Friday, 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)

September 10, 2010 in Aggregate Litigation Procedures, Mass Tort Scholarship, Settlement | Permalink | Comments (0) | TrackBack (0)

Monday, 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."

ADL

August 23, 2010 in 9/11, Aggregate Litigation Procedures, Mass Disasters, Settlement | Permalink | Comments (0) | TrackBack (0)

Monday, August 9, 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


August 9, 2010 in 9/11, Aggregate Litigation Procedures, Settlement | Permalink | Comments (0) | TrackBack (0)

Sunday, 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. 

BGS    

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.

July 18, 2010 in Aggregate Litigation Procedures, Class Actions, Environmental Torts, Ethics, Informal Aggregation, Lawyers, Procedure, Settlement | Permalink | Comments (7) | TrackBack (0)

Monday, 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.

ECB

June 14, 2010 in Class Actions, Settlement | Permalink | Comments (0) | TrackBack (0)

Wednesday, June 2, 2010

Lawyers Reduce Fees in WTC Disaster Site Litigation

The civil procedure blog reports on it here.  The AP report can be found here.  


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) . 

ADL

June 2, 2010 in 9/11, Aggregate Litigation Procedures, Settlement | Permalink | Comments (0) | TrackBack (0)

Tuesday, May 4, 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.

ADL

May 4, 2010 in 9/11, Aggregate Litigation Procedures, Mass Disasters, Settlement | Permalink | Comments (0) | TrackBack (0)

Monday, May 3, 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.

ADL

May 3, 2010 in 9/11, Aggregate Litigation Procedures, Informal Aggregation, Mass Disasters, Settlement, Vioxx | Permalink | Comments (0) | TrackBack (0)

Monday, 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).  

BGS

April 19, 2010 in Aggregate Litigation Procedures, Conferences, Environmental Torts, Informal Aggregation, Mass Tort Scholarship, Pharmaceuticals - Misc., Products Liability, Settlement | Permalink | Comments (0) | TrackBack (0)

Monday, March 29, 2010

Panel on Pluralism in Tort Law and Litigation at Annual Conference of the Association for the Study of Law, Culture and the Humanities

As previously mentioned, I was part of a panel on Pluralism in Tort Law and Litigation at the annual conference of the Association for the Study of Law, Culture and the Humanities, which took place on Saturday, March 20 at Brown University.  Professor Alan Calnan (Southwestern) moderated the panel, and other participants included Professors Christopher Robinette (Widener) and Sheila Scheuerman (Charleston).  Below are the abstracts and links to audio from the presentations and Q&A.  Thanks to Alan Calnan for moderating and to all for participating.

***

I.  Prof. Alan Calnan -- Introduction (audio)

II.  Prof. Christopher Robinette -- "The Instrumentalism in Tort Reforms" (audio)

The traditional view among legal historians is that tort was largely deontic private law until the late nineteenth century.  Due to factors such as the Industrial Revolution and the advent of liability insurance, tort became (more) instrumentalist.  A survey of major tort reforms over the course of the last century provides evidence to support this view.  Each of the reforms--workers' compensation, no-fault automobile insurance, products liability, and "modern" tort reforms (such as damage caps)--is based in instrumentalism.  Furthermore, the reforms become increasingly integrated into tort law as time passed.  The earliest reform, workers' compensation, was a substitute for tort law.  By the time of the modern reforms, instrumentalism is operating within tort itself, and covers a multitude of tort cases.

