Tuesday, February 2, 2016

GM Bellwether Trial - Developments

Some more news coverage of the GM Bellwethers and the allegations made against the lead lawyer.

An interview with Robert Hilliard can be found here: Amanda Bronstad, Plaintiffs Lawyer Hilliard Saw No Red Flags in Case, National Law Journal, Feb. 1, 2016. 

Amanda Bronstad, Lawyer Claims GM Bellwether Counsel Cut Sweetheart Deal with Automaker, National Law Journal, Jan. 28, 2016. 

Sara Ranzaddo & Mike Spector, GM, Plaintiffs Lawyers Dispute Misconduct Allegations in Ignition Switch Cases, Wall Street Journal, Feb. 2, 2016. 

February 2, 2016 in Aggregate Litigation Procedures, Products Liability, Vehicles | Permalink | Comments (0)

Friday, January 29, 2016

Repeat Players, the Settlements They Design, GM, and VW

There's obviously been a lot in the news about multidistrict litigation--from Lance Cooper's allegations in GM to the recent selection of the plaintiffs' leadership slate in VW.  But what do we really know about the settlements that come out of those large MDLs?  On one hand, the answer is not much.  Many of the deals are secret because they are private.  But sometimes those private deals are nevertheless publicly available.  And when they are, we read them.  And analyze them.

The results can be a little disturbing.  Given all of the hubbub over Cooper's allegations in GM (see Lahav's post), my co-author Margaret Williams and I decided to go ahead and release the findings of our recent study, Repeat Players in Multidistrict Litigation: The Social Network, on SSRN.  

While past studies have considered repeat play on the plaintiffs’ side, this study is the first comprehensive empirical investigation of repeat play on both sides. It won't surprise most readers to learn that we found robust evidence of repeat play among both plaintiff and defense attorneys.  What may be more interesting is that we used social-network analysis to demonstrate  that a cohesive multidistrict-litigation leadership network exists, which connects people, law firms, and the proceedings themselves.

While repeat play may not be surprising for those in the know, the fact that repeat players exist matters considerably. Lead lawyers control the litigation, dominate negotiations, and design settlements.

To consider repeat players’ influence, we examined the publicly available nonclass settlements these attorneys negotiated, looking for provisions that one might argue principally benefit the attorneys, and not one-shot plaintiffs. By conditioning the deal on achieving a certain claimant-participation rate and shifting the deal-making entities from plaintiffs and defendants to lead lawyers and defendants, repeat players tied all plaintiffs’ attorneys’ financial interests to defendants’ ability to achieve closure.

Over a 22-year span, we were unable to find any publicly available nonclass settlement that didn’t feature at least one closure provision (which benefits the defendant), and likewise found that nearly all settlements contained some provision that increased lead lawyers’ fees. Based on the limited settlements available to us, we found reason to be concerned that when repeat players influence the practices and norms that govern multidistrict proceedings—when they “play for rules,” so to speak—the practices they develop may principally benefit them at the expense of one-shot plaintiffs.

Of course, our research doesn't speak directly to the allegations in GM, but it does make those allegations far less surprising.  And if you compare our list of repeat players to the names of those appointed in Volkswagen, you'll see a lot of familiar names.

January 29, 2016 in Aggregate Litigation Procedures, Current Affairs, Lawyers, Mass Tort Scholarship, Procedure, Products Liability, Settlement | Permalink | Comments (0)

Tuesday, January 26, 2016

GM Ignition Switch Litigation Bellwethers

Lance Cooper, a lawyer with ignition switch cases against GM, has made a motion to remove the MDL plaintiffs counsel in the ignition switch litigation.  You can find some coverage by Sara Randazzo & Mike Spector at the Wall Street Journal. (I haven't seen the motion). 

The first lawsuit to proceed to trial - of a total of six, three picked by plaintiffs, three by defendants - has ended with a dismissal with prejudice under a cloud of allegations of fraud.  What does this say about bellwethers?

I think it says nothing about the underlying cases, or not very much.  (It does tell you something about lawyer error, but that's a topic for another day).  However, the recent events at trial do show that the way bellwether trials are structured is deeply flawed.  If the cases tried are going to be meaningful, they should be randomly selected and the number of trials should be related to the variation in the underlying group of cases.  If there is a high variation, you will need more trials to tell you much about the underlying run of cases.  A number that is convenient (six, for example) is just that, convenient, but convenience should not be confused with meaningful.  Now a lot is riding on this case because one would imagine, since plaintiffs picked it and they only get three, its a really good case for plaintiffs.  So a skewed sample can tell you something - but what it ends up telling you is more about the lawyers than the underlying run of cases. 

