March 08, 2011
Campos on the Future of Mass Torts
Sergio Campos (Miami) sent me the link to the following debate on the University of Pennsylvania Law Review's internet companion Pennumbra (cute eh? the italics are in the original)
The short piece is called "The Future of Mass Torts - and How to Stop It" - its a defense of the deterrence rationale for limiting individual control of cases in mass tort situations. Our own Howard Erichson is scheduled to respond. Enjoy!
February 17, 2011
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?
February 16, 2011
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.
UPDATE -- Here's the full-length brochure for the symposium: Download MC Law BP Symposium Handout.
January 11, 2011
Southwestern Law School Symposium on International Law Ten Years From Now
On Saturday, February, 26, 2011, the Southwestern Journal of International Law is hosting a symposium entitled, 2021: International Law Ten Years From Now, at Southwestern Law School in Los Angeles. The symposium is being presented in conjunction with International Law Weekend-West of the International Law Association (American Branch). Panels will address topics including international litigation, international human rights, international environmental law/climate change, international dispute resolution law, and international legal profession. The keynote speaker will be Michael Traynor, President Emeritus and Council Chair of the American Law Institute, and Co-Chair of the ABA Commission on Ethics 20/20. Here's the brochure.
Ken Feinberg Cover Story in ABA Journal
Reporter Terry Carter provocatively asks, "Is Ken Feinberg changing mass tort law?" in the article, The Master of Disasters.
November 22, 2010
More Discussion of Ken Feinberg's Pay in BP Gulf Oil Spill Fund
Moira Herbst of Reuters has a short, but thoughtful piece analyzing the issues at play for a private claims administrator running a quasi-public claims fund. It's easy to sympathize in the abstract with Ken Feinberg's difficult situation in exploring what's appropriate in his unprecedented role; but with his firm being compensated at an average of $1,000 per hour (according to Herbst's analysis), he's not ultimately likely to get much sympathy.
November 20, 2010
Other-Regarding Preferences in the 9/11 Workers Settlement
Reading yesterday’s New York Times article on the 9/11 Workers Settlement, I couldn’t help but think of the other-regarding preferences and psychological influences that played a role in garnering the requisite 95.1% agreement. The two claimants quoted in the article, Jennifer McNamara (whose firefighter husband died of colon cancer last year) and Kenny Specht, a retired firefighter with thyroid cancer, both framed their ultimate decision to participate in the settlement in terms of helping others within the community of plaintiffs. As described by the N.Y. Times, McNamara “explained to friends in a letter that she did not want to delay the settlement for the many plaintiffs who needed it to pay mortgages and medical bills.” Specht said, “I am not sure that holding out for a better offer will ever be something that is attainable.”
I’ve written about this internal group pressure in the past and how claimants might be able to use it to their benefit as opposed to lawyers using it for theirs. It does appear that Napoli Bern Ripka LLP held at least one town hall meeting (video footage available below), but I’m not sure whether claimants were encouraged or given opportunities to discuss the deal with one another or whether the lawyers did most of the talking. Given the claimants geographical proximity to one another in the 9/11 Workers Settlement as well as the closeness of the firefighting and police officers’ communities, it appears that altruism, reciprocity, and a concern for others' well-being within their community played a significant role in members’ decision to approve the settlement (though the settlement did not receive the 100% approval rate that would have paid out $712 million). Others simply appeared to be exhausted by the protracted litigation and wanted finality. Still others, at least 520 of them, opted out (or did not respond by the deadline). A New York Times article last August described several plaintiffs' difficult decision-making process.
Although the House of Representatives has approved a bill that would reopen the 9/11 Victim’s Compensation Fund, the Senate has yet to approve it and those who have signed on to the 9/11 Workers Settlement will be ineligible for compensation.
Here's a link to Napoli Bern's press release (with the percentage of claimants signing-on in each tier).
