Mass Tort Litigation Blog

One Fund Boston

Over at the Conglomerate Blog, Christine Hurt has a great post on the One Fund Boston and individual victim fundraising.  Her blog post is entitled One Fund Boston, Torts and Social Capital.

ADL

 

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

Possible BP Settlement with Federal Government Over Deepwater Horizon Gulf Oil Spill

Two Wall Street Journal articles in recent days have tracked recent settlements talks between BP and the federal government regarding civil and criminal liability in connection with the Deepwater Horizon oil spill in the Gulf.  On Wednesday, the Journal reported, BP Close to Spill Settlement: Multibillion-Dollar Deal With U.S. Would Combine Civil, Criminal Liabilities.  But on Thursday, the Journal noted in Slick Complicates BP Liability Talks that a new thin oil slick determined to be related to the prior Deepwater Horizon spill has appeared. 

BGS

NPR Interview with Ken Feinberg About His New Book

NPR has an extended interview with famed claims administrator Ken Feinberg about his new book, Who Gets What: Fair Compensation After Tragedy and Financial Upheaval.

BGS 

Settlement Reached in BP Litigation

John Schwartz at the New York Times reports that the litigation surrounding the BP Deepwater Horizon Oil Spill has settled for all of the litigants except the federal government.  The Judge overseeing the litigation issued the order late Friday night and will review the settlement. 

Here's the report from Bloomberg as well.

According to these reports, either the settlement will be paid by the $20 billion fund BP created to compensate victims or the fund will close and be replaced by a court overseen claims facility.  In any event, the amount of the settlement is $7.8 billion that from these reports is not in addition to the $20 billion already set aside. 

More to come. ADL

BP Today, Tomorrow and Into the Future

Gentle Readers,

You don't need the Mass Tort Litigation Blog to tell you that the imminent BP trial has been stayed pending settlement talks.  In the meantime, here are some thoughts from the ever relevant George Conk. Special shout out for his poetic references:  Diving Into the Wreck: BP and Kenneth Feinberg's Gulf. 

I was just at a wonderful conference at the Charleston School of Law on Mass Torts and the Federal Courts where Feinberg spoke.  One of the key questions at the conference is the extent to which claims facilities (BP, 9/11, etc.) are unique and unlikely to be repeated or the wave of the future.  The interesting thing about BP is that it shows the interaction between claims facilities and litigation - its not one or the other.  Speakers mentioned how companies trying to get ahead of a litigation may well look to the BP model.   Others questioned whether BP was really special because the company was prepared to admit liability (although not gross negligence). 

I was especially interested by the remarks of Sheila Birnbaum, currently running the 9/11 Fund for first responders and who mediated settlements for the 94 families who chose not to participate in the 9/11 Victim Compensation Fund.  Even the families who wanted a public trial to find out what happened ultimately settled because of the uncertainty of trial.  This raises important questions about the purpose of litigation for individuals: is it ultimately to get compensation? How important is it to get to the "truth"?  How important is vindication?  Punishment?  When people settle (or waive their right to litigate prior to filing suit), what kind of consent do we want and does money ultimately satisfy?  Lynn Baker, who was at the conference, referred me to the following article that addresses some of these questions: Gillian Hadfield, Framing the Choice Between Cash and the Courthouse: Experiences with the 9/11 Victims Compensation Fund.  This continues to be relevant, especially if Funds become a model rather than a one-off.

ADL

More on the Second Circuit's Refusal to Block Enforcement of Ecuadoran Judgment

From Michael D. Goldhaber at AmLaw Daily.

BGS

No Formaldehyde Liability for US for FEMA Trailers After Hurricanes Katrina and Rita, Fifth Circuit Holds

The decision in In re FEMA Trailer Formaldehyde Products Liability Litigation, Nos. 10-30921, 10-30945 (5th Cir. Jan. 23, 2012), turns on liablity for the government "to the same extent" as private individuals, under the Federal Torts Claims Act, and the protection afforded private individuals giving voluntary disaster assistance under Good Samaritan statutes in Alabama and Mississippi.

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

Zimmerman on Compensation Funds

Adam Zimmerman (St. John's) has a nice post on Prawfsblawg called "The Rise of Executive (Branch) Compensation" in which he discusses the historical antecedents and politics of compensation funds for mass disasters.  It reminds us that not all worthy victims have been the beneficiaries of such funds and the reasons why some are picked (and others are not) are not always clear.  

ADL

BP, the Gulf Coast Claims Fund, and MDL Plaintiffs' Lawyers

All that in the recent interesting op-ed from New York Times business columnist Joe Nocera -- BP Makes Amends.

