Sunday, March 23, 2014

2014 Vancouver Summer Law Program and Global Tort Litigation Course

I'm serving as Co-Director of Southwestern Law School's 2014 Vancouver Summer Law Program, which is offered in collaboration with the University of British Columbia Faculty of Law and the International Centre for Criminal Law Reform and Criminal Justice Policy.  All classes will take place at the University of British Columbia's new Allard Hall, which was completed in 2011 at a cost of $56 million.  On-campus housing at St. Andrew's Hall next to the law school may also be arranged through the summer law program.  The program will run from May 25 to June 25, 2014.  Here is the brochure.  

One of the courses offered will be a course on Global Tort Litigation, which I'll be co-teaching with Professor Jasminka Kalajdzic of the University of Windsor.   Other courses include comparative criminal procedure, international environmental law, and comparative sexual orientation law; students may elect to take two courses for four units, or three courses for six units.  

We welcome applications from students in good standing at an ABA-approved or state-accredited American law school or accredited Canadian law school.  Special reduced tuition rates are available for Canadian law students.  Come join us in beautiful Vancouver, Canada!

BGS

March 23, 2014 in Aggregate Litigation Procedures, Environmental Torts, Foreign, Procedure, Products Liability, Punitive Damages, Travel | Permalink | Comments (0) | TrackBack (0)

Friday, March 14, 2014

BP Loses 5th Circuit Appeal - Class Action Settlement Stands

In a decision issued on March 3, the Fifth Circuit held that BP must stick to the settlement it signed on to, even if it doesn't like any longer the broad approach to compensation it once agreed to.   As Professor and former Soliciter General Charles Fried said, in sum and substance, a contract is a promise.  Here is an excerpt from the Fifth Circuit opinion:

There is nothing fundamentally unreasonable about what BP accepted but now wishes it had not.  One event during negotiations in the fall of 2012 suggests reasons for just requiring a certification [instead of proof of causation]. The claims administrator, in working through how the proposed claims processing would apply in specific situations, submitted a hypothetical to BP and others. It posited three accountants being partners in a small firm located in a relevant geographic region. One of the three partners takes medical leave in the period immediately following the disaster, thus reducing profits in that period because that partner is not performing services for the firm. At least some of the firm's loss, then, would have resulted from the absence of the partner during his medical leave. BP responded that such a claim should be paid.

We raise this not for the purpose of analyzing an issue we conclude is not relevant to our decision, namely, whether BP is estopped from its current arguments. Instead, we mention it in order to identify the practical problem mass processing of claims such as these presents, a problem that supports the logic of the terms of the Settlement Agreement. These are business loss claims. Why businesses fail or, why one year is less or more profitable than another, are questions often rigorously analyzed by highly-paid consultants, who may still reach mistaken conclusions. There may be multiple causes for a loss. ... The difficulties of a claimant's providing evidentiary support and the claims administrator's investigating the existence and degree of nexus between the loss and the disaster in the Gulf could be overwhelming. The inherent limitations in mass claims processing may have suggested substituting certification for evidence, just as proof of loss substituted for proof of causation. ...

In re Deepwater Horizon, --- F.3d ----, 2014 WL 841313, *5 (5th Cir. 2014). 

Readers may also be interested in a Bloomberg News article by Laura Calkins and Jeff Feeley entitled BP Must Live with $9.2 Billion Oil Spill Deal, Court Says.  In other BP news, looks like it can drill in the Gulf of Mexico again, according to the NYTimes

ADL

March 14, 2014 in Class Actions, Environmental Torts, Mass Disasters, Procedure | Permalink | Comments (0) | TrackBack (0)

Wednesday, March 12, 2014

Why the GM Litigation May Not Be Your Usual Products Case

Hilary Stout of the New York Times reports in a piece today called "Lawyers Prepare for GM Suits with Novel Strategies."    The issue may be not just products liability, but fraud in the working out of the GM Bankruptcy.

ADL

March 12, 2014 in Products Liability, Vehicles | Permalink | Comments (0) | TrackBack (0)

Tuesday, March 4, 2014

SDNY Finds Ecuador Judgment Unenforceable in Chevron Environmental Litigation

Judge Lewis Kaplan entered judgment today in favor of Chevron in the long-running dispute concerning environmental liability for oil pollution in the Oriente region of Ecuador. The court, after a bench trial, found that plaintiffs' attorney Steven Donziger and his team engaged in fraud and corruption in obtaining a $9.5 billion judgment in Ecuador. Judge Kaplan ruled that the Ecuador judgment is unenforceable in the United States and that Donziger may not benefit from the judgment. Undoubtedly, this dispute isn't over, as Donziger surely will appeal to the Second Circuit. And the outcome cannot have been much of a suprise to the parties, given the clarity of Judge Kaplan's views based on his past rulings in this dispute. But by any measure, today's judgment is a huge moment in the Chevron-Ecuador litigation. 