To understand this, imagine you have a jar full of marbles.  If you know all the marbles are the same color, you can just pick one marble out of the jar to find out what the color of all the marbles is.  But if the marbles are of various colors picking one marble is not enough.  If you have a sense of the distribution of colors in the jar - say you know that there are some black and some red marbles - you can calculate how many marbles to pick out so that you will have a pretty good estimate of the proportion of red to black.   The same with cases.  If your cases are homogeneous, you can just try a few to get a sense of their value.  The more heterogeneity, the greater the number of cases that need to be tried.  This was the basis for Francis McGovern's idea of maturation of mass torts - you try lots of cases, and over time a value emerges.  It was also the basis for the structure of bellwether trials in the 9/11 First Responders' Litigation.  

Of course, its easy for me to say this. I am not running an MDL and I don't have to pay for all those trials, which are expensive. But that said, if you want to get a sample that could mean something, the sample size needs to be related to the variance of the underlying class and the method of selection needs to be random.  That's basic statistical methods.  I think that MDL judges need to partner with statisticians and have a serious conversation about what bellwether trials are trying to achieve and how best to do this.  Judges have a lot of discretion and they can use it wisely to lead to fair and equitable results for everyone. There are ways to do better, we just need to find them.  

January 26, 2016 in 9/11, Aggregate Litigation Procedures, Trial, Vehicles | Permalink | Comments (0)

Thursday, January 21, 2016

GM Ignition Switch Bellwethers

Thursday, December 17, 2015

Feinberg to head VW Compensation Fund

Now that we know where the VW MDL will go (Northern District of California - cue if you're going to San Francisco...) and that Judge Charles Breyer will be in charge, VW has announced that Ken Feinberg will run their claims administration program.  You can find Danielle Ivory's New York Times article about the announcement here

As this Wall Street Journal article by Sara Randazzo points out, the highest concentration of affected cars (but not the highest concentration of cases) is in California.  But there were lots of reasons (which she lists) to pick other locations.

There are a number of ways that Feinberg can help resolve this litigation, but one very important question is how his work will interrelate with that of the many powerful plaintiffs firms now involved.  There are lots of ways to calculate the damages here that would seem fair, such as for example predicting based on past driving habits a given driver's likely use of the car and paying for the difference in gas mileage (since the cars complying with emissions standards will have lower gas mileage than promised), or calculating the value of the car on the secondary market and paying the difference of what it would have been worth had the representation been accurate (the "Edmonds/Kelly Bluebook approach").  It will be interesting to see what Feinberg does.

 

 

December 17, 2015 in Aggregate Litigation Procedures, Vehicles | Permalink | Comments (0)

Tuesday, October 27, 2015

Repeat Players in MDL: VW edition

The New York Times has an article by Barry Meier called Lawyers Jostle for Lead Position in Volkswagen Suits.  

Quoted in the article are our own Beth Burch (who has recently written a great article on repeat players in MDL litigation) and Howard Erichson (who has written significant articles about the ethics of settlements in mass tort including Vioxx).

 

October 27, 2015 in Aggregate Litigation Procedures, Mass Tort Scholarship, Vehicles | Permalink | Comments (0)

Friday, October 23, 2015

Diversity Jurisdiction, MDL and History

I was just rereading Henry Friendly's Essay on the history of diversity jurisdiction. 

There he quotes from remarks by George Mason:

“What!” he exclaimed, “carry me a thousand miles from home — from my family and business, where perhaps, it will be impossible for me to prove that I paid it [a bond]? ... Suppose I have your bond for £ 1000 — if I have any wish to harrass you, or if I be of a litigious disposition, I have only to assign it to a gentleman in Maryland.”

Henry J. Friendly, The Historic Basis of Diversity Jurisdiction, 41 Harv. L. Rev. 483, 491 (1928).  This reminds me of the concerns raised by individuals swept into the MDL.  The subject is contract, but the idea is the same.
 

October 23, 2015 in Aggregate Litigation Procedures, Procedure | Permalink | Comments (0)

Sunday, September 27, 2015

Good Ol' Boys Clubs in MDL

Amanda Bronstad at the National Law Journal recently published an article titled Good Ol' Boys Clubs in MDL that includes a list of law firms that I recently identified as firms with the most lawyers appointed to leadership positions in products liability MDLs.  Given the title of her piece, I thought readers might also be interested in the gender breakdown of lead lawyers in those multidistrict litigation cases.  Of the top fifty lawyers who were appointed most frequently, only 11 of the 50, or approximately 22% were female.  The full list of those attorneys is available in Judging Multidistrict Litigation, 90 N.Y.U. L. Rev. 71, 139-40 (2015) (gender breakdowns are mentioned in footnoted 102).

