Mass Tort Litigation Blog

Lawyering for Groups

The papers from the Fordham Law Review Symposium Lawyering for Groups are now online.

Howard Erichson & Ben Zipursky wrote the Foreword.

Other contributors include.....

Elizabeth Burch, Adquately Representing Groups

Kristen Carpenter & Eli Wald, Lawyering for Groups: The Case of American Indian Tibal Attorneys

Samuel Issacharoff, The Governance Problem in Aggregate Litigation

Alexandra Lahav, The Political Justification for Group Litigation

Troy McKenzie, "Helpless" Groups

Nancy Moore, Ethical Issues in Mass Tort Plaintiffs' Representation: Beyond the Aggregate Settlement Rule

ADL

 

 

 

 

 

 

 

 

Stanley Chesley Disbarred

Stanley M. Chesley, one of the leading mass tort lawyers of his generation, was disbarred today by the Kentucky Supreme Court (court's opinion here). Chesley played an important role in many of the biggest mass torts of the past forty years: the Beverly Hills Supper Club fire, tobacco, breast implants, fen-phen, Bendectin, Bhopal, Lockerbie, Catholic church sex abuse, MGM Grand Hotel, San Juan Dupont Plaza, and other mass torts, as well as numerous antitrust and securities class actions. He was disbarred for his involvement in an aggregate settlement of Kentucky fen-phen claims. The court found that the lawyers violated rules of professional conduct by taking fees in excess of what their fee agreement provided, by including an inappropriate cy pres remedy that advantaged the lawyers rather than the clients, and by failing to comply with the disclosure and informed consent requirements of the aggregate settlement rule.

The Kentucky diet drug settlement also led to the disbarment and imprisonment of Kentucky attorneys William Gallion and Shirley Cunningham, as well as criminal, civil, and ethics proceedings and penalties for several other lawyers. For earlier coverage of the Kentucky fen-phen settlement dispute, see here, here, here, here, and here.

On today's disbarment of Chesley, see these news accounts in the Lexington Herald-Leader, the Cincinnati Enquirer, and the ABA Journal.

HME

Widener Law Symposium: Perspectives on Mass Tort Litigation

Widener University School of Law and the Widener Law Journal are presenting a day-long symposium, Perspectives on Mass Tort Litigation, on Tuesday, April 16, 2013 in Harrisburg, Pennsylvania.  The Honorable Eduardo Robreno of the Eastern District of Pennsylvania will present a luncheon address, Federal Asbestos Litigation: Black Hole or New Paradigm?  Other participants include Hon. Thurbert Baker (McKenna Long); Mark Behrens (Shook Hardy); John Beisner (Skadden); S. Todd Brown (SUNY Buffalo); Scott Cooper (Schmidt Kramer); Amaris Elliot-Engel (Legal Intelligencer); Michael Green (Wake Forest); Deborah Hensler (Stanford); Mary Kate Kearney (Widener); Randy Lee (Widener); Bruce Mattock (Goldberg Persky); Tobias Millrood (Pogust Braslow); Linda Mullenix (Texas); Christopher Robinette (Widener); Susan Raeker-Jordan (Widener); Sheila Scheuerman (Charleston); Victor Schwartz (Shook Hardy); William Shelley (Gordon & Rees); Aaron Twerski (Brooklyn); Nicholas Vari (K&L Gates); and Nancy Winkler (Eisenberg Rothweiler).  I will also participate via Skype videoconference.  Here's the brochure:  Download Widener 2013 MTL Symposiu Brochure

BGS

Lawyering for Groups symposium

On Friday, Nov. 30, Fordham Law School will host a symposium entitled Lawyering for Groups: Civil Rights, Mass Torts, and Everything in Between. Organized by Benjamin Zipursky and myself, the conference participants include Elise Boddie, Elizabeth Burch, Kristen Carpenter, Brian Fitzpatrick, Bruce Green, Samuel Issacharoff, Alexandra Lahav, Troy McKenzie, Nancy Moore, Russell Pearce, Theodore Rave and Eli Wald. It is co-sponsored by the Stein Center for Law and Ethics and by the Fordham Law Review, which will publish the papers.