Judge Kaplan's opinion -- all 485 pages and 1842 footnotes of it -- is attached here (Download ChevronSDNYopinion030414). And the judgment, which spells out exactly what the court ordered, is here (Download ChevronSDNYjudgment030414). Judge Kaplan found that Donziger and his team submitted fraudulent evidence, used a partisan as a supposedly impartial expert, and offered to bribe the judge. The opinion does not mince words:

Upon consideration of all of the evidence, including the credibility of the witnesses – though several of the most important declined to testify – the Court finds that Donziger began his involvement in this controversy with a desire to improve conditions in the area in which his Ecuadorian clients live. To be sure, he sought also to do well for himself while doing good for others, but there was nothing wrong with that. In the end, however, he and the Ecuadorian lawyers he led corrupted the Lago Agrio case. They submitted fraudulent evidence. They coerced one judge, first to use a court-appointed, supposedly impartial, “global expert” to make an overall damages assessment and, then, to appoint to that important role a man whom Donziger hand-picked and paid to “totally play ball” with the [Lago Agrio plaintiffs]. They then paid a Colorado consulting firm secretly to write all or most of the global expert’s report, falsely presented the report as the work of the court-appointed and supposedly impartial expert, and told half-truths or worse to U.S. courts in attempts to prevent exposure of that and other wrongdoing. Ultimately, the [Lago Agrio plaintiff] team wrote the Lago Agrio court’s Judgment themselves and promised $500,000 to the Ecuadorian judge to rule in their favor and sign their judgment. If ever there were a case warranting equitable relief with respect to a judgment procured by fraud, this is it.

 

The ruling does not purport to bar enforcement of the judgment outside the United States. Rather, it bars enforcement of the judgment in any U.S. court, and in Judge Kaplan's words, it "prevent[s] Donziger and the two LAP Representatives ... from profiting in any way from the egregious fraud that occurred here." The plaintiffs have sought to enforce the Ecuadorean judgment in Canada, Brazil, and Argentina; it will be interesting to see what effect the SDNY decision might have on enforcement of the judgment in those countries.

In the SDNY litigation, Chevron asked the court to focus on the conduct of the plaintiffs' lawyers, while Donziger wanted to focus on the company's environmental liability for harm in the Oriente region of Ecuador. Judge Kaplan, in ringing language about the integrity of the judicial process, made it clear where he stands:

The issue here is not what happened in the Orienté more than twenty years ago and who, if anyone, now is responsible for any wrongs then done. It instead is whether a court decision was procured by corrupt means, regardless of whether the cause was just. An innocent defendant is no more entitled to submit false evidence, to coopt and pay off a court-appointed expert, or to coerce or bribe a judge or jury than a guilty one. So even if Donziger and his clients had a just cause – and the Court expresses no opinion on that – they were not entitled to corrupt the process to achieve their goal.

 

The painful irony of the Chevron-Ecuador litigation is this: The plaintiffs originally brought their claims in the United States -- in the Southern District of New York. They were dismissed on grounds of forum non conveniens. In other words, the U.S. legal system told the plaintiffs that they should litigate this dispute in Ecuador. Which is exactly what they did. And they won big. And today the Southern District of New York has told the plaintiffs that their Ecuador judgment is corrupt and unenforceable. As I have written elsewhere, the forum non conveniens dismissal made sense in this case. And parties must be able to challenge the enforceability of judgments on grounds of fraud and corruption. But if this is how the Chevron-Ecuador litigation ends (which remains to be seen), isn't there something deeply unsatisfying and mind-blowingly inefficient about such an ending to a two-decade litigation over serious environmental claims?

HME

March 4, 2014 in Environmental Torts, Ethics | Permalink | Comments (0) | TrackBack (0)

LSU Symposium on Multidistrict Litigation

Louisiana Law Review is hosting a symposium on Multidistrict Litigation this Friday, March 7, 2014, that focuses on remand and may be of interest to our readers.  The title of the symposium is "The Rest of the Story: Resolving Cases Remanded by MDL Here's the link for registration and additional information.