September 27, 2015 in Aggregate Litigation Procedures, Lawyers, Procedure, Products Liability | Permalink | Comments (0)

Monday, September 14, 2015

Howard Erichson on Judge Jack Weinstein and the Allure of Antiproceduralism

Professor Howard Erichson (Fordham Law and Editor, Mass Tort Litigation Blog) has posted to SSRN his article, Judge Jack Weinstein and the Allure of Antiproceduralism,  64 DePaul L. Rev. 393 (2015).  Here's the abstract:

In one sense of the word proceduralist — a person with expertise in procedure — Judge Jack Weinstein is among the leading proceduralists on the federal bench. But in another sense of the word proceduralist — an adherent of proceduralism, or faithfulness to established procedures — he falls at a different end of the spectrum. Looking at four examples of Judge Weinstein’s work in mass litigation, this Article considers what it means to be an antiproceduralist, someone unwilling to let procedural niceties stand in the way of substantive justice. The allure of antiproceduralism is that it eschews technicalities in favor of substantive justice, but technicalities are in the eye of the beholder, and this Article asks what is lost when a judge steers around procedural constraints.

September 14, 2015 in Aggregate Litigation Procedures, Class Actions, Mass Tort Scholarship, Tobacco | Permalink | Comments (0)

Saturday, August 15, 2015

University of Haifa Conference on the Legal Resolution of Mass Disputes

The University of Haifa in Israel is hosting an international conference on the Legal Resolution of Mass Disputes on November 26-27, 2015.  The conference includes a remarkable gathering of  speakers from numerous countries.  Participating academic speakers include the following: Dean Gad Barzilai (U. Haifa) and Professors Arthur Miller (NYU Law), Christopher Hodges (Oxford U.), Alon Klement (IDC Herzliya), Geraint Howells (City U. of Hong Kong),  Stefaan Voet (U. Leuven), Willem Van Boom (U. Leiden), Astrid Stadler (Konstanz U.), Rhonda Wasserman (U. Pittsburgh), Rabeea Assy (U. Haifa), Ariel Flavian (U. Haifa), Morris Ratner (UC Hastings), Orna Rabinovich Einy (U. Haifa),  Linda Mullenix (U. Texas), and Hélène van​​ Lith (Sciences Po Law Paris).

August 15, 2015 in Aggregate Litigation Procedures, Class Actions, Conferences, Foreign, Procedure | Permalink | Comments (0)

Wednesday, May 6, 2015

Multidistrict Centralization: An Empirical Examination

Our friends at the FJC and Administrative Office of the U.S. Courts, Emery Lee, Catherine Borden, Margaret Williams, and Kevin Scott have posted their latest empirical analysis of multidistrict litigation on SSRN.  Here's the abstract: 

Following the judiciary's experience with aggregate litigation in the 1960s, Congress established a procedure for the transfer of related cases to a single district court for coordinated pretrial proceedings. Originally designed to achieve efficiencies associated with coordinated discovery, the multidistrict litigation (MDL) process evolved from a rather modest starting point to become a central part of aggregate litigation in the federal courts today. Despite its importance, however, there is little empirical research on the MDL process. This article seeks to fill this gap in the empirical literature by addressing a few central questions about the work of the Judicial Panel on Multidistrict Litigation (Panel). Using a unique database, we examine how that body decided motions to centralize multidistrict litigation. We find, most importantly, that the Panel became more likely to order centralization of proceedings over time, after controlling for other factors. That trend is not, however, apparent in the most recent years' data. We also find, all else equal, that the Panel is more likely to centralize a proceeding including class allegations, and more likely to centralize proceedings raising certain kinds of claims.

May 6, 2015 in Aggregate Litigation Procedures, Mass Tort Scholarship | Permalink | Comments (0) | TrackBack (0)

Thursday, April 30, 2015

Class Actions at the ALI Annual Meeting

In conjunction with its annual meeting each year, the American Law Institute hosts a CLE the day before the meeting begins.  This year, there are two programs that may be of interest to readers on Sunday, May 17, 2015:

1) Changes for Federal Rule of Civil Procedure 23?  An Open Forum with the Rule 23 Subcommittee of the Advisory Committee on Civil Rules; and

2) Ethical Issues in Class Actions and Non-Class Aggregate Litigation.

The panels run from 1:30-3:00 p.m. and 4:00-6:00 p.m., respectively and are located in the Ritz-Carlton Hotel in Washington, D.C.  I understand that panel members on the second panel will include Bob Klnonoff, Elizabeth Cabraser, Judge Diane Wood, Judge Lee Rosenthal, Sam Issacharoff, John Beisner, and myself among others.  Hope to see you there!

