April 24, 2013
Mullenix on Class Actions at the Supreme Court
Linda Mullenix (Texas) has posted to SSRN The Practice: Class Action Cacophony at the Supreme Court. The abstract provides:
Commentary and analysis of the Supreme Court’s February and March 2013, decisions in three major class action appeals: Amgen Inc. v. Connecticut Retirement Plan and Trust Funds (February 27, 2103); Standard Fire Ins. Co. v. Knowles (March 19, 2013), and Comcast Corp. v. Behrends (March 27, 2013). The article surveys the Court’s liberal and conservative divide on class certification issues, giving some support to both the plaintiff and defense sides of the class action docket. In Amgen, in an opinion by Justice Ginsburg, a divided Court again saved the fraud on the market presumption for certification of securities class actions. On the other hand, in Comcast, in an opinion authored by Justice Scalia, an equally divided Court found fatal to class certification the failure of proof of classwide damages for a Rule 23(b)(3) damage action. The Comcast decision, coupled with a concurrence by Justice Alito, suggests that there may be at least four votes for the Court to consider the original fraud on the market presumption announced in the landmark case, Basic v. Levinson.
Although embodying different outcomes, the Amgen and Comcast decisions both embrace the same litany of core class certification principles. However, the Court in neither case has clarified or illuminated further the debate over the extent to which trial courts may properly assess the underlying merits of class claims as part of the certification process. Instead, the Court in both cases deflected the merits conversation into the Rule 23 predominance requirement.
Finally, in Standard Fire Ins. Co. v. Knowles, in an opinion by Justice Breyer, a unanimous Court agreed that a class representative could not stipulate to less than the $5 million damage threshold in order to evade removal under the Class Action Fairness Act of 2005. A class representative could bind himself, but had no power or authority to bind absent class members.
March 12, 2013
WSJ on Asbestos Claims and Fraud
A front page article in yesterday's Wall Street Journal reported on a WSJ investigation into the state of asbestos litigation. The article, "Asbestos Claims Rise, So Do Worries About Fraud," is behind a pay wall. In part, the article reports:
The Wall Street Journal reviewed trust claims and court cases of roughly 850,000 people filed since the late 1980s until as recently as 2012.
The analysis found numerous apparent anomalies: More than 2,000 applicants to the Manville trust said they were exposed to asbestos working in industrial jobs before they were 12 years old.
Hundreds of others claimed to have the most-severe form of asbestos-related cancer in paperwork filed to Manville but said they had lesser cancers to other trusts or in court cases.
The Manville trust declined to comment on individual cases, citing privacy concerns. The trust's general counsel, David Austern, said the trust tightened its oversight after a 2005 claims scandal, adding: "We audit periodically and haven't found any fraud."
Accompanying the article is a neat graphic showing the connections between various law firms and the asbestos bankruptcy trusts.
February 18, 2013
Steroid Meningitis MDL Sent to Massachusetts
Claims regarding the meningitis outbreak tied to injectable steroids has been consolidated in a MDL before Judge F. Dennis Saylor of the District of Massachusetts. The National Law Journal has the full story (behind a free registration wall).
Thanks to Lisa Smith-Butler for the alert.
February 12, 2013
Mass Tort Filings Down 70% in Philly
The Pennsylvania Record reports that rules changes to the mass torts program at the Philadelphia Court of Common Pleas have resulted in a 70% drop in mass tort filings.
October 01, 2012
Maines on "The Asbestos Litigation Master Narrative"
Forthcoming in the December issue of Enterprise & Society, Rachel Maines (Cornell School of Electrical and Computer Engineering) has an article on "The Asbestos Litigation Master Narrative: Building Codes, Engineering Standards, and "Retroactive Inculpation." You can download a pdf of the article here: Download Maines Asbestos Litigation Master Narrative 2012
September 25, 2012
"Philly Regrets Flood of Cases"
The Wall Street Journal reports that mass tort filings in the Philadelphia Court of Common Pleas have "skyrocketed from 550 in 2008 to nearly 2,700 last year. The surge left an already busy court system buried in lawsuits and scrambling to repair the damage." The article reports:
Also contributing to the surge of cases: the success of the Complex Litigation Center, a specialized Philadelphia court established in 1992 largely to handle the growing asbestos and pharmaceutical docket. The center adopted techniques that were designed to move cases through quickly, such as setting early trial dates, holding frequent meetings among the lawyers, and consolidating similar cases.
