Mass Tort Litigation Blog

Foreign Courts Wary of Punitive Damages

The New York Times has an interesting story on Italians’ view of punitive damages. Apparently they are "so offensive to Italian notions of justice" that Italy refuses to enforce judgements containing punitive damages. Here’s an excerpt of the full article, which begins by highlighting an Alabama woman who sued when her 15-year old’s motorcycle helmet failed:

Most of the rest of the world views the idea of punitive damages with alarm. As the Italian court explained, private lawsuits brought by injured people should have only one goal — compensation for a loss. Allowing separate awards meant to punish the defendant, foreign courts say, is a terrible idea.

Punishments, they say, should be meted out only by the criminal justice system, with its elaborate due process protections and disinterested prosecutors. It is not fair, they add, to give plaintiffs a windfall beyond what they have lost. And the ad hoc opinions of a jury, they say, are a poor substitute for the considered judgments of government safety regulators.

Some common-law countries do allow punitive damages, though in limited circumstances and modest amounts. In the United States, by contrast, enormous punitive awards are relatively common, although they are often reduced or eliminated on appeal. Last month, for instance, the United States Supreme Court heard arguments in the Exxon Valdez case, where a jury’s initial award of $5 billion was later reduced to $2.5 billion.

Still, such awards terrify foreign courts.

"The U.S. practice of permitting a lay jury to exercise largely discretionary judgment with limited constraints in awarding punitive damages is regarded almost universally outside the U.S. with a high degree of disfavor," said Gary Born, an American lawyer who works in London.

Foreign lawyers and judges are quick to cite particularly large American awards. Julian Lew, a barrister in London, recalled a Mississippi court’s $400 million punitive award against a Canadian company in 1995 with scorn. "It did bring America into total and utter contempt around the world," Mr. Lew said.

Yet there are signs that the gap between the United States and the rest of the world is narrowing, as American courts and legislatures start to limit punitive awards and other countries start to experiment with them.

Punitive damages have deep roots in American and English common law, but their nature has changed here over time. "Until well into the 19th century," Justice John Paul Stevens of the Supreme Court wrote in 2001, "punitive damages frequently operated to compensate for intangible injuries" like pain and suffering or emotional distress.

These days, driven by the structure of the American civil justice system, entrepreneurial plaintiffs’ lawyers and the populism they embrace, punitive damages are used to send messages to large corporations, to fill gaps in regulation and to reward successful plaintiffs with multiples of what they have lost. Distinctive features of the American legal system — civil juries, class actions, contingency fees and the requirement that each side bear its own lawyers’ fees — all play a role in amplifying punitive damages.

ECB

Cardiologists Question Continued Use of Vytorin and Zetia

This morning’s Wall Street Journal reports that a panel at the American College of Cardiology Study questioned heavy use of Vytorin and Zetia in fighting cardiovascular disease. Merck and Schering-Plough countered by saying "they believe Vytorin failed to show a benefit likely because most of the study patients had previously been treated with statins, and their arteries were healthier than expected." Here’s an excerpt of the article:

The panel's opinion, which came at the annual meeting of the American College of Cardiology Sunday, could prompt many physicians to switch heart patients away from significant use of the drugs, known as Vytorin and Zetia, and frustrate efforts of the drug companies to shore up sales of the medicines. Together, the perspective and the study results themselves appeared to strengthen the view that adoption of the medicines has far outpaced any evidence supporting their benefits.

"You've just seen a negative trial that should change practice, especially the way we in this country have prescribed" the drugs, Yale University cardiologist Harlan Krumholz told thousands of cardiologists. He urged doctors to go "back to statins," the class of cholesterol-lowering drugs that includes Lipitor and Zocor. Major studies have demonstrated their ability to save lives and prevent heart attacks.

If the advice is followed by cardiologists and primary care physicians, it would almost certainly spur a significant drop in sales of the drugs. The companies have been trying to revive or hold the line on already slumping sales of the pills, which climbed to a combined $5.1 billion last year.

Officials with both Merck and Schering-Plough took issue with calls to curtail their use. Enrico Veltri, a group vice president for clinical research at Schering-Plough, said Zetia and Vytorin remain an important "practical option" for helping patients to reduce LDL cholesterol, the type associated with cardiac issues.