Here's the list of Panels and Panelists:

8:25-8:30: Welcome Address & Opening Remarks

  • Chancellor Jack Weiss; LSU Law School

 8:30-9:30: Panel 1: Collaboration of Judges and Attorneys in MDL Case Management

The panel will discuss how attorneys and judges can successfully collaborate to use disaggregation as a tool of effective case management.

Moderator: Francis McGovern; Professor of Law, Duke Law School

  • Judge Eldon Fallon; U.S. District Court for the Eastern District of Louisiana
  • Richard Arsenault; Neblett, Beard, & Arsenault
  • James Irwin; Irwin Fritchie Urquhart & Moore, LLC

 9:40-10:40: Panel 2: Effectively Planning for Disaggregated Discovery

The panel will discuss when discovery issues should be disaggregated for separate resolution, and the costs, benefits, and challenges of reserving issues for separate discovery. 

Moderator: Judge Lee Rosenthal; U.S. District Court for the Southern District of Texas

  • Mark Lanier; The Lanier Law Firm
  • James Irwin; Irwin Fritchie Urquhart & Moore, LLC
  • Dean Edward F. Sherman; Tulane University Law School

 10:50-11:50: Panel 3: Integrating Aggregated and Disaggregated Discovery Issues

The panel will discuss various kinds of discovery (e.g., E-Discovery, expert discovery, and specific discovery), and the strategic and case management challenges each method presents in the context of MDLs, including both aggregated and disaggregated discovery issues. 

Moderator: Mark Lanier, The Lanier Law Firm

  • Judge Lee Rosenthal; U.S. District Court for the Southern District of Texas
  • Francis McGovern; Professor of Law, Duke Law School
  • Richard Arsenault; Neblett, Beard, & Arsenault
  • David Jones; Beck Redden, LLP

 11:50-12:10: Lunch Break

12:10-1:10: Panel 4: (Lunch Presentation) The Real Story: FJC Data on What the Empirical Data on MDL Remands Shows

Federal Judicial Center researchers will present findings from their research on multidistrict litigation. The analysis will focus on two sets of cases: (1) cases that are considered for transfer but not transferred, and (2) cases that are transferred and that are subsequently remanded back to the transferor court. Understanding these cases, and the cases that are resolved in the transferee court, may provide some insight into the effects of aggregation on various kinds of cases

Moderator: Judge Lee Rosenthal; U.S. District Court for the Southern District of Texas

  • Emery G. Lee, III, Federal Judicial Center
  • Margaret Williams, Federal Judicial Center
  • Catherine Borden, Federal Judicial Center

 1:20-2:20: Panel 5: When Remand is Appropriate

The panel will discuss at what stages plaintiffs, defendants, and judges perceive optimal windows to disaggregate various kinds of issues, and the factors that influence the decision and timing.

Moderator: Dean Edward F. Sherman, Tulane University Law School

  • Judge Fallon; U.S. District Court for the Eastern District of Louisiana
  • Professor Elizabeth Burch, University of Georgia School of Law
  • David Jones, Beck Redden, LLP

2:30-3:30: Panel 6: How Remand Should be Effectuated

The panel will discuss how judges and attorneys work together to effectuate remand of MDL cases, including methods for ensuring smooth transitioning of work product, case management, and expertise to state and federal judges upon remand. 

Moderator: Francis McGovern; Professor of Law, Duke Law School

  • Judge Fallon; U.S. District Court for the Eastern District of Louisiana
  • Professor Teddy Rave, University of Houston
  • Professor Elizabeth Burch, University of Georgia School of Law

 3:30-3:45: Closing Remarks

 

ECB

March 4, 2014 in Conferences, Current Affairs, Mass Tort Scholarship, Procedure, Settlement, Trial | Permalink | Comments (0) | TrackBack (0)

Monday, March 3, 2014

Goldberg & Zipursky on the fraud-on-the-market doctrine

Torts scholars John Goldberg (Harvard) and Benjamin Zipursky (Fordham) have written a thoughtful analysis of the fraud-on-the-market issue that the Supreme Court will consider this week when it hears oral argument in Halliburton v. Erica P. John Fund. They gave me permission to post their analysis here, which I thought readers would find worthwhile. By breaking down the issues in fraud-on-the-market securities class actions, Goldberg and Zipursky help clarify the link between a defendant's allegedly wrongful conduct and widespread harm that plaintiffs allege was caused by that conduct -- a link that is at the core of mass tort disputes as well as securities litigation.

