Friday, January 29, 2016
There's obviously been a lot in the news about multidistrict litigation--from Lance Cooper's allegations in GM to the recent selection of the plaintiffs' leadership slate in VW. But what do we really know about the settlements that come out of those large MDLs? On one hand, the answer is not much. Many of the deals are secret because they are private. But sometimes those private deals are nevertheless publicly available. And when they are, we read them. And analyze them.
The results can be a little disturbing. Given all of the hubbub over Cooper's allegations in GM (see Lahav's post), my co-author Margaret Williams and I decided to go ahead and release the findings of our recent study, Repeat Players in Multidistrict Litigation: The Social Network, on SSRN.
While past studies have considered repeat play on the plaintiffs’ side, this study is the first comprehensive empirical investigation of repeat play on both sides. It won't surprise most readers to learn that we found robust evidence of repeat play among both plaintiff and defense attorneys. What may be more interesting is that we used social-network analysis to demonstrate that a cohesive multidistrict-litigation leadership network exists, which connects people, law firms, and the proceedings themselves.
While repeat play may not be surprising for those in the know, the fact that repeat players exist matters considerably. Lead lawyers control the litigation, dominate negotiations, and design settlements.
To consider repeat players’ influence, we examined the publicly available nonclass settlements these attorneys negotiated, looking for provisions that one might argue principally benefit the attorneys, and not one-shot plaintiffs. By conditioning the deal on achieving a certain claimant-participation rate and shifting the deal-making entities from plaintiffs and defendants to lead lawyers and defendants, repeat players tied all plaintiffs’ attorneys’ financial interests to defendants’ ability to achieve closure.
Over a 22-year span, we were unable to find any publicly available nonclass settlement that didn’t feature at least one closure provision (which benefits the defendant), and likewise found that nearly all settlements contained some provision that increased lead lawyers’ fees. Based on the limited settlements available to us, we found reason to be concerned that when repeat players influence the practices and norms that govern multidistrict proceedings—when they “play for rules,” so to speak—the practices they develop may principally benefit them at the expense of one-shot plaintiffs.
Of course, our research doesn't speak directly to the allegations in GM, but it does make those allegations far less surprising. And if you compare our list of repeat players to the names of those appointed in Volkswagen, you'll see a lot of familiar names.
Thursday, January 28, 2016
Tuesday, January 26, 2016
Lance Cooper, a lawyer with ignition switch cases against GM, has made a motion to remove the MDL plaintiffs counsel in the ignition switch litigation. You can find some coverage by Sara Randazzo & Mike Spector at the Wall Street Journal. (I haven't seen the motion).
The first lawsuit to proceed to trial - of a total of six, three picked by plaintiffs, three by defendants - has ended with a dismissal with prejudice under a cloud of allegations of fraud. What does this say about bellwethers?
I think it says nothing about the underlying cases, or not very much. (It does tell you something about lawyer error, but that's a topic for another day). However, the recent events at trial do show that the way bellwether trials are structured is deeply flawed. If the cases tried are going to be meaningful, they should be randomly selected and the number of trials should be related to the variation in the underlying group of cases. If there is a high variation, you will need more trials to tell you much about the underlying run of cases. A number that is convenient (six, for example) is just that, convenient, but convenience should not be confused with meaningful. Now a lot is riding on this case because one would imagine, since plaintiffs picked it and they only get three, its a really good case for plaintiffs. So a skewed sample can tell you something - but what it ends up telling you is more about the lawyers than the underlying run of cases.
To understand this, imagine you have a jar full of marbles. If you know all the marbles are the same color, you can just pick one marble out of the jar to find out what the color of all the marbles is. But if the marbles are of various colors picking one marble is not enough. If you have a sense of the distribution of colors in the jar - say you know that there are some black and some red marbles - you can calculate how many marbles to pick out so that you will have a pretty good estimate of the proportion of red to black. The same with cases. If your cases are homogeneous, you can just try a few to get a sense of their value. The more heterogeneity, the greater the number of cases that need to be tried. This was the basis for Francis McGovern's idea of maturation of mass torts - you try lots of cases, and over time a value emerges. It was also the basis for the structure of bellwether trials in the 9/11 First Responders' Litigation.