The Complex Litigation Center drew more mass-tort cases to Philadelphia. But until recently, it was largely able to manage its docket. Since 2008, the backlog of asbestos and pharmaceutical cases has shot up from about 2,600 to more than 6,100 through last month. Last year, 88% of the pharmaceutical cases were filed by out-of-state plaintiffs, according to the court.
The mess is now largely Judge Herron's to deal with. Since taking over as the administrative judge late last year, he has put into place several measures designed to reverse the trend—and to send a message to out-of-state lawyers to take their lawsuits to other courts. "Go elsewhere," he says, when asked to describe the message he is hoping to send to out-of-state lawyers. "There are a lot of really wonderful courts in the U.S., and you should make broader use of them."
June 18, 2012
Judge Allows Privacy Claims Against Apple
The Recorder (via law.com) reports that:
Apple Inc. will face a proposed class action accusing the company of letting advertisers track users' activity without their permission, a federal judge ordered Tuesday.
Owners of Apple devices, including the iPhone, iPad and iPod Touch, may pursue claims under two California consumer protection laws, U.S. District Judge Lucy Koh said.
June 08, 2012
MDL Complaint Filed in NFL Concussion Litigation
Plaintiffs have filed a master complaint in the MDL concerning the NFL concussion litigation. The complaint was filed in the U.S. District Court for the Eastern District of Pennsylvania, and consolidates 86 suits involving 2,300 retired players.
Update: BBC News also has coverage.
May 23, 2012
Facebook Settles Privacy Class Action
The Recorder reports that Facebook has settled a putative class action that alleged that Facebook's "Sponsored Stories" feature violated the right to publicity under California law. According to the story, " 'Sponsored Stories' are paid advertisements that appear on someone's Facebook page when a friend "likes" an advertiser, complete with that person's name and photograph." As a putative class action, the settlement requires judicial approval.
May 15, 2012
Gerber Probiotic Suits Consolidated in NJ
U.S. District Judge Jose Linares (NJ) consolidated five separate putative class actions against Gerber last week. The suits allege that Gerber misrepresented the benefits of its probiotic baby food. New Jersey Law Journal has more behind a free registration wall.
May 07, 2012
Judge Gives Preliminary Approval to $7.8B BP Settlement
Judge Barbier rejected numerous objections and gave preliminary approval to the BP Settlement last week. The settlement is estimated by BP to be worth $7.8 billion. Notably, as part of the agreement, BP is going to pay the attorneys' fees and costs of the plaintiffs' steeting committee. (Of course, plaintiffs remain responsibile for their own individual attorney's fees). The Court Supervised Settlement Program is scheduled to begin June 4th. Louisiana lawyer Patrick Juneau will be handling the economic damages payments, and the Garretson Resolution Group will be handling the medical claims.
April 27, 2012
Federal Judge Dismisses Economic Damages Claims Against Toyota
Behind a free registration wall, the National Law Journal reports that Judge Selna has "tentatively dismissed" the economic damages claims of Florida and New York consumers in the sudden acceleration litigation on the ground that they had not actually experieced any SUA problems.
March 01, 2012
Mass Torts in the Federal Courts - Recap Part II
As I mentioned yesterday, kudos to the students of the Federal Courts Law Review here at the Charleston School of Law for the Mass Torts in the Federal Courts symposium last week. In addition to the keynote address by Ken Feinberg and remarks by Judge Corodemus, the day included three lively panel presentations.