III.  Prof. Byron Stier -- ""Examining Litigant Autonomy in Mass Torts: Insights from the Individualism of Ayn Rand" (audio)

Class actions and other aggregate procedural methods raise questions about the relationship of the individual to the group.  Litigant autonomy -- the litigant's interest in controlling his or her lawsuit -- has generally been considered merely one value among others in mass tort litigation, and only recently has a robust commitment to litigant autonomy been seen to call into question the entire structure of class action practice.  In looking for insight into the proper place for litigant autonomy in class actions or other management methods, we might fruitfully turn to political debates concerning the relationship of the citizen to the state, for both settings examine the rights of the individual against the perceived needs of the group or collective.  For discussion of that political question, I look to an unusual source -- outside law, to the literature of one known for her radical political individualism, Ayn Rand.  Her novel, "We The Living," which was published in 1936 and is set in the aftermath of the communist revolution in Russia, puts forth a moral argument for individualism stemming from the sanctity of one's own life, and of one's control of one's own life, for one's own ends, not the group's; she also argues that personal tragedy and systemic corruption accompany an approach that fails to respect individuals' lives and choices.  Turning back to mass tort litigation, I suggest that our notion of litigant autonomy can be informed by Rand's themes and that current class action rules show flaws similar to the collectivism that Rand critiques. Viewing litigant autonomy not merely as one value among others, but instead as an organizing principle that must be respected as a core right, I suggest that current class action rules regarding notice, opt-out, and settlement are problematic because they do not allow adequate expression of individual preference and they blunt each class member's individuality.  In addition, by avoiding individual control, the current class action rules create fertile ground for corruption and collusive settlements.

IV.  Prof. Sheila Scheuerman (audio)

In my presentation, I examine whether and when tort law should permit
"no injury" claims -- claims where the plaintiff's harm has not yet
materialized.  Examples of these suits include medical monitoring
actions, products liability claims where a known defect exists, but the
product has not yet malfunctioned, as well as consumer fraud claims
where the consumer's decision was not affected by the defendant's
alleged misrepresentation.  Recent years have seen an influx of these
suits under an array of tort and contract theories.  Traditionally,
however, tort doctrine has premised liability on an injury to an
identified party.  But is "injury" a necessary pre-requisite?  I address
whether tort values support these "no injury" causes of action.  In
other words, should "no injury" claims be actionable under the varied
rationales for the tort system and, if so, under what circumstances?

V.  Questions and Answers (audio)

***

BGS

March 29, 2010 in Aggregate Litigation Procedures, Books, Class Actions, Conferences, Informal Aggregation, Lawyers, Mass Tort Scholarship, Procedure, Products Liability, Regulation, Settlement | Permalink | Comments (0) | TrackBack (0)

Tuesday, March 23, 2010

Litigating Together: Social, Moral, and Legal Obligations

I have posted a draft of the last in a trilogy of articles on nonclass aggregation and thought I would provide a brief retrospective for the interested reader.  The first article in the trilogy is Procedural Justice in Nonclass Aggregation, which explains in-depth the problems and risks presented by nonclass aggregation.  It observes that systemic legitimacy and compliance with judicial decisions hinges on ensuring procedural justice, but that our current system for handling large-scale litigation fails to provide a number of key procedural-justice components including the preference for adversarial litigation, participation opportunities, impartiality, and error correction.  These institutional shortcomings are due in large part to the trade-offs inherent in large-scale litigation.  Those trade-offs include that "litigation is no longer adversarial despite litigants’ preferences, but effective individual litigation is too costly to pursue; aggregate settlements provide few participation opportunities and no avenues for appeal or error correction despite potential conflicts, but, without aggregate settlements, cost and delay could be staggering and the relief may come too late; mediators or special masters might afford claimants additional participation opportunities, but process is then less adversarial and may suffer from legitimacy problems."  Id. at 46. 

The second article in the trilogy is Litigating Groups. In Litigating Groups, I laid the theoretical groundwork for an alternative to our current approach by borrowing insights from other disciplines—social psychology, moral and political philosophy, and behavioral law and economics—and bringing those notions of commitment, community, and groups to bear on nonclass aggregation.  By relying on the other-regarding preferences that tend to form from group membership, I argued that groups of plaintiffs may have or could be encouraged to develop organic or indigenous origins such that they form moral obligations to one another that are reinforced by social and personal norms. (I have also summarized these contentions in a short response to Judge Weinstein - A New Way Forward: A Response to Judge Weinstein.)

