Mass Tort Litigation Blog

Jury Verdict for Whirlpool in Moldy Washing Machine Case

The Ohio jury's verdict yesterday was in favor of the defendant, Whirlpool, in the moldy washing machine issue class action.  BNA has the report.  

In re Whirlpool Corp. Front-Loading Washer Prods. Liab. Litig. (Glazer v. Whirlpool Corp.), N.D. Ohio, No. 08-65001, verdict10/30/14

BP's Cert Petition Appealing the Deepwater Horizon Settlement

The papers in the Deepwater Horizon Settlement cert petition are mostly in.   The case is BP Exploration & Production Inc. v. Lake Eugenie Land & Development, Inc. -- you can find the documents on SCOTUSBLOG.  

BP's basic argument is that the settlement approved by Judge Barbier in the mass tort class action against it was ultra vires because it contemplated giving money to people who were, according to BP, not injured.   The plaintiffs respond that BP is just trying to overturn a settlement it championed through the backdoor now that its unhappy with the deal.

One of the most interesting briefs filed in this dispute is from Kenneth Feinberg, who oversaw both the 9/11 Victims Compensation Fund and the Gulf Coast Claims Facility.  The latter was the entity that settled claims arising out of the Deepwater Horizon oil spill immediately after it happened.

Feinberg is a world class mediator and one of the most prominent figures in the mass tort world.   The class action settlement that BP is now disputing is the successor to the Gulf Coast Claims Facility, which he headed.   What the class action did that the Gulf Coast Claims Facility could not do is give BP global peace. In other words, all civil claims against BP arising out of the oil spill are precluded by that class action settlement.  

Feinberg's brief asks the Supreme Court to grant cert.  The argument is basically the following: claim facilities like the ones he ran apply a causation requirement that parallels that of the tort system. But, he argues, the settlement agreed to by BP does not include as strong a causation requirement, and this threatens the possibility of future compensation funds to solve mass torts. The brief explains: 

..the Fifth Circuit's decisions in this case affecting the causation standard, if permitted to stand, threaten to make these sorely needed alterantives to mass tort litigation unlikely to be replicated.  Future funds would either adopt the Fifth Circuit's new standard, thereby threatening to overwhelm the claims process with spurious claims, or continue to require causation, thereby channeling claimants toward litigation where the burden of proof is lower. (Feinberg petition at 6). 

This argument seems to me to be just wrong.  The settlement imposed a looser causation requirement than tort law requires.  But that causation requirement was agreed to in order for claimants collect under the settlement; it is not the causation requirement of the substantive law. In the future, if a defendant perferred to create a settlement fund of the Feinberg-ian variety, they could do so and rest "easy" that the causation requirement of the substantive law remains as it always was. (Whether the requirement of specific causation is the best requirement from a normative point of view in mass tort litigation I leave to another day).  

There is no risk that this settlement will affect future litigation because it is a settlement - the defendant participated in crafting and agreed to the causation requirement applied in the claims facility created by the settlement.   One might say it is a form of private lawmaking only applicable to these parties.  If a future mass tort defendant doesn't like this type of loosened causation requirement, they don't have to agree to it.  In fact, they are free to say "we'll litigate every case" as Merck did for five years in the Vioxx mass tort and then in each and every case the standard causation requirement of the tort law in the relevant jurisdiction will apply. 

And what of the argument championed by BP that the settlement pays people who were not injured in fact?  Welcome to the world of settlements, Dorothy.  What happens in a settlement is this: each party has a sense of what the case is "worth" - that is, the likely result at trial.  They discount that amount by the risk of loss.  Then they substract from that discounted amount their transactions costs (the costs of litigation).  If the resulting number is close for both parties, they settle.  See Steven Shavell, Foundations of the Economic Analysis of Law, 401-407 (2004).  If they settle, they don't litigate. When they don't litigate, there is no trial.  

A settlement means that the plaintiff never has to prove causation, or any other element of her cause of action.  If the BP settlment violates Article III because plaintiffs didn't prove their legal entitlements, then every settlement violates Article III.  The reason is that in no settlement does plaintiff ever prove that they are entitled to compensation because the very purpose of the settlement is to avoid trial.  A plaitniff's entitlement at settlement is always uncertain.  If settlements in general are constitutional, then so is this one. 