As I read the authors' drafts in preparation for the symposium, I am struck by how difficult the fundamental questions remain. What does it mean, really, for a lawyer to represent a group of similarly situated claimants? Is it a bundle of individual lawyer-client relationships, or is it better understood in practice as a relationship between a lawyer and a group, with the primary duty owed to the group as a whole?  Does class certification fundamentally change the nature of the representation, or in some cases is the class action better understood as an acknowledgement of the reality of mass representation and the imposition of a set of procedural protections? 

I am struck, as well, by how these questions transcend any particular area of practice. The symposium grew out of Ben Zipursky's and my shared interest in the ethics of group lawyering. He and I have lectured to mass tort lawyers on ethics in mass tort litigation, as well as to civil rights lawyers on the ethics of civil rights litigation. Each area brings its own challenges, but the core questions about collective representation apply to both. Convinced that these issues deserve attention, we pulled together a group of proceduralists and ethicists with widely varying views on aggregate litigation and different areas of expertise. I'm looking forward to learning a lot. The agenda is here.

HME

Legal Crisis Management

Two years ago, I blogged about the need for greater scholarly attention to mass tort crisis management.  Since then, crisis-management practice groups at law firms have continued to burgeon.  Here's a sampling of crisis-management groups at large law firms: Baker Hostetler, Bingham, Cooley, Covington & Burling, Freshfields, Gibson Dunn, McCarter & English, McDermott Will & Emery, Patton Boggs, Pillsbury Winthrop, Skadden, and Steptoe & Johnson.

For media coverage of recent growth in crisis-management groups, see the following: 

(1) Ashby Jones, On Covington and the 'Crisis Management' Boomlet, Wall Street Journal Law Blog (Jan. 6, 2011, 1:37 p.m.);

(2) Leigh Kamping-Carder, Savvy Firms Seek Business Through Crisis Management, Law360 (Feb. 19, 2010, 7:12 p.m.) (online registration required for article); and

(3) David Lat, A Look at Orrick's Crisis Management Practice, Above the Law (Oct. 8, 2009, 11:06 a.m.). 

While business schools have offered courses on crisis management and leadership, public-policy schools have offered courses on governmental crisis management, and communications schools have offered courses on crisis communications, law schools appear not to have provided curricular attention to legal crisis management. (The University of Texas School of Law has a course on crisis management, but it appears to track public-policy courses focusing on the government's role in a crisis.)  What might a law-school course on legal crisis management look like, focusing on the role of lawyers in preventing, managing, and resolving crises?  Here's a draft description I put together for such a course that I've been considering more fully developing:

Legal Crisis Management and the Media

Although crisis management has long been an important skill for lawyers, formal crisis management practices today proliferate among global law firms seeking to aid clients facing complex crises that span various countries, practice areas, and advocacy settings such as judicial, legislative, regulatory, or media inquiries.  This course will examine and integrate insights on legal crisis management from multiple disciplines, including not only law, but also management, leadership, communications, and public relations.  Within law, the course will draw upon ethics, counseling, negotiation, and alternative dispute resolution, and address lawyers' and clients' interaction with the media during a crisis, including global perspectives on the legal limits of media coverage.  In addition to developing conceptual approaches, the course will discuss case studies of legal crisis management implicating the law, culture, and media of multiple countries and areas, and consider lawyers' actual and potential contributions to successful resolution of the crises.   

BGS

Michael Downey on Ethical Issues Related to Incentive Payments for Class Representatives

As part of the ABA Sound Advice series, Michael Downey (Armstrong, Teasdale) addresses ethical issues related to incentive payments for class representatives.