The current (and latest) article is the third and final piece in the trilogy.  It's titled Litigating Together, Social, Moral, and Legal Obligations.  This Article translates the theoretical foundation laid in Litigating Groups into concrete, feasible procedures for litigating together.  Although Litigating Groups maintained that plaintiffs who form groups will likely develop other-regarding preferences toward their fellow group members, it did not fully formulate procedures for promoting cooperation and group formation; decide when, whether, or how to impose sanctions when norms and moral obligations fail; contemplate incentives to join the group; or determine when exiting the group is appropriate.  Accordingly, this Article takes up those hard questions as well as the challenge of determining whether and how substantive and procedural law should enforce moral obligations once a certain level of moral interconnectedness exists.  Here's the SSRN abstract:

In a post-Class Action Fairness Act world, the modern mass-tort class action is disappearing. Indeed, multi-district litigation and private aggregation through contracts with plaintiffs’ law firms are the new mass-tort frontier. But something’s amiss with this “nonclass aggregation.” These new procedures involve a fundamentally different dynamic than class actions: plaintiffs have names, faces, and something deeply personal at stake. Their claims are independently economically viable, which gives them autonomy expectations about being able to control the course of their litigation. Yet, they participate in a familiar, collective effort to establish the defendant’s liability. They litigate from both a personal and a collective standpoint.

Current scholarship overlooks this inter-personal dimension. It focuses instead on either touting the virtues of individual autonomy or streamlining mass litigation to maximize social welfare. Both approaches fail to solve the unique problems caused by these personal dimensions: temptations for plaintiffs to hold out and thus derail settlements demanding near unanimity, outliers who remain disengaged from the group but free-ride off of its efforts, and subgroups within the litigation whose members compete for resources and litigation dominance to the group’s detriment. Accordingly, this Article has two principal objectives: one diagnostic, one prescriptive. The diagnosis is this: current procedures for handling nonclass aggregation miss the mark. Process isn’t just an exercise in autonomy or a handy crutch for enforcing substantive laws. Procedures can serve as a means for bringing plaintiffs together, plugging their individual stories into a collective narrative, making sense of that narrative as a community, reasoning together about the right thing to do, and pursuing that end collectively. Thus, the prescription is litigating together.

Along the way, I've developed a few aspects of this overall project in greater detail for various symposia:

 In Aggregation, Community, and the Line Between, I provided a more detailed account of the moral and political theory animating this "litigating together" approach.  This article contends that encouraging plaintiffs to form groups and reach decisions through deliberation relies on a mix of individual consent and moral obligation. Allowing plaintiffs to exercise their free will when deciding whether to associate with others preserves the liberal tenet of self-determination and escapes the anti-democratic criticism leveled at class actions. Yet, a purely liberal approach fails to capture the obligatory aspect of reciprocal promises to cooperate and the communal obligations that attach. Although plaintiffs voluntarily enter into the group, once they are group members and have tied together their collective litigation fates, they should not be permitted to exit when doing so violates their commitments. Of course, the community itself determines the content of its members’ rights and obligations to one another. Thus, the article concludes by explaining the rationale for group autonomy in terms of pluralism and communitarianism. 

In Group Consensus, Individual Consent (which is still very much "in progress," as they say), I explore how this project relates to sections 3.17 and 3.18 of the American Law Institute’s Principles of the Law of Aggregate Litigation and use those principles as a lens for exploring thematic questions about the value of pluralism, group cohesion, governance, procedural justice, and legitimacy in nonclass aggregation.  Both this project and Litigating Together: Social, Moral, and Legal Obligations are still very much in progress, so, as always, I welcome your comments. 

I'm extremely grateful for all of the helpful comments and criticisms of so many scholars in the field along the way.  I'm also looking forward to tackling new and different projects that have been waiting in the wings for some time now.