A class action settlement is different than an ordinary settlement because it requires judicial approval.  But does that judicial approval require that plaintiff establish injury?  Here is the requirement for judicial approval of class action settlements:  "If the settlement would bind class members," then the court needs to determine at a fairness hearing that the settlement is "fair, reasonable and adequate."  Fed. R. Civ. P. 23(e)(2).  The reason that a fairness hearing is only required "if the settlement woudl bind class members" is that the purpose of the hearing and approval process is to protect absent class members who are to be bound, but are not before the court to state their objections.  This requirement is not meant to protect defendants, who are certainly well able to defend their interests and state their objections before the court.

And what was the benefit to BP? Why would BP enter into such a settlement?  They wanted global peace.  Only a class action settlement can provide that.  They were willing to pay a high price for global peace at the time.  Now things are different for BP, time has passed and it is in a better position than it was when it made this agreement, but that doesn't make the agreement unconstitutional or violative of the class action rule.  

I hope the Supreme Court does not grant certiorari because the Fifth Circuit correctly rejected these claims.  The ideas that underly the BP cert petition don't make sense in a litigation system that permits settlement.  And they don't make sense under modern jurisprudential understanding of what a right is.  People can sue when they think they have a right that has been violated.  If the lawsuit goes to trial, then plaintiff will have to meet their burden of proving that they in fact (1) have a right and (2) it was violated.  (Actually, they will likely have to show that they have a colorable case long before then).  At the beginning of the litigation these things are uncertain. Uncertainty is the space in which settlements happen.  

 

 

 

 

 

The Future of Class Action Litigation: A View from the Consumer Class

NYU's new Center on Civil Justice is hosting a conference on November 7 titled "The Future of Class Action Litigation: A View from the Consumer Class."  Here's a bit more information for those in the area who might be interested (I understand there will be up to 6 CLE hours available):

Co-hosted with the NYU Journal of Law & Business

Keynote Address by Chief Judge Alex Kozinski, US Court of Appeals for the Ninth Circuit

Friday, November 7, 2014

REGISTER HERE.  Up to 6  hours of New York State CLE credit will be available to both experienced and newly admitted attorneys under the Areas of Professional Practice Category.

NYU School of Law
Vanderbilt Hall, Greenberg Lounge
40 Washington Square South

Have consumer class actions run their course? Once, they were praised for increasing access to justice by compensating "small claims held by small people." They were also seen as a form of regulation, because they allowed private enforcement of the law by overcoming the economics of small-stakes individual litigation. This view was so widely accepted that the Supreme Court described these "negative value" suits as "the very core of the class action mechanism."  

Now, consumer class actions face serious criticism for failing to provide compensation for class members or to achieve effective market regulation.  Courts and commentators have questioned whether class members or society benefit from these cases. Perhaps as a result, it is harder to certify a consumer class action today than at any time since the adoption of modern Rule 23 in 1966.

This conference will explore whether consumer class actions deserve the criticism—or the praise—that they have received. Participants will discuss a broad range of issues about the recent development of the law of consumer class actions. The conference will also consider what the criticism of consumer class actions means for the future of class actions more generally. If "the very core" of class actions goes away, what will be left? 

 

Conference Schedule

8:30 - 9:00 am - Registration

(Registration will take place just outside of Greenberg Lounge)

9:00 - 9:15 am  - Welcoming Remarks

Introduction – Peter L. Zimroth, Director of the Center on Civil Justice

Remarks - Dean Trevor W. Morrison, NYU School of Law

9:15 - 10:30 am: Panel 1 -  The Current State of the Consumer Class Action

Moderator:  Samuel Issacharoff, Bonnie and Richard Reiss Professor of Constitutional Law and Faculty Co-Director, Center on Civil Justice, NYU School of Law

When Peace is Not the Goal of a Class Action Settlement
D. Theodore Rave, Assistant Professor of Law, University of Houston Law Center

The Identifiable Consumer: The Ascertainability Doctrine and Rule 68 Offers as Impediments to the Class
Myriam Gilles, Professor of Law, Benjamin N. Cardozo School of Law

Comments: Andrew Pincus, Mayer Brown LLP

10:30 - 10:45 am - Coffee Break

10:45 am - 12:00 pm: Panel 2 - Reforming the Consumer Class Action

Moderator:  Troy A. McKenzie, Professor of Law and Faculty Co-Director, Center on Civil Justice, NYU School of Law

