Mass Tort Litigation Blog

Second Edition of Mullenix's Mass Tort Litigation Casebook

Professor Linda Mullenix (Texas) is publishing a second edition of her seminal casebook, Mass Tort Litigation: Cases and Materials.  The first edition was published in 1996, and a supplement followed in 2000.  That's quite a while for such a fast-moving field as mass tort litigation, and those of us who teach with the Mullenix text (myself included) will no doubt be opening the arriving casebook box with a kind of Christmas-morning glee.  Indeed, comparing the changes of the two casebooks should provide an interesting history of the development of mass torts -- more on that when it arrives in May.  Here's the release from West publishing:

Mullenix's Mass Tort Litigation: Cases and Materials, Second Edition is publishing in May and will be available for Fall 2008 class adoptions. This edition is updated with materials relating to breast implant litigation, tobacco litigation, and medical device and pharmaceutical litigation, in addition to the seminal cases relating to Agent Orange, Dalkon Shield, DES, and asbestos litigation. The materials demonstrate that the core cases and materials relating to mass tort litigation still remain viable precedents after 25 years and that courts are still struggling to find solutions to the resolution of this complex litigation. The casebook is suitable for advanced courses in tort litigation, complex procedure, class action litigation, and dispute resolution offerings.

BGS

Kentucky Mass Tort and Class Action Litigation Committee

The Kentucky Supreme Court has created a committee to explore possible improvements in the handling of mass tort litigation.  According to the press release, the committee "will determine whether current court rules for attorneys and judges provide adequate safeguards against unethical conduct and whether rule changes may provide guidance to attorneys and courts dealing with complex litigation."  The appointment comes in the wake of indictments against several Kentucky lawyers charged with stealing client funds in fen-phen settlements.  Here's the Torts Prof post about the committee, with a link to a news account.

I met with the Kentucky committee in Frankfort last month, and enjoyed the opportunity to discuss with them the challenges of mass tort litigation and some of the ways in which rules of procedure and rules of professional conduct may be modified or sensibly interpreted to accommodate the demands of mass disputes while respecting core values of justice and attorney-client relationships.  It will be interesting to see what proposals, if any, the committee generates after exploring the possibilities.  It will be equally interesting to see how many of those proposals are ultimately adopted.

HME

Lerach Sentenced to Two Years Prison for Alleged Kickbacks to Class Representatives

Article in the Wall Street Journal -- Closing Argument: Mr. Lerach Mulls Life Behind Bars, by Peter Lattman.  Here's an excerpt:

Yesterday in Los Angeles, U.S. District Judge John Walter sentenced Mr. Lerach, 61 years old, to two years in federal prison for conspiring to obstruct justice in connection with alleged kickback payments made by his former law firm, Milberg Weiss LLP. Mr. Lerach is also paying an $8 million penalty. He has been suspended from the practice of law and will be disbarred.

The punishment brings to an end a controversial legal career. The costly class-action lawsuits Mr. Lerach pursued in the name of shareholders made him loathed in America's boardrooms. Executives hit with his suits said they had been "Lerached." His defenders maintained he had championed investors and helped keep companies accountable.

It's the latter view that Mr. Lerach, who has earned more than $200 million, sees as his legacy. He recently looked back at his career and the case against him in an interview at his club and at his home, an Italianate California mansion perched on a cliff overlooking the Pacific Ocean in La Jolla. And, with his Chihuahua, Tommy, on his lap, he looked ahead to being in prison and to getting out.

The Wall Street Journal also has an editorial on Lerach. 

BGS

Vioxx - The End of Lawyer's Ethics?

Adam Liptak of the NY Times published a piece on January 22 basically arguing that the duty of loyalty is dead and the Vioxx settlement dealt the final blow.  You can find the piece here.  He quotes Richard Nagareda arguing that “Speaking of individualized notions of lawyer loyalty is sort of like the mindset of the French military in 1940. The French generals hunkered down in a series of reinforced bunkers along the German border called the Maginot Line, meanwhile, the new world of warfare literally blitzed right past them."  The analogy is a particularly good use of the war metaphor in litigation.

Liptak's view is that any change to the duty should come from the legislature or state bar, not individual lawyers and legal developments on the ground.  (This type of thing is what the ALI is trying to do with the Project on Aggregate Litigation.)  But people that do not like what the existence of inventory cases does to the lawyer-client relationship shouldn't like it any better when the outcome is legislated.  See Howie Erichson's post on the aggregate settlement rule here, Nancy Moore's article here for some criticisms. 

What appears as a new development is old wine in new bottles.  See, for example, Judge Weinstein's classic (and excellent) article Ethical Dilemmas in Mass Tort Litigation, 88 Nw. U. L. Rev. 469 (1994) (which Howard Erichson blogged about here). Samuel Issacharoff and John Fabian Witt have shown this pretty convincingly in The Inevitability of Aggregate Settlement which was published by the Vanderbilt Law Review and can be found on SSRN.  That the problem is old doesn't mean that it isn't real, but it does show that its not a problem that can be resolved by process (it doesn't matter if the rule comes from the ALI, the bar, Congress, or the norms of the profession as they develop over time) but a structural problem of the mismatch between mass industrial harms and the tort system.

ADL 

Registration for Southwestern Law School Asbestos Symposium

On Friday, January 18, 2008, Southwestern Law School is hosting a symposium entitled, Perspectives on Asbestos Litigation.   Here's the press release, and brochure: Download southwestern_law_school_asbestos_symposium_brochure.pdf  For further information about the conference, see my prior posts here and here.  Attendees may register in advance by contacting the Student Affairs Office of Southwestern Law School at (213) 738-6716.  We look forward  to an engaging and informative day with a remarkable slate of speakers, and hope you will be able to join us.

BGS

Perspectives on Asbestos Litigation Symposium

As I previously mentioned, Southwestern Law School is hosting a symposium entitled, "Perspectives on Asbestos Litigation," on Friday, January 18, 2008.  Here is a copy of the brochure Download lr_perspectiveinasbestoslitigation.pdf, which lists the exceptional speakers and panels that will occur throughout the day.  Hope you can join us.  We're overjoyed at the remarkable speakers who have agreed to participate.

BGS

Judge Weinstein's Numerous Mass Torts & The "Related Case" Designation by Plaintiffs

Point of Law flags a recent story in the New York Sun -- Judge Lands at Center of a New York Legal Mystery, by Joseph Goldstein -- which chronicles the use of the "related-case" designation by plaintiff's lawyers to maneuver their cases before Judge Weinstein in the Eastern District of New York. 