April 30, 2015 in Aggregate Litigation Procedures, Class Actions, Current Affairs | Permalink | Comments (0) | TrackBack (0)

Constructing Issue Class Actions

There's been a lot of chatter over the past few years about the greater use of issue classes.  The Rule 23 Subcommittee in its recent report (p. 41) indicated that issue classes top its agenda for possible reform and there's been a greater willingness to rely on Rule 23(c)(4) among the circuit courts over the last few years.  Much of the scholarship on issue classes thus far, however, has focused on how to use issue classes in conjunction with Rule 23(b)(3)'s predominance requirement.  Professor Laura Hines (Kansas) has, for instance, written a series of articles on the topic and there have been several debates in symposium pages, such as DePaul's 2013 symposium.  

Whatever side of the debate one adheres to on the to-be-or-not-to-be question, the courts are embracing issue classes.  Thus, there remains much work to be done on discerning which issues should qualify for certification, how to think about Seventh Amendment Reexamination Clause questions, and how to compensate plaintiffs' attorneys who initiate issue classes.

I've recently written a paper on issue classes that takes some steps toward fleshing out these problems.  The paper is long since it's meant to be a one-stop shop for judges and attorneys on the subject, but here are the critical points worth underscoring:

First, one of the main difficulties of our system is that the focus in massive lawsuits has shifted to the ways in which the plaintiffs are dissimilarly situated, even when the defendant's conduct is uniform.  Take the GM ignition switch debacle or the Toyota acceleration cases, for example.  Corporate actions are nonindividuated; it doesn't make sense to litigate what GM or Toyota did in 40,000 different cases.  (Draft pp 5-8) But defendants have successfully shifted the procedural focus to how their behavior affected claimants, which tends to defeat class certification because common questions do not predominate over individual ones.  The issue class has the potential to recapture what is common to the plaintiffs: defendant's conduct--at least so long as that conduct is nonindividuated.  One can capture this notion by divvying up the legal elements in any claim or defense as "conduct components," which concern the defendant's conduct, or "eligibility components," which concern a plaintiff's eligibility for relief.  (Draft pp 15-29)

Second, by embracing the standard suggested by the ALI's Principles of the Law of Aggregate Litigation, courts can ease the supposed tension (to the extent any remains) between Rule 23(c)(4) and Rule 23(b)(3).  (Draft pp 31-32)  Courts should certify issue classes where resolving the issue would "materially advance the resolution of multiple civil claims by addressing the core of the dispute in a manner superior to other realistic procedural alternatives, so as to generate significant judicial efficiencies." (Principles, 2.02(a)(1), 2.02 cmt. a, 2.08, 2.08 cmt. a)  Predominance is embedded in the "materially advance" language and superiority is included as a condition that certifying the issue would be "superior to other realistic alternatives" such that it "generate[s] significant judicial efficiencies."  Moreover, the courts themselves seem to have reached a general consensus on this matter, with even the Fifth Circuit embracing issue classes in In re Deepwater Horizon, 739 F.3d 790, 804 (5th Cir. 2014).  (Draft p. 30)

Third, courts must figure out a way to compensate (and thus incentivize) plaintiffs' attorneys.  This is perhaps the trickiest part because of both the lack precedent and doctrinal hurdles such as Lexecon.  Lexecon presents a special challenge in multidistrict litigation cases where issue classes might prove most useful.  Nevertheless, one need not invent a theory out of whole cloth.  Charging liens and the common-benefit doctrine provide sound analogies for fashioning a coherent path forward.  (Draft pp 42-50)

Finally, there are some hurdles to making issue classes stick, such as preclusion doctrines, adequate representation, and the Seventh Amendment Reexamination Clause.  Thus, the paper concludes by suggesting solutions to these problems and arguing that preclusion can provide a way to coordinate dispersed public and private regulators.

As always, comments are welcome (eburch at uga.edu).

April 30, 2015 in Aggregate Litigation Procedures, Class Actions, Current Affairs, Lawyers, Mass Tort Scholarship, Procedure, Products Liability, Tobacco, Vioxx | Permalink | Comments (0) | TrackBack (0)

Thursday, April 9, 2015

11th Circuit holds Engle progeny cases preempted

You can find the surprising opinion here.   The crux of the opinion is the last paragraph:


Cigarette smoking presents one of the most intractable public health
problems our nation has ever faced. It was not so long ago that anyone would walk
a mile for a Camel: cigarette smoke once filled movie theaters, college classrooms,
and even indoor basketball courts. For fifty years, the States and the federal
government have worked to raise awareness about the dangers of smoking and to
limit smoking’s adverse consequences to the greatest extent possible, all without
prohibiting the sale of cigarettes to adult consumers. To that end, the State of
Florida may ordinarily enforce duties on cigarette manufacturers in a bid to protect
the health, safety, and welfare of its citizens. But it may not enforce a duty, as it
has through the Engle jury findings, premised on the theory that all cigarettes are
inherently defective and that every cigarette sale is an inherently negligent act. So
our holding is narrow indeed: it is only these specific, sweeping bases for state tort liability that we conclude frustrate the full purposes and objectives of Congress.
As a result, Graham’s Engle-progeny strict-liability and negligence claims are
preempted, and we must reverse the District Court’s denial of judgment as a matter
of law. For these reasons, the judgment of the District Court is REVERSED.