November 19, 2010
9/11 Settlement Report
The allocation neutral in the World Trade Center litigation reported today that 10,043 claimants have agreed to participate in the settlement. This number, which constitutes 95.1% of the 10,563 eligible claimants, apparently meets (just barely) the 95 percent threshold required under the terms of the settlement agreement. But the settlement agreement also required at least 90% participation and 95% participation by particular categories of claimants. The report filed today states that 87.4% eligible "Tier 1" claimants (2383 out of 2726) signed on. Does this mean that the settlement fails? Media reports suggest that the settlement is going forward, but I will be interested to find out whether all of the participation requirements were met.
In general, it comes as no surprise when a mass tort settlement meets a participation threshold, given that clients overwhelmingly follow their lawyers' advice to participate in a settlement. But the WTC litigation -- and particularly Judge Hellerstein's rejection of an earlier settlement proposal amid questions about whether a judge in a non-class action has any business "approving" or "disapproving" a settlement -- generated enough notoriety that reasonable observers might have wondered how claimants would react.
UPDATE/CLARIFICATION: The settlement agreement requires 90% participation by each category of claimants with "qualifying injuries" but does not require a specified percentage of participation by claimants with no qualifying injury. Tier 1 consists of claimants with no qualifying injury. Therefore, the participation levels do meet the requirement under the terms of the agreement.
November 18, 2010
WTC Disaster Site Litigation Settlement - Results Announced Tomorrow
The results of how many plaintiffs signed on to the WTC Disaster Site Litigation Settlement, which required that 95% of the plaintiffs sign on for the settlement to go forward, will be announced at 1 PM tomorrow. Click here to see docket & documents online.
Interestingly, the allocation neutral overseeing this aspect of the settlement adminsitration is from Ohio - Matthew Garretson. His profile can be found here. Here is the description of the firm's work on allocating settlement proceedings to claimants:
Perhaps the hallmark of our settlement allocation service, GFRG helps ensure that similarly-situated claimants are treated the same under the methodology developed to allocate the settlement proceeds and to help ensure that every claimant is allocated a fair and equitable share of the settlement proceeds (taking into account the terms/conditions of the Settlement Agreement, the severity of the injury and the proof available).
The question of course is whether the terms of the settlement agreement - i.e. the matrix developed by the lawyers - fairly allocates funds and what data is used to make those determinations.
h/t Fred Mogul, WNYC.
September 20, 2010
BP Still Faces Investigations, Lawsuits, and Fines
An article in the Wall Street Journal discusses the remaining BP's remaining challenges stemming from the Gulf Oil Spill -- governmental investigations, civil lawsuits, and fines. The amount of fines imposed may turn on whether BP is found "grossly negligent." With regard to lawsuits, much will depend on the extent to which Ken Feinberg can persuade potential plaintiffs to forego their legal claims in exchange for quicker compensation via the $20 billion BP claims fund.
September 19, 2010
Toyota Settles Unintended Acceleration Lawsuit
According to an article in the Wall Street Journal, Toyota has settled, for an undisclosed amount, an unintended-acceleration lawsuit involving the deaths of four persons. The accelerator appeared to have been caught in the floormat. The article notes that Toyota faces about 200 unintended-acceleration lawsuits.
September 10, 2010
Simons on Statistical Knowledge
Kenneth Simons (BU Law) has posted an article entitled "Statistical Knowledge Deconstructed." This piece looks like it will have important implications for mass torts. The piece seems to focus on the criminal context (what level of knowledge is required for culpability) but in mass torts we struggle with the problem of the creation of increased risk of injury but the difficulty of proving individual injury when the level of culpability Simons discusses (intent) is not at issue. Here is the abstract:
In a wide range of contexts, especially in criminal law and tort law, the law distinguishes between individualized knowledge (awareness that one’s act will harm a particular victim, e.g., X proceeds through an intersection while aware that his automobile is likely to injure a pedestrian) and statistical knowledge (awareness that one’s activity or multiple acts will, to a high statistical likelihood, harm one or more potential victims, e.g., Y proceeds with a large construction project that she predicts will result in worker injuries). Acting with individualized knowledge is generally much more difficult to justify, and is presumptively considered much more culpable, than acting with statistical knowledge. Yet the distinction is very difficult to explain and defend.