Constructing Issue Classes
Elizabeth Chamblee Burch, Associate Professor of Law, University of Georgia School of Law

Compensation in Consumer Class Actions:  Data and Reform
Brian T. Fitzpatrick, 2014-15 FedEx Research Professor of Law, Vanderbilt Law School (with Robert C. Gilbert, , Grossman Roth)

Comments:  Elizabeth J. Cabraser, Lieff Cabraser Heimann & Bernstein, LLP

12:00 - 1:00 pm - Lunch

1:00 - 2:15 pm: Panel 3 - Alternatives to the Consumer Class Action

Moderator:  Michael S. Barr, Professor of Law, University of Michigan Law School

Contract Procedure, Regulatory Breakdown
David L. Noll, Assistant Professor of Law, Rutgers University School of Law – Newark

Government Compensation and the Class Action
Adam Zimmerman, Associate Professor of Law, Loyola Law School

Comments: Mark P. Goodman, Debevoise & Plimpton LLP

2:15 - 2:30 PM: Break

2:30 - 3:45 PM: Panel 4 - Roundtable Discussion:  Consumer Class Actions and the Future of the Class Action

Moderator: Arthur R. Miller, University Professor and Faculty Co-Director, Center on Civil Justice, NYU School of Law

Participants:

• Sheila A. Birnbaum, Quinn Emanuel Urquhart & Sullivan, LLP
• Elizabeth J. Cabraser, Lieff Cabraser Heimann & Bernstein, LLP
• Charles Delbaum, National Consumer Law Center
• Andrew Pincus, Mayer Brown LLP
• Hon. Lee H. Rosenthal, US District Court for the Southern District of Texas

4:00 - 4:45 pm: Keynote Address

Chief Judge Alex Kozinski, US Court of Appeals for the Ninth Circuit

Introduction by Arthur R. Miller

4:45 - 5:00 PM: Closing Remarks by Peter Zimroth

 

Register here

First Annual Civil Procedure Workshop

I received a notice about the First Annual Civil Procedure Workshop from Dave Marcus (Arizona) this morning and wanted to circulate it as broadly as possible.  Here's the information from the organizers:

We are pleased to announce the first annual Civil Procedure Workshop, to be co-hosted by Seattle University School of Law, the University of Washington School of Law, and the University of Arizona Rogers College of Law. The Workshop will be held at Seattle University on July 16-17, 2015. Future conferences will take place at the University of Washington and the University of Arizona.

The Workshop will give both emerging and established civil procedure scholars an opportunity to gather with colleagues and present their work to an expert audience. We hope the Workshop will strengthen the study of procedure as an academic discipline. By assembling annually, colleagues will have regular opportunities to meet to exchange ideas, to collaborate, and to participate in a national conversation on civil procedure scholarship.

Scholars whose papers are selected will present their work in small panel sessions. A senior scholar will moderate each panel and lead the commentary. Confirmed participants for 2015 include Stephen Burbank, Scott Dodson, Myriam Gilles, Suzette Malveaux, Judith Resnik, Suja Thomas, and Tobias Barrington Wolff.

We welcome all civil procedure scholars to attend this Workshop. Those wishing to present a paper for discussion in the Workshop should submit a two-page abstract by December 15, 2014. While we welcome papers from both emerging and senior scholars, preference may be given to those who have been teaching for ten years or fewer. Workshop organizers will select papers to be presented by January 31, 2015. Please send all submissions or related questions to Brooke Coleman.

The Workshop will provide meals for registrants. Participants must cover travel and lodging costs. We will provide information about reasonably priced hotels as the date approaches.

Feel free to contact us with questions. 

Brooke Coleman (Seattle), [email protected]

Liz Porter (UW), [email protected]

Dave Marcus (Arizona), [email protected]

Remanding Multidistrict Litigation

I've been a bit slow in posting this, but Louisiana Law Review hosted an excellent symposium last spring titled The Rest of the Story: Resolving the Cases Remanded by the MDL.  As part of that symposium, I wrote a piece titled Remanding Multidistrict Litigation.  Remands are something that have received scant attention in the scholarly literature, but are a constant hope for many plaintiffs' lawyers involved in multidistrict litigation (well, at least those who aren't on the steering committees). 