BGS

D. Theodore Rave on Governing the Anticommons in Aggregate Litigation

D. Theodore Rave (Furman Fellow, NYU) has posted his article, Governing the Anticommons in Aggregate Litigation, to SSRN.  Here is the abstract:

This article argues that there is an unrecognized “anticommons” problem in aggregate litigation. An anticommons occurs when too many owners’ consent is needed to use a resource at its most efficient scale. When many plaintiffs have similar claims against a common defendant, those claims are often worth more if they can be packaged up and sold to the defendant (i.e., settled) as a single unit — that is, the defendant may be willing to pay a premium for total peace. But because the rights to control those claims are dispersed among the individual plaintiffs, transaction costs and strategic holdouts can make aggregation difficult, particularly in cases where class actions are impractical. Recently the American Law Institute has proposed to modify long-standing legal ethics rules governing non-class aggregate settlements to allow plaintiffs to agree in advance to be bound by a supermajority vote on a group settlement offer. By shifting from individual control over settlement decisions to collective decision making, the ALI proposal may offer a way out of the anticommons and allow the group to capture the peace premium. Critics, however, say that allowing plaintiffs to surrender their autonomy will leave them vulnerable to exploitation by the majority and by their lawyers. Viewed through the lens of the anticommons, these concerns are manageable. Similar anticommons problems arise in many areas of law, ranging from eminent domain to oil and gas to sovereign debt. But instead of slavishly preserving the autonomy of individual rights-holders, these areas of law have developed strategies for aggregating rights when doing so will result in joint gains. Drawing from these other contexts, this article argues that the legitimacy of compelling individuals to participate in a value-generating aggregation depends on the presence of governance procedures capable of protecting the interests of the individuals within the collective and ensuring that the gains from cooperation are fairly allocated. Governance is thus the key to legitimizing attempts to defeat the anticommons in mass litigation through aggregation, whether by regulatory means, such as the class action, or contractual precommitment, as in the ALI proposal.

BGS

Chevron, Ecuador, and Allegations of Misconduct

In yesterday's Wall Street Journal, Mary Anastasia O'Grady has an article, Chevron's Ecuador Morass: The U.S. oil company charges that the $18 billion judgment against it was secured by fraud, which discusses Chevron's attempts in federal district court in Miami to obtain records to show bribery of a court expert.

Another article in today's Wall Street Journal discusses recent decisions from the Southern District of New York. In one opinion, the court allowed certain claims by Chevron, including RICO claims, to proceed against attorney Steven Donziger in connection with Donziger's alleged role as advisor in the Ecuadoran lawsuit, but in the other opinion, the court denied Chevron's motion to attach various assets. 

BGS 

Businesspersons in Law Firms

Interesting article in today's Wall Street Journal on the increasing influence of businesspersons in managing law firms -- Practicing Business: Professional Managers Gain Wider Presence at Law Firms, by Jennifer Smith and Ashby Jones.  As defense firms expand their offices globally and sometimes exceed a billion dollars in annual revenue, business expertise is clearly beneficial, but must be integrated with professional ethical responsibilities and firm culture.  Not discussed in the article are the possible benefits to plaintiffs' firms in including businesspersons.  Increasingly, plaintiffs' firms in mass torts are collaborating globally, as well, and might benefit from specialized business insight.  

BGS

Sixth Circuit Affirms Kentucky Fen-Phen Convictions

On Tuesday, the Sixth Circuit U.S. Court of Appeals affirmed the convictions and sentences of William Gallion and Shirley Cunningham for their handling of a massive settlement of fen-phen claims. Here is the  Sixth Circuit opinion, and here are news accounts from Thomson Reuters and Bloomberg. The lawyers had been sentenced to 25 years and 20 years, respectively. The opinion provides interesting and useful background on the diet drugs litigation and settlement, and it offers a picture of how badly things can go when mass tort aggregate settlements are mishandled. Because the Daubert exclusion of defendants' expert was an issue on appeal, the Sixth Circuit referred to my trial testimony as an expert on behalf of the United States -- I don't know whether I should be offended or flattered that I was accused of espousing ivory tower ideals, but I take some solace in knowing that the court thought the ivory tower had it right.

HME

Hermann on Aggressive Lawyering

A great post on Above the Law by Mark Hermann (formerly of Drug and Device Law Blog & Jones Day) today explains why a blowhard isn't necessarily the best lawyer.