Of course, its easy for me to say this. I am not running an MDL and I don't have to pay for all those trials, which are expensive. But that said, if you want to get a sample that could mean something, the sample size needs to be related to the variance of the underlying class and the method of selection needs to be random. That's basic statistical methods. I think that MDL judges need to partner with statisticians and have a serious conversation about what bellwether trials are trying to achieve and how best to do this. Judges have a lot of discretion and they can use it wisely to lead to fair and equitable results for everyone. There are ways to do better, we just need to find them.
Thursday, January 21, 2016
The first GM Ignition Switch Bellwether trial is going forward now. Below are some links to media coverage:
Wednesday, January 20, 2016
Monday, January 18, 2016
Professor Erin Sheley (Calgary Law) and Theodore Frank (Competitive Enterprise Institute) have posted to SSRN their article, Prospective Injunctive Relief and Class Action Settlements, Harv. J. L. & Pub. Pol'y (forthcoming). Here is the abstract:
Despite much controversy and criticism, the class action is alive and well. In particular, the injunctive remedy, requiring the defendant to change some aspect of its business practice, has become a common feature of class action settlements. This article explores a taxonomically distinct remedial category of injunction that has, as of yet, not generally been considered by courts and scholars as such: the prospective injunctive remedy. We demonstrate how the prospective injunctive remedy operates and argue that, in light of the special policy and legal problems it creates, courts should observe a presumption against approving settlements that contain provisions for prospective injunctive relief. In Part I we show how the parties to a class action have, in general, no incentive to benefit either absent class members or society at large and therefore require courts to police them to ensure justice. In Part II we describe the public law underpinnings of prospective injunctive relief and provide three case studies of consumer class actions that demonstrate how and why courts fail to accurately police this relief in the private law context. We compare the approved relief in these cases to the regulatory regimes they disrupt to argue that courts in this way allow class action litigation to produce bad public policy. In Part III we explore the ways in which these prospective remedies likewise produce bad law: namely, through the inappropriate creation of regulatory preemption and the potential violations of attorney-client fiduciary duty, the adequacy requirement of Rule 23(a)(4), and constitutional standing requirements. In Part IV we consider counterarguments and in Part V we conclude.
Tuesday, December 22, 2015
In an environmental disaster of tragic proportions, the City of Flint, Michigan has discovered that by switching water sources to save money, it inadvertently corroded the lead pipes of the city's water system, leaching lead into the water supply. The result is a generation of children who have been exposed to lead and likely will suffer permanent effects. The story is reported, among other places, in this story in the Washington Post. Residents filed a class action suit against the State and the City in mid-November - you can find the complaint here. It is interesting in that it alleges constitutional violations - a violation of the right to bodily integrity and deprivation of property under the due process clause of the 14th Amendment.
The Mayor declared a state of emergency this week.
Monday, December 21, 2015
Patricia Moore over at the Civil Procedure and Federal Courts Blog draws attention to a recent decision by Judge William Young (U.S.D.-MA) about attorneys fees in a case involving coupons (or "vouchers" which is the new coupon), especially footnote 29 in which the Judge explains why it is that judges might want to be more rigorous in their fee determinations in order to attract MDLs to their district, and in so doing preserve or increase their share of judicial appointments. The opinion is Tyler v. Michaels Stores, Inc., No. CV 11-10920-WGY, 2015 WL 8484421 (D. Mass. Dec. 9, 2015).
Readers interested in the phenomenon may want to check out an article by Daniel Klerman & and Greg Reilly called Forum Selling which describes the creative interpretations of the Federal Rules engaged in by judges in the Eastern District of Texas to attract patent cases.
Thursday, December 17, 2015
Now that we know where the VW MDL will go (Northern District of California - cue if you're going to San Francisco...) and that Judge Charles Breyer will be in charge, VW has announced that Ken Feinberg will run their claims administration program. You can find Danielle Ivory's New York Times article about the announcement here.
As this Wall Street Journal article by Sara Randazzo points out, the highest concentration of affected cars (but not the highest concentration of cases) is in California. But there were lots of reasons (which she lists) to pick other locations.
There are a number of ways that Feinberg can help resolve this litigation, but one very important question is how his work will interrelate with that of the many powerful plaintiffs firms now involved. There are lots of ways to calculate the damages here that would seem fair, such as for example predicting based on past driving habits a given driver's likely use of the car and paying for the difference in gas mileage (since the cars complying with emissions standards will have lower gas mileage than promised), or calculating the value of the car on the secondary market and paying the difference of what it would have been worth had the representation been accurate (the "Edmonds/Kelly Bluebook approach"). It will be interesting to see what Feinberg does.