HME

 

Parsing Reliance in Securities Fraud

John C.P. Goldberg, Harvard Law School
Benjamin C. Zipursky, Fordham Law School

         In Halliburton v. Erica P. John Fund, Inc., to be argued before the Supreme Court on March 5, the Justices could drastically curtail federal-court class-action lawsuits for securities fraud.  At issue in Halliburton is the Supreme Court’s 1988 decision in Basic v. Levinson.  Basic held that it is not necessary for investors such as the Erica P. John Fund to prove that they actually read and relied upon the particular fraudulent statements alleged to have caused the their losses.  Public misstatements by a company like Halliburton have the capacity to defraud the market as a whole and distort the prices for all investors.  Basic’s “fraud-on-the-market” theory, as it is called, affords investors who can prove that the defendant made misrepresentations about important matters a presumption that the misrepresentations negatively affected the stock’s value.    It is widely agreed that, without Basic’s presumption, securities fraud suits could rarely proceed as class actions.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          For a variety of reasons – the fact that Congress has weighed in extensively on securities fraud and left Basic untouched, the substantial pro-defendant changes that the Court and Congress have already made to securities fraud law, the expressed wishes of the S.E.C. to retain Basic because of the indirect regulatory force private actions supply, and the value of stare decisis – we think the Court would do best to leave Basic intact.    It appears, however, that while some of the Justices may be similarly inclined, others are leaning toward overruling Basic, and others may be looking for a middle ground.   With the fate of Basic in play, it is worth getting clear on some aspects of fraud-on-the-market doctrine that have typically been confused, and were in fact confused in Justice Blackmun’s Basic opinion itself.

The first and most important point to make about Basic’s so-called “presumption of reliance” is that it is not one presumption (as we have explained in a recent article offering a detailed analysis comparing securities fraud to common law fraud, see John C.P. Goldberg & Benjamin C. Zipursky, The Fraud-on-the-Market Tort, 66 Vanderbilt L. Rev. 1756 (2013)); Basic’s “presumption” is actually two presumptions (both favoring plaintiffs) and one affirmative defense (favoring defendants).   Thus, if the Court decides to rethink “the presumption of reliance,” it will actually be rethinking two or three ideas, not one.  

Basic’s first presumption allows a plaintiff to establish a legally cognizable injury by establishing that she bought or sold securities at a market price that was distorted by the defendant’s misrepresentations.  This is an important departure from common law fraud, the tort from which the law of securities fraud has evolved.  In a suit for common law fraud, it is critical for the plaintiff to establish that she, personally, made a decision in reliance on the information contained in the defendant’s misrepresentations.  This is because the core injury at the heart of common law fraud is an interference with a person’s right to make decisions free from deception.  Basic’sso called “presumption” of reliance – like many presumptions in the law – departed substantively from this aspect of the common law.  A securities fraud plaintiff need not demonstrate that she was misled into believing that certain false propositions were true.  Instead, according to Basic, she need only prove economic loss caused by the misrepresentation—that she bought or sold the defendant’s stock at a price distorted by the defendant’s misrepresentations, irrespective of whether she ever learned of the content of the defendant’s false statements.

            Basic’s second presumption is evidentiary rather than substantive.   It allows securities fraud plaintiffs to use a certain kind of circumstantial evidence to prove that the defendant’s misrepresentations in fact distorted market prices.   If a misrepresentation is “material” and disseminated to the public, and if the securities are sold on an “efficient” market, it will be presumed that the misrepresentation caused a price distortion.  Like many evidentiary presumptions, the materiality-based presumption of price distortion may be rebutted by evidence that the misrepresentation had no effect. 

            Justice Blackmun’s opinion in Basic also bundled a third idea into the so-called “presumption of reliance,” but this idea is actually an affirmative defense for the defendant, one akin to the consent defense to the tort of battery and the assumption of risk defense to the tort of negligence.   Even if it is established that the defendant’s misrepresentations caused a price distortion and a loss to the plaintiff, the defendant can nonetheless escape liability by proving that the plaintiff was actually aware of the falsity of the misrepresentation and chose to engage in the market transaction nevertheless.  Defendant Halliburton’s petition to overrule Basic has nothing to do with this third aspect of Basic.