ADL

Catherine Sharkey on the Vicissitudes of Tort

Professor Catherine Sharkey (NYU) has posted to SSRN her article, The Vicissitudes of Tort: A Response to Professors Rabin, Sebok & Zipursky.  Here is the abstract:

This response essay probes three themes that tie together three articles submitted for a tort symposium on “The Limits of Predictability and the Value of Uncertainty.” First, I explore the use of unpredictability as a code word for an assault on tort doctrine in response to an out-of-control tort system. In his historical account of the evolution of tort, Professor Rabin focuses on the canonical “no duty” rules of the nineteenth century and the contemporary rules-based limitations on open-textured liability in the twentieth century. But largely missing from this account is the story of rules promoting tort liability, such as strict liability, vicarious liability, negligence per se, and the like. Second, I probe the link between unpredictability and insurance. I argue that Professor Sebok’s efforts to distinguish champerty from illegal gambling and to analogize it to a form of insurance will inevitably fall short of establishing social acceptance or embrace of the practice. Third, I highlight the role of the U.S. Supreme Court and its incursions into the state law domain of tort in the name of predictability. Professor Rabin is doubtful that the U.S. Supreme Court will achieve great strides in its endeavor to quell unpredictability in punitive damages. Professor Zipursky has considerable angst about the Court’s making inroads into privacy and emotional distress torts. Such incursions are in keeping with the Court’s longer-term project of procedural reform of the civil litigation system in the name of unpredictability, but are novel in their ambition to launch frontal attacks.

BGS

Fordham Lecture on Third-Party Litigation Funding by Lisa Rickard fo U.S. Chamber Institute for Legal Reform

Lisa Rickard, the President of the U.S. Chamber Institute for Legal Reform, will present the 2012 Noreen E. McNamara Memorial Lecture at Fordham Law School in New York.  Her lecture is entitled, The Commercialization of Legal Practice: Legal and Ethical Perils of Third-Party Litigation Funding, and the lecture will take place at 6:00 p.m., February 28, 2012.

BGS

Zamir, Medina, and Segal on the Uniformity of Lawyers' Contingent Fee Rates

Eyal Zamir (Hebrew Univ.), Barak Medina (Hebrew Univ.), and Uzi Segal (Boston College, Economics) have posted to SSRN their article, The Puzzling Uniformity of Lawyers’ Contingent Fee Rates: An Assortative Matching Solution.  Here is the abstract:

Lawyers’ Contingent Fee (CF) rates are rather uniform, often one-third of the recovery. Arguably, this uniformity attests to collusion in the market, resulting in clients paying supra-competitive fees. This paper challenges this common argument.

Uniform CF rates are not necessarily superior to negotiable ones; yet they provide clients with an important advantage. They result in clients making a defacto “take-it-or-leave-it” offer. It precludes lawyers from exploiting their private information about the lawsuit’s expected value and the amount of work it requires. The uniformity of CF rates enables clients to hire the best available lawyer, either directly, if clients know lawyers’ ranking, or indirectly, through the referral system. This uniformity thus fosters a positive assortative matching of lawyers and clients. Finally, the fact that both direct clients and clients obtained through paid-for referrals pay the same CF rate does not attest to cross-subsidization, as the cases a lawyer gets through referrals are quite different than those she gets directly.

 BGS

Chevron Appeals $8.6 billion Judgment to Ecuador's National Court

CNN reports that Chevron has appealed the $8.6 billion environmental judgment to Ecuador's National Court.  The case has been closely watched not only for its high dollar amounts, but for the questions raised by Chevron about the integrity of Ecuador's courts.  Questions of foreign-court bias may be more frequent as mass tort litigation increasingly becomes global tort litigation, and disputes against large, deep-pocketed corporations are brought by foreign claimants in foreign courts.

BGS

Federal Government to Require Pharmaceutical Company Reporting of Payments to Doctors

The New York Times reports that under new regulations to be announced by the Obama administration, pharmaceutical companies will have to report payments to non-employee doctors for "research, consulting, speaking, travel and entertainment."  The reporting requirements are to cover any company that has a product covered by Medicare or Medicaid, and the reporting information is to be subsequently posted by the government on a publicly accessible website.