This article presents the first systematic analysis of this pervasive but underappreciated problem, and it offers a qualified defense of the distinction. Acting with statistical knowledge is ordinarily less culpable than acting with individualized knowledge, and often is not culpable at all. Expanding the spatial or temporal scope of an activity or repeating a series of acts might cause the actor to acquire statistical knowledge, but such an increase in scale ordinarily does not increase the level of culpability properly attributable to the actor. I articulate two invariant culpability principles, “Invariant culpability when acts are aggregated” and “Invariant culpability when risk-exposures are aggregated,” that formalize this idea.
Why is acting with individualized knowledge especially culpable? Part of the answer is the special stringency principle (SSP), a deontological principle that treats an actor as highly culpable, and treats his acts as especially difficult to justify, when he knowingly imposes a highly concentrated risk of serious harm on a victim. (Under SSP, speeding to the hospital to save five passengers, knowing that this will likely require killing a pedestrian in one’s path, is much harder to justify than speeding to the hospital to save one passenger, knowing that this creates a 20% chance of killing a pedestrian in one’s path.)
The analysis has a number of implications and is also subject to important qualifications: Notwithstanding the invariant culpability principles, if a faulty actor repeats his unjustifiable acts or expands his activity, that repetition sometimes reveals a new type of culpability: the defiance of moral and legal norms. Accordingly, a retributivist can indeed support a punishment premium for recidivists; in rare cases, when the actor possesses merely statistical knowledge but his conduct is extremely unjustifiable, the actor’s culpability is comparable to that of an actor with individualized knowledge; the higher culpability of acting with individualized knowledge is not explained by a supposed higher duty owed to “identifiable victims,” except insofar as that duty is a crude version of SSP; the decision by an actor to proceed with an activity after conducting a cost-benefit analysis is not, by itself, evidence of culpability, even if that analysis provides the actor with statistical knowledge that the activity will cause serious harm; a legal system can be legitimate even though legal actors within the system know that it will, as a statistical matter, punish the innocent.
ADL (h/t Torts Prof Blog)
August 23, 2010
Comparing the 9/11 Fund and the Oil Spill Fund
Michael Cooper has an article in the NYTimes about the two entitled "Spill Fund May Prove as Challenging as 9/11 Payments."
Richard Nagareda (Vanderbilt) is quoted as saying: "Although he had a very difficult time placing a dollar value on human life, in some way that was a more straightforward job than estimating the long-term harm to a shrimper’s business."
In both cases, I think, you have a situation where Feinberg is asked to monetize things that are very hard to monetize and about which people have strong and conflicting opinions - but that is what our tort system asks juries to do all the time. I've recently written on this issue in a piece called "Rough Justice" - an earlier draft is available on SSRN and I plan to post a revision soon.
The NYT article also raises the prospect of fraudulent claims. The 9/11 Fund was manageable in this regard because, as the paper quotes Feinberg “You’ve got verification of death."
August 09, 2010
NYTimes Article on Plaintiff Disappointment with 9/11 Settlement
The NY Times' Mireya Navarro has a long article today entitled "9/11 Settlements Bring Moment of Reckoning" about the disappointment of many plaintiffs in the WTC Disaster Site Litigation with the settlements they are being offered. The settlements take account both of the severity of the injury and the possibility that causation can be proven in court, leaving many with cancer or who have died of cancer getting less than they expected or hoped for.
A very important twist to the 95% agreement requirement in the settlement is the effect that is having on some plaintiff's decision to settle or not to settle. One is quoted as saying: "“It weighs heavy on one’s mind that your decision would impact the compensation of those who are sick, because if you don’t get 95 percent you’re not going to settle.”