I first encountered plaintiffs' use of this device as a lawyer for defendants in the Simon II tobacco case, which plaintiffs had put before Judge Weinstein as a "related case."  A court might justifiably want to keep related cases before a judge with related cases -- there's an argument that it's inefficient to educate multiple judges about the same complex factual and legal issues.  But the devil is in the details.  Take a look at the Eastern District of New York civil action cover sheet: Download js44-45.pdf .  The cover page has a section asking whether there are "RELATED CASE(S) IF ANY" and includes a line for Judge and Docket Number.  The plaintiff then has the ability to list any case and judge on the line, and then I believe the case is automatically routed to that judge. 

The problem is that there may be multiple judges in a district who have cases that are arguably related to the plaintiff's case.  The plaintiff might list whichever judge the plaintiff believes is most inclined to the plaintiff's position -- a system that biases judge selection in favor of plaintiffs.  And then as the article notes, the defendant may be held to have no standing to challenge the "related case" judge selection by plaintiffs, on the remarkable grounds that it is an administrative determination when in fact  the determination has been made not by an administrator or a judge, but by opposing counsel.  Imagine that the first judge plaintiffs get in a mass tort is one who they don't like; then when filing another case, they list no related case, and hope for another particular judge; finally, once the desired judge is obtained, then all future cases are checked as "related" to that cases before that desired judge only. 

A better system would be for plaintiffs lawyers to be informed that they are ethically bound to list every case and judge that counsel is aware the case might be reasonably considered related to.  If the "related case" box is checked, the court -- through administrators or a judge committee -- should undertake an independent review of whether any other cases and judges are implicated.  (For example, court administrators could circulate a weekly "related case" email to clerks, asking if their judges have any cases that are related.)  If several judges are involved in the cases, then the case should be randomly assigned among those judges -- unless the court makes its own decisions to centralize all cases before a single judge for administrative reasons.  Case assignment to judges is a decision that should be made by the court, not the litigants -- and certainly not only one type of litigant.

BGS

Balducci Pleads Guilty; Scruggs Pleads Not Guilty

According to an article in the L.A. Times -- Lawyer admits bribing judge, from the Associated Press -- lawyer Timothy Balducci has pleaded guilty to attempting to bribe a Mississippi judge in the Katrina insurance litigation.  Dickie Scruggs, however, has pleaded not guilty.

BGS

Robles Sentenced to 15 Years

Plaintiffs' mass tort lawyer Louis Robles was sentenced yesterday to the maximum 15 years for stealing settlement money from clients he represented in asbestos litigation.  Here's an excerpt from the Sun Sentinel:

A Miami attorney who admitted stealing more than $13 million from thousands of clients suffering from asbestos-related illnesses was sentenced Tuesday in Miami federal court to 15 years in prison.

Louis Robles, 59, once known as the "King of Torts," pleaded guilty in September to three counts of mail fraud, each carrying a possible five year sentence. U.S. District Judge Alan Gold, who had rejected an earlier plea agreement he thought was too lax, sentenced Robles to the maximum prison term.

Between 1989 and 2002, Robles collected more than $164 million on behalf of roughly 7,000 clients suing asbestos companies. In the mid-1990s, he began dipping directly into settlement proceeds without his clients' knowledge to fund an extravagant lifestyle, prosecutors said.

For earlier proceedings, see posts on April 19,  Sept. 17, and Sept. 24.

HME

More on the Scruggs Indictment for Allegedly Attempting to Bribe a Mississippi State Judge

The Wall Street Journal has more on the Dickie Scruggs indictment for allegedly attempting to bribe a Mississippi state judge in the Katrina insurance litigation -- It's Party Time for Mr. Scruggs, by Paulo Prada and Peter Lattman.  (Prior related posts are here and here.)  Some in the article who defend Mr. Scruggs speculate that perhaps Mr. Balducci, the less-well-known lawyer allegedly taped offering the bribe on behalf of him and Mr. Scruggs, was working on his own, trying to impress Mr. Scruggs.   

Interestingly, the best-selling author John Grisham, who is also a friend of Mr. Scruggs, defends Mr. Scruggs on the grounds of egregious plot:

"This doesn't sound like the Dickie Scruggs that I know," Mr. Grisham said yesterday. "When you know Dickie, and how successful he has been, you could not believe he would be involved in such a boneheaded bribery scam that is not in the least bit sophisticated."

We'll have to wait for Grisham's next novel to see how he can correct the plot to make it more convincing.  But as many a practicing lawyer knows, real law practice is often not as interesting as a Grisham novel.

BGS

Balducci Cooperating with Government in Alleged Attempted Bribery Case?

The Wall Street Journal has an article -- In Scruggs Probe, Focus Turns to Another Lawyer, by Peter Lattman and Ashby Jones -- that suggests that Timothy Balducci is cooperating with the government prosecutors in connection with the alleged attempted bribery of a Mississippi state judge by Balducci, Dickie Scruggs, and others.  The alleged attempted bribery was supposedly meant to skew the judge's attorney-fee distribution in the Katrina insurance litigation.  From the article:

The indictment also cites several conversations held between Mr. Balducci and others named in the indictment that were held outside the judge's chambers. That, some defense lawyers say, suggests that, at some point in the investigation, Mr. Balducci began cooperating with the government.

"I would not be surprised at all if Balducci was cooperating," said Daniel Gitner, a defense attorney in New York and former federal prosecutor who isn't familiar with the case beyond the indictment and news reports. "There's a tremendous amount of detail relating to what he did in relation to the other defendants. It would appear that a good portion of that probably came from his mouth" because it happened outside of the judge's bugged office, said Mr. Gitner.

He added that while it is possible that there were several wiretaps outside the judge's chambers, "the odds of the government monitoring more than one phone are lower than the government monitoring a single phone. It's complicated for the government to use electronic survelliance."

Furthermore, Mr. Balducci hasn't been arraigned in court this week, while the other four defendants all pleaded not guilty.

BGS

Scruggs Indictment for Allegedly Attempting to Bribe a Judge in Katrina Insurance Litigation

Top plaintiffs' lawyer Dickie Scruggs, of tobacco and asbestos fame, has been indicted for alleged attempted bribing of a Mississippi state judge in connection with the distribution of fees from the Katrina insurance litigation.  As with the separate Milberg Weiss allegations about paying class representatives, the government appears to have much stronger evidence against a less-well known lawyer intermediary, who was allegedly working on behalf of the well-known plaintiffs' lawyer.  In the Katrina litigation, that intermediary is alleged to be Timothy Balducci, who was audiotaped offering the bribe and delivering the money, according to the government.  Scruggs denies the allegations.

The Wall Street Journal has details on the build up of the case in the article, How the Scruggs Case Came Together, by Ashby Jones and Peter Lattman.  In addition, an editorial in the Journal -- The Trial Bar on Trial -- celebrates the possible downfall of prominent tort lawyers who were indicted this year, including Bill Lerach, Dickie Scruggs, and others at Milberg Weiss including Melvyn Weiss. 