ECB

Hadfield on the September 11 Fund and Litigation

Gillian Hadfield (USC) has posted what promises to be a fascinating qualitative analysis on the decision of victims of the terror attacks of September 11, 2001 to litigate or obtain compensation through the September 11 Fund.  The Article, called "Framing the Choice Between Cash and Courthouse: Experiences with the 9/11 Victim Compensation Fund" will be published in the Law and Society Review and is posted on SSRN.  This is a very important contribution to our thinking on what types of procedures ought to be used in mass tort cases.  Here is the abstract:

In this paper I report the results of a quantitative and qualitative empirical study of how those who were injured or lost a family member in the September 11, 2001 terrorist attacks evaluated the tradeoff between a cash payment - available through the Victim Compensation Fund - and the pursuit of litigation. Responses make it clear that potential plaintiffs saw much more at stake than monetary compensation and that the choice to forego litigation required the sacrifice of important non-monetary, civic, values: obtaining and publicizing information about what happened, prompting public findings of accountability for those responsible, and participating in the process of ensuring that there would be responsive change to what was learned about how the attacks and deaths happened. The results shed light on the framing component of the transformation of disputes, and in particular on how potential litigants see the decision to sue, or not, as a decision as much or more about how they understand their relationship to their community and their responsibilities as a citizen as how they evaluate monetary considerations.

ADL

Mnookin on Idealizing Science and Demonizing Experts

Jennifer Mnookin (UCLA) has just posted an article on SSRN entitled "Idealizing Science and Demonizing Experts: An Intellectual History of Expert Evidence," 52 Villanova L. Rev. (2007).  The Article provides some much needed perspective on the role of science in litigation.  Here is the abstract:

This Article, published in a symposium issue focusing on science and expertise, traces the early reception of the modern expert witness. It describes in some detail the widespread frustrations with expert witnesses in court in the closing decades of the nineteenth century, focusing in particular on the two most vociferous critiques: that experts too often became partisans, mere mouthpieces for the party that hired them; and that expert testimony was so frequently contradictory that it confused and perplexed, rather than enlightened, the lay jurors who heard it.

The Article argues that these criticisms can only be properly understood by recognizing two important aspects of how expert evidence was being wielded and understood in this period. First, it is important to recognize that even amidst the rampant complaints by the bench, bar, and experts themselves, about the content and methods of expert testimony, the actual use of expert evidence was simultaneously increasing. Second, I argue that a key source of the dissatisfaction with expert testimony was a disjunction between a set of idealized expectations for scientific evidence and the practical realities of its use in the courtroom. It was precisely because of what science was thought to be able to offer to the process of legal decisionmaking, that the spectacle of warring experts provoked such frustration and anger. Science ought to have been able to offer proof more objective, more certain, and more neutral than that of the lay eyewitness, or so believed scientists and legal commentators alike. When it failed to do so, this failure was frequently attributed to partisan excess or the problems of adversarialism, rather than recognized as being, at least in significant part, the result of unrealistic expectations for science itself. In the conclusion, I suggest that this idealized conception of science lingers with us today as well, and continues to influence how we understand and critique expert evidence in court.

ADL

ABA Teleconference on Communicating with Class Members

On May 20, the ABA Class Action and Derivative Suits Committee will host a teleconference CLE program on communicating with class members. I’ll be on the panel along with Lisa Rodriguez and Chris Murphy. Here’s the pertinent information from the ABA:

Upcoming Class Actions and Derivative Suits Committee CLE Program: Are You Talking To Me? Communicating with Class Members Before, During and After Class Certification Click here to register: http://www.abanet.org/cle/programs/t08atm1.html

Date: Tuesday, May 20, 2008 Duration: 90 Minutes Time: 12:00PM-1:30pm Central Program Description: Confusion abounds among class counsel, defense counsel, courts, and putative class members as to the scope and appropriateness of communications with putative class members before, during, and after class certification. Our teleconference and audio webcast will provide guidance on who can talk to whom, when, and about what.

This program will discuss everything relating to communications with class members, including:

Pre-filing communications, seeking plaintiffs via websites, and the effect of any website advertising to obtain plaintiffs What communications are permissible between filing the complaint and class certification, i.e., are the class members considered represented or not?

