family members along with insurers and other commercial interests seeking compensation. ...
The plaintiffs allege that Saudi Arabia funded and controlled Islamic charities that were used to launder money into al-Qaeda. Absent that financial support, al-Qaeda never would have become a global terrorist threat and never would have been able to pull off the Sept. 11 attacks, they allege.
The Obama administration, concerned about the case's effect on U.S.-Saudi relations, weighed in with an amicus brief last month urging the Supreme Court to decline the case.
Monday, June 8, 2009
Wednesday, May 6, 2009
What's going on with the 9/11 "First Responder" cases these days?
I just saw the following article in NYLJ - "Plan Implemented to Resolve Complex Suits in World Trade Center Cleanup." The special masters who are creating this plan are two eminent mass tort scholars: Aaron Twerski (formerly dean of Hofstra Law and now back on the faculty at Brooklyn) and James Henderson (on the faculty at Cornell Law). The plan involves creating a database of all the plaintiffs, and then conducting in depth discovery of a selected number of them to get a sense of how the cases develop, with the ultimate view of either having trials or settling the cases. Here is a description of the special masters' plan from the NYLJ article:
The plan divides the 9,090 cases into five groups, running from the first wave of cases filed to the last. The first four groups will contain 2,000 cases each. The fifth group will contain the remainder and any after-filed cases.
The special masters and counsel for both sides prepared severity charts that grade a person's condition on a scale from zero to four. They also selected six major disease categories in which to group the illnesses.
The plan kicked off on Jan. 1 and within 40 days, plaintiffs in the first group of 2,000, Group A, completed a subset of the data fields that detailed their disease rankings, duration of exposure at Ground Zero and pre-existing disorders.
Ten days later, the special masters selected from this group the 200 cases ranked most severe, 25 additional cases for diseases that are not necessarily included in the severity chart, and an additional 400 cases at random.
The database for the 200 most severe cases and the 25 additional cases will be completed by April 1. Within five days, both sides and the judge will select the first six sample cases.
Completion of the database for the 400 cases chosen at random is due in late May, after which each party will choose two more cases and the judge picks another two. Those 400 cases will proceed along on discovery only, with no schedule set for motion or trials.
I haven't seen whether the six sample cases that were to be selected in April actually were selected, but will post then I find out. Judge Hellerstein, who is overseeing these cases, is quoted in the article as saying of the methodology: ""It allows the parties to get a good sense of the strengths and weaknesses of all the cases."
This approach shares some similarities with the bellwether trials procedure I describe in a recent article. (See Lahav, Bellwether Trials, available on SSRN). What is interesting about this form of statistical adjudication is that it addresses the discovery phase and illustrates the extent to which discovery really makes or breaks a litigation, rather than trial.
Thursday, September 11, 2008
It's been seven years since the attacks in 9/11/2001, and health concerns remain. Here's an excerpt from an article today from cnn.com -- 9/11 survivors troubled by asthma, PTSD, by Andrea Kane:
A commission charged with examining the scope and depth of the attack's health effects reviewed more than 100 scientific articles published since 2001 and found that new asthma levels among residents and rescue workers were two to three times higher than the national estimates.
The report by the World Trade Center Medical Working Group, issued in advance of the September 11 anniversary, also found that two to three years after the attack, symptoms of post-traumatic stress disorder remained elevated among rescue and recovery workers and residents of lower Manhattan.
Friday, May 9, 2008
Yesterday, Gov. Tim Pawlenty signed a $38 million settlement for victims of the I-35W bridge collapse. Here's the AP story in USA Today. Interestingly, state legislator Phyllis Kahn, who co-authored the compensation bill, was quoted in this article in the Minnesota Daily as saying that the bill was modeled after the 9/11 Victim Compensation Fund, including the waiver of the right to sue the state. For reasons I explained on Monday, the Minnesota compensation deal is better understood as an ordinary mass tort settlement rather than as an extraordinary government compensation package like the September 11 Fund. There's an enormous difference between the government's using taxpayers' money to settle potential claims against that government (the Minnesota deal) and the government's using taxpayers' money to settle potential claims against others (the 9/11 Fund, which used federal government funds but required participants to release whatever claims they may have had against the airlines or Port Authority). The former might occur anytime a government defendant faces mass tort claims. That's why the Minnesota package makes me glad as long as both the claimants and the state are satisfied with its terms. The latter, however, can rarely be justified. This is the point that special master Ken Feinberg made powerfully in his final report on the Victim Compensation Fund: the 9/11 situation and the government's generous response to it should be viewed as sui generis. That strikes me as exactly right, which is why it makes me nervous to hear the 9/11 Fund invoked as a model for something that in fact is quite different and much less problematic.
Monday, May 5, 2008
The Minnesota state legislature appears on the verge of approving a $38 million compensation package to settle the claims of victims of the 2007 collapse of the I-35 bridge over the Mississippi River in Minneapolis, according to this AP story on law.com (via Point of Law):
Minnesota lawmakers reached agreement on a $38 million compensation package for victims of a deadly bridge collapse, culminating months of work to provide relief beyond the state's legal liability. The deal struck in a joint committee of the House and Senate will offer everyone who was on the bridge up to $400,000, with an additional $12.6 million pool for the people who suffered the most severe injuries and losses. Thirteen people died in the Aug. 1 collapse and 145 were hurt. ...