BGS 

Fight Ensures over Attorneys' Fees in BP Oil Spill MDL

Yesterday's NY Times had an article by John Schwartz titled, "Plaintiffs' Lawyers in a Bitter Dispute Over Fees in Gulf Oil Spill Cases."  The article chronicles the now typical battle over attorneys' fees in multidistrict litigation where judges compensate Plaintiffs' Steering Committee members from other attorneys' fee awards.  This dispute is particularly bitter; the steering committee is asking for fees not just from those involved in the federal multidistrict litigation, but from those who negotiated their own recoveries from the privately administered Gulf Coast Claims Facility.

ECB

Fifth Annual Conference on the Globalization of Class Actions and Mass Litigation at The Hague

The Fifth Annual Conference on the Globalization of Class Actions and Mass Litigation is being hosted by Tilburg University and will be held on December 8-9, 2011 in The Hague, Netherlands.  The conference is being organized by Professors Deborah Hensler (Stanford Law School), Christopher Hodges (Oxford Centre for Socio-Legal Studies and Erasmus University), and Ianika Tzankova (Tilburg University).  Master claim administrator Kenneth Feinberg is delivering the keynote speech.

BGS  

Morris Ratner on A New Model of Plaintiffs' Class Action Attorneys

Morris Ratner (Harvard) has posted to SSRN his article, A New Model of Plaintiffs' Class Action Attorneys, Rev. Litig. (forthcoming).  The article presents a nuanced, updated portrait of plaintiffs' class action firms today that challenges prior conceptions of class-counsel bias.  Here's the abstract:

This Article offers a new model for conceptualizing plaintiffs’ class action attorneys, and thus for understanding principal-agent problems in class action litigation. It responds to the work of Professor John C. Coffee, Jr., who, in a series of influential articles, demonstrated that principal-agent problems may be acute in class action litigation because class members lack the information or financial incentive to monitor class counsel; class counsel is thus free to pursue his own interests at the expense of the class members. But what are those interests, and how do they diverge from the class members’ interests? Professor Coffee provided one answer to this sub-set of questions, presenting a conventional account of class counsel and the precise parameters of his disloyalty corresponding with three descriptive assertions: that class counsel is either a solo practitioner or in a small firm; that he is predominantly interested in maximizing his law firm profit; and he capably pursues his fee-maximizing goal by investing his time in cases based on confident predictions about expected fees. In this Article, I articulate an updated and competing conception of the dominant class action attorneys and firms: the leading firms today are relatively large and internally complex; law firm structural complexity creates diverse incentives other than maximization of law firm profit; and class counsel invest time in cases for complex reasons other than the effect on expected fees, particularly because fees are notoriously difficult to predict. Modeling class counsel to recognize this complexity has three virtues: it better reflects the actual characteristics of the most significant class action attorneys, and hence is a more accurate descriptive tool; as such, it enables a more precise understanding of the extent and nature of agency or loyalty problems; and thus, finally, it provides a more solid basis for reforms. In particular, this new model sheds insight on the importance of direct versus incentive-based regulation to manage agency costs in class actions. In light of the diverse incentives this new model reveals, direct regulation of outcomes by trial courts using enhanced final approval standards should be a central part of any package of reforms to manage agency costs in class litigation.

BGS

All or Nothing Aggregate Settlements in Trouble

(With apologies to HME for stealing his title)

The Second Circuit last week (just in time for the Jewish New Year) decided Johnsons v. Nextel Communications, Inc., -- F.3d -- , 2011 WL 4436263 (2d Cir. Sept. 26, 2011) .  You can find the opinion here.  That case involved an aggregate settlement with all kinds of schenanigans that our own Howard Erichson described in his article "The Trouble With All or Nothing Settlements." (download it while its hot! ...as they say....)

The Second Circuit allowed the clients to sue the lawyers on a broad breach of fiduciary duty theory.  The clients may also sue the defendants on an "aiding and abetting" theory.

I learned from this opinion from Adam Zimmerman (St. John's) who has also blogged about it on the ADR Prof Blog. 

ADL