Tuesday, October 27, 2015
The New York Times has an article by Barry Meier called Lawyers Jostle for Lead Position in Volkswagen Suits.
Quoted in the article are our own Beth Burch (who has recently written a great article on repeat players in MDL litigation) and Howard Erichson (who has written significant articles about the ethics of settlements in mass tort including Vioxx).
Readers may be interested in the following announcement from the organizers of the civil procedure workshop, contact information below.
We are excited to announce the second annual Civil Procedure Workshop, to be co- hosted by the University of Washington School of Law, Seattle University School of Law, and the University of Arizona James E. Rogers College of Law. The Workshop will be held at the University of Washington in Seattle on July 14-15, 2016.
The Workshop gives both emerging and established civil procedure scholars an opportunity to gather with colleagues and present their work to an expert audience. Scholars will present their papers in small panel sessions. A senior scholar will moderate each panel and lead the commentary. In addition to paper presentations, we intend to engage members of the judiciary and federal civil rulemaking bodies in discussions about current developments in procedure. Our goal is for the Workshop to strengthen the study of procedure as an academic discipline, and to deepen ties among the academy, rulemakers, and the judiciary. Confirmed participants for 2016 include Robert Bone, Sergio Campos, David Engstrom, Samuel Issacharoff, Alexandra Lahav, Alexander Reinert, the Hon. Lee Rosenthal, Joanna Schwartz, and Adam Steinman.
We welcome all civil procedure scholars to attend this Workshop. Those wishing to present a paper for discussion in the Workshop should submit a two-page abstract by January 15, 2016. While we welcome papers from both emerging and senior scholars, preference may be given to those who have been teaching for less than ten years. We will select papers to be presented by March 1, 2016. Please send all submissions or related questions to Liz Porter.
The Workshop will provide meals for registrants. Participants must cover travel and lodging costs. We will provide information about reasonably priced hotels as the date approaches.
Feel free to contact us with questions.
Liz Porter (UW), email@example.com
Brooke Coleman (Seattle U), firstname.lastname@example.org
Dave Marcus (Arizona), email@example.com
Friday, October 23, 2015
I was just rereading Henry Friendly's Essay on the history of diversity jurisdiction.
There he quotes from remarks by George Mason:
“What!” he exclaimed, “carry me a thousand miles from home — from my family and business, where perhaps, it will be impossible for me to prove that I paid it [a bond]? ... Suppose I have your bond for £ 1000 — if I have any wish to harrass you, or if I be of a litigious disposition, I have only to assign it to a gentleman in Maryland.”
Monday, October 12, 2015
Professor Christopher Hodges (Oxford) has posted to SSRN his research paper, US Class Actions: Promise and Reality, EUI Department of Law Research Paper No. 2015/36. Here's the abstract:
The US class action is the best-known tool of civil procedure for enforcement of mass private rights. It is intended to achieve judicial and procedural economy in civil procedure, and to exert significant pressure on corporate defendants to observe the law. This piece summarises the major empirical evidence on how the mechanism works. It confirms extensive enforcement of law. It also identifies issues of selectivity of case types (especially securities cases brought by investors), high transactional costs and reductions in sums received by claimants, the risk that high economic factors distort the legal merits of settlements, the limited evidence on evaluating the legal merits of outcomes, forum shopping, and aspects of conflicts of interest that have been criticised by European politicians as abusive. The piece notes that these features are predictable consequences of the policy of encouraging widespread private enforcement of law by incentivising intermediaries and reducing risk to claimants. Various questions are noted in relation to the future of collective redress in the different context of the European legal order.
Professor Benjamin Zipursky (Fordham) has posted to SSRN his article, Reasonableness In and Out of Negligence Law, 163 U. Pa. L. Rev. 2131 (2015). Here's the abstract:
The word “reasonable” and its cognates figure prominently in innumerable areas of the law – from antitrust and contract law to administrative and constitutional law, from the common law of nuisance to an assortment of rules in statutes and regulations. While some thinkers have equated “reasonableness” with “rationality,” others have looked to “justifiability,” and others still have decided that “reasonableness” means virtually nothing at all, but serves the important function of allocating decisionmaking authority. The reality is that the term “reasonable” is both vague and ambiguous, and thus plays many different roles in the law. As with terms such as “rights” and “responsibility,” we will benefit from an analysis of “reasonable” that admits that different meanings take center stage in different legal contexts. This broad, ‘varietal’ analysis of reasonableness in the law comprises the first half of the article.