If true, all of these allegations suggest remarkable hubris in at least some of the top plaintiffs' lawyers.  One wonders about the effect of a lifestyle of private jets and multiple wins of multiple millions (or tens of millions) in fees.  One also wonders about the effect of high-risk, winner-take-all, contingency fee litigation.  Brash and aggressive personalities seem to thrive in such an environment -- but they too must keep in mind that lawyers ultimately serve the client (not the other way around) and that no one (especially not the lawyer) is above the law.

BGS

Sebok and Zipursky on Vioxx Settlement Ethics

Excellent FindLaw column today by Tony Sebok and Ben Zipursky -- Getting With the Program: The Vioxx Settlement Agreement.  One of their central points is that Vioxx plaintiffs need advice to decide whether to accept the Merck settlement offer, but it is hard for clients to trust their lawyers' advice when the lawyers have already agreed to recommend the settlement to every client.

HME

Senate Report Criticizes Glaxo's Treatment of Physician Raising Avandia Concerns

Article in the Wall Street Journal -- Glaxo's Handling of Physician Criticized, by Jeanne Whalen.  Here's an excerpt:

Over a period of several years, drug maker GlaxoSmithKline PLC was so concerned about a prominent physician's negative views of its diabetes drug that it engaged in a concerted effort to intimidate him and stifle his opinion, a report by the U.S. Senate Finance Committee found.

The report offers a window into the rarely acknowledged practice among drug companies of monitoring and seeking to influence the opinions of leading physicians, who can make or break a drug's sales. The report alleges that Glaxo Chief Executive Jean-Pierre Garnier and former research chief Tachi Yamada were involved in the intimidation.

The Senate Finance Committee released the report Thursday, after researching Glaxo's relationship with John Buse, a diabetes expert and professor of medicine at the University of North Carolina in Chapel Hill. In 1999, Dr. Buse began expressing concerns about the cardiovascular risks of Avandia, one of Glaxo's top selling drugs.

BGS

Concern Over Plaintiff Counsel Ethics in Vioxx Settlement

Article in the Wall Street Journal -- Vioxx Plaintiffs' Choice: Settle or Lose Their Lawyer, by Nathan Koppel.  Here's an excerpt:

Plaintiffs in litigation over the painkiller Vioxx are supposed to be able to decide whether to enroll in the übersettlement announced last week or take their cases to court. But due in part to what lawyers say is an unusual provision in the settlement agreement, many plaintiffs in effect may have little choice but to accept the deal.

The provision, agreed to by Merck & Co. and the lead lawyers in the case, requires that if one client of an attorney enrolls in the settlement, then the attorney must recommend the deal to all other clients. If a client decides not to take part in the settlement, then the lawyer, according to the deal, must take "all necessary steps" to withdraw from representing that client. It is relatively rare for a settlement to require lawyers to cut ties with clients, but it appears to be happening more often, lawyers say.

Some find the development problematic. The provision improperly "stacks the choice for the client," says Deborah Rhode, an ethics professor at Stanford Law School. "If the price of exercising what should be their right to reject the settlement means they have to forfeit their representation from the lawyer actually familiar with the case, it's not exactly an uncoerced choice."

Merck pulled the widely used painkiller Vioxx from the market in September 2004 because it was tied to a higher risk of heart attack and stroke. Thousands of lawsuits ensued, and after three years, Merck and the lead plaintiffs lawyers negotiated a $4.85 billion settlement, announced Friday.

BGS

Professor Kelly Strader on the Milberg Weiss Prosecutions

Professor Kelly Strader of Southwestern Law School has published his article, White Collar Crime and Punishment: Reflections on Michael, Martha, and Milberg Weiss, 15 George Mason L. Rev. 45 (2007).  The article discusses allegations that certain Milberg partners paid class representatives.  Here's the abstract from the SSRN post of the article:

We are deeply conflicted about white collar crime and punishment. This conflict is largely born of the government's use of novel, “gray-area” legal theories in many high profile white collar prosecutions. Such prosecutions, which seek to expand the scope of existing crimes, tend to undermine the integrity and expressive function of our system of white collar criminalization. These prosecutions also may violate the defendants' right to fair notice of the possible crimes with which they may be charged. We need a new approach. First, in such “gray-area” cases, we should rely upon civil and administrative remedies except in extraordinary circumstances. Second, we should assess whether extraordinary circumstances exist by examining whether the defendant's alleged acts caused substantial, identifiable harm. To test this approach, I examine three of the most significant economic fraud investigations and prosecutions of the last 20 years – those of Michael Milken, Martha Stewart, and the Milberg Weiss law firm. I conclude that none of the cases warranted criminal prosecution on “gray-area” economic fraud theories, and that assertion of those theories actually served to undermine our confidence in white collar criminalization and punishment.

BGS

The Vioxx Settlement

What does the Vioxx settlement tell us about mass tort strategy, procedure, and ethics?  Merck's mass aggregate settlement, which weighs in at $4.85 billion and up to 47,000 plaintiffs, matters not only to its many participants, but also to anyone interested in understanding how mass tort litigation works.

THE PARTICIPANTS.  Before turning to the deal's broader implications, let's talk about its significance to the five major sets of participants -- Merck, plaintiffs, plaintiffs' counsel, judges, and defense counsel.  Assuming the settlement goes through (the deal is subject to several conditions, including an 85% walkaway clause), it's happy news for most of them.

• For Merck, the settlement allows the company to take its hit, slash its litigation expenses, limit its remaining exposure, and get back to business.  That's why Merck's stock was up sharply yesterday despite a down day in the market.  The first time I saw a stock price go up after a company announced a massive settlement, I found it odd (this is, after all, a multi-billion dollar expense); now I expect it.
• For most plaintiffs, the settlement provides compensation rather than the delay and uncertainty of litigation.  Many participating plaintiffs will be disappointed with the amount of compensation they receive, but that's the nature of settlement.  It's a compromise.
• For participating plaintiffs' counsel, the settlement offers a signficant payday after several years of unpaid Vioxx work and significant expenditure of resources.  It also offers lawyers the chance to get out of Vioxx and to move on to the next mass tort or other litigation opportunity.  And for the lawyers involved in negotiating the deal, such as Russ Herman, Chris Seeger, Andy Birchfield, and Arnold Levin, yesterday's announcement represents a satisfying accomplishment and the sort of attention-generating event that cannot be bad for business.
• For the judges -- particularly Judges Eldon Fallon (overseeing the MDL in E.D. La.), Carol Higbee (NJ), Victoria Chaney (CA), and Randy Wilson (TX) -- the settlement clears away a huge number of docket-clogging cases.  For some of the judges, the settlement also reflect a personal victory, a professional accomplishment, and, one hopes, a sense of getting justice done.  Judge Fallon, in particular, had announced early on in the litigation his desire to drive the parties toward a large-scale settlement.  To whatever extent he may have experienced Merck's ongoing refusal to settle as a source of frustration and embarrassment, yesterday's announcement surely brought relief, satisfaction, and some vindication of his handling of the litigation.
• Of the major participants, the only apparent losers are Merck's outside counsel, who lose an important revenue stream.  But that's taking an unnecessarily grudging view of defense counsel's position.  For lead counsel Theodore Mayer of Hughes Hubbard & Reed, a settlement like this caps an overall successful defense strategy, and for other lawyers involved in negotiating the deal, including Doug Marvin of Williams & Connolly, John Beisner of O'Melveny & Myers, and Adam Hoeflich of Bartlitt Beck, the deal represents a professional accomplishment and a business-generating news event.  A satisfied client is always good news.  Except perhaps for local defense counsel, who experience a loss in revenue from upcoming trials that won't happen, but who may get little attention or client gratitude.