Case: 13-14590 Date Filed: 04/08/2015 Page: 50 of 50

April 9, 2015 in Aggregate Litigation Procedures, Class Actions, Tobacco | Permalink | Comments (0) | TrackBack (0)

Friday, February 6, 2015

Special Report on Issue Classes

Perry Cooper, of the BNA Class Action Litigation Report, published a special report yesterday titled "Issue Classes Swell in Consumer Suits: Are Potential Rewards Worth the Risk?"  A subscription is required to read the full article, but it does a nice job of portraying different points of view on the topic - John Beisner and Jessica Miller (Sadden Arps) for the defense, Gary Mason (Whitfield Bryson & Mason) for the plaintiffs, and some of my own views as an academic.

Issue classes have been on my mind for awhile now as well as the minds of many others--the Rule 23 Subcommittee has indicated that the topic tops their list for potential rule changes.  As such, I've been working on an article titled "Constructing Issue Classes."  I'm still tweaking it, so it's not available for public consumption yet, but for those interested in the topic, here's the gist of it:

Issue classes under Rule 23(c)(4) have the potential to adjudicate collectively what actually unites plaintiffs: defendant's uniform conduct.  One can separate the elements of any cause of action into "conduct elements" that relate to the defendant's conduct--what the defendant knew, when the defendant knew it, etc.--or "eligibility elements" that relate to the plaintiff's eligibility for relief--specific causation, damages, etc.  When defendant's conduct toward the plaintiffs is uniform, as it was for example in the smelly washing machine cases, then adjudicating elements relating to that conduct collectively can even out resource imbalances between plaintiffs' attorneys and defendants and reduce the possibility of inconsistent verdicts.

As you may imagine, a lot rides on that one trial.  Issue classes work by generating two-way preclusion in follow-on cases.  In the Ohio "smelly washer" trial against Whirlpool, the defense verdict meant that defendants could preclude class members from relitigating those same issues in subsequent cases.  (Granted, the class was limited to Ohio purchasers, but did include some 100,000 consumers.)  The high stakes suggest that anytime courts certify an issue for class treatment they should be prepared to allow an interlocutory appeal on the merits (not just the certification question as Rule 23(f) permits).  It also means that courts shouldn't certify trivial issues for class treatment.  As the ALI in its Principles of the Law of Aggregate Litigation suggest, the issue class should "materially advance the resolution of the claims," which would be the case with regard to most conduct-related questions.

February 6, 2015 in Aggregate Litigation Procedures, Class Actions, Current Affairs, Mass Tort Scholarship, Procedure | Permalink | Comments (0) | TrackBack (0)

Sunday, December 14, 2014

Debra Lyn Bassett on Class Action Silence

My colleague Professor Debra Lyn Bassett (Southwestern) has posted to SSRN her article, Class Action Silence, 94 Boston U. L. Rev. 1781 (forthcoming 2014).  Here is the abstract:

A number of law review articles have noted the issues inherent in treating class members' failure to opt out as consent to the court's personal jurisdiction or as agreement to a proposed class settlement. Missing from the existing analyses, however, is the "big picture" -- the reality that class action silence is layered, resulting in silence that is repeatedly and inappropriately compounded. At each and every step in class action litigation, absent class members are not just expected, but effectively encouraged, to remain silent. Moreover, at every step, courts interpret class members' silence as consent. The ultimate result is a "piling on" of consents: the expected and encouraged silence is deemed to constitute consent to the filing of the class suit and consent to personal jurisdiction and consent to be bound to any resulting class judgment and consent to the proposed class settlement and approval of the proposed settlement's terms and conditions. Yet this compounded effect occurs under highly ambiguous circumstances, where arguably the most sensible interpretation of class members' silence is not consent, but confusion. The multiple and contradictory meanings of silence render it unreasonable to equate the failure to opt out with consent. The fallacy of repeatedly ascribing consent to highly ambiguous silence should be recognized as a due process danger that potentially can deprive class members of property rights and their day in court.

December 14, 2014 in Aggregate Litigation Procedures, Class Actions, Mass Tort Scholarship, Procedure | Permalink | Comments (0) | TrackBack (0)

Monday, November 3, 2014

Pelvic Mesh Litigation - Consolidated Sample Trials

A recent article by Jessica Dye (Thomson Reuters) describes the procedure adopted by Judge Goodwin (U.S.D. So. Dist. W. Va).  