Another interesting theme that comes out of the article is the expressive uses of the lawsuit for plaintiffs. One plaintiff who is taking a settlement of approximately $11,000, the article explained "To him, the legal battle was never about the money but about calling attention to the health consequences suffered by those “who stepped up to the plate” after the terrorist attacks."ADL
July 18, 2010
Ken Feinberg Compensation for Administering BP Fund -- A Problem and Possible Solution
Today, I saw on Bloomberg Rewind a video of several questions to Kenneth Feinberg, administrator of the $20 billion BP oil-leak compensation fund. (Video of the interview apparently not yet available on the internet.) At one point, the reporter asked Feinberg how he would be paid, and Feinberg responded that BP would pay because neither the victims nor taxpayers should have to pay him. Fair enough. But when the reporter asked Feinberg whether his compensation would be disclosed, Feinberg said that his compensation "would be confidential."
The issue of Feinberg's compensation is interesting. Feinberg worked pro bono on the 9/11 victim compensation fund -- a remarkable and laudable commitment given the substantial time involved. I'm not suggesting that Feinberg should go on doing such monumental administrative tasks pro bono -- but is it appropriate for him to keep his compensation from BP confidential?
As with the 9/11 fund, Feinberg will likely have tremendous discretion in fashioning the administrative claim mechanism for the BP compensation fund. His exercise of discretion could possibly result in BP saving substantial funds, especially if any remainder of the $20 billion fund is to be returned to BP. Accordingly, a fair process at a minimum requires that both the amount of his compensation, and the method of compensation be disclosed publicly. If BP has the ability to review and cut his billable hours or his billable-hour rate, for example, Feinberg might have a conflict of interest that could lead him unconsciously to favor BP in structuring the administrative fund or making awards. As a result, in addition to public disclosure, an even better solution might be for BP and Feinberg also to agree to have a federal judge review Feinberg's billable hours, billable-hour rate, and total fee, much as is already typically done by judges reviewing class counsel fee awards in class-action settlements under Rule 23. See Fed. R. Civ. P. 23(h) ("In a certified class action, the court may award reasonable attorney's fees and nontaxable costs that are authorized by law or by the parties' agreement.").
I of course do not mean in any way to call into question Feinberg's integrity; he is widely viewed as the nation's leading claims administrator. But even federal judges have their compensation set publicly and in a manner that could not be said to incentivize them to favor one litigant over another. We would never approve of a judge being paid confidentially by only one litigant -- and we shouldn't here either, especially when the claims structure could be seen as quasi-public in light of the President's central involvement and comments that "[i]n order to ensure that all legitimate claims are paid out in a fair and timely manner, the account must and will be administered by an independent, third party." Ultimately, removing the issue of Feinberg's fees from any controversy would aid Feinberg in making the BP fund a success.
UPDATE -- Professor Andrew Perlman (Suffolk) comments at Legal Ethics Forum on my post above.
UPDATE #2 -- Forbes' On The Docket blog discusses my post above: Feinberg's BP Pay: Should It Be Disclosed?, by Daniel Fisher.
June 14, 2010
E-Ferol Class Action Settlement Approved
Today's National Law Journal reports that Judge Sidney Fitzwater of the Northern District of Texas has approved a class-action settlement in the E-Ferol litigation. E-Ferol was a non-FDA approved vitamin E supplement given to premature babies during the 1980s that is alleged to have caused the deaths of approximately 40 babies. The class action, brought against defendant manufacturer Carter-Glogau Laboratories and distributor O'Neal, Jones & Feldman, Inc., includes 369 plaintiffs who claimed that E-Ferol caused liver and kidney failure as well as brain bleeds in the affected children. The settlement amount is $110 million.