Panel One focused on Preemption. Moderated by my colleague, Bill Janssen, the panel featured (left to right) Jim Beck (Drug & Device Blog/Dechert), Deepak Gupta (Senior Counsel, Consumer Financial Protection Bureau), and Cathy Sharkey (NYU). Beck focused on the presumption against preemption and pointed out the Supreme Court's inconsistency on the doctrine. Beck termed the presumption a "judicial football," and noted that Justice Kennedy holds the "key vote" on the issue. Gupta provided a consumer protection viewpoint, and noted that agencies rely on the tort system to supplement and inform the agency's work. Sharkey pointed out the "absurdity" of the Court's rulings in Wyeth v. Levine and Pliva v. Mensing: If you take the generic version of a drug, preemption applies, but if you take the brand name version of the same drug, preemption does not apply. Sharkey advocated a new framework for the Court to view the preemption question focusing on agency consideration: whether the governing agency has paid particular attention to the risk of the plaintiff's injury should control the premption question.
I moderated Panel Two on "Aggregation and Mass Torts." Sheila Birnbaum is speaking in the photo, while seated left to right are myself, Timothy Eble, Alexandra Lahav (Connecticut) and Linda Mullenix (Texas). Eble and Lahav focused on the current litigation system, while Mullenix and Birnbaum addressed the fund approach. Eble focused on settlement class actions and presented a case study involving a medical monitoring settlement class action. He argued that the settlement class is an appropriate use of Rule 23. Lahav discussed the tension between individualism and efficiency in the debate over how to adjudicate mass torts, and asserted that a third value was missing from this discussion: equality. Responding to Ken Feinberg, Mullenix argued that the fund approach is not "sui generis," but increasingly the chosen method for resolving mass torts. Her presentation focused on the voluntariness of a plaintiff's election of remedies under a fund system, and suggested three solutions to combat what she argued was uninformed consent. Her solutions included provision of pro bono counsel to fund claimants, bar association counseling of fund claimants, and judicial invalidation of fund award's based on lack of informed consent. Birnbaum agreed that we are "going to have lots and lots of funds." In response to Mullenix, Birnbaum pointed out that most of the 9/11 claimants had counsel and discussed her work with the 9/11 litigants as well as with the new 9/11 Fund claimants. Birnbaum asserted that the fund approach can provide "more justice" than litigation and criticized the expense and delay involved in the tort system.
The final panel considered Ethical Issues Surrounding Fees and Settlements in Mass Torts. Nathan Crystal (Charleston) moderated the panel, with presentations by (left to right) Lynn Baker (Texas), Beth Burke (Richardson Patrick), John Beisner (Skadden), and Morris Ratner (Visting, Harvard/Professor-Elect, UC Hastings). Burke discussed aggregate settlements under Model Rule of Professional Responsibility 1.8, and the use of a point-based allocation system as opposed to a dollar-based system. Ratner addressed a new phenomena - trial courts relying on the ethical rules to impose caps on attorneys' fees in non-class settlements. He argued that the ethics rules do not provide the right guidance to fill this procedural gap, and further that incorporating the ethical rules in this fashion imposed a cost on the system. Beisner proposed that the ethics rules should be strengthened to better address conflicts of interest at the outset of mass tort litigation. In response to Ratner, Beisner suggested that courts felt a need to do something about fees that were perceived to be too high. Finally, Baker also considered the trend of judges imposing caps on fees in non-class actions, and asked whether the plaintiffs' attorney ethically may challenge the cap where the court sua sponte has now created a conflict of interest between the attorney and her client.
My thanks to all the participants for a wonderful conference.
February 29, 2012
Mass Torts in the Federal Courts - Recap Part I
Congratulations to the students of the Federal Courts Law Review for a wonderful symposium last Friday, February 24, 2012, on "Mass Torts in the Federal Courts." In today's post, I will recap the two individual presenters: Ken Feinberg and the Honorable Marina Corodemus (ret.).