While Goodwin originally scheduled a series of single-plaintiff bellwether, or test, trials for the federal litigation, he scrapped those plans earlier this year and instead consolidated claims from multiple women into a single trial. Doing so, he said, would help save courts' time and resources, and "may facilitate settlement" by giving Boston Scientific and plaintiffs a clearer picture of the strengths and weaknesses of their cases.

You can find the article here. I would love to know how Judge Goodwin is picking the plaintiffs and locations to go forward and what coordination is happening with state courts.  

November 3, 2014 in Aggregate Litigation Procedures, Products Liability | Permalink | Comments (0) | TrackBack (0)

Tuesday, October 14, 2014

BP's Cert Petition Appealing the Deepwater Horizon Settlement

The papers in the Deepwater Horizon Settlement cert petition are mostly in.   The case is BP Exploration & Production Inc. v. Lake Eugenie Land & Development, Inc. -- you can find the documents on SCOTUSBLOG.  

BP's basic argument is that the settlement approved by Judge Barbier in the mass tort class action against it was ultra vires because it contemplated giving money to people who were, according to BP, not injured.   The plaintiffs respond that BP is just trying to overturn a settlement it championed through the backdoor now that its unhappy with the deal.

One of the most interesting briefs filed in this dispute is from Kenneth Feinberg, who oversaw both the 9/11 Victims Compensation Fund and the Gulf Coast Claims Facility.  The latter was the entity that settled claims arising out of the Deepwater Horizon oil spill immediately after it happened.

Feinberg is a world class mediator and one of the most prominent figures in the mass tort world.   The class action settlement that BP is now disputing is the successor to the Gulf Coast Claims Facility, which he headed.   What the class action did that the Gulf Coast Claims Facility could not do is give BP global peace. In other words, all civil claims against BP arising out of the oil spill are precluded by that class action settlement.  

Feinberg's brief asks the Supreme Court to grant cert.  The argument is basically the following: claim facilities like the ones he ran apply a causation requirement that parallels that of the tort system. But, he argues, the settlement agreed to by BP does not include as strong a causation requirement, and this threatens the possibility of future compensation funds to solve mass torts. The brief explains: 

..the Fifth Circuit's decisions in this case affecting the causation standard, if permitted to stand, threaten to make these sorely needed alterantives to mass tort litigation unlikely to be replicated.  Future funds would either adopt the Fifth Circuit's new standard, thereby threatening to overwhelm the claims process with spurious claims, or continue to require causation, thereby channeling claimants toward litigation where the burden of proof is lower. (Feinberg petition at 6). 

This argument seems to me to be just wrong.  The settlement imposed a looser causation requirement than tort law requires.  But that causation requirement was agreed to in order for claimants collect under the settlement; it is not the causation requirement of the substantive law. In the future, if a defendant perferred to create a settlement fund of the Feinberg-ian variety, they could do so and rest "easy" that the causation requirement of the substantive law remains as it always was. (Whether the requirement of specific causation is the best requirement from a normative point of view in mass tort litigation I leave to another day).  

There is no risk that this settlement will affect future litigation because it is a settlement - the defendant participated in crafting and agreed to the causation requirement applied in the claims facility created by the settlement.   One might say it is a form of private lawmaking only applicable to these parties.  If a future mass tort defendant doesn't like this type of loosened causation requirement, they don't have to agree to it.  In fact, they are free to say "we'll litigate every case" as Merck did for five years in the Vioxx mass tort and then in each and every case the standard causation requirement of the tort law in the relevant jurisdiction will apply. 

And what of the argument championed by BP that the settlement pays people who were not injured in fact?  Welcome to the world of settlements, Dorothy.  What happens in a settlement is this: each party has a sense of what the case is "worth" - that is, the likely result at trial.  They discount that amount by the risk of loss.  Then they substract from that discounted amount their transactions costs (the costs of litigation).  If the resulting number is close for both parties, they settle.  See Steven Shavell, Foundations of the Economic Analysis of Law, 401-407 (2004).  If they settle, they don't litigate. When they don't litigate, there is no trial.  

A settlement means that the plaintiff never has to prove causation, or any other element of her cause of action.  If the BP settlment violates Article III because plaintiffs didn't prove their legal entitlements, then every settlement violates Article III.  The reason is that in no settlement does plaintiff ever prove that they are entitled to compensation because the very purpose of the settlement is to avoid trial.  A plaitniff's entitlement at settlement is always uncertain.  If settlements in general are constitutional, then so is this one. 

