Tuesday, November 18, 2014
The NFL Concussion Settlement: Class Action Exploitation
By Howard Erichson
Tomorrow in Philadelphia, lawyers for the NFL and lawyers for former football players will try to persuade Judge Anita Brody to approve their settlement of claims that the League concealed chronic risks of concussions and failed to protect players. The judge, the players, and the public should view the settlement with suspicion.
We have grown so accustomed to "settlement class actions" that we have lost sight of what is strange and troubling about them. Class actions serve an essential function in our legal system by empowering claimants in mass disputes, and I reject the knee-jerk criticisms of class actions that I hear too often. But when the class action tool is exploited by defendants to buy peace on the cheap, and when class members are harmed by the alignment of interests between defendants and class counsel, I feel the need to speak up.
Who reached this agreement with the NFL? Not the thousands of former football players. The deal was struck by lawyers who purported to represent the players but who had not actually gotten the go-ahead to litigate for the class. To litigate a class action, lawyers must get the class certified. But in this case, the lawyers negotiated their settlement before the court certified the class.
It makes sense that the NFL would want to do it this way. By negotiating before class certification, the NFL knew that the plaintiffs’ lawyers lacked the leverage that comes with being able to say, “See you at trial.” And it makes sense that the players’ lawyers would go along. They stand to make $112 million plus up to five percent of each award going forward. If these lawyers failed to reach agreement with the NFL, they risked being cut out if the League struck a deal with someone else.
In a “settlement class action” like the NFL deal, lawyers ask the court to certify the class for settlement only, as opposed to a standard class action that can be litigated or settled. This ought to be the first question people ask when they hear about a class action settlement: Was the class certified for litigation? If not, then class members are especially vulnerable to exploitation.
It is not an obscure problem. As I explain in The Problem of Settlement Class Actions, settlement class actions have become more common than standard class actions. And while good settlements exist, we see mischief too often. Three weeks ago, the Seventh Circuit heard arguments in Pearson v. NBTY, a settlement class action about false labeling for glucosamine supplements. Among numerous other problems, the lawyers’ fees were more than double the amount actually paid to the class. The district court's opinion approving the settlement is disturbing, and Ted Frank's argument for the objectors is powerful. And in Lane v. Facebook, a settlement class action involving claims that Facebook illegally shared information about members’ Internet activity, Facebook paid over $2 million to the plaintiffs’ lawyers, $6.5 million to a foundation that Facebook would partly control, and zero to the class members. Facebook discontinued the challenged program but could reinstate it under a different name. Facebook wiped away its liability while the class members got nothing of value. Chief Justice Roberts was horrified.
Compared to these settlements, the NFL deal looks pretty good. For some players, it offers immediate compensation, and for others it offers long-term insurance. Judge Brody initially rejected the settlement but then gave it preliminary approval after the NFL removed a cap on the fund. But the dynamic of settlement class actions should make us ask questions. The settlement rewards certain diagnoses (Alzheimer’s, Parkinson’s, ALS) over others (CTE). It pays for cognitive impairment but not mood disorders. The objectors make a strong argument that these items are crucial. The settlement imposes a registration requirement and other hurdles that objectors say are intended only to reduce claims. I can see why the deal has drawn so much fire and why Public Citizen sought to intervene.
The truth is, it is always hard to judge whether a class settlement is fair. A settlement, after all, is a compromise. There is no magic formula by which a football fan or a federal judge can evaluate whether the settlement is good enough. What we can ask, however, is whether the settlement resulted from a fair process, a negotiation on a level playing field. The answer is no.
The concern in every settlement class action is that lawyers may have struck the deal not because it was the best the class members could have gotten, but because it was the best the lawyers could get for themselves. If the settlement proves inadequate, then the lawyers get rich, the League gets off easy, and the football players – damaged forever – are left without the money they need to take care of themselves and their families for the rest of their lives.
There is, of course, something the judge can do about it. Reject this settlement, and on a proper motion, certify the class for litigation as well as settlement. Rest assured, there will be a better offer on the table. Although the judge would still face the difficult task of evaluating a class settlement and would still have to be on the lookout for abuse, at least she would know that the players weren’t disempowered from the start.
November 18, 2014 in Class Actions, Settlement, Sports | Permalink | Comments (0) | TrackBack (0)
Friday, November 14, 2014
Plaintiff win in Pelvic Mesh Trial
Plaintiffs have won another multi-million dollar verdict in a pelvic mesh trial in Florida. More cases are slated for trial. So far, defendant has won two individual trials and lost one individual trial. This latest loss was a consolidated trial of four plaintiffs. Another consolidated trial is proceeding in West Virginia.
This article from Reuters gives more detail.
November 14, 2014 | Permalink | Comments (0) | TrackBack (0)
Monday, November 3, 2014
Pelvic Mesh Litigation - Consolidated Sample Trials
A recent article by Jessica Dye (Thomson Reuters) describes the procedure adopted by Judge Goodwin (U.S.D. So. Dist. W. Va).
While Goodwin originally scheduled a series of single-plaintiff bellwether, or test, trials for the federal litigation, he scrapped those plans earlier this year and instead consolidated claims from multiple women into a single trial. Doing so, he said, would help save courts' time and resources, and "may facilitate settlement" by giving Boston Scientific and plaintiffs a clearer picture of the strengths and weaknesses of their cases.
You can find the article here. I would love to know how Judge Goodwin is picking the plaintiffs and locations to go forward and what coordination is happening with state courts.
November 3, 2014 in Aggregate Litigation Procedures, Products Liability | Permalink | Comments (0) | TrackBack (0)