Halliburton’s challenge to Basic’s presumption of reliance relates to the combination of the substantive and evidentiary presumptions described above.   The Court in Basic allowed that materiality (given an efficient market) was enough, from an evidentiary point of view, to create a rebuttable presumption of price distortion, and it additionally concluded – as a substantive matter – that distortion suffices to replace the impact-on-plaintiff finding that reliance fulfills in the common law tort of fraud.   It is these two ideas, taken together, that have permitted securities fraud plaintiffs to go forward without direct proof of reliance.   Crucially, although Basic itself describes the combined effect of these two presumptions as establishing indirect proof of reliance, that description is inaccurate. Taken together, they instead amount to indirect proof of distortion, not of reliance. 

            Clarifying the distinction between the evidentiary and substantive aspects of the presumption in Basic is critical for evaluating what is and what is not at issue in Halliburton.   Halliburton contends that Basic should be overruled because the efficient-market hypothesis has been rejected by economists during the quarter century since Basic was decided.   Whether the efficient-market hypothesis actually has been rejected is a highly contentious issue.  Even assuming, however, that it is unsound, that affects only the evidentiary aspect of the presumption of reliance—that is, only the part of Basic which states that material representations in an open market will be reflected in the market’s pricing of securities, and hence can be presumed to have distorted their price.  If the evidentiary side of Basic is rejected or modified, that still leaves intact the substantive side of the presumption of reliance – the side which states that price distortion caused by the misrepresentations will suffice in place of individual reliance.  

Appreciating the irrelevance of the efficient-market hypothesis to the substantive side of Basic is critically important for two reasons.   First, the substantive side of Basic has received little cogent criticism over the decades.  The courts that first recognized private rights of action under federal securities laws did so on the ground that those laws were established in the midst of the Great Depression to protect investors from losses resulting from deceptive practices.  Under these circumstances, it was eminently sensible for these courts to interpret federal law as including an individual right to be free from economic harm caused by deceptive practices, whether through price distortion or individual reliance.   And since then, both Congress and the Court have shown a steady commitment to the substantive side of Basic.

Second, price distortion is a common issue of fact in securities fraud litigation.  This means that the securities defense bar’s effort to undermine securities class actions through a critique of the efficient-market hypothesis is misconceived.   The alleged shakiness of the efficient-market hypothesis is an argument against the evidentiary side of Basic, not against its substantive side.   But the substantive side --  the move from reliance to price distortion – is what makes class actions an appropriate vehicle for 10b-5 claims.   If the Court is truly persuaded by the efficient-market hypothesis critique, and is not moved by stare decisis or any other reasons to leave Basic untouched, then it is, at most, the evidentiary side of the presumption of reliance that might bear revisiting.  Of course, new questions might then arise at or before trial as to whether event studies or other sorts of evidence will suffice to establish price distortion, but that is a different matter, unconnected to the general question of whether distortion-based 10b-5 claims can be adjudicated as class actions.   

            The wrong of causing economic loss through misrepresentations that distort market prices is not identical to common law fraud.  But it is closer to what Congress actually sought to protect in the Securities Exchange Act, it is consistent with what Congress has very thoughtfully kept alive in its more recent securities legislation, and its justifiability has nothing to do with the soundness of the efficient-market hypothesis.    So long as this wrong remains the core of 10b-5 claims, class actions will continue to be an appropriate means for resolving them.

 

 

 

March 3, 2014 in Class Actions, Mass Tort Scholarship | Permalink | Comments (0) | TrackBack (0)

Friday, January 24, 2014

Allegations of Fraud in the BP Settlement

See BP's letter to Louis Freeh here.  ADL

January 24, 2014 | Permalink | Comments (0) | TrackBack (0)

Tuesday, January 21, 2014

The NYTimes on How to Compensate Victims of Terrorism

You can find the Room for Debate segment here, with input from a number of law professors including Michele Landis Dauber (Stanford), Betsy Grey (Arizona State), and Stephen Shugerman (UC Berkeley)

ADL

January 21, 2014 in 9/11, Resources - Publications, Settlement | Permalink | Comments (0) | TrackBack (0)

Tuesday, January 14, 2014

What Happened to the BP Settlement?