ECB

March 23, 2010 in Aggregate Litigation Procedures, Class Actions, Informal Aggregation, Lawyers, Mass Tort Scholarship, Procedure, Products Liability, Resources - Publications, Settlement, Vioxx, Zyprexa | Permalink | Comments (0) | TrackBack (0)

Saturday, March 20, 2010

9/11 First Responder's Settlement Rejected by Judge

On Friday Judge Hellerstein (SDNY) rejected the settlement that had been reached by lawyers in the 9/11 First Responders Litigation (otherwise known as In Re World Trade Center Disaster Litigation).  He said the settlement was too obscure and that the lawyers were probably being paid too much at 30%.

The New York Times coverage is here:  Judge Rejects Deal on Health Claims of Workers at Ground Zero

The Times reports that the Judge said he would oversee further negotiations and would take "judicial control" over the matter.  "There has to be additional negotiations to come up with a better and fair settlement. I will not preside over a settlement based on fear or ignorance."  He said.  "I want transparency. I want accountability. I want judicial control over this process.  They've got to come up with an agreement under judicial supervision that will make us all proud."

The judge also said he would hear from plaintiffs directly about the settlement when the time came, not from their lawyers.  I recommended that judges do this in an article called The Law and Large Numbers - if you're looking for other similar suggestions, read the last few pages of that piece. 

Now for some law.  The judge does not have formal veto over the settlement the way that he would had this case been certified as a class action (basically impossible now after Amchem).  And the right of a judge to reject a settlement like this has never been tested on appeal.  (Richard Nagareda is quoted in the Times saying this - and he will be posting on Torts Prof Blog Monday so you can read his views on aggregation there). 

The ALI Aggregate Litigation Project has proposed letting judges oversee aggregate settlements in the way Judge Hellerstein is doing but as a formal matter.  What the judge is doing now is not a formal requirement, but a use of discretion.  Of course, once the judge opines that the settlement isn't good whether he has a formal veto or not doesn't matter because there is no way the 95% of the plaintiffs required for the settlement to go forward will agree to accept its terms.  So as a matter of practice it looks like the ALI model is being adopted informally.

ADL 

 

March 20, 2010 in 9/11, Aggregate Litigation Procedures, Settlement | Permalink | Comments (2) | TrackBack (0)

Wednesday, March 17, 2010

ASLCH Annual Conference and Presentation on "Examining Litigant Autonomy in Mass Torts: Insights from the Individualism of Ayn Rand"

On Saturday, March 20, I'll be speaking as part of a panel on "Pluralism in Tort Law and Litigation" at the annual meeting of the Association for the Study of Law, Culture, and Humanities, at Brown University in Rhode Island.  The panel will be moderated by Professor Alan Calnan (Southwestern), and other presenting panelists are Professors Christopher Robinette (Widener) and Sheila Scheuerman (Charleston). A podcast of the panel may later be posted on this blog.  Given the conference's focus on culture and humanities, my talk draws upon literature and political theory.  Here's the abstract for my talk:

Byron Stier -- "Examining Litigant Autonomy in Mass Torts: Insights from the Individualism of Ayn Rand"

Class actions and other aggregate procedural methods raise questions about the relationship of the individual to the group.  Litigant autonomy -- the litigant's interest in controlling his or her lawsuit -- has generally been considered merely one value among others in mass tort litigation, and only recently has a robust commitment to litigant autonomy been seen to call into question the entire structure of class action practice.  In looking for insight into the proper place for litigant autonomy in class actions or other management methods, we might fruitfully turn to political debates concerning the relationship of the citizen to the state, for both settings examine the rights of the individual against the perceived needs of the group or collective.  For discussion of that political question, I look to an unusual source -- outside law, to the literature of one known for her radical political individualism, Ayn Rand.  Her novel, "We The Living," which was published in 1936 and is set in the aftermath of the communist revolution in Russia, puts forth a moral argument for individualism stemming from the sanctity of one's own life, and of one's control of one's own life, for one's own ends, not the group's; she also argues that personal tragedy and systemic corruption accompany an approach that fails to respect individuals' lives and choices.  Turning back to mass tort litigation, I suggest that our notion of litigant autonomy can be informed by Rand's themes and that current class action rules show flaws similar to the collectivism that Rand critiques. Viewing litigant autonomy not merely as one value among others, but instead as an organizing principle that must be respected as a core right, I suggest that current class action rules regarding notice, opt-out, and settlement are problematic because they do not allow adequate expression of individual preference and they blunt each class member's individuality.  In addition, by avoiding individual control, the current class action rules create fertile ground for corruption and collusive settlements.