BGS

Vanderbilt Law Review Symposium on the BP Oil Spill

You can access the article from their website: www.vanderbiltlawreview.org

Or read a summary of the pieces on Concurring Opinions.

ADL

Oil Spill Trial To Begin

District Court Judge Carl Barbier (EDLa) has issued a case managment order for the upcoming trial arising out of the BP Horizon Deep Water Oil Spill.  You can find the order here: Pretrial Order #41.  According to BNA, the MDL has more than 500 lawsuits arising out of the spill.

ADL

BP Oil Spill Appeals Judges Appointed

The Gulf Coast Claims Facility has appointed twenty-five people to serve as appeals judges for BP's private compensation system.  Alabama's Press Register describes the process as follows:

Anyone who files a claim valued at more than $250,000 can protest the claims operation’s initial ruling to the appeals panel. BP can protest the decision on any claim above $500,000.

The judges will serve in panels of three. The panels will have 14 days to rule on each case before them.

If claimants are not happy with the appeals ruling, they can file their claim with the U.S. Coast Guard, or sue BP and other companies involved in the spill.

Jack Weiss, LSU's law school dean selected the following people to serve on the panel:

• Judge Delores R. Boyd (ret.) of Montgomery, Alabama. Boyd is a former Magistrate Judge of the United States District Court for the Middle District of Alabama.
• Dean John L. Carroll of Birmingham, Alabama. Carroll is the Dean and Ethel P. Malugen Professor of Law at the Cumberland School of Law of Samford University and a former Magistrate Judge of the United States District Court for the Middle District of Alabama.
• Judge William R. Gordon (ret.) of Montgomery, Alabama. Gordon is a former Circuit Judge of the 15th Judicial Circuit Court of Alabama.
• Justice Champ Lyons, Jr. (ret.) of Point Clear, Alabama. Lyons is a former Associate Justice of the Supreme Court of Alabama.
• Judge Edward B. McDermott (ret.) of Dauphin Island, Alabama. McDermott is a former Circuit Judge of the 13th Judicial Circuit Court of Alabama.
• Judge Kenneth O. Simon (ret.) of Birmingham, Alabama. Simon is a former Circuit Judge of the 10th Judicial Circuit Court of Alabama.
• Professor Charles W. Ehrhardt of Tallahassee, Florida. Ehrhardt is the Ladd Professor Emeritus at Florida State University College of Law.
• J. Joaquin Fraxedas of Altamonte Springs, Florida. Fraxedas is an attorney mediator/arbitrator and a Distinguished Fellow of the American College of Civil Trial Mediators.
• Judge Melvia B. Green (ret.) of Tampa, Florida. Green is a former Judge of the 3rd District Court of Appeal of Florida.
• Justice Major B. Harding (ret.) of Tallahassee, Florida. Harding is a former Chief Justice of the Supreme Court of Florida.
• Judge John J. Upchurch (ret.) of Ormond Beach, Florida. Upchurch is a former Chief Judge of the 7th Judicial Circuit Court of Florida and was appointed by the Supreme Court of Florida as a charter member of the Supreme Court Committee on Mediation and Arbitration.
• Dean Donald J. Weidner of Tallahassee, Florida. Weidner is the Dean and Alumni Centennial Professor at Florida State University College of Law.
• Judge Gerald T. Wetherington (ret.) of Coral Gables, Florida. Wetherington is a former Chief Judge of the 11th Judicial Circuit Court of Florida and has served as a Judge Pro Tempore of the 2nd and 4th District Courts of Appeal of Florida.
• Judge Robert J. Burns, Sr. (ret.) of Metairie, Louisiana. Burns is a former Chief Judge of the 24th Judicial District Court of Louisiana and served as a Judge Pro Tempore of the 5th Circuit Court of Appeal.
• Judge Philip C. Ciaccio (ret.) of New Orleans, Louisiana. Ciaccio is a former Judge of the Louisiana 4th Circuit Court of Appeal and has served as a Justice Ad Hoc of the Supreme Court of Louisiana.
• Judge David S. Gorbaty (ret.) of Chalmette, Louisiana. Gorbaty is a former Judge of the Louisiana 4th Circuit Court of Appeal.
• Chancellor Freddie Pitcher, Jr. of Baton Rouge, Louisiana. Pitcher is the Chancellor and Professor of Law at the Southern University Law Center and a former Judge of the Louisiana 1st Circuit Court of Appeal.
• Professor Ronald J. Scalise, Jr. of New Orleans, Louisiana. Scalise is the A.D. Freeman Associate Professor of Civil Law at Tulane Law School.
• Lynne R. Stern of New Orleans, Louisiana. Stern is an attorney mediator/arbitrator and past Chairman of the Alternative Dispute Resolution Section of the Louisiana State Bar Association.
• Professor Guthrie T. Abbott of Oxford, Mississippi. Abbott is a Professor Emeritus of Law at the University of Mississippi School of Law.
• Professor Patricia W. Bennett of Madison, Mississippi. Bennett is a Professor of Law at Mississippi College School of Law.
• Richard T. Bennett of Clinton, Mississippi. Bennett is an attorney mediator/arbitrator, former President of the Mississippi State Bar and serves on the Board of Directors of the American Arbitration Association.
• Judge W. Raymond Hunter (ret.) of Gulfport, Mississippi. Hunter is an attorney mediator/arbitrator, a former Municipal Court Judge for the City of Long Beach and serves as President of the Mississippi Chapter of Attorney-Mediators.
• Harold D. Miller, Jr. of Madison, Mississippi. Miller is an attorney mediator/arbitrator and served as the first Chairman of the Alternative Dispute Resolution Section of the Mississippi State Bar.
• Anne P. Veazey of Ridgeland, Mississippi. Veazey is an attorney mediator/arbitrator and serves on the Executive Committee of the Mississippi State Bar Alternative Dispute Resolution Section