June 02, 2010
Lawyers Reduce Fees in WTC Disaster Site Litigation
The lawyers have offered to cap their fees at 20% instead of 30%. But this does not solve all the issues identified by Judge Hellerstein, particularly the "pig in a poke" problem - claimants can't figure out what they will get before signing on.
This offer to reduce fees reminds me of the governmental attempt to reduce the bonuses AIG had contracted to give certain employees after its implosion. Not that the situation is the same, but it shares a theme. The theme: even when you have a signed contract there is the possibility to renegotiate (perhaps something more than a mere possibility in the case where a federal judge says your fees are too high) .
May 04, 2010
Link to WTC Settlement
For readers interested, the WTC settlement and various documents can be conveniently found on the Napoli Bern Ripka LLC website here:http://www.nbrlawfirm.com/blog/read_blog/213/wtc-respiratory-illness-law
I think its a great public service that the firm is being transparent about the agreement and these motions by posting them online.
May 03, 2010
Profile of WTC Litigation Judge in the NYTimes
Mireya Navarro of the New York Times wrote an article published on Sunday about Judge Alvin Hellerstein who is overseeing the 9/11 World Trade Center Disaster Site litigation, and who now famously came out against the proposed settlement in that case. The article is called "Empathetic Judge in 9/11 Suits Seen By Some As Interfering."
The theme of the article is Judge Hellerstein's empathy for these special victims. Some legal experts, Navarro writes, say that he was acting outside of his judicial capacity -- "such intervention is not the norm outside the class action."
While Judge Hellerstein's actions in this case are very public and the subject of a great deal of interest, its not clear to me that there is a difference between what he did and what judges usually do. As I see it, the litigants here (or the lawyers more precisely) are trying to put together the kind of settlement that Merck and the plaintiffs lawyers were able to put together in Vioxx. In that case, the litigants sought Judge Fallon's approval for the settlement, which was controversial. Judge Fallon's approval - especially because he is a thoughtful, intelligent and well-respected federal judge - was critical to the success of that settlement. I asked him once why, if it wasn't a class action, his approval was needed. He replied in sum and substance that the parties wouldn't proceed without his approval.
The WTC lawyers wanted Judge Hellerstein's approval for the same reasons the Vioxx lawyers did - he is a thoughtful, intelligent and well respected federal judge. His approval of the settlement would give it gravitas; it would make plaintiffs whose lawyers weren't involved in drafting it want to sign on; it would make plaintiffs who had no way of knowing what they would get at the end of the day agree to buy a pig in a poke because they could trust the process. The lawyers didn't get the Judge's sign-on. It seems that with their appeal to the Second Circuit they are saying he acted beyond the scope of judicial power now that they got a response from the judge that they didn't like.
But how is this different than a settlement conference in an ordinary case when the judge opines that a settlement is not giving the plaintiff enough? After all, the parties came to Judge Hellerstein. They could settle the cases individually and dismiss them one after the other as settlement is reached. If they chose to dismiss their individual cases, its not clear to me that there is anything Judge Hellerstein could do other than to tell the client he thought that was a bad idea. But if the lawyers want an aggregate settlement and they want a Judge to give them legitimacy, then they have to face the reality that he will only legitimate a settlement he thinks is appropriate under the circumstances.
EDITED TO ADD: You can find the documents regarding the appeal on the Napoli Bern website.
April 19, 2010
ACI Conference on Chemical Products Liability and Environmental Litigation
American Conference Institute will be hosting a conference on Chemical Products Liability and Environmental Litigation on April 28-29, 2010 in Chicago, IL. I will be speaking on mass torts and ethics, with particular attention to the ethics of mass settlements. Here's the brochure (Download ACI Brochure).
April 19, 2010 in Aggregate Litigation Procedures, Conferences, Environmental Torts, Informal Aggregation, Mass Tort Scholarship, Pharmaceuticals - Misc., Products Liability, Settlement | Permalink | Comments (0) | TrackBack