BGS

March 17, 2010 in Aggregate Litigation Procedures, Class Actions, Conferences, Informal Aggregation, Lawyers, Mass Tort Scholarship, Procedure, Products Liability, Settlement | Permalink | Comments (0) | TrackBack (0)

What Should Plaintiffs In Aggregate Litigation Ask Their Lawyers?

What should plaintiffs in large-scale litigation that settles as an aggregate settlement -- like Vioxx or the WTC litigation -- ask their lawyers in trying to evaluate the settlement?  As a general matter, plaintiffs are trying to compare unknowns and this is really hard. 

If it were the case that a lawyer could tell her client "well, if you go to trial you will get X and if you settle you will get X minus 10 but will save transactions costs" this would be easy.  But nobody knows what will happen at trial, and sometimes settlements themselves can only offer ballpark predictions rather than actual numbers.  For example, the plaintiffs choosing to participate in the 9/11 victims compensation fund were taking a risk that they would get something different than what the tort system would provide and they did not know in advance what that number would be.  Most of them elected to participate in that administrative process rather than the tort system.  Those that did not eventually settled, but it took a lot longer.  Settling is not just about money and the risk of losing at trial or pretrial motions, but also time and the emotional costs of litigation.

Here are some ideas for questions - happy to add others as comments come in:

1. What are the weaknesses in my case? What are the strengths?

2. What are the chances we will lose before or at trial?

3. What are the costs to me of going to trial, in terms of money, time and emotions?

4. If we go to trial, how long will it take for me to eventually get paid? Are there likely to be appeals and how long will that take?

5. How does the amount I am being offered compare to what other, similarly situated plaintiffs are getting?

6. How does the amount I am being offered compare to what plaintiffs who have lesser harm/greater harm are getting?

ADL

March 17, 2010 in Aggregate Litigation Procedures, Settlement | Permalink | Comments (1) | TrackBack (0)

Tuesday, March 16, 2010

WTC Litigation Settlement Link

The WTC Settlement is now available online. I wasn't able to track it down until late last night. Here is the link, from the Bern Napoli website (that is the firm spearheading the settlement):

http://www.nbrlawfirm.com/blog/read_blog/213/wtc-respiratory-illness-law

ADL

March 16, 2010 in 9/11, Settlement | Permalink | Comments (1) | TrackBack (0)

Monday, March 15, 2010

9/11 First Responders Settlement - "Fairness Hearing" April 12

Judge Hellerstein has scheduled a "fairness hearing" in the 9/11 First Responders Settlement (the case is known as In re World Trade Center Disaster Site Litigation) to take place on April 12, the New York Times Reports.  Next Friday (3/19) he will meet with the parties to give them his impressions of the settlement.  The judge also said he may reduce attorneys fees awards to as low as 15% (from the 30% that most retainer agreements require). 

Kenneth Feinberg, the special master overseeing the 9/11 Victim's Compensation Fund is reported as saying that the only reason these workers weren't compensated under that fund was that they had not fallen ill when the fund closed in 2003.  I predict the compensation will try to mirror what that fund did.  Feinberg's dissatisfaction with that process, which he handled very well, is chronicled in his book What Is Life Worth?