Can discovery be propounded to the putative class members? What about questionnaires?

Is there a different standard where the non-named plaintiffs have called plaintiffs' counsel directly and asked to be a part of the case but are not named plaintiffs?

What if a defendant has an ongoing business or employment relationship with the putative class? What's allowed and when? Must any communications be approved by the court or plaintiffs' counsel?

If communications are made, can questionnaires obtained by class or defense counsel be used as evidence? What if they are unsigned or redacted?

What about post-certification before any opt-out period expires? What effect does the ABA’s recent Ethics Opinion (No. 07-445) have on such communications? Post-certification and opt-out period expiration: what's the scope of discovery from absent class members? Is it allowed? When? How?

Program Moderator Fred B. Burnside, Davis, Wright, Tremaine, LLP, Seattle, WA

Program Faculty Beth Burch, Assistant Professor of Law, Cumberland School of Law, Samford University, Birmingham, AL Lisa Rodriguez, Trujillo, Rodriguez & Richards, LLC, Haddonfield, NJ Chris Murphy, McDermott, Will, & Emery, Chicago, IL

ECB

FDA Proposes Guidelines for Drug-Coated Stents

Article in the Wall Street Journal -- FDA Proposes Stent Guidelines, by Jennifer Levitz.  Here's an excerpt:

The Food and Drug Administration proposed tougher clinical-trial guidelines for drug-coated stents in response to concerns about blood clotting in the artery-opening devices long after implantation.

The move is the first concrete change since the FDA held a two-day meeting in December 2006 about whether such stents increase the risk of clots compared with bare-metal stents years after the procedure. Coated stents don't appear to increase deaths or blood clots overall; whether they increase late clots years after implantation is still debated.

Instead of assessing patients' progress and health in trials nine months after a stent is implanted, the agency will now require companies to submit trial data on patients' health one and two years after the procedure, before stents can be approved. The new draft guidelines appear to codify standards that the FDA used to assess trials for new stents from Medtronic Inc. and Abbott Laboratories.

BGS

FDA Drug Approval Near Deadline Linked to Safety Problems

Article in the Wall Street Journal -- Late Drug Approval Linked To Safety Issues, by Keith J. Winstein.  Here's an excerpt:

Although every unsafe drug is different, most of them have something in common: last-minute approvals by the Food and Drug Administration, according to a new study.

Liver problems led Pfizer Inc. to withdraw its diabetes drug Rezulin from the U.S. market in 2000. Bayer AG pulled cholesterol-lowering Baycol in 2001 because it caused muscle damage in some patients. Vioxx, Merck & Co.'s controversial painkiller, was withdrawn in 2004 because it sometimes caused heart attacks and strokes.

These and other unsafe drugs all received approval shortly before the FDA deadline for deciding on new-drug applications.

Since 1993, the 97 drugs approved near the FDA's deadline had a 14% rate of severe safety problems down the road, compared with 3% for 216 other drugs. That's according to an analysis in Thursday's issue of the New England Journal of Medicine by Daniel Carpenter, a professor of government at Harvard University. The FDA says some of Dr. Carpenter's data are inaccurate, and disputed his conclusions.

BGS

Transparency in the Court System

Lynn LoPucki (UCLA) has recently posted an article entitled "Court Transparency" on SSRN.  This article discusses an issue that will be increasingly important, the availability of filings and other court data maintained electronically to the general public and to scholars.  In the mass tort context, there is a significant amount of data not kept by the court system that would be useful to policy makers and scholars, so this article address only part of the question, but a very important part.  It got me thinking that perhaps in the electronic age it would be possible to file discovery responses with the courts and make them universally available.  Would this be a good or bad thing?  The counter-arguments and objections to transparency that he raises are also important to think about seriously.  Here is the abstract:

Over the past decade, technology has transformed the federal courts. The federal courts moved from paper to electronic filing, resolved daunting privacy problems, and made their files available on PACER - thereby becoming the world's most transparent court system. Now they have already embarked on what may be a second, equally important transformation - the use of relational forms from which court data can be extracted automatically. This Article describes the technology and seeks to project and evaluate the effects of that second transformation.