STRATEGY.  Nearly all the commentary on the settlement emphasizes the success of Merck's defense strategy in the VIoxx litigation, with lots of comments suggesting that future mass tort defendants should take a page from Merck's playbook.  I agree that the settlement reflects the culmination of a successful strategy for Merck, but before assuming the same thing will work for other defendants, you have to look at the confluence of factors that made the strategy work in Vioxx.

Merck took an aggressive approach, fighting each case individually.  This strategy had three main components:  refusing to settle either wholesale or retail, opposing trial aggregation, and pouring resources into litigating each individual case on the merits.  Although early on Merck suggested that it would settle cases involving over 18 months exposure, it quickly backed off and pursued a strong no-settlement strategy.  On aggregation, Merck accepted and even embraced aggregated pretrial handling (MDL and statewide consolidations), but staunchly resisted class certification and any form of joint trial.  And in each plaintiff's case, Merck fought hard on specific causation and every other contestable issue.  Merck could have settled many of those cases more cheaply than going to trial, but by refusing to settle Merck sent a powerful message to plaintiffs' counsel:  there's no easy money to be had here.

The no-settlement, individual-trial strategy worked in the Vioxx litigation because several critical factors came together:

• First, Vioxx was off the market.  This is often the case, as product recalls are a common triggering event for mass tort litigation, but not always.  Plenty of mass tort litigation involves products that remain available.  Think Zyprexa, Oxycontin, tobacco, guns.  And lots of other mass tort litigation involves products that, while no longer on the market, present an ongoing risk of exposure -- lead paint, asbestos, certain medical devices.  Because Vioxx was no longer available, Merck did not have to worry about a never-ending stream of potential plaintiffs, and could get some finality with a mass aggregate settlement.  Also, with the product off the market, Merck could focus on litigation strategy without worrying about protecting the Vioxx brand and its ongoing prescribability by physicians, in contrast with, for example, Eli Lilly's position on Zyprexa.
• Second, Vioxx did not raise significant problems of latent disease.  In some mass torts, such as asbestos and tobacco, latency creates enormous settlement difficulties.  How can a defendant get peace without binding future claimants?  This was the driving factor behind the Amchem and Ortiz asbestos settlement class actions, and an important cause of their failure.  It was the primary reason for the multiple back-end opt-outs in the fen-phen nationwide settlement class action, which later proved so problematic.  When I worked on the American College of Trial Lawyers Mass Tort Litigation Manual, asbestos and fen-phen were front and center, and we took time-dispersed disease manifestation as a defining characteristic of mass torts.  So did Richard Nagareda in Mass Torts in a World of Settlement.  Vioxx, by contrast, did not involve such significant latency problems.  Latency was a disputed issue in the litigation, but the settlement reflects a willingness on the part of plaintiffs' counsel to let go of claims by persons who experience heart attacks or strokes long after their exposure to Vioxx.  This, combined with the fact that Vioxx was off the market, and the statute of limitations, allowed Merck to seek peace in the litigation without worrying much about future claimants.
• Third, Merck had stronger individual defenses than general defenses.  Like tobacco defendants, who always try to focus attention on the individual smoker, Merck focused on each individual plaintiff.  In the case of tobacco, it's more about personal responsibility; with Vioxx, it's all about individual causation.  Compare this with Bendectin, silicone gel breast implants, or Agent Orange, where the defendants had strong scientific defenses on general causation.  In Bendectin, Merrell favored (and won) a mass aggregated trial in which it could present its scientific argument on general causation without the jury hearing from individual plaintiffs.  Merck did not think it had a strong enough chance to defeat liability on a wholesale basis to be worth the risk, so it preferred to take a series of wins and losses in individual trials.
• Fourth, the issues were sufficiently individualized that Merck was able to defeat efforts at class certification and mass trials.  On class certification, Vioxx is no different from most other mass tort personal injury cases (and post-CAFA, defendants have even greater confidence that mass tort class cert will usually be denied), but it differs markedly from other types of mass litigation.  Aside from class cert, Merck was able to avoid large-scale joint trials.  Even Judge Higbee's relatively modest effort at a ten-plaintiff consolidated trial in New Jersey fizzled.  In other mass torts, even if defendants defeat class cert, they won't always have Merck's success at avoiding large multi-plaintiff trials.
• Fifth, and most important, Merck mostly won.  That's because individual causation was hard for Vioxx plaintiffs to prove.  Heart attacks and strokes are common.  They are especially common among older people, who were Vioxx's primary consumers.  So it's hard to show by a preponderance of the evidence that a particular person's heart attack or stroke was caused by Vioxx.  Compare this with mesothelioma and asbestos, or PPH and fen-phen, or lung cancer and tobacco, or rhabdo and Baycol.  Because of the difficulty establishing specific causation, Merck was able to win most of the individual cases that went to trial.  Defense wins drive down settlement values, pure and simple.  Had Merck lost several more of the individual trials, it would have cost a lot more than $4.85 billion to settle this.

Without this confluence of factors, Merck's no-settlement, no-aggregation, try-every-case strategy could easily have backfired.  That's why in the future some mass tort defendants will continue to settle cases individually, others will seek early wholesale settlements whether by settlement class action or by non-class aggregate settlement, and others may even seek mass adjudication.

