Mass Tort Litigation Blog

Volkswagen Proposed Class Settlement for $14.7 Billion

The parties litigating over Volkswagen's emissions defeat device have submitted a proposed class action settlement to Judge Breyer for his approval.  After the parties confer with him on June 30, he'll hear arguments over whether to approve that settlement on July 26.

The proposed settlement is available here: Download 1. The settlement money available to class members is a fund of $10,033,000,000, which is based on an assumed 100% buyback of all eligible vehicles and leased eligible vehicles.

If approved, parties who wish to object or opt out must do so before September 16, 2016 (p. 27 describes the opt-out process, which will have to be approved in conjunction with the notice to class members, and p. 28 describes the objection process).  Class members must likewise complete and submit a valid claim form before September 1, 2018, and decide on their chosen remedy by December 30, 2018. Put differently, class members will need to take affirmative action to receive relief.  Failing to submit a claim or to opt out means that their claims will be extinguished under the settlement (and through general res judicata principles). 

The proposal provides VW owners with several options.  They can:

• sell their car back to VW for the "vehicle value" (a term of art defined in the settlement on p. 16);
• receive restitution payments calculated based on a percentage of the vehicle value (some owners are eligible for loan forgiveness up to 30% of the vehicle value and owner restitution payment) - an estimate of those settlement payments is available here -  Download 7
• terminate their car leases with no early termination penalty;
• modify their vehicle, which should help fix the emissions problems based on the different vehicles; 
• or may receive both a restitution payment and a vehicle modification.

An overview of the options available to class members and proposed allocation plan is available here:  Download 2

And the proposed short form notice, which is refreshingly straightforward is available for download here:  Download 3.  The longer notice is here:  Download 4. And detailed information on the proposed 5-step claims program and administration is available here:  Download 5. 

New Book on Class Actions in Context: How Culture, Economics and Politics Shape Collective Litigation

A new book, Class Actions in Context: How Culture, Economics and Politics Shape Collective Litigation, has been published by Edward Elgar Publishing (also available on Amazon).  The editors of the book are Associate Dean Deborah Hensler (Stanford Law) and Professors Christopher Hodges (Oxford) and Ianika Tzankova (Tilburg Law).  A global group of aggregate-litigation scholars contributed to the book, including Dean Camille Cameron (Dalhousie Law, Canada); Associate Dean Manuel Gomez (Florida International Law); Professors Agustin Barroilhet (U. Chile Law), Naomi Creutzfeldt (Research Fellow, Oxford), Axel Halfmeier (Leuphana U., Germany), Kuo-Chang Huang (Member, Taiwan national congress and formerly of National Cheng-Chi U., Taiwan), Jasminka Kalajdzic (Windsor Law, Canada), Alon Klement (Tel-Aviv U., Israel), Elizabeth Thornburg (SMU Law), and Stefaan Voet (U. Leuven & U. Hasselt, Belgium); and myself.  

I authored a chapter, The promise and peril of media and culture: The Toyota unintended acceleration litigation and the Gulf Coast Claims Facility in the United States, and Professor Ianika Tzankova and I co-authored another chapter, The culture of collective litigation: A comparative analysis.    

The book was a remarkable and fascinating undertaking, with many of us contributors gathering at several conferences across the globe over recent years to discuss and compare our ongoing research.  Here is a brief description of the book:

In recent years collective litigation procedures have spread across the globe, accompanied by hot controversy and normative debate. Yet virtually nothing is known about how these procedures operate in practice. Based on extensive documentary and interview research, this volume presents the results of the first comparative investigation of class actions and group litigation ‘in action’.

Produced by a multinational team of legal scholars, this book spans research from ten different countries in the Americas, Europe, Asia and the Middle East, including common law and civil law jurisdictions. The contributors conclude that to understand how class actions work in practice, one needs to know the cultural factors that shape claiming, the financial arrangements that enable or impede litigation and how political actors react when mass claims erupt. Substantive law and procedural rules matter, but culture, economics and politics matter at least as much.

This book will be of interest to students and scholars of law, business and politics. It will also be of use to public policy makers looking to respond to mass claims; financial analysts looking to understand the potential impact of new legal instruments; and global lawyers who litigate transnationally.

We are honored that Professor Geoffrey Hazard (Emeritus, UC Hastings Law & Penn Law) offered the following comment on the book:

Class Actions in Context is a penetrating analysis of class and group actions worldwide. A group of international scholars brings to bear legal, economic, and political analyses of this evolving judicial remedy. It explores various substantive claims ranging from consumer protection to securities litigation. Drawing on case studies of practice as well as legal analysis, it demonstrates the importance of factors running from litigation finance to background cultural traditions. It is worth study in every legal system.

 

Wendy Parmet on Paternalism, Self-Governance, and Public Health: The Case of E-Cigarettes

Professor Wendy Parmet (Northeastern Law) has posted to SSRN her article, Paternalism, Self-Governance, and Public Health: The Case of E-Cigarettes, 70 U. Miami L. Rev. 879 (2016).  Here is the abstract:

This article develops a normative framework for assessing public health laws, using the regulation of e-cigarettes as a case study. Although e-cigarettes are likely far less dangerous to individual users than traditional cigarettes, it remains uncertain whether their proliferation will lead to a reduction of smoking-related disease and deaths or to increased morbidity and mortality. This scientific uncertainty presents regulators with difficult challenges in determining whether and how to regulate e-cigarettes. This article presents a normative framework for analyzing such questions by offering three justifications for public health laws: impaired agency, harm to others, and self-governance. Each justification responds to the common charge that public health laws are impermissibly paternalistic. The self-governance rationale, which is the most robust, and most reflective of public health’s own population perspective, has been the least theorized. This article develops that theory, examining the basis for the justification as well as its limitations. The article then applies its normative framework to the regulation of e-cigarettes, focusing on the FDA’s so-called deeming regulations, which at the time the article was written were pending but have since been promulgated in a substantially similar form. The article supports the FDA’s ultimate decision to ban the sales of e-cigarettes to minors and to require the disclosure of warning labels based upon the impaired agency rationale. However, the scientific uncertainty renders the harm rationale inadequate. As a result, the regulations’ pre-market review requirement must rely on the self-governance rationale for its normative justification. Given the lack of clear legislative guidance and political engagement, the article concludes that the pre-market review provisions are normatively problematic: if public health advocates want to claim the mantle of self-governance, they must take it seriously.

MDL Leadership

On Bloomberg BNA Perry Cooper has an important article on MDL leadership fights entitled "MDLs Led By the Usual Suspects, and Not Everyone is Happy."

Our own Prof. Burch's work is featured.  Cooper writes "Burch, a professor at the University of Georgia Law School in Athens, Ga., who specializes in complex litigation, said she's troubled by the number of “repeat players” she sees among attorneys that represent both plaintiffs and defendants in MDLs."  

Elizabeth Cabraser, a frequent leader in MDLs, explains: "The problem for getting