ECB

Popper on The Gulf Oil Spill and Arbitrary Limits on Civil Liability

Andrew Popper (American University) has posted his recent piece, Capping Incentives, Capping Innovation, Courting Disaster: The Gulf Oil Spill and Arbitrary Limits on Civil Liability, on SSRN.  Here's the abstract: 

Limiting liability by establishing an arbitrary cap on civil damages is bad public policy. Caps are antithetical to the interests of consumers and at odds with the national interest in creating incentives for better and safer products. Whether the caps are on non-economic loss, punitive damages, or set for specific activity, they undermine the civil justice system, deceiving juries and denying just and reasonable compensation for victims in a broad range of fields. 

This Article postulates that capped liability on damages for offshore oil spills may well have been an instrumental factor contributing to the recent Deepwater Horizon catastrophe in the Gulf of Mexico. More broadly, it argues that caps on damages undermine the deterrent effect of tort liability and fail to achieve economically efficient and socially just results.

ECB

The Japanese Liability System & Mass Disasters

I just saw a summary of a talk at Columbia Law School by Curtis Milhaupt, an expert on Japanese Law.  Here's what he says about liability for Tokyo Electric Power Co. (TEPCO):

Japanese law provides for strict and unlimited liability for a nuclear plant operator except for damages caused by a “grave natural disaster of exceptional character, which Milhaupt said would seem to apply here.

 

“To an American lawyer, if this doesn’t constitute a grave natural disaster, I don’t know what would,” said Milhaupt, an expert on Japanese law. “But very interestingly, several government officials came out shortly after the accident and said this exception does not apply.”

 

Even if Tepco were to claim the exception did apply, Milhaupt said that could create problems for the company. “The public anger at Tepco is so great that this may be a pyrrhic victory.”

 

Milhaupt, the Parker Professor of Comparative Corporate Law and Fuyo Professor of Japanese Law, said that suits may also be brought under Japanese corporate and securities laws. “One could imagine suits brought against Tepco by investors for misleading disclosure with respect to its crisis management systems,” said Milhaupt. He added that Tepco’s board of directors might also be sued for ignoring signs that its disaster prevention systems were woefully inadequate.

This could drive TEPCO into bankruptcy, but it won't because TEPCO is too big to fail. Milhaupt says

“Bankruptcy for Tepco is extremely unlikely. It’s too important a company for Japan and the impact on the other power companies would be too great,” Milhaupt said. “Whether through nationalization, or through capital injections, the bottom line is the Japanese government will have to support Tepco for years to come.”

ADL

Video for Mississippi College Law Review Symposium on BP Oil Spill

The Mississippi College Law Review has posted the video for its symposium, Beyond the Horizon: The Gulf Oil Spill Crisis -- Analyzing the Economic, Environmental, and Legal Implications of the Oil Spill. 

Panel One included Ms. Trudy Fisher, Executive Director, Mississippi Department of Environmental Quality; Professor Kenneth Murchison, James E. & Betty M. Phillips Professor, Paul M. Herbert Law Center Louisiana State University; and Professor David Robertson, W. Page Keeton Chair in Tort Law University Distinguished Teaching Professor, University of Texas at Austin.  The moderator for Panel One was Ms. Betty Ruth Fox, Of Counsel, Watkins & Eager.