If it occurs, the second transformation would create millions of windows into the courts at virtually no cost to the government. All relevant aspects of the courts' decision making would be revealed to policymakers, litigants, and the public, in forms they could readily comprehend. All would be able to see who wins what and how often. That would give policy makers the feedback necessary to fine tune the system, lawyers the ability to predict the outcomes of their cases, and the public the ability to see what courts actually do. Members of the public could also see whether the precautions they take for supposed legal reasons are the right ones.

Opponents argue that court record transparency (1) will expose parties and witnesses to the risk of identify theft and other harms, (2) will invade privacy by making previously difficult-to-obtain public record information about individuals readily available, and (3) will pressure judges in ways that deprive them of judicial independence. The Article argues that none of those objections is well-founded.

ADL

Plaintiffs' Attorneys Mass Tort Conference

Mass Tort plaintiffs’ attorneys are hosting a conference in Las Vegas on April 10-11 titled "Mass Torts Made Perfect."  Topics include Vioxx, Paxil, preemption, Ortho Evra, Heparin, Fosamax, and Accutane. Speakers include a number of prominent plaintiffs’ attorneys as well as Lynn Baker (Texas).

ECB

GM Receives Preliminary Settlement Approval in Nationwide Auto-Repair Litigation

The Recorder reports that Alameda County Superior Court Judge Robert Freedman has preliminarily approved a 49-state class action settlement between General Motors and plaintiffs over auto repairs. The settlement is worth approximately $150 million to car owners even though it reportedly compensates them for only about 50% of the repairs. Here’s an excerpt:

Under the settlement, the class would be split into three groups based on the cars they drive, the type of engine and the kinds of repairs performed. Plaintiffs would collect $50 to $800 per repair, with speedier repairs generating larger reimbursements.

The settlement does not cap the total amount GM would pay class members, though it does set maximums in other areas: court-approved attorney fees of up to $16.5 million, litigation expenses of up to $1.55 million and total named plaintiffs' incentive awards of up to $140,000.

Lawyers in California and Missouri first filed suit against GM about five years ago, claiming the auto manufacturer used an engine coolant in factories that created performance problems in more than 30 models of GM cars, including the Oldsmobile Cutlass and Chevy Impala. All of the cases targeted Dex-Cool, a coolant GM started using with the 1995 model year. The suits asserted claims for breach of warranty and violations of unfair business practices statutes.

GM was represented by Robert Ellis, a Chicago-based partner at Kirkland & Ellis. Through a Kirkland spokesman, Ellis referred calls about the settlement to a General Motors spokesman, who declined to comment.

Earlier in the litigation, plaintiffs attorneys experienced some bumps along the road to class certification.

Four years ago, Alameda County Superior Court Judge Ronald Sabraw denied a motion seeking class certification to get declaratory judgment on one issue in the California piece of the litigation.

In 2006, after Sabraw retired from the Alameda County court, the same plaintiffs filed a motion seeking certification of a California class to establish liability. Judge Freedman denied that but said the plaintiffs could bring a renewed motion supported by additional evidence. The plaintiffs asked to certify a California class last year for a third time, supporting it with affidavits from four expert witnesses. That time, Freedman granted class certification.

ECB

Lilly Settles with the State of Alaska over Zyprexa Claims

Rather than proceed with trial, Eli Lilly has entered into a $15 million settlement with the State of Alaska in the State’s Medicaid lawsuit over Zyprexa. The State’s suit involved claims that it had to pay for treatment of Zyprexa-related health problems such as diabetes and weight gain. The Wall Street Journal reports some remarks by the Alaska judge:

Anchorage Superior Court Judge Mark Rindner said on the bench, without jurors present, that without lawsuits like the one the state of Alaska brought, claims that drugs cause health problems "might well go unaddressed."

Judge Rindner was reacting to an assertion by Lilly lawyer George Lehner that drug regulation is up to the federal Food and Drug Administration, not any state. He argued that Alaska's Unfair Trade Practices and Consumer Protection Act shouldn't apply to drugs.

But Judge Rindner said evidence presented by the state had established that the FDA "isn't capable of policing this matter."

The Wall Street Journal’s Health Blog adds:

The settlement means the end of an Anchorage jury trial that people were watching as a bellwether, to get a read on how Lilly might fare in negotiations with other states and with the feds, which have leveled similar allegations.