PROCEDURE.  The Vioxx litigation shows the successful use of informal bellwether trials to drive a mass aggregate settlement.  As a matter of procedural policy, the Vioxx litigation and settlement show mass tort litigation functioning reasonably well, as Byron Stier points out.  There have, of course, been enormous litigation costs, unpredictable and inconsistent results along the way, and a fair amount of unseemly forum-shopping and forum-fighting, but that's par for the course in mass tort litigation.  More significantly, look at what worked.  The vast majority of cases were consolidated, at least for pretrial handling, in a small number of courts.  Most of the cases were before Judge Higbee in New Jersey (cases were filed disproportionately in Merck's home state to make them non-removable under 28 U.S.C. 1441(b)); many others were before Judge Fallon in the multidistrict litigation, as well as in large statewide consolidations in California and Texas.  Class certification was appropriately rejected; these cases are too individualized to be suitable for representative litigation that binds non-parties.  Nor did courts employ formal bellwethers, in the sense of trials from which binding results could be extrapolated for other parties.  Rather, Judges Fallon, Higbee and others used informal bellwether trials.  That is, they scheduled cases for trial on steady basis, trying to get a range of representative cases, with the goal not only of resolving those particular actions but of providing enough data points to allow the parties to reach a widespread settlement.  It worked.

ETHICS.  Despite viewing the settlement mostly as good news for the participants and the litigation system, I have some concerns.  Mass aggregate settlements always raise troubling ethical issues, and this one is no exception. 

Here's the good news, ethically speaking.  The parties seem to understand clearly that acceptance of the settlement is up to the clients, not the lawyers, and that any participating plaintiff must give informed consent after adequate disclosure.  Also, the parties were wise to include a walkaway provision.  The deal is conditioned upon acceptance by 85% of the plaintiffs (actually, 85% of each of a number of plaintiff groups).  This provides Merck with adequate assurance of peace, while providing a safety valve so that not every plaintiff need accept the deal.  As I've commented before, all-or-nothing settlements are much more troubling than those with walkaway provisions.

Now the bad news.  The deal contains a term that requires each participating lawyer to recommend the settlement to 100% of the lawyer's eligible clients (paragraph 1.2.8.1 of the Settlement Agreement).  That's troubling.  A lawyer's duty of loyalty to each client cannot be bargained away to an adverse party.  Some Vioxx plaintiffs' lawyers represent hundreds or thousands of clients, and even if the lawyer thinks the settlement's terms are generally fair, that does not necessarily mean that acceptance is the right decision for each individual client.

Worse, the deal requires that any participating lawyer withdraw from representing any client who declines the settlement (paragraph 1.2.8.2) .  That's really troubling.  It makes it nearly impossible for a client to say no.  The paragraph tries to avoid ethical impropriety by adding "to the extent permitted by the equivalents to Rules 1.16 and 5.6 of the ABA Model Rules of Professional Conduct."  Withdrawing from the representation of clients under these circumstances may well violate both RPC 1.16 and RPC 5.6, but with this term in the Settlement Agreement, it is unrealistic to expect any of the plaintiffs' lawyers to continue representing Vioxx claimants. 

In a mass settlement, lawyers ideally should be able to say to their clients:  "Here's the settlement we negotiated with the defendant.  Here are all the terms and conditions of the deal, and here's where you fit in.  I think it's a good deal, and I recommend that you accept it.  But you're the client, and it's your call.  And if you decide not to accept the settlement, I'll be right by your side and continue to represent you." 

Compromise is one thing.  The lawyer-client relationship is another.  The problem, of course, is that in mass aggregate settlements, the interests of the defendant, plaintiffs' counsel, and judges align, and don't necessarily correspond with the interests of individual plaintiffs.  Merck, with its $4.85 billion, expects to buy not only peace from tens of thousands of plaintiffs, but also peace from the law firms that have been the biggest thorns in its side.  The challenge, which the Vioxx settlement only partly surmounts, is to craft a settlement that accommodates the interests of the parties without unduly interfering with the lawyer's core duty of loyalty.

HME

Simon on the Market for Bad Legal Advice

William Simon (Columbia Law) recently posted an article critiquing academic expert opinions in aggregate litigation (h/t: Leiter).  The litigation he discusses is an employment discrimination case, but his point has relevance for mass torts.  The paper is available on SSRN here and the abstract follows.

Clients demand bad legal advice when legal advice can favorably influence third-party conduct or attitudes even when it is wrong. Lawyers supply bad legal advice most readily when they are substantially immunized from accountability to the people it is intended to influence. Both demand and supply conditions for a flourishing market are in place in several quarters of the legal system. The resulting practices, however, are in tension with basic professional and academic values. I demonstrate these tensions through critiques of the work of academic professional responsibility consultants in such matters as Enron, Lincoln Savings & Loan, and a heretofore undiscussed aggregate litigation settlement. I also suggest reforms to reduce the incentives and pressures for bad advice that now prevail.

ADL

State Farm Sues Mississippi Over Katrina Investigation

Here's an interesting twist on the complexities of handling parallel civil and criminal proceedings.  State Farm Insurance filed a lawsuit against Mississippi's attorney general, claiming that the AG reopened a criminal investigation in violation of an agreement to drop the inquiry in exchange for the company's reconsideration of thousands of policyholder's claims after Hurricane Katrina.

Victoria Pynchon wrote a provocative post on this at the IP ADR Blog -- State Farm v. State of Mississippi: Withdrawing Criminal Charges to Settle a Civil Action? -- raising ethical questions about the underlying agreement.  Pynchon, a copyright mediator, says that she often faces the question whether a plaintiff may agree to withdraw criminal charges in exchange for a settlement of civil claims.  She refers to an AP news report in the New York Times describing State Farm's lawsuit:

State Farm Insurance is suing Mississippi's attorney general, accusing him of violating an agreement to end a criminal investigation of the insurer’s handling of claims on the Gulf Coast after Hurricane Katrina, according to court papers unsealed Friday.

State Farm’s lawsuit claims that the attorney general, Jim Hood, reopened a criminal investigation of the company and its employees “for the purpose of harassment” and to coerce the insurer into settling civil litigation spawned by the Aug. 29, 2005, hurricane.

State Farm says Mr. Hood agreed in January to end his office’s criminal inquiry as part of a settlement agreement that called for the company to reopen and possibly pay thousands of policyholder claims.

On Pynchon's reading, such an agreement would be unethical:

State Farm suing Mississippi for failing to honor an agreement to drop a criminal inquiry in exchange for the settlement of civil claims?  I must be missing something because the settlement sounds unethical and the lawsuit without merit because civil claims were settled in exchange for the termination of a criminal investigation.