A class action settlement is different than an ordinary settlement because it requires judicial approval.  But does that judicial approval require that plaintiff establish injury?  Here is the requirement for judicial approval of class action settlements:  "If the settlement would bind class members," then the court needs to determine at a fairness hearing that the settlement is "fair, reasonable and adequate."  Fed. R. Civ. P. 23(e)(2).  The reason that a fairness hearing is only required "if the settlement woudl bind class members" is that the purpose of the hearing and approval process is to protect absent class members who are to be bound, but are not before the court to state their objections.  This requirement is not meant to protect defendants, who are certainly well able to defend their interests and state their objections before the court.

And what was the benefit to BP? Why would BP enter into such a settlement?  They wanted global peace.  Only a class action settlement can provide that.  They were willing to pay a high price for global peace at the time.  Now things are different for BP, time has passed and it is in a better position than it was when it made this agreement, but that doesn't make the agreement unconstitutional or violative of the class action rule.  

I hope the Supreme Court does not grant certiorari because the Fifth Circuit correctly rejected these claims.  The ideas that underly the BP cert petition don't make sense in a litigation system that permits settlement.  And they don't make sense under modern jurisprudential understanding of what a right is.  People can sue when they think they have a right that has been violated.  If the lawsuit goes to trial, then plaintiff will have to meet their burden of proving that they in fact (1) have a right and (2) it was violated.  (Actually, they will likely have to show that they have a colorable case long before then).  At the beginning of the litigation these things are uncertain. Uncertainty is the space in which settlements happen.  

 

 

 

 

 

October 14, 2014 in Aggregate Litigation Procedures, Class Actions, Environmental Torts, Mass Disasters | Permalink | Comments (0) | TrackBack (0)

The Future of Class Action Litigation: A View from the Consumer Class

NYU's new Center on Civil Justice is hosting a conference on November 7 titled "The Future of Class Action Litigation: A View from the Consumer Class."  Here's a bit more information for those in the area who might be interested (I understand there will be up to 6 CLE hours available):

Co-hosted with the NYU Journal of Law & Business

Keynote Address by Chief Judge Alex Kozinski, US Court of Appeals for the Ninth Circuit

Friday, November 7, 2014

REGISTER HERE.  Up to 6  hours of New York State CLE credit will be available to both experienced and newly admitted attorneys under the Areas of Professional Practice Category.

NYU School of Law
Vanderbilt Hall, Greenberg Lounge
40 Washington Square South

Have consumer class actions run their course? Once, they were praised for increasing access to justice by compensating "small claims held by small people." They were also seen as a form of regulation, because they allowed private enforcement of the law by overcoming the economics of small-stakes individual litigation. This view was so widely accepted that the Supreme Court described these "negative value" suits as "the very core of the class action mechanism."  

Now, consumer class actions face serious criticism for failing to provide compensation for class members or to achieve effective market regulation.  Courts and commentators have questioned whether class members or society benefit from these cases. Perhaps as a result, it is harder to certify a consumer class action today than at any time since the adoption of modern Rule 23 in 1966.

This conference will explore whether consumer class actions deserve the criticism—or the praise—that they have received. Participants will discuss a broad range of issues about the recent development of the law of consumer class actions. The conference will also consider what the criticism of consumer class actions means for the future of class actions more generally. If "the very core" of class actions goes away, what will be left? 

 

Conference Schedule

8:30 - 9:00 am - Registration

(Registration will take place just outside of Greenberg Lounge)

9:00 - 9:15 am  - Welcoming Remarks

Introduction – Peter L. Zimroth, Director of the Center on Civil Justice

Remarks - Dean Trevor W. Morrison, NYU School of Law

9:15 - 10:30 am: Panel 1 -  The Current State of the Consumer Class Action

Moderator:  Samuel Issacharoff, Bonnie and Richard Reiss Professor of Constitutional Law and Faculty Co-Director, Center on Civil Justice, NYU School of Law

When Peace is Not the Goal of a Class Action Settlement
D. Theodore Rave, Assistant Professor of Law, University of Houston Law Center

The Identifiable Consumer: The Ascertainability Doctrine and Rule 68 Offers as Impediments to the Class
Myriam Gilles, Professor of Law, Benjamin N. Cardozo School of Law

Comments: Andrew Pincus, Mayer Brown LLP

10:30 - 10:45 am - Coffee Break

10:45 am - 12:00 pm: Panel 2 - Reforming the Consumer Class Action

Moderator:  Troy A. McKenzie, Professor of Law and Faculty Co-Director, Center on Civil Justice, NYU School of Law

Constructing Issue Classes
Elizabeth Chamblee Burch, Associate Professor of Law, University of Georgia School of Law