The outcome looks pretty good for the company. Before the jury trial started, the WSJ reported that Lilly floated a settlement offer of about $2 million, while Alaska was looking for something closer to $200 million.

ECB

Punitive Damages and the World

Interesting article by Adam Liptak in tomorrow's New York Times -- Foreign Courts Wary of U.S. Punitive Damages -- as part of the series on the American legal system in comparative perspective.  The main point of the story is the uniqueness of U.S. punitive damages and the reluctance of some foreign courts to enforce U.S. punitive damage awards, but the story also suggests "that the gap between the United States and the rest of the world is narrowing, as American courts and legislatures start to limit punitive awards and other countries start to experiment with them."

HME

Pfizer Denied Discovery of JAMA Confidential Peer-Reviewer Comments in Celebrex and Bextra Litigation

As the Wall Street Journal reports -- see Pfizer Is Denied Access to JAMA Files, by Thomas M. Burton -- a magistrate judge in federal district court in Chicago has denied Pfizer's request to obtain confidential JAMA peer-reviewer comments in connection with the litigation involving Bextra and Celebrex.  Such peer-reviewer comments on a study can generally be valuable to defendants questioning a scientific study in connection with a scientific evidence challenge under Daubert, as well as for criticisms at trial if the Daubert evidentiary challenge fails.  Indeed, understanding peer-reviewer misgivings may be essential to placing in proper perspective the publication of a study in a prestigious scientific journal.  On the other hand, scientific journals may assert an interest in developing scientific publications without the specter of litigation-driven discovery at every turn.  Given the tremendous implications of the science underlying a mass tort for plaintiffs and defendants, I would be inclined to tread a middle ground -- allow limited discovery that vindicates the law's need for reliable scientific evidence, but does not unduly burden the medical journals in their important work.      

In an editorial in JAMA -- Preserving Confidentiality in the Peer Review Process -- Dr. DeAngelis and JAMA's counsel, Joseph Thornton, provide more details on the dispute and decision.  In addition, here's a related post on the dispute from Pharmalot, and another post from TortsProf Blog.  For more depth, take a look at the following article by Professor Bill Childs (Western New England): The Overlapping Magisteria of Law and Science: When Litigation and Science Collide, Nebraska L. Rev. (2007).

BGS

Pthalates in Toys

The PBS show NOW aired a segment about pthalates which are a chemical found in many toys and other soft plastic goods made of PVC plastic.  You can access the show here.  The EU has banned these substances in toys and products meant for use by children because there is some scientific evidence (although not conclusive) that pthalates interfere with sexual development in boys.  The EU and San Francisco has banned the use of pthalates in toys.  Apparently, there are other chemicals and substances that can be used to make soft plastic toys that are pthalate-free, although they are slightly more expensive.  Many of these toys are manufactured in China, and many factories there have two production lines - for toys meant for the European market (pthalate-free) and those made for the American market.

In our liberalized regulatory environment, where we rely largely on ex-post regulation through litigation, this seems like a litigation waiting to happen once the science is more established.   This controversy also raises some interesting questions about the relationship between innovation and regulation.  It is possible that the absence of regulation in a case such as this results in less innovation, because there is no incentive for manufacturers to seek out alternative chemicals if consumers aren't informed enough to make their preferences known (assuming, of course, that significant numbers of consumers prefer toys that don't put their boys sexual development at risk).  There are a couple of regulatory reactions that the government could adopt.  Like Europe, we could ban pthalates.  Or we could require that manufacturers identify which of their products contain pthalates and let consumers decide whether they would rather pay more for a toy that is pthalate-free.  My sense is that the requirement of adding a pthalate warning (especially if it included substantive information about the risks) would spur the use of alternative chemicals.  According to NOW, there is some movement among big retailers (Wal-Mart and Toys 'R Us were mentioned) to demand pthalate-free toys from manufacturers.  If I were a European company, I would advertise my toys in the US as European regulated (especially my soft plastic toys) - there is a market for regulated toys that seems lucrative.   In fact, I think Europe could benefit greatly from its regulated environment by using the regulation as a seal of approval for American consumers.