The Fifth Circuit issued a decision on January 10th affirming the class action settlement in the In re Deepwater Horizon litigation.  You can find the opinion here

This opinion is the result of objections to the settlement, but BP intervened to argue that there was an Article III standing problem with the way the settlement agreement had been interpreted.  That interpretation was very generous to claimants in its interpretation of how they must prove economic loss to collect.  The problem BP faces now is that it didn't cap the settlement amount in the agreement (yes, you read that right, and furthermore this was a selling point of the settlement).  As a result, BP has a classic "if you build it, they will come" problem and is trying to upend the settlement as a result. At the moment, the Fifth Circuit in a separate opinion by a separate panel has stayed the settlement adminsitration as it considers the interpretation of the agreement.  In that separate opinion, the panel (which couln't quite agree) indicated that the agreement interpretation may be too generous and remanded for reconsideration. You can find that opinion here

In the opinion issued on Friday, this panel indicated the interpretation may be just fine, and sent a strong hint to the District Judge about what he should do. 

So here's the question, why did BP agree to these terms?  It was an open ended settlement with a broad geographic reach and a flexible standard for compensation - that was clear from the start.   I'm sure BP's excellent counsel knew this was a risk.   So what happened?  Were the economists predictions dead wrong?  Is this just a case of buyer's remorse? 

The WSJ has some coverage, here.

ADL 

January 14, 2014 in Aggregate Litigation Procedures, Environmental Torts, Mass Disasters, Procedure | Permalink | Comments (0) | TrackBack (0)

Two major decisions from the Supreme Court today

The Supreme Court issues two decisions this morning, one on personal jurisdiction and the other on mass actions under CAFA.

In Mississippi ex rel Hood v. AU Optronics, the Court issued a unanimous opinion authored by Justice Sotomayor holding that an action brought by the Mississippi AG could not be removed to federal court under CAFA's mass action exception because the AG is a single plaintiff.  The opinion is based on a formal reading of the statute.  You can find the opinion here

In Daimler AG v. Bauman, the Court held that the parent company was not subject to general personal jurisdiction in California for a human rights lawsuit relating to the company's conduct in Argentina's dirty war.  The opinion, written by Justice Ginsburg, was nearly unanimous with a concurrence from Justice Sotomayor.

The Court held over (again) petitions relating to consumer class actions alleging that washing machines cause mold.  They are now scheduled for conference on January 17th. 

ADL

 

 

 

 

 

January 14, 2014 in Procedure | Permalink | Comments (0) | TrackBack (0)

Sunday, December 15, 2013

Possible Toyota Mass Settlement in Unintended Acceleration Cases

Article in the Los Angeles Times:  Toyota looks to settle sudden-acceleration lawsuits, by Ken Bensinger.  I'm quoted in the article.

BGS

December 15, 2013 in Products Liability, Settlement, Travel, Vehicles | Permalink | Comments (0) | TrackBack (0)

Wednesday, November 27, 2013

Jasminka Kalajdzic on Class Actions and Settlement Culture in Canada

Professor Jasminka Kalajdzic (Univ. of Windsor Faculty of Law) has posted to SSRN her book chapter, Class Actions and Settlement Culture in Canada.  Here is the abstract:

Mass harm exerts enormous pressure on civil justice systems to provide efficient but fair procedures for redress. In this context, settlement of mass disputes is easily understood as a common good. Yet settlements involving hundreds or thousands of claims, often across jurisdictions, raise concerns about the substantive fairness of the compromise reached by lawyers, and the ability of the court system to ensure meaningful oversight. Unburdening the judicial system from mass claims comes at a price; how much rough justice are we prepared to accept?

The difficulty of balancing these competing interests is ubiquitous. Canadian class action settlement practice is no exception. In this book chapter, I first explore the realities of this form of litigation, and to some extent debunk the myth that class actions inevitably result in large monetary settlements. I then turn to a brief discussion of the incentives and disincentives to settle large claims, for both plaintiffs’ lawyers and defendants. In Part III, I describe and critique the judicial framework for the approval of proposed settlements. I finish by pointing out the lack of alternatives to class proceedings and conclude that, though not perfect, the Canadian class action settlement system stands as a model for consideration by other jurisdictions wrestling with the problem of mass disputes.

The chapter is part of the forthcoming book, Resolving Mass Disputes: ADR and Settlement of Mass Claims (Edward Elgar 2013), edited by Christopher Hodges and Astrid Stadler.

BGS

November 27, 2013 in Aggregate Litigation Procedures, Class Actions, Foreign, Procedure | Permalink | Comments (0) | TrackBack (0)

Tuesday, November 26, 2013

Ongoing Asbestos Cleanup in Libby, Montana

The Wall Street Journal has an article on the ongoing asbestos cleanup by W.R. Grace in Libby, Montana:  In Montana Town, a Shut Mine Leaves an Open Wound, by Dionne Searcey.  The Journali also has a related slideshow.  The cost of the cleanup has so far been approximately $400 million.