Panel Two included Professor Jamison Colburn, Professor of Law, Penn State University; Professor Edward Sherman, W.R. Irby Chair & Moise S. Steef, Jr. Professor of Law, Tulane University; and myself.  The moderator for Panel Two was Professor Jeffrey Jackson, Owen Cooper Professor of Law, Mississippi College School of Law.

Kenneth Feinberg, claims administrator for the Gulf Coast Claims Facility, delivered the symposium Keynote Presentation.

Papers from the symposium will published in the Mississippi College Law Review.  Here's the abstract for my symposium talk and forthcoming article: 

The Gulf Coast Claims Facility set up following the BP Gulf Oil Spill might be seen as creating a new category of claims fund that might be termed a quasi-public mass tort claims fund.  Unlike purely public funds such as the 9/11 Victim Compensation Fund, or purely private funds such as are increasingly created for mass settlements as in Vioxx, the Gulf Coast Claims Facility is funded privately by BP, but bears the public imprimatur of having been initially negotiated by President Obama.  Indeed, in an Oval Office Address, President Obama promised that claims would be "fairly" paid and that the fund would "not be controlled by BP," but would instead be administered by an "independent third party."  While a quasi-public fund has the advantage of delivering swift compensation in response to an ongoing crisis, the quasi-public fund risks claimant confusion about claim-administrator independence and whether claimants should retain their own counsel to assist in evaluating fund settlement offers.  In turn, that claimant confusion can jeopardize the fund's societal savings in attorney-fee transaction costs, and lower claimant participation in the fund.  Accordingly, to minimize claimant confusion, a quasi-public fund should provide transparency in its fee structure for claims administrators, and seek a claims-administrator fee structure that minimizes bias, such as utilizing a fixed fee not subject to reevaluation or having defendant agree to a third-party panel's assessment of fees for claims administrators.  With regard to the Gulf Coast Claim Facility, claimant participation would likely be enhanced by greater transparency and use of a third-party panel to determine claim-administrator fees.

BGS 

BP Management Failures and the Gulf Oil Spill

Article in the Harvard Gazette -- Deep water, deep trouble.

BGS 

BP Complains About Generous Terms From Oil Spill Fund

John Schwartz of the NYTimes reports in an article entitled "BP Says Terms in Oil Spill Settlement Are Too Generous."  The basic complaint is contained in a 25 page letter to Mr. Feinberg that basically says BP is unahppy over the valuation of future damages.  The article points out that BP's letter seems to indicate that Feinberg is independent in his valuations.  It raises an important question also raised by John CP Goldberg's memo to Feinberg.  That is, what is and what ought to be the relationship between the law on the books and the decisions of a claims facility set up outside the legal system?

ADL

Mississippi College Law Symposium on BP Gulf Oil Spill

On this Friday, February 18, Mississippi College School of Law will be hosting a law review symposium, Beyond the Horizon: The Gulf Oil Spill Crisis -- Analyzing Economic, Environmental, and Legal Implications of the Oil Spill.  Here's the short-form brochure:  Download MC Law Review Symposium Brochure.

Speakers include Professors Jamison Colburn (Penn State), Kenneth Murchison (LSU), David Robertson (Texas), Edward Sherman (Tulane), and Trudy Fisher (Miss. Dep't Envt'l Quality).  Moderators include Jeffrey Jackson (Mississippi College) and Betty Ruth Fox (Watkins & Eager).  Papers will subsequently be published in the Mississippi College Law Review.

I will also be speaking at the symposium, discussing issues of claim-administrator compensation, transparency, and independence in connection with the Gulf Coast Claims Facility.  My talk will expand upon my prior blog posts raising concerns (see here and here), which last summer triggered two articles in Forbes (see here and here), as well as a post from Legal Ethics Forum.  Two weeks ago, the federal MDL court overseeing the BP litigation granted in part plaintiffs' motion to have the court oversee communications by the Gulf Coast Claims Facility, and the MDL court ordered that the Gulf Coast Claims Facility may not state that it is "neutral" or completely "independent" of BP.  Here's the MDL opinion:  Download Order - Mot to Supervise GCCF Doc 1098 2-2-2011.  On the recent MDL opinion, see also this Reuters article from Moira Herbst, quoting David Logan (Roger WIlliams), Monroe Freedman (Hofstra), and me.

BGS

UPDATE -- Here's the full-length brochure for the symposium:  Download MC Law BP Symposium Handout.