The law is far from uniform on the ethics of using criminal charges to civil settlement negotiations.  In New York, following the Model Code of Professional Responsibility, DR 7-105 provides: "A lawyer shall not present, participate in presenting, or threaten to present criminal charges solely to obtain an advantage in a civil matter."  The ABA abandoned this rule when it adopted the Model Rules of Professional Conduct.  Pynchon cites ABA Ethics Op. 920-363 (1992) (allowing a lawyer to use a threat of a criminal referral to obtain advantage if the civil claim and criminal matter are related and well-founded).  Some states that adopted the Model Rules chose to retain the prohibition.  New Jersey's RPC 3.4(g), for example, provides: "A lawyer shall not ... present, participate in presenting, or threaten to present criminal charges to obtain an improper advantage in a civil matter."

I've always found this rule intriguing and a bit troubling.  First, the language of both DR 7-105 and NJ RPC 3.4(g) leaves open a possible distinction between bringing or threatening criminal charges and withdrawing or offering to withdraw charges, although as a matter of legal ethics and public policy it is hard to see why that distinction should matter.  Pynchon points to a California ethics opinion (Formal Op. 1991-124) extending the prohibition to dismissal of criminal charges.

More fundamentally, while the prohibition seems nice in theory, I wonder whether it really makes sense.  The theory, as I understand it, is that citizens ought to report crimes (or not) as a matter of civic responsibility, not for personal gain.  The criminal process, on this theory, should be reserved for its public purpose, not as a private tool in civil litigation.  But I wonder whether that idea hold up.  Criminal sanctions are supposed to encourage good behavior.  If fear of criminal punishment persuades a wrongdoer to make right a wrong, isn't that a good thing?  That, of course, assumes the legitimacy of the criminal charges and civil claims, but to the extent parties threaten illegitimate charges, couldn't we deal with that through the law of extortion or similar doctrines, rather than through an ethics rule that prohibits or chills consideration of criminal proceedings for civil advantage even in connection with legitimate claims?

Finally, even if we were to accept the theoretical justification for the prohibition, isn't it one of the least realistic rules in the book?  Any civil defendant accused of serious wrongs understands the possibility of criminal proceedings.  The implicit threat of such proceedings is present in the civil settlement dynamic, whether expressed openly or not.  The defendant knows that one of the advantages of resolving civil claims to the satisfaction of those who have been harmed is that satisfied claimants are less anxious to pursue other avenues to obtain justice.  Isn't that the reality, regardless of whether the ethics rules force lawyers to keep their mouths shut about it?  And if it is the reality, what's so bad about it?

In the State Farm case, by the way, it is not clear to me whether Pynchon fairly characterizes the deal as "an agreement to drop a criminal inquiry in exchange for the settlement of civil claims."  Did the company reopen policyholder claims as part of a civil settlement?  Is there a difference between plaintiffs' attorneys using criminal charges to drive a settlement of their clients' claims, versus the state using criminal charges to drive a settlement of citizens' claims?  The State Farm situation does not neatly fit the usual DR 7-105 scenario.  Keep in mind, in any event, that we're talking about third-hand info:  an agreement described in a lawsuit described in a newspaper article described in a blog.  In January I blogged on a failed earlier attempt at an agreement between State Farm and Mississippi (Birnbaum, Scruggs and the Katrina Settlement), but until now I had not continued to follow the saga.

HME

Update:  Thanks to Ted Frank for pointing out David Rossmiller's post on the State Farm action at the Insurance Coverage Law Blog.  Rossmiller has links to the complaint and other documents, as well as an extensive post on the suit.  He also has a shorter post on the subject at Point of Law, calling this "the most unusual development yet" in Katrina litigation.

UCLA and RAND Form Research Alliance; Host Conference on Civil Justice Secrecy

UCLA Law School and the RAND Corporation have formed an alliance to study law and public policy -- see the RAND press release.  Their first endeavor was a conference on November 2, 2007, studying the use of secrecy in the civil justice system.  Here's an excerpt from the L.A. Times article -- UCLA Law School joins others to pry into judicial secrecy, by Henry Weinstein:

UCLA Law School and the Rand Corp. launched an alliance Friday to study secrecy in the nation's civil justice system.

Attorneys and legal scholars spent the day at a conference at the law school debating just how much secrecy there is and whether any of it is justified.

"This subject could not be more timely," said UCLA Law School Dean Michael Schill. "Transparency in our civil justice system is incredibly important for its legitimacy." At the same time, he said, privacy trumps transparency on some occasions.

Michael Rich, Rand's executive vice president, expressed dismay that in recent years the civil justice system has seemed to be moving away from public scrutiny, with fewer trials being held, more private judges operating outside the normal court system and a proliferation of cases settled with confidentiality agreements.

Among the controversial issues discussed were the role of secrecy in settlement agreements and the increasing prevalence of arbitration agreements.  More information on the conference and speakers can be found at the RAND conference description, which notes that "[t]he papers presented at the Transparency in the Civil Justice System will be collected in a book that will be released at an event on Capitol Hill in Summer 2008."

BGS

Lerach pleads guilty

Former Milberg Weiss partner William Lerach pleaded guilty this week to charges of paying kickbacks to plaintiffs to serve as class representatives.  His plea agreement calls for forfeiture of $7.75 million, a fine of $250,000, one to two years in prison and three years of supervised release.

Today, the Los Angeles Times published an editorial -- An Isolated Case -- arguing that the scandal does not indicate a need to curtail class actions in general:

Famous -- or make that infamous -- class-action attorney William S. Lerach pleaded guilty Monday to one count of conspiracy, admitting his role in a $11.3-million kickback scandal that has upended his former law firm, the pathbreaking shareholder advocacy firm of Milberg Weiss.

As part of his plea, Lerach will pay $8 million to the federal government, and could spend up to two years in prison. Responding to news of the deal, tort reform advocates seized the easy opportunity to make sport of Lerach's downfall. But for those tempted to argue that his crimes make the case for curtailing class-action suits sharply, we'd like to offer the objection that such an argument overstates the evidence. Paying plaintiffs to sue is illegal and should be. Zealously representing injured clients is not and shouldn't be.

To the contrary, it's a necessary calling that benefits victims and society. The usual complaint against lawyers such as Lerach is that they trump up frivolous claims against innocent corporations, dragging down the economy and laughing all the way to the bank. Business interests point out, with some merit, that while individual plaintiffs can receive little in compensation, class-action lawyers reap millions of dollars in fees. Lerach's fees in suits against Enron alone may surpass $1 billion.

But here's the rub: Complaints against a company such as Enron, to cite an obvious example, aren't frivolous at all. Through deceitful accounting practices, Enron defrauded shareholders out of $40 billion and wreaked havoc in energy markets. Class-action lawsuits allow wronged investors and other parties injured by corporate malfeasance to pool resources and seek redress far more effectively and efficiently than any individual could. It's not always pretty, but it's the best solution at hand. Government, for instance, lacks the resources -- and often the incentive -- to handle all business oversight through regulation.