Compensation in Consumer Class Actions:  Data and Reform
Brian T. Fitzpatrick, 2014-15 FedEx Research Professor of Law, Vanderbilt Law School (with Robert C. Gilbert, , Grossman Roth)

Comments:  Elizabeth J. Cabraser, Lieff Cabraser Heimann & Bernstein, LLP

12:00 - 1:00 pm - Lunch

1:00 - 2:15 pm: Panel 3 - Alternatives to the Consumer Class Action

Moderator:  Michael S. Barr, Professor of Law, University of Michigan Law School

Contract Procedure, Regulatory Breakdown
David L. Noll, Assistant Professor of Law, Rutgers University School of Law – Newark

Government Compensation and the Class Action
Adam Zimmerman, Associate Professor of Law, Loyola Law School

Comments: Mark P. Goodman, Debevoise & Plimpton LLP

2:15 - 2:30 PM: Break

2:30 - 3:45 PM: Panel 4 - Roundtable Discussion:  Consumer Class Actions and the Future of the Class Action

Moderator: Arthur R. Miller, University Professor and Faculty Co-Director, Center on Civil Justice, NYU School of Law

Participants:

  • Sheila A. Birnbaum, Quinn Emanuel Urquhart & Sullivan, LLP
  • Elizabeth J. Cabraser, Lieff Cabraser Heimann & Bernstein, LLP
  • Charles Delbaum, National Consumer Law Center
  • Andrew Pincus, Mayer Brown LLP
  • Hon. Lee H. Rosenthal, US District Court for the Southern District of Texas

4:00 - 4:45 pm: Keynote Address

Chief Judge Alex Kozinski, US Court of Appeals for the Ninth Circuit

Introduction by Arthur R. Miller

4:45 - 5:00 PM: Closing Remarks by Peter Zimroth

 

Register here

October 14, 2014 in Aggregate Litigation Procedures, Class Actions, Conferences, Current Affairs | Permalink | Comments (0) | TrackBack (0)

Saturday, October 4, 2014

Remanding Multidistrict Litigation

I've been a bit slow in posting this, but Louisiana Law Review hosted an excellent symposium last spring titled The Rest of the Story: Resolving the Cases Remanded by the MDL.  As part of that symposium, I wrote a piece titled Remanding Multidistrict Litigation.  Remands are something that have received scant attention in the scholarly literature, but are a constant hope for many plaintiffs' lawyers involved in multidistrict litigation (well, at least those who aren't on the steering committees). 

I just got around to posting the piece on SSRN today.  Here's the abstract:

Multidistrict litigation has frequently been described as a “black hole” because transfer is typically a one-way ticket. The numbers lend truth to this proposition. As of 2010, the Judicial Panel on Multidistrict Litigation remanded only 3.425% of cases to their original districts. That number dwindled to 3.1% in 2012, and to a scant 2.9% in 2013. Retaining cases in hopes of forcing a global settlement can cause a constellation of complications. These concerns range from procedural justice issues over selecting a forum and correcting error, to substantive concerns about fidelity to state laws, to undermining democratic participation ideals fulfilled through jury trials in affected communities. Yet, if transferee judges remanded cases after overseeing discovery into common issues, they could alleviate those concerns while avoiding inconsistent rulings on common questions and streamlining discovery.

Despite the potential upside, remand rarely occurs because it disfavors those with litigation control—transferee judges, lead plaintiffs’ attorneys, and defendants. Transferee judges deem settlement a hallmark of their success. Lead plaintiffs’ lawyers try to increase their fees by inserting fee provisions into settlements. Likewise, plaintiffs’ attorneys can bypass doctrinal uncertainties over weak claims by packaging plaintiffs together in a global settlement. And aggregate settlements allow defendants to resolve as many claims as possible in one stroke, take their hit, and return to business, which their shareholders view as a net positive.  The remand process itself defers to these vested interests. Although the Panel could remand cases at a party’s request, in practice it appears never to have done so. Rather, it waits for the transferee judge to admit defeat and suggest remand—thereby conceding failure.

For transferee judges to begin remanding cases, the “pro-settlement” norm and “remand-as-a-failure” stigma must change.  Accordingly, transferee judges should routinely entertain a suggestion for remand by a party or initiate them sua sponte as soon as discovery on common issues concludes and only case-specific issues remain.  Likewise, the Panel should seriously consider parties’ remand requests even when the transferee judge does not support them.  This reopens a direct line for parties to request remand when common discovery ends, but the transferee judge prefers to hold cases hostage in hopes of coercing settlement.

October 4, 2014 in Aggregate Litigation Procedures, Conferences, Current Affairs, Informal Aggregation, Lawyers, Mass Tort Scholarship, Procedure | Permalink | Comments (0) | TrackBack (0)