Ken Feinberg gave the keynote address. His remarks focused on his work with the 9/11 Fund as well as the Gulf Coast Claims Facility. Feinberg noted five options to adjudicating mass torts: (1) Rule 23 class actions, (2), MDLs, (3) regional consolidation, (4) bankruptcy by the defendant, and (5) individual litigation of each case. Feinberg expressed skepticism that Rule 23 permitted aggregation of mass torts. While acknowledging that MDLs worked for mass torts, he pointed out that MDLs only capture federal cases. The downside to regional consolidation, according to Feinberg, was that it did not provide truly mass resolution. Finally, he asserted that bankruptcy was a "draconian way" to achieve mass resolution. He argued that the 9/11 Fund and the Gulf Coast Claims Facility were both sui generis and challenged the audience (and other speakers) to address three questions: (1) Are the federal courts receptive to mass tort litigation? (2) What legal challenges to do mass torts confront in the federal courts? and (3) What is the alternative to adjudicating mass torts in the federal courts? Audience questions raised the delegation issue inherent in the fund approach: is it a good idea to delegate all of that authority to one person to resolve mass tort claims including the amount of payment?
The Honorable Marina Corodemus (ret). shared "A View from the Bench" based on her perspective as New Jersey's sole mass torts judge for over ten years. Judge Corodemus discussed her experiences in trying to coordinate mass tort cases with federal judges handling MDLs as well as other state court judges. She concluded by identifying two problems for the future: (1) the increasing number of mass tort claims and (2) the shrinking budgets of the state court system.
In tomorrow's post, I will describe the three panel presentations.
January 23, 2012
Pfizer Seeks Zoloft Birth Defect MDL
The Legal Intelligencer reports that Pfizer has asked the U.S. Judicial Panel on Multi District Litigation to consolidate over 50 cases filed in PA, NY, IL, MS, MO and OH. The cases involve Zoloft, which the plaintiffs allege caused birth defects in the patient's children. Pfizer has requested the Southern District of New York for the MDL forum. The full story is behind a registration block.
November 21, 2011
"Kill the class action; kill the tort"
From the good people at Drug & Device Law comes word of a federal district court opinion finding that each "plaintiff's individual medical condition/history is relevant" to a medical monitoring claim under Pennsylvania law. As D&D points out, this holding creates an individual issue, which should defeat class certification of a medical monitoring claim.
November 01, 2011
WSJ Profile of Ted Frank
October 10, 2011
Informal Aggregate Settlements
The blogosphere is talking about a recent decision by the United States Court of Appeals for the Second Circuit: Johnson v. Nextel Communications, Inc. (pdf). In Johnson, the Second Circuit allowed clients to sue their own attorney - and even the defendant - for breach of fiduciary duty in entering a settlement agreement. Never certified as a class action, the plaintiff's counsel had reached an aggregate settlement agreement with Nextel for various discrimination claims
As Adam Zimmerman wrote on ADR Prof:
The settlement agreement in Johnson created a dispute resolution process for a large group of clients, represented by the same law firm, who commenced similar employment discrimination claims against Nextel. Among other things, the agreement included tight time frames for claimants to participate and resolve their claims; the agreement even reduced plaintiff counsels’ fee awards, on a sliding scale, when they failed to persuade clients to meet those deadlines or participate in the settlement. By entering into the deal, according to the Second Circuit, the plaintiffs’ former lawyers “violated [their fiduciary] duty to advise and represent each client individually, giving due consideration to differing claims, differing strengths of those claims, and differing interests in one or more proper tribunals in which to assert those claims.” . . . [T]he plaintiffs’ law firm also agreed to take on a multi-million dollar consulting agreement with defendants after all the individual claims finally settled
September 03, 2011
Class Actions in Mexico
WSJ Law Blog recently posted on Mexico's adoption of class actions. The new Mexican law includes a loser-pays provision. The details are here.
Thanks to Mark Behrens for the tip.
August 01, 2011
Yaz MDL Case Management Order
Mass Tort Defense notes that the New Jersey state court has issued its case management order for the first bell wether trials in the Yaz MDL.