BGS  

November 26, 2013 in Asbestos, Environmental Torts, Products Liability | Permalink | Comments (0) | TrackBack (0)

Tuesday, November 19, 2013

Johnson & Johnson announces settlement of hip implant litigation

Johnson & Johnson has agreed to terms for settling hip implant claims, according to multiple news reports. The New York Times article reports that under the agreement, J&J "will pay some $2.475 billion in compensation to an estimated 8,000 patients who have been forced to have the all-metal artificial hip removed and replaced with another device." The article states that a typical claimant settlement, before legal fees, would be about $250,000 plus all medical costs. The article also states that the deal requires the participation of 94 percent of eligible claimants.

The lawsuits addressed by this settlement involve the Articular Surface Replacement, or A.S.R., a product of the DePuy Orthopaedics division of J&J. A couple of news sources reported a settlement of this litigation six days ago but without confirmation from defendants or plaintiffs. Today's reports come on the heels of a hearing in the multidistrict litigation (MDL 2197) before Judge David Katz in the Northern District of Ohio. 

HME

Update:  For DePuy's and J&J's press release about the settlement program, see here and here. For the settlement website, see here. For an overview of the settlement terms, including settlement eligibility, settlement amounts, and deadlines, see here.

November 19, 2013 in Medical Devices - Misc., Products Liability, Settlement | Permalink | Comments (0) | TrackBack (0)

Thursday, November 14, 2013

Ecuador high court affirms but cuts Chevron judgment

As the trial continues to unfold in New York in Chevron's RICO lawsuit against plaintiffs' lawyer Stephen Donziger -- amid accusations of judicial bribes, ghostwritten opinions, and sex scandals -- it is worth noting what happened in Ecuador this week.

On Tuesday, Ecuador's high court, the National Court of Justice, affirmed the underlying judgment against Chevron but reduced the amount from about $19 billion to $9.5 billion. The court eliminated the portion of damages that had been imposed as punishment for Chevron's failure to apologize. Here are news accounts from the Wall Street Journal and Reuters. Chevron's suit against Donziger contends that he engaged in fraud and other misconduct to obtain the massive judgment in the Lago Agrio environmental litigation.

HME

November 14, 2013 in Environmental Torts, Ethics, Foreign, Lawyers, Trial | Permalink | Comments (0) | TrackBack (0)

Wednesday, November 13, 2013

Johnson & Johnson DePuy hip implant settlement reported

The New York Times and Bloomberg are reporting that Johnson & Johnson has agreed to settlement terms to resolve thousands of DePuy metal hip implant claims. According to the Bloomberg article, J&J Said to Reach $4 Billion Deal to Settle Hip Lawsuits, and the New York Times article, Johnson & Johnson Said to Agree to $4 Billion Settlement Over Hip Implants, the deal would provide about $300,000 to $350,000 in compensation for each claimant who underwent surgery to replace the DePuy hip implant, which could be as many as 8000 cases. The amount for each claimant would depend on age, medical condition, and other factors. According to the articles, the settlement has not been formally announced.

The Depuy hip implant cases are pending in Multidistrict Litigation (MDL 2197) before Judge David Katz in the Northern District of Ohio, as well as in state courts in Ohio, California, and New Jersey. Two cases have gone to trial, with one plaintiff victory and one for the defense. Seven more trials are scheduled. This would be the largest settlement ever for medical device litigation, and one of the largest mass tort settlements.

HME

Update:  See here for Nov. 19 info.

November 13, 2013 in Medical Devices - Misc., Products Liability, Settlement | Permalink | Comments (0) | TrackBack (0)

Thursday, November 7, 2013

Supreme Court Hears Oral Argument on Whether CAFA Permits Removal of AG Actions

Yesterday, the Supreme Court heard oral arguments on whether parens patriae actions brought by state attorneys general are removable as mass actions under the Class Action Fairness Act.  (Mississippi ex rel. Hood v. AU Optronics Corp., U.S., No. 12-1036)  The lower courts have split on the issue, with the Fifth Circuit holding that such actions are removable when the citizens are the "real parties in interest," and the Fourth, Seventh, and Ninth Circuits reaching the opposite conclusion.  The Fifth Circuit, in Louisiana ex rel. Caldwell v. Allstate Insurance Co., held that because the attorney general sought damages on behalf of insurance policy holders, the policy holders were the real parties in interest to that relief.  But other courts, even within the Fifth Circuit, have distinguished that reasoning.  Judge Fallon, for example, in some of the Vioxx cases, held that the Kentucky attorney general's action against Merck was not removable as a class action.  He distinguished Caldwell, reasoning that it was decided under CAFA's mass action provision and the citizens of Kentucky were not the real parties in interest.  Instead, the Kentucky attorney general was requesting injunctive relief and civil penalties, not damages as was the case in Caldwell.