I have it on good authority that the federal government was considering reopening the 9/11 fund to deal with these cases, but the settlement has mooted that idea (and whether it would have actually come to pass is an open question). 

An unnamed tort management firm has already been appointed to handle the claims. The administrator in charge of evaluating cases and meting out awards will be appointed in a few weeks. 

The Times article can be found here: Hurdles Remain for Ground Zero Settlement.

ADL

March 15, 2010 in 9/11, Aggregate Litigation Procedures, Environmental Torts, Informal Aggregation, Lawyers, Mass Disasters, Settlement | Permalink | Comments (1) | TrackBack (0)

Thursday, March 11, 2010

First Responders Litigation Settles

The New York Times reports that In Re World Trade Center Disaster Site Litigation in the Southern District of New York has settled.  The case involved nearly 10,000 plaintiffs and at least 90 defendants.

The parties agreed that if 95% of the plaintiffs sign on to the litigation, then the settlement will go forward at $575 million.  If 100% agree, then the settlement will go forward at $654.5 million. This looks a lot like the Vioxx settlement in that sense.  It sets aside a $23.4 million "insurance fund" to cover future claims - those plaintiffs whose illnesses have yet to develop.

The amounts allocated to each plaintiff will be based on a points chart that will be administered by a neutral claims administrator on the model of the Sept. 11th Victims Compensation Fund.   The points will be based on illness severity and, according to the Times, "Other factors that will be considered include evidence of a link to ground zero and adjustments for age, pre-existing conditions, time of diagnosis and smoking history. The process could take up to a year."  The process is set up to weed out fraudulent claims.

The lawyers will get up to a third in fees, and the insurer that will fund this settlement has already paid over $200 million in fees  to defend the litigation.

How will they value the cases? They haven't held any bellwether trials (and they won't now) so it will be interesting to see what the basis of calculations will be.  A study of the Sept. 11th Victims Compensation Fund found that most people who disputed the forensic economists findings got higher compensation; and the judge has said that the amounts individuals get must be individualized and subject to his review even though the case is not certified as a class action. See Tinari et al, Did the 9/11 Victim Compensation Fund Accurately Assess Economic Losses?

I urge any readers with ideas or insights into this question to contact me via email.

ADL

March 11, 2010 in 9/11, Aggregate Litigation Procedures, Mass Disasters, Settlement | Permalink | Comments (0) | TrackBack (0)

Monday, March 1, 2010

Erichson & Zipursky on mass settlements

SSRN 
Benjamin Zipursky and I have completed a paper entitled "Consent versus Closure."  Ben is one of the nation's leading experts on torts and legal theory.  He and I have long shared an interest in mass tort litigation, and we share certain concerns about the direction mass tort settlements seem to be heading.  In particular, we were both troubled by the mandatory withdrawal provision of the Vioxx settlement, and we both opposed the American Law Institute's proposal to permit advance consent to aggregate settlements.  More generally, we see the Vioxx deal and the ALI proposal as part of a troubling broader trend, in both practice and scholarship, toward embracing the pursuit of absolute closure by empowering plaintiffs' lawyers to deliver their clients' claims in settlement.  Here's the abstract:

Claimants, defendants, courts, and counsel are understandably frustrated by the difficulty of resolving mass tort cases. Defendants demand closure, but class certification has proved elusive and non-class settlements require individual consent. Lawyers and scholars have been drawn to strategies that solve the problem by empowering plaintiffs’ counsel to negotiate package deals that effectively sidestep individual consent. In the massive Vioxx settlement, the parties achieved closure by including terms that made it unrealistic for any claimant to decline. The American Law Institute’s Principles of the Law of Aggregate Litigation offers another path to closure: it proposes to permit clients to consent in advance to be bound by a settlement with a supermajority vote. This article argues that, despite their appeal, both of these strategies must be rejected. Lawyer empowerment strategies render settlements illegitimate when they rely on inauthentic consent or place lawyers in the untenable position of allocating funds among bound clients. Consent, not closure, is the touchstone of legitimacy in mass tort settlements.

