Thursday, October 3, 2019

Mass Tort Deals - Chapter 6

Wrapping up the Mass Tort Deals series, we have suggestions for possible reforms.  (If you want links to the prior reviews, the Mass Torts Litigation Blog has a consolidated list here.)

Burch recognizes that getting real reforms here will be a challenge and that we are not likely to simply scrap the existing structure and start with something new for these cases.  In light of that, she focuses on empowering current and potential stakeholders who will have appropriate incentives to improve how the system functions.

Let's start with financiers.  Burch's scholarship has suggested empowering financiers to serve as monitors in this kind of litigation.  She continues that thread here and proposes a system where "plaintiffs could assign a financier a stake in their lawsuit as the contingent fee does now.  In exchange the financier funds the suit on a nonrecourse basis and pays attorneys a billable-hour rate plus some small percentage of the recovery as a bonus."  In my view, this seems likely to generate much more effective and sophisticated oversight of attorney conduct.  A financier without in-house expertise in the area could simply hire sophisticated counsel to oversee the litigation.  Corporate defendants do this all the time and generally manage to select more sophisticated and competent counsel for themselves.  We cannot expect ordinary people to have the necessary expertise to competently oversee their counsel in these complex cases.  Reducing the sophistication gap between counsel will likely do much good for plaintiffs.

Securities law attempted something similar with the lead plaintiff provision for securities class action suits.  Although allowing larger institutional stakeholders to play a larger role in securities class actions has yielded some benefits, it doesn't seem nearly as effective as Burch's proposal here.  Even a larger institutional shareholder isn't likely to have the same intensely concentrated interest in the action as a financier would.

Burch also focuses on how to better surface relevant information and inform courts about the true state of play.  She suggests a range of reforms to improve outcomes.  Actually conducting more trials, granting more remands, and appropriately calibrating lawyer groups will all likely generate more useful information.  She suggests a more competitive application process to crack open the cartel and allow other lawyers access to court.  One interesting possibility is to solicit objections in leadership contests and allow attorneys provide objections confidentially.  Without a protection like this, many important objections will never be made.  Consider the calculus for a repeat player.  If you know about problems and speak up, you paint a target on yourself for retaliation in the action, or other ongoing actions.  Leadership groups dole out work, rewards, and access.  Offending a well-connected player could cost an attorney millions.

She also suggests independent organizing by plaintiffs.  Social media and modern technology now enable communication and coordination between plaintiffs.  Having been the victim by a particular drug or product can create a type of shared identity.  We now have sites dedicated to "pelvic-mesh victims, Vioxx users, Essure plaintiffs, and retired NFL players."  More reforms and oversight might emerge if group members coordinate and coordinate with each other.  It may makes sense for groups to encourage members to refuse to assent to lowball or uncertain, contingent settlement offers.  With defendants including walkaway thresholds, groups of plaintiffs could hold out together instead of settling after one-to-one conversations with an attorney facing enormous pressure to get them to settle.  Burch closes the book by with something both true and obvious, yet often forgotten.  "Plaintiffs aren't commodities on an assembly line or inventory in a lawyer's filing cabinet--they're people like us."

Burch's work appears increasingly relevant as momentum builds toward reforming mass torts.  Ultimately, this review can only do rough justice to the complex and compellingly presented ideas.  This series has only scratched the surface.  If you're interested in mass torts or complex civil litigation, go get the book!

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