Yes, there have been abuses, but many of the worst were legislated out of existence by the Private Securities Litigation Reform Act of 1995 (which wasn't yet law when Milberg Weiss and Lerach paid off their plaintiffs.) The best outcome of Lerach's fall wouldn't be the demise or even the curtailing of the class-action lawsuit. It would be weeding out lawyers who abuse the system. Such action would assure that legitimate class-action suits get their fair hearing in court.

It's good to read a non-shrill account of the Milberg Weiss fiasco.  The editorial is surely correct that one firm's nondisclosed payments to class reps, while wrongful, does not indicate a need for massive reform.  But I wouldn't have minded if the editorial had taken it a step further and said that in a world with serious litigation abuses (by lawyers for both plaintiffs and defendants), a set of payments to class reps is hardly the biggest thing to worry about.

HME

Coke Trying to Use Expected Guilty Plea by Lerach to Deny Class Status Based on Inadequate Representation

In Coke Tries New Defense: Firm Hopes to Use Plea in Lerach Case To Its Advantage, by Peter Latman, the Wall Street Journal reports Coca-Cola Co.'s attempt to use the impending criminal guilty plea by plaintiffs' lawyer William Lerach to deny class action status to a securities suit brought by Lerach while at the firm now called Coughlin Stoia.  The Journal reports that Lerach took the case with him when he left the firm.

In appointing class counsel, a federal court must under Rule 23(g) that the counsel may "fairly and adequately represent the interests in the class."  Moreover, Rule 23(g)(C)(ii) notes that the court may broadly consider "any other matter pertinent to counsel's ability to fairly and adequately represent the interests of the class."

Lerach, members of Lerach's former firm Milberg Weiss, and Milberg Weiss itself are all under indictment for their alleged roles in a scheme to pay class representatives -- the few plaintiffs who represent in court the interests of the thousands of absent class members whose claims are being adjudicated.  While any payment of class representatives would appear to have been done to keep them on standby for quick filing of lawsuits, those payments also have the capacity of undermining the independence of the class representatives and perpetrating a fraud on the court.

What's so interesting about Coke's move are its implications for other lawsuits.  Should all putatitve class actions brought by Lerach or Milberg Weiss be denied class certification on grounds of inadequate class counsel?  Here, I would argue that the presumption of innocence should apply to prevent the government from effectively destroying the business of a plaintiffs' firm by causing the denial of all class actions brought by the firm.  Of course, many would argue that the specter of the indictment alone destroys the accused firm -- but it is one thing for individuals to choose not to associate with an entity accused of a crime, but quite another thing for a court effectively to impose penalties based merely on an accusation.

What if the allegations against Lerach, Milberg Weiss, and certain Milberg partners are proven?  Indeed, Steven Schulman of Milberg has already pleaded guilty, as has Milberg partner David Bershad.  Then, denial of future class actions by the lawyer or firm on the basis of inadequacy seems more reasonable, at least until the bar decides whether the lawyers in question will be able to continue to practice. 

And what about any prior class actions resolved where class representatives were illegally paid?   That's a question with implications for perhaps hundreds of millions of dollars of recoveries.  The representation in those classes would likely be deemed inadeqate -- both by class counsel and by the class representatives.  And the inadequate representation could be seen as a violation of constitutional due process, which turns in class actions upon the adequacy of class representation.  One could imagine myriad actions for malpractice against the lawyers involved (if courts hold that absent class members have an attorney-client relationship with class counsel), as well as attempts by defendants to recoup settlement payments made under alleged fraud by class representatives and class counsel.  Interestingly, many defendants would probably rather not reopen settled class actions, for fear that courts would toll the statute of limitations against them and allow new class counsel to bring new actions against them based on the same alleged wrongs.  All in all, it would be a litigation meltdown worthy of a law school exam.   

BGS

Schulman Pleads Guilty in Milberg Weiss Case

Steven Schulman, former partner of Milberg Weiss, pleaded guilty yesterday to a racketeering conspiracy charge.  Here's an excerpt from the New York Times article:

Mr. Schulman ... admitted in federal court to being part of a scheme in which the firm, known for its class-action lawsuits against companies, gave secret kickbacks to individuals who remained on call to act as lead plaintiffs. This allowed the firm to file suit faster than its competitors and to gain a lead position that generally resulted in higher fees.

... Mr. Schulman is also cooperating with prosecutors and agreed to forfeit $1.85 million in profit, pay a $250,000 fine and accept a prison sentence. Though his plea could bring a sentence of up to 20 years, court filings suggest 27 to 33 months.

HME

More on Melvyn Weiss Indictment

Article on cnn.money.com -- Mel Weiss is Sinking HIs Firm, by Peter Elkind.  Here's an excerpt:

As the government describes it, Weiss was personally involved in dirty dealings with all three of Milberg’s showcase paid plaintiffs—Steven Cooperman, Seymour Lazar, and Howard Vogel—each of whom secretly received millions for serving as name plaintiff in dozens of Milberg class actions. (Lazar, also a defendant in the case, has pled not guilty. Cooperman and Vogel have pled guilty and are cooperating with the government.) The indictment also ties Weiss to an unnamed trio of Florida residents who were paid to serve as plaintiffs in about 60 more lawsuits.

And the allegations are ugly. Weiss is no longer thinly masked, as he was in earlier government filings, as “Partner A.” The new indictment places him at the scene of the alleged crimes from the beginning.  It has Weiss, in August 1979, informing his number-two man, senior partner David Bershad (one of the now-cooperating former Milberg lawyers) that he had struck a deal with California investor Lazar to serve as a plaintiff in Milberg lawsuits in exchange for 10% of the firm’s attorney fees in those cases.  It has Weiss, in the early 1980s, informing Bershad not to worry about violating the law by paying a Florida plaintiff because they would be making the payments in cash, and thus there would be no paper trail and little risk of getting caught. Indeed, in the mid-1980s, the indictment says, Weiss personally carried “thousands of dollars in cash” from New York to Florida to make payments to two plaintiffs.  The indictment details how Weiss—along with Lerach and Bershad—in January 1986 included a provision in the firm’s partnership agreement that would allow the “conspiring partners” to tap the firm’s coffers to reimburse themselves for cash they’d each kicked in to a slush fund for paying plaintiffs. (Some of this cash was stashed in a safe in Bershad’s office at the law firm.) In December 1987, 1988, and 1999, according to the indictment, Weiss then “caused” the firm to reimburse him a total of about $380,000 in cash for such payments.

BGS

Louis Robles Guilty Plea

Asbestos plaintiffs' lawyer Louis Robles pleaded guilty last week to three counts of mail fraud for stealing settlement money from his clients, according to this AP story on Forbes.com.  He will be sentenced on December 4 in federal court in Miami.  Robles faces up to fifteen years in prison, because each count carries a five-year term.  He is being held without bail.  Robles agreed to a plea deal in April that would have included a ten-year prison term, but Judge Alan Gold rejected it because he considered the sentence too light considering Robles' inability to pay full restitution.  Trial was set to begin last week, producing the new plea.

