Friday, September 4, 2009

Scholarship on Multiparty Litigation & Settlement

An article recently posted on SSRN by Andrew F. Daughtey and Jennifer F. Reinganum, entitled "A Dynamic Model of Lawsuit Joinder and Settlement" models strategies on both sides of multidistrict litigation. Here is the abstract:

In this paper we examine a dynamic model of the process by which multiple related lawsuits may be filed and combined; we also examine actions a defendant may employ that may disrupt the formation of a joint suit. Our initial model involves two potential plaintiffs, with private information about the harm they have suffered, in a multi-period setting with positive costs of filing a suit. If two plaintiffs file, they join their suits to obtain a lower per-plaintiff trial cost and a higher likelihood of prevailing against the defendant. We find that some plaintiff types never file, some wait to see if another victim files and only then file, some file early and then drop their suits if not joined by another victim and, finally, some file and pursue their suits whether or not they are joined; thus, the equilibrium resembles a 'bandwagon.'

We then consider the effect of allowing preemptive settlement offers by the defendant aimed at discouraging follow-on suits. Preemptive settlement results in a 'gold rush' of cases into the first period. In general, plaintiffs (ex ante) strictly prefer that such preemptive settlements not be allowed, and computational results suggest this may be broadly true for defendants as well; however, the inability of defendants to commit to such a policy results in an equilibrium with preemptive settlement. Finally, we consider partial unawareness of victims as to the source of harm; this provides a role for plaintiffs’ attorneys, who may seek additional victims to join a combined lawsuit. Confidential preemptive settlements in the case of partial unawareness restrict the plaintiff’s attorney from seeking additional victims and therefore leads to higher preemptive settlement amounts. Moreover, the defendant strictly prefers to employ preemptive settlement if the fraction of unaware victims is sufficiently high.


September 4, 2009 in Mass Tort Scholarship | Permalink | Comments (0) | TrackBack (0)

Ford Settles New Jersey Toxic Tort Case

According to this report in The Record, Ford Motor Co. yesterday reached a settlement in which Ford agreed to pay millions of dollars to settle the claims of 600 residents of Upper Ringwood, NJ.  Although the settlement amount is confidential, the article mentions $10 million as an amount stated by sources.  The claims involved allegations of asthma, cancer, and other illnesses that residents claimed were attributable to Ford's 1960s-1970s dumping of paint sludge in a former mining area of Ringwood.


September 4, 2009 in Environmental Torts, Settlement | Permalink | Comments (0) | TrackBack (0)

Wednesday, September 2, 2009

Does the Google Settlement Matter to this Blog?

I was just perusing the ACS Blog and saw a post on Prof. James Gimmelman's take on the Google Book Settlement - which you may recall is the class action settlement that is giving Google a license to scan all the books in the world into a giant searchable database.  Here is what Gimmelman says:

The settlement tackles the orphan works problem, but through the judicial process. Laundering orphan works legislation through a class action lawsuit is both a brilliant response to legislative inaction and a dangerous use of the judicial power. Many of the public interest safeguards that would have been present in the political arena are attenuated in a seemingly private lawsuit; the lack of such safeguards is evident in the terms of the resulting settlement. The solution is to reinsert these missing public interest protections into the settlement.

(Empahsis mine).  Sounds familiar, doesn't it?  Think about aggregate litigation -- all the safeguards of the class action device are absent because, well, its not a class action.  (Gimmelman doesn't think those protections are enough and he's right).  But when ostensibly individual lawsuits are resolved en mass, they are being treated as a class rather than individuals. There's no other way to resolve thousands of cases. People cry out for legislative solutions (asbestos anyone?) and nothing happens. Meanwhile, things happen in the world. People get sick. Defendants get sued.

How good is the legislature at dealing with these issues, if they were to turn their attention to it? Who would like the result?  Is the problem the judicial process or the outcome? (That is, can judges do a good job here or are we really worried about legitimacy?)  What is the public interest and who, if anyone, serves it?  I'm worried that these structural issues - courts vs. legislatures - avoid the real areas of substantive disagreement.


September 2, 2009 in Aggregate Litigation Procedures, Class Actions, Procedure | Permalink | Comments (1) | TrackBack (0)

Tobacco Companies Bring First Amendment Challenge to New Marketing Rules

More from Ross Todd of AmLaw Daily in his post, Big Tobacco Asserts First Amendment with Help from Floyd Abrams.  Here's the complaint.


September 2, 2009 in FDA, Tobacco | Permalink | Comments (0) | TrackBack (0)

Jackpot Justice: Verdict Variability and the Mass Tort Class Action

SSRN I posted to SSRN my article, Jackpot Justice: Verdict Variability and the Mass Tort Class Action, 80 Temple Rev. 1013 (2007).  Notwithstanding the 2007 formal publication date, the article was published this year.  Here's the abstract:

Mass tort scholars, practitioners, and judges struggle with determining the most efficient approach to adjudicate sometimes tens of thousands of cases. Favoring class actions, mass tort scholars and judges have assumed that litigating any issue once is best. But while litigating any one issue could conceivably save attorneys' fees and court resources, a single adjudication of thousands of mass tort claims is unlikely to further tort goals of corrective justice, efficiency, or compensation in a reliable way. That is because, as recent empirical research on jury behavior shows, any one jury's verdict may be an outlier on a potential bell curve of responses applying the law to the facts before it. Indeed, one aberrational, high jury claim valuation, if extrapolated to thousands of claims through a class action, may inappropriately bankrupt an entire industry. Similarly, one unusually low jury verdict might deny legions of plaintiffs the compensation that they deserve. To illustrate the problems of attempting to resolve a mass tort with a single jury, this Article discusses the Engle tobacco class action of Florida smokers, where the application of a single jury verdict to approximately 700,000 smokers appears to be an outlier verdict in light of prior juries' verdicts in Florida tobacco cases. In contrast, this Article argues that the use of multiple juries in individual cases is a superior method of resolving a mass tort. While the use of multiple juries in class actions to create statistically cobbled claim values has been rejected as violating due process and state tort law, no such problems accompany the approach espoused here: that individual-plaintiff lawsuits, each with its own jury, be tried and that the jury verdicts be used by mass tort litigants to develop claim values for broad mass tort settlement. In addition to remaining within the strictures of constitutional and tort law, this clustering of multiple juries around an accurate valuation of mass tort claims and the resulting likely settlement furthers both the procedural goal of litigant autonomy and the tort aims of efficiency, corrective justice, and compensation.


September 2, 2009 in Aggregate Litigation Procedures, Class Actions, Mass Tort Scholarship, Procedure, Products Liability, Settlement, Tobacco | Permalink | Comments (0) | TrackBack (0)