The issue is an important one as the standard for certifying a class action has become more rigorous.  Many commentators have argued that state attorneys general should step into the breach to provide relief and deterrence when actions aren't certifiable as class actions.  Yet, questions remain about this approach.  Specifically, most parens patriae statutes do not contain the same protections as Rule 23 does with regard to adequate representation.  Plus, courts are often unsure how to evaluate issue or claim preclusion when a private citizen sues in the wake of a parens patriae action.

For the interested reader, yesterday's BNA Class Action Litigation Report had an article by Jessie Kokrda Kamens about the oral argument.  Her take was that even though some justices questioned state attorneys generals' motives in bringing parens patriae actions, they weren't ready to declare them removable under CAFA.

ECB

November 7, 2013 in Aggregate Litigation Procedures, Class Actions, Current Affairs, Procedure | Permalink | Comments (0) | TrackBack (0)

Friday, October 25, 2013

Toyota Settlement in Unintended Acceleration Case Following $3 Million Compensatory Damages Verdict

According to the New York Times, the jury had also determined that Toyota had acted with "reckless disregard" and was about to begin deliberations on punitive damages when the settlement was announced.  The New York Times article also appropriately emphasizes that the case is noteworthy because plaintiffs' tried their claims of electronic throttle control problems.  

Though the New York Times article notes the ages of the plaintiff driver was 82 (the Los Angeles Times says she was 76), the New York Times article does not note that there have been in the past been particular concerns of pedal misapplication by older drivers, and the article does not reference a government report that found no problems in Toyota's electronic throttle control system.  According to CNNMoney, Toyota apparently argued that the plaintiff in Oklahoma case hit the gas, rather than the brake.  In response, plaintiffs pointed to long skid marks on the road, suggesting the driver was hitting the brake.  One wonders if the event data recorder in this car might have shed more light on the issue.  Toyota would certainly want to avoid having juries deciding unintended acceleration cases based on the believability of the testimony of a driver who claims to have hit the brake, rather than the accelerator.  If Toyota is unable to exclude plaintiffs' proferred expert testimony of electronic throttle control defect on the grounds that such testimony is not scientifically reliable, then Toyota should also be concerned that the jury may be unable to grasp the arcane details of software code design.  I'm reminded of the line by Robert Duvall's character in the film, A Civil Action, depicting the Woburn water contamination case; waiting for a jury decision, his character opines, "[I]t's not going to have anything to do with dates or groundwater measurements or any of that crap, which nobody can understand anyway.  It's going to come down to people like it always does."

BGS

October 25, 2013 in Products Liability, Vehicles | Permalink | Comments (0) | TrackBack (0)

Tuesday, October 15, 2013

Wall Street Journal on the Chevron Ecuador Case

The Wall Street Journal editorial page comments on the Chevron Ecuador case and the current trial in which Chevron is alleging RICO violations by a plaintiff attorney involved in the Ecuador case.

BGS

October 15, 2013 in Environmental Torts, Ethics | Permalink | Comments (0) | TrackBack (0)

Friday, October 11, 2013

Moldy Washers Redux: Petition for Cert

Defendants in the moldy washers cases have filed cert petitions once again after the 6th and 7th Circuits reinstated those liability only (or issue) class actions.  You can find the briefs here and here

It doesn't make sense for the Supreme Court to grant cert, but stranger things have happened. 

Why don't I think the Court should grant cert?  Commonality is clear, there aren't real damages issues because its an issue class action and the circuits are coming together on the question of issue class actions and their parameters (coalescing around the ALI proposals and the Manual on Complex Litigation) and these are squarely in the field where class actions are most useful - consumer claims.  In other words, there's nothing adventuresome here for the Court to consider.  

For more defense side links with a different point of view see the Volokh Conspiracy

ADL

 

 

October 11, 2013 in Class Actions, Procedure, Products Liability | Permalink | Comments (0) | TrackBack (0)