"Consent versus Closure" critiques mandatory withdrawal, looking at specific legal ethics rules and doctrines as well as the more basic problem of inauthentic consent.  It critiques the ALI's advance consent proposal based not only on the problem of inauthentic consent, but also the problem of nonconsentable conflicts, exploring what it means for claimants to own their claims and for lawyers to represent clients in pursuing those claims.  

This article picks up on the theme of "The Trouble with All-or-Nothing Settlements," in which I used six case studies to show various problems caused by demands for fully comprehensive settlements outside of class actions and bankruptcy.

HME

March 1, 2010 in Ethics, Lawyers, Mass Tort Scholarship, Settlement, Vioxx | Permalink | Comments (0) | TrackBack (0)

Tuesday, February 9, 2010

Bebchuck & Klement on Negative Value Suits

Lucian Bebchuck (Harvard) and Alon Klement (Radzyner School of Law & B.U.) have posted an encyclopedia entry on Negative Value Suits on SSRN. Here is the abstract:

We review the literature on negative-expected-value suits (NEV suits) – suits in which the plaintiff would obtain a negative expected return from pursuing the suit all the way to judgment. We discuss alternative theories as to why, and when, plaintiffs with NEV suits can extract a positive settlement amount. In particular, we explain how such a plaintiff can extract a positive settlement due (i) asymmetry of information between the parties, (ii) divisibility of the plaintiff's litigation costs, (iii) upfront costs that the defendant must incur before the plaintiff incurs any costs; (iv) expectation that the arrival of information during the course of the litigation may turn the suit into a positive-expected-value one, (5) reputation that enables the plaintiff to bind itself to going to trial if the defendant refuses to settle; or (6) the plaintiff’s having a contingency fee or retainer arrangement with its lawyer.

ADL

February 9, 2010 in Class Actions, Mass Tort Scholarship, Procedure, Settlement | Permalink | Comments (0) | TrackBack (0)

Thursday, February 4, 2010

Sept 11th First Responder Suits in Settlement Talks

The New York Times has published an article by Mireya Navarro entitled "Effort to Settle Sept. 11th Lawsuits".  The article describes (albeit without much detail) the efforts to settle the lawsuits brought by first responders against various contractors and New York City in the aftermath of the terrorist attack of September 11th.  Twelve cases have been scheduled to go to trial in May 16, ten thousand total have been brought against approximately 200 defendants.  Apparently there is a 70 page settlement plan and the judge says that the parties have been working "very hard."  The article also mentions a bill pending in Congress to compensate the workers at the disaster site, similar to that created to compensate the victims of the tragedy.  

The judge is using a relatively sophisticated approach to sampling, first surveying the class and using a severity chart to pick cases for trial.  The special masters that came up with it are both law professors and experts in mass torts: Aaron Twersky (Brooklyn) and James Henderson (Cornell).

The article quotes two law professor mass tort experts.  Anthony Sebok (Cardozo) explains the difficulty of the causation issues: "“There’s not a lot of experience with this kind of risk, [i]t may be very difficult from a technical point of view to get testimony from experts.”

Richard Nagareda (Vanderbilt) explains “Ultimately, everybody understands there’s going to be some sort of comprehensive settlement. The question is, what is the price?”  

I am working on a paper that attempts to answer this question - what is the best way to determine the price. I think holding some sample trials is the best way, but it sounds like the players in this litigation disagree and would prefer to reach a settlement prior to trial.  The judge is prepared for this and apparently has suggested having multiple judges try the sample cases rather than trying them together.

Impending trials have a way of focusing the mind. I predict a settlement by May. 

ADL

February 4, 2010 in 9/11, Aggregate Litigation Procedures, Mass Disasters, Settlement, Trial | Permalink | Comments (0) | TrackBack (0)