HME

Melvyn Weiss Formally Indicted and Steven Schulman Agrees to Plead Guilty

Article on cnn.com -- Top class-action lawyer indicted.  Here's an excerpt:

A federal grand jury in Los Angeles has indicted prominent class-action lawyer and Milberg Weiss co-founder Melvyn Weiss for conspiring to make illegal payments to plaintiffs in more than 250 lawsuits that generated $250 million in attorneys' fees for the firm, the government said Thursday.

Additionally, Steven Schulman, a former partner in the firm, has agreed to plead guilty to a racketeering charge and acknowledge that he and others, including Weiss, conspired to conceal the secret payments from judges presiding over suits filed by Milberg Weiss.

The racketeering conspiracy against Schulman carries a maximum sentence of 20 years in prison. A plea agreement released Thursday by federal prosecutors "contemplates" a sentence of 27 months to 33 months. Schulman had previously pleaded not guilty to the charges.

In a statement, Ben Brafman, Weiss' lawyer, said his client will fight the charges. "We are confident that when the evidence is carefully reviewed at a trial of these charges, Mr. Weiss will be fully exonerated," Brafman said.

Here's an excerpt from the related Wall Street Journal article, In Role Reversal, Melvyn Weiss is Indicted, by Nathan Koppel:

Mr. Weiss's share of firm profits during the years 1983 to 2005 was about $209.9 million, it says. The indictment also alleges Mr. Weiss profited greatly from the kickback scheme. The government alleges that Milberg Weiss earned more than $250 million in fees from cases involving kickbacks and that Mr. Weiss received more than about $41 million of those "tainted" fees.

***

Yesterday's indictment raises new allegations of kickbacks to certain "Florida plaintiffs" who served as name plaintiffs in 60 or more lawsuits for the firm. Prosecutors allege that around the early 1980s, David Bershad, a Milberg lawyer who has pleaded guilty in the case, told Mr. Weiss and another partner that paying a Florida plaintiff would violate laws prohibiting a lawyer from paying someone to induce the filing of a lawsuit. According to the indictment, Mr. Weiss and the other lawyer replied that because they would be paying in cash, there would be no paper trail and therefore there was little risk they would ever be caught.

Mr. Weiss "carried thousands of dollars in cash from New York to Florida" to compensate plaintiffs for taking the lead in class actions, the indictment alleges. Prosecutors allege Milberg paid kickbacks so it would have a ready stable of plaintiffs willing to file suits quickly, giving the firm an edge in the race to win the lucrative and powerful "lead counsel" status in class actions.

BGS

Milberg Weiss Statement on Melvyn Weiss Indictment

In the latest blow to Milberg Weiss, the once-powerful class action law firm now facing criminal charges for undisclosed payments the firm allegedly made to class representatives, an indictment against lead partner Mel Weiss is anticipated today.  The firm released the following statement yesterday:

Milberg Weiss understands that a second superseding indictment will be
issued tomorrow that will include new charges against the Firm and also
Melvyn Weiss. Mr. Weiss has decided to discontinue his participation in
Firm management in order to focus on the defense of the charges against
him. The Firm's other partners, none of whom is alleged to have been
involved in any wrongdoing, will be responsible for its management and
litigation activities. Mr. Weiss will remain available to counsel clients
and Firm attorneys. The Firm remains proud of Mr. Weiss' and the Firm's
accomplishments over the years and will continue to fight for its clients
and class members and to produce the excellent results for which it is
known. We do not anticipate any interruption in our work and we look
forward to putting this difficult period behind us.

An article in today's Wall Street Journal -- Milberg's Weiss May Face Indictment in Kickback Case -- reports on the development, emphasizing the importance of Weiss as a target of the investigation:

Having secured a plea agreement this week with one of its biggest targets in the criminal prosecution of the Milberg Weiss law firm, the government is moving forward against another.

Melvyn Weiss, co-founder of the plaintiffs firm and a pioneer in the field of securities class-action cases, is expected to be indicted today in Los Angeles, according to people familiar with the situation. An indictment would come more than a year after Milberg and two then-name partners were charged with fraud for allegedly paying kickbacks to clients to induce them to serve as lead plaintiffs in lucrative securities class actions and shareholder suits. ...

It is expected that the indictment will charge Mr. Weiss with helping to steer secret payments to clients who served as lead plaintiffs in class actions; it will also raise a charge new to the case -- that Mr. Weiss allegedly obstructed justice by failing to turn over a document subpoenaed by prosecutors, according to people familiar with the case.

Although the firm is best known for its work in securities class actions, Milberg Weiss has represented plaintiffs in significant mass tort litigation in the past decade, including Rezulin, Zyprexa, Vioxx, fen-phen, and Exxon Valdez litigation.

HME

Louis Robles Trial to Begin

Jury selection is set to begin tomorrow in the criminal trial of Miami asbestos lawyer Louis Robles, according to an article by Julie Kay on law.com, Nationally Known Mass Torts Lawyer Headed for the Trial Nobody Wants:

Jury selection is scheduled to begin Tuesday in the long-awaited federal trial of former superstar Miami attorney Louis Robles, who was charged with mail fraud in the alleged theft of $13.5 million in clients' settlement money. The trial is expected to last four weeks before U.S. District Judge Alan Gold.

Robles was disbarred in 2003 and later indicted on federal charges.  In April, Robles agreed to plead guilty and receive a ten-year prison term, but Judge Gold rejected the deal: 

Neither prosecutors nor defense attorneys wanted a trial. But Gold rejected a plea deal that called for Robles to serve 10 years in prison and recently rejected a request from Assistant Federal Public Defender Hector Flores for a 60-day continuance. 

The article notes that the defense has proposed voir dire questions to identify juror with a negative image of personal injury lawyers.

HME

Moore on the ALI Aggregate Litigation Draft

Legal ethicist Nancy Moore of Boston University has posted a paper on SSRN entitled The ALI Draft Proposal to Bypass the Aggregate Settlement Rule: Do Mass Tort Individual Clients Need (or Want) Group Decision-Making, forthcoming in DePaul Law Review.  Here's the abstract:

The American Law Institute has recently undertaken an entirely new project - Principles of the Law of Aggregate Litigation. The bulk of the project is devoted to class actions; however, a number of sections address various forms of non-class aggregations, and there is an extensive discussion of non-class aggregate settlements, including the controversial “aggregate settlement rule”. Rule 1.8(g) of the ABA Model Rules of Professional