ADL 

Spiriva Respiratory Drug May Have Stroke Risk

Article from the March 18 Wall Street Journal  -- Boehringer Inhaler Might Pose Higher Stroke Risk, FDA Says, by Jennifer Corbett Dooren.  Here's an excerpt:

The Food and Drug Administration said Tuesday it is opening a safety review of Boehringer Ingelheim GMBH's respiratory drug Spiriva after the company reported a possible higher risk of stroke to the agency.

In an "early communication" posted on the FDA's Web site, the agency said Boehringer Ingelheim submitted the results of 29 studies involving Spiriva, an inhaler that treats patients with chronic obstructive pulmonary disease, which showed a slightly higher rate of stroke among patients treated with Spiriva compared to those not receiving the drug. Most of the studies looked at Spiriva's HandiHaler, which is co-marketed with Pfizer Inc.

"Additional information is needed to further evaluate this preliminary information about stroke in patients who take Spiriva HandiHaler," the FDA said. The agency said it has requested additional information from the company and is reviewing post-marketing adverse events reported to FDA involving Spiriva.

BGS

Heparin Recall Because of Potentially Dangerous Contaminant

Article in the Wall Street Journal -- Another Company Recalls Blood Thinner Heparin, by the Associated Press.  Here's an excerpt:

A manufacturer of the blood thinner heparin initiated a nationwide recall Friday because some products may contain a potentially dangerous contaminant. Contaminated heparin from a different manufacturer has been associated with 19 deaths and hundreds of allergic reactions.

In the recall announced Friday, B. Braun Medical Inc. said it was recalling 23 lots of heparin as a precautionary measure. No adverse events have been reported in connection with their product, company officials said in a press release.

The company issued the recall after one of its suppliers, Wisconsin-based Scientific Protein Laboratories, disclosed that an ingredient it provided contained oversulfated chondroitin sulfate, a chemical that does not occur naturally. Federal officials are investigating how the contaminant got into the drug.

Previously, on March 20, the Wall Street Journal published FDA Identifies Contaminant in Heparin Batches, by Anna Wilde Mathews and Thomas M. Burton.  Here's an excerpt:

A contaminant found in recalled batches of the blood-thinner heparin was deliberately altered in a way that mimicked the real drug, the Food and Drug Administration said, a finding that will add to pressure on U.S. regulators and pharmaceutical companies to step up oversight of burgeoning Chinese drug production.

Yesterday, the FDA said the contaminant, which has surfaced in batches of heparin made from active ingredient sourced in China, appears to be a chemically altered material derived from a cheap and widely available substance found in animals, particularly in cartilage.

The agency said it isn't clear if the contaminant, called over-sulfated chondroitin sulfate, is the cause of allergic reactions, some fatal, that occurred in people who took heparin supplied by Baxter International Inc., which has recalled the drug batches linked to the problem. The contaminant has been found in heparin taken by people who had reactions.

BGS

Behrens, Sebok on Nagareda's Mass Torts in a World of Settlement

Mark Behrens of Shook, Hardy & Bacon has a short book review of Professor Richard Nagareda's Mass Torts in a World of Settlement in the Federalist Society's February issue of Engage.  Prior posts on Professor Nagareda's book are here (see interview below) and here.

For further views of Professor Nagareda's book, see also a September 2007 FindLaw column from Professor Anthony Sebok (Brooklyn), who will also be reviewing Professor Nagareda's book in a forthcoming issue of the Michigan Law Review.

BGS

Interview with Richard Nagareda on Mass Torts in a World of Settlement

This blog has featured Richard Nagareda (Vanderbilt)'s new book Mass Torts in a World of Settlement in a previous post.  Here is an interview of Nagareda sent to me by Rodger Citron (Touro) that may interest our readers:

Vanderbilt Law School Professor Richard A. Nagareda became interested in mass torts litigation while he was a student at Harvard law School, worked in private practice on an important class action that attempted to resolve the asbestos litigation – the case, Amchem Products, Inc. v. Windsor, eventually went to the Supreme Court – and now has written Mass Torts in a World of Settlement (University of Chicago Press 2007), which makes the case for rethinking the legal system’s current approach to resolving certain types of mass torts lawsuits.  In his book, Nagareda addresses litigation over a mass-marketed product that involves claims of injury to large numbers of people and a delay in the time between a person’s exposure to a harmful product and that person’s development of an injury.  The numerous lawsuits generated by claims of exposure to asbestos are representative of the cases studied by Nagareda.