Turning to negligence law, the second half of the article offers a broad critique of the Hand formula conception of reasonableness. The article criticizes both the Posnerian/economic interpretation of the Hand formula and the more basic idea (in the Restatement (First)) that the “unreasonableness” of risk is the core of negligence law. The breach element of negligence law is focused first and foremost not on a level of risk but on a kind of person – a reasonably prudent person or a reasonable person. By attending closely to the role of reasonableness concepts in various aspects of negligence doctrine, and comparing them to reasonableness concepts in other parts of the law, the article constructs and defends a “moderation and mutuality” conception of reasonableness in negligence law.
Sunday, October 11, 2015
Professor David Bernstein (George Mason) and Eric Lasker (Hollingsworth) have posted to SSRN their article, Defending Daubert: It's Time to Amend Federal Rule of Evidence 702, 57 Wm. & Mary L. Rev. 1 (2015). Here's the abstract:
The 2000 amendments to Rule 702 sought to resolve the debate that had emerged in the courts in the 1990s over the proper meaning of Daubert by codifying the rigorous and structured approach to expert admissibility announced in the Daubert trilogy. Fifteen years later, however, the amendments have only partially accomplished this objective. Many courts continue to resist the judiciary’s proper gatekeeping role, either by ignoring Rule 702's mandate altogether or by aggressively reinterpreting the Rule’s provisions.
Informed by this additional history of recalcitrance, the time has come for the Judicial Conference to return to the drafting table and finish the job it began in 2000. Rule 702 should be amended to secure the promise of Daubert and effectively protect future litigants and juries from the powerful and quite misleading impact of unreliable expert testimony.
Sunday, September 27, 2015
Amanda Bronstad at the National Law Journal recently published an article titled Good Ol' Boys Clubs in MDL that includes a list of law firms that I recently identified as firms with the most lawyers appointed to leadership positions in products liability MDLs. Given the title of her piece, I thought readers might also be interested in the gender breakdown of lead lawyers in those multidistrict litigation cases. Of the top fifty lawyers who were appointed most frequently, only 11 of the 50, or approximately 22% were female. The full list of those attorneys is available in Judging Multidistrict Litigation, 90 N.Y.U. L. Rev. 71, 139-40 (2015) (gender breakdowns are mentioned in footnoted 102).
Wednesday, September 23, 2015
Harvard Business Review has a an article, What VW Didn't Understand About Trust, by Andrew Wilson. As perhaps occurred in the Toyota Unintended Acceleration Litigation, VW may be motivated to settle somewhat swiftly any civil litigation or regulatory or criminal inquiries and fines, as part of a larger strategy to regain the public's trust and preserve its brand.
Monday, September 14, 2015
Professor David Logan (Roger Williams) has posted to SSRN his article, Judges, Juries, and the Politics of Tort Reform, 83 U. Cin. L. Rev. 903 (2015). Here's the abstract:
The civil justice system has many repeat players with a deep interest in the civil justice system because they are often the target of personal injury lawsuits, most prominently product manufacturers and physicians, and the companies that insure them. Following a blueprint drafted by leading corporate lawyer Lewis Powell, prior to his appointment to the Supreme Court of the United States, these deep pocket interests have spent four decades and tens of millions of dollars maligning the civil jury and trying, with notable success, to influence legislators, administrators, and judges, both state and federal, under the catchy, but misleading banner of “tort reform.” These campaigns have been amplified by media coverage of the civil justice system that has been unsophisticated, and at times misleading.
This article argues that separation of powers concerns counsel that we should be cautious about constricting the role of the jury, one of our most democratic institutions. Juries provide checks and balances on government; juries are independent; juries bring community values into the judicial system; juries are fair; juries legitimatize the civil justice system; and, juries generally “get it right.”
Instead of draconian reforms like damage caps, the article argues for the primacy of judges when adjustments to the civil justice system are called for. Judges bring legal experience and knowledge not shared by most legislators and administrators; the nature of the judicial process makes judges predictable and their work transparent; judges are far less likely to be “captured” by special interests than legislators and administrators; and state judges have the best perspective of how the civil justice system works and are thus in the best position to implement reforms when necessary.
The article concludes with a survey of various tools, some time-tested and others novel, by which judges can oversee the work of juries, and the civil justice system more generally.