The package is expected to be approved by the Legislature on Monday and sent off to Republican Gov. Tim Pawlenty, who called it "needed relief and support" for victims.
If victims agreed to take the money, they would have to sign away their rights to sue the state and other governmental entities in Minnesota. They would not be precluded from suing other parties in the collapse. ...
The National Transportation Safety Board is investigating the cause of the collapse. Officials have focused on a design flaw involving gussets, the plates that help connect steel beams, and the weight of construction materials at vulnerable points in the bridge. Victim lawsuits are on hold until a final determination is made.
As a legislative decision to compensate disaster victims, the package bears a passing resemblance to the September 11 Victims Compensation Fund. It is better understood, however, as an ordinary mass tort settlement, in which a defendant (the state) offers to settle plaintiffs' claims against it. Unlike the 9/11 Fund, which used government funds but required participants to release their claims against the airlines and other private parties, the Minnesota deal apparently requires only the release of claims against the state, just like any other settlement offer by a defendant.
Friday, April 11, 2008
Robert Rabin (Stanford Law) and Stephen Sugarman (Boalt Hall) have just posted an intriguing article entitled "The Case for Specially Compensating the Victims of Terrorist Attacks: An Assessment" on SSRN. The paper was published in the Hofstra Law Review in 2007. The abstract explains:
In light of the daunting prospect of terrorists striking again on the home front, what special measures, if any, should be taken to assure compensation to those killed or injured by such violence? The starting point for any discussion of the compensation of these victims (and their survivors), we believe, is an appreciation of the baseline arrangements our nation has in place for those killed or seriously injured regardless of cause. One policy option would be to leave victims of terrorism to whatever they might obtain from these baseline tort and social welfare compensation systems in default of special treatment. On what basis, if any, should terrorist victims be singled out for different treatment? Is there something about being victims of terrorism that should entitle them and their survivors to be better treated than they would be by Social Security, victims of violent crimes schemes, and the like? Is there something about tort law's application, or non-application to the terrorist setting, that makes a special compensation scheme appropriate for victims of terrorism?
In addressing these questions, there are two basic alternatives to the default solution. One would involve the creation, ex ante, of an ongoing victim compensation fund in anticipation of the occurrence of future terrorist acts. The other would involve the ad hoc creation of a fund established after the occurrence of a terrorist event to provide retrospective compensation to victims. Israel and Northern Ireland are examples of countries with longstanding experience with terrorism, which have adopted legislative schemes of the first sort. In the U.S., the 9/11 Victim Compensation Fund is an example of the ad hoc retrospective approach.
We begin by commenting on the 9/11 Fund itself, setting it in the context of other American compensation schemes that arose out of concerns about the appropriateness of having injury victims seek compensation through tort law. Next, we consider, in turn, the ex ante and ex post options for addressing the claims of terrorist victims. Finally, we return to the default systems mentioned above, raising the question of whether they offer in all, or most, circumstances the most sensible approach to dealing with future incidents of personal injury from terrorist acts.
Tuesday, April 1, 2008
BNA Law Week reports that on March 26 the Second Circuit held that New York City and its contractors are not automatically entitled to derivative Stafford Act immunity for state law claims brought by various persons (police, firefighters, etc.) who helped clean up the site of the World Trade Center attacks of September 11, 2001. In re World Trade Center Disaster Site Litigation, 2d Cir., No. 06-5324-cv, 3/26/08. The opinion is available here, on the Second Circuit website.
A quote from the opinion:
"Separation of powers animates discretionary function immunity; this doctrine does not permit us to extend limitless derivative immunity to ensure that, in the event of another attack, contractors are willing to assist in disaster recovery efforts. We are confined to the parameters of the derivative defense. Nonetheless, we observe that private contractors, unlike volunteers or conscripts, are paid for their services and able to pass along the cost of liability protection to the government, either by including the cost of liability insurance in their contract or by seeking indemnification from the government."
Friday, March 28, 2008
Gillian Hadfield (USC) has posted what promises to be a fascinating qualitative analysis on the decision of victims of the terror attacks of September 11, 2001 to litigate or obtain compensation through the September 11 Fund. The Article, called "Framing the Choice Between Cash and Courthouse: Experiences with the 9/11 Victim Compensation Fund" will be published in the Law and Society Review and is posted on SSRN. This is a very important contribution to our thinking on what types of procedures ought to be used in mass tort cases. Here is the abstract:
In this paper I report the results of a quantitative and qualitative empirical study of how those who were injured or lost a family member in the September 11, 2001 terrorist attacks evaluated the tradeoff between a cash payment - available through the Victim Compensation Fund - and the pursuit of litigation. Responses make it clear that potential plaintiffs saw much more at stake than monetary compensation and that the choice to forego litigation required the sacrifice of important non-monetary, civic, values: obtaining and publicizing information about what happened, prompting public findings of accountability for those responsible, and participating in the process of ensuring that there would be responsive change to what was learned about how the attacks and deaths happened. The results shed light on the framing component of the transformation of disputes, and in particular on how potential litigants see the decision to sue, or not, as a decision as much or more about how they understand their relationship to their community and their responsibilities as a citizen as how they evaluate monetary considerations.