Nagareda says that there are two fundamental flaws in the resolution of mass torts claim in the current legal system.  First, settlements in mass torts cases often do not sufficiently protect future claimants – those individuals who have been exposed to the defective product but do not yet show signs of injury.  Nagareda argues that this lack of protection results, in large part, a related problem in the resolution of mass torts cases.  Currently the settlement of such cases is seen as raising only litigation-related questions.  However, such settlements also – even primarily – implicate questions of governance and administration, according to Nagareda.  In his book, he outlines a number of suggestions for improving the legal system’s approach to resolving mass torts lawsuits.   On November 30, 2007, Rodger D. Citron interviewed Nagareda at a conference at the University of Pennsylvania Law School.  An edited transcript of their conversation follows:

Q:    Is the recent settlement in the Vioxx litigation against Merck the type of case that you address in your book?
RN:      It is actually in a kind of grey area. . . .  [I]t’s very close to what I talk about in the book because it’s clearly dealing with a pharmaceutical product mass-marketed and in that sense presented some of the same coordination problems.  [However, t]he temporal dispersion problem was less of a problem at least when it came to the point of designing a comprehensive settlement.  That is because of the particulars of the underlying science surrounding Vioxx.  My understanding is that of the sorts of people who have even colorable claims of a connection between taking Vioxx and suffering a heart attack are people, who have, at least by now, suffered the heart attack. 

Q:      Can you describe what occurs in the litigation and then resolution of mass torts cases in the current system?
RN:      [V]iewing things in the prism of litigation has an obvious truth to it but it is also somewhat misleading and doesn’t really describe what is going on in these kinds of litigations right now. . . .  [L]itigation is in one way or another simply a prelude . . . to some effort through some mechanism – whether we could call it a class action or a reorganization bankruptcy or a multi-district litigation proceeding as in Vioxx – to some effort to make and enforce a comprehensive peace to set the terms for the resolution of these claims.  Once you move from litigation to this peacemaking process, what the peacemaking process involves is a kind of administration.  You set up a grid that defines, in very simplified way the characteristics of the claims that you are going to pay, and you set up some framework, typically with specific dollar amounts saying what you are going to pay for those kinds of claims.  My book is about this process of moving from litigation, as we conventionally think about it, to this kind of administration and the role that lawyers and judges play in that process.

Q:       In the current legal system, what problems arise in the transition from initial lawsuit to the peacemaking process you describe? 
RN:      [I]n the most immediate sense, lawyers, particularly lawyers on the plaintiffs’ side, are actually functioning in a different way then we conventionally think about a lawyer functioning for a client. . . .  [W]hat is going on in these sorts of settlements is a kind of leveraging.  What the plaintiffs’ lawyer is doing is leveraging their current, what’s called ‘inventory of claims’, into the ability to not only . . . obtain compensation for those claimants, but also [using that inventory of claims] as the basis for those lawyers asserting a much broader power that goes beyond the strict lawyer-client relationships that they have with their existing clients.  And that is the power to set the terms in one way or another under which people who are not currently their clients and may never become their clients will get paid.  I think we need to move away from a litigation-based or client-based conception of what’s going on to something that does have a more kind of administrative tinge to it, where the relationships, where the power that’s being exercised is not the byproduct of some contract [i.e.] a lawyer-client retention agreement. 

Q:      How would you change the current system?
RN:      Well, first, I think the main point of the book is, simply for people to start from an accurate descriptive account of what is going on.  Because I think we can certainly debate what the right approaches would be, but I think we need to start with an accurate and un-romanticized picture of what’s going on.  [I]f we proceed from a more accurate picture, then I think the fundamental challenge for the law is not to think of these peace-making mechanisms in their various procedural categories . . . .  [Instead t]he fundamental problem is how do we achieve closure in a way that gives us confidence that the process . . . is such that future claimants will be adequately provided for?  The pervasive problem . . . is that we see the same kind of problem cropping up again and again.  And that is resources are over-consumed by present day claimants and ultimately to the financial benefit of their lawyers, and future claimants are not adequately provided for.  What I say in the book is . . . we cannot rely on the individual claimants, realistically, to police this process. 

Q:    What are the obstacles in the current legal system to your approach? 
RN:    Current law really inhibits us from getting there . . . because its starts from the notion that it’s a conflict of interest for lawyers to have an existing inventory of clients and then to try and represent in some negotiation future claimants. 

Q:     In your book, you discuss the Supreme Court’s decision in the Amchem case as representative of the current legal system’s views on conflicts of interest in these cases.  Is the Amchem decision a cause or a symptom of the problems you describe?
RN:      Amchem flows from things that are much more deeply ingrained than our class action rules or even civil procedure thinking. . . .  [W]hat I think that was missing in Amchem is both a recognition of this leveraging that’s going on the part of plaintiff’s lawyers, and what’s also missing in our broader thinking about this is the degree to which we need to get away form conventional thinking in terms of lawyer-client relations and conventional thinking in terms of regarding mass torts as purely a litigation problem.   It’s not a purely a litigation problem; it’s a problem of administration, it’s a problem of governance, and once you make that shift I think we come to a very different kind of understanding of conflicts of interest.  When we think about representation in more public or political processes, in legislatures and other public mechanisms, there is not this fastidious obsession with avoiding conflicts of interest.  We regard representation as actually a good thing when it encompasses a broad array of interests.  But we also with that impose various sorts of constraints.  Political representatives have to stand for re-election and that’s because they have this sort of ongoing relationship [with their constituents].  Part of what one can see my proposal as doing is trying to move us from the fee mechanism to something like a kind of ongoing relationship that gets away from the current situation where the attorneys can make peace, it’s a one-shot deal, they walk away, they get their money, the defendant may well get some benefits from the settlement but future claimants really are short changed.

Q:    It seems to me that under the current system, there are principally three players:  the plaintiffs’ counsel, the defense counsel, and the judge managing the litigation.  What’s in it for them to change from the current system to your approach?
RN:      I think that my proposal is a proposal that is not going to be palatable to lawyers, because both lawyers on the plaintiffs’ side and lawyers on the defense side understand very well how the existing systems work and can work its dysfunctional features for the benefit of their particular interests.  Courts, I think, are beginning to understand the sort of magnitude of the problem but they are of course quite rightly limited by existing law, and existing procedures.  I think ultimately there has to be some sort of legislative type of push.  Now the important thing that I would say about my proposal is that one, you don’t have to change the entire world, and two, you don’t have to have the federal government dictating the terms of the deal.  What I mean by not changing the entire world is . . . there are particular areas in which we have an existing administrative apparatus. . . .  [P]art of the debate should also involve what responsibilities the agency might have or what role it can in better structuring this bargaining process and that leads to my second point.  That is, I really have a respect for the creativity of attorneys here.  These are complex business deals fundamentally, and I certainly do not think that the government has any business or any real expertise in dictating the precise terms of those deals.  But I do think there is an appropriate role for setting up the bargaining process in a way that gives us much more confidence that the deal making savvy of lawyers will be directed in a way that we would find more socially desirable.

Rodger D. Citron is an assistant professor of law at Touro Law Center.  ADL

Van Houtte & Yi on Mass Claims Relating to Wartime Property Loss

Hans van Houtte (Katholieke Universiteit Leuven) and Iasson Yi have recently posted "Due Process in International Mass Claims" on SSRN.  The article is published in 1 Erasmus Law Review (2008).  The paper catalogs recent settlements of litigation arising out of World War II era claims of lost property and labor.

ADL

Brickman on Fraudulent Claims

Lester Brickman (Cardozo) recently updated an article on fraudulent claims in the asbestos context on SSRN.  The title is "Disparities Between Asbestosis and Silicosis Claims Generated by Litigation Screenings and Clinical Studies." The article was published in the Cardozo Law Review in 2007.

The bottom line, according to Brickman: "The conclusion I draw from the data and evidence presented is that Judge Jack's findings with regard to the medical reports in the silica MDL applies with at least equal force to nonmalignant asbestos litigation: the medical reports are mostly manufactured for money."

ADL