I just got around to posting the piece on SSRN today.  Here's the abstract:

Multidistrict litigation has frequently been described as a “black hole” because transfer is typically a one-way ticket. The numbers lend truth to this proposition. As of 2010, the Judicial Panel on Multidistrict Litigation remanded only 3.425% of cases to their original districts. That number dwindled to 3.1% in 2012, and to a scant 2.9% in 2013. Retaining cases in hopes of forcing a global settlement can cause a constellation of complications. These concerns range from procedural justice issues over selecting a forum and correcting error, to substantive concerns about fidelity to state laws, to undermining democratic participation ideals fulfilled through jury trials in affected communities. Yet, if transferee judges remanded cases after overseeing discovery into common issues, they could alleviate those concerns while avoiding inconsistent rulings on common questions and streamlining discovery.

Despite the potential upside, remand rarely occurs because it disfavors those with litigation control—transferee judges, lead plaintiffs’ attorneys, and defendants. Transferee judges deem settlement a hallmark of their success. Lead plaintiffs’ lawyers try to increase their fees by inserting fee provisions into settlements. Likewise, plaintiffs’ attorneys can bypass doctrinal uncertainties over weak claims by packaging plaintiffs together in a global settlement. And aggregate settlements allow defendants to resolve as many claims as possible in one stroke, take their hit, and return to business, which their shareholders view as a net positive.  The remand process itself defers to these vested interests. Although the Panel could remand cases at a party’s request, in practice it appears never to have done so. Rather, it waits for the transferee judge to admit defeat and suggest remand—thereby conceding failure.

For transferee judges to begin remanding cases, the “pro-settlement” norm and “remand-as-a-failure” stigma must change.  Accordingly, transferee judges should routinely entertain a suggestion for remand by a party or initiate them sua sponte as soon as discovery on common issues concludes and only case-specific issues remain.  Likewise, the Panel should seriously consider parties’ remand requests even when the transferee judge does not support them.  This reopens a direct line for parties to request remand when common discovery ends, but the transferee judge prefers to hold cases hostage in hopes of coercing settlement.

SUNY Buffalo Civil Justice Symposium 2014

If you happen to be in Buffalo this Monday, you might check out SUNY's Civil Justice Symposium on Recent Developments in Tort Law and Practice.  Ken Feinberg is the keynote speaker.  There's also a panel at 10:20 where I, along with our co-blogger Sergio Campos, Emery Lee (FJC), and Matt Steilen will discuss disaggregating (I think the official title is Aggregation and Disaggregation in Mass Torts).  Here's the rest of the agenda:

Civil Justice Symposium 2014: Recent Developments in Tort Law and Practice 

Featuring

Kenneth R. Feinberg as The Gerald S. Lippes Lecture Speaker

The Lippes Lecture is brought to you by SUNY Buffalo Law and UB's School of Managment

Mr. Feinberg is an attorney who has overseen the payouts of billions of dollars to the victims of the September 11 Victim Compensation Fund, the BP oil spill, and the Boston Marathon bomb victims, among other highly visible settlements. 

7:30 a.m.Conference and keynote registration begins 

8:00 a.m. Coffee and light food

8:45 a.m. to 10:00 a.m. Keynote Address and Q&A

The all-day CLE conference - Civil Justice Symposium 2014 - featuring renowned judges and attorneys on recent developments in tort law and practice to immediately follow the Lippes Lecture.

Earn 4.5 non-transitional NYS CLE credits in the area of professional practice. The Law School has a financial harship policy. For details contact: Lisa Mueller [email protected]

For a full panel listing, including descriptions and speakers visit our web page.

10:20 a.m. Aggregation and Disaggregation in Mass Torts

11:30 a.m. Luncheon

12:15 p.m. Luncheon panel with judges from across NYS speak on their experience with asbestos litigation.

1:40 p.m. Past, Present and Future of NYCAL

2:50 p.m. Update on the RAND ICJ Asbestos Project

4:00 p.m. The Past, Present and Future of the New York Scaffolding Law

5:00 p.m. Wine & Beer Reception with light fare
Sponsored in part by the SUNY Buffalo Law Alumni Association
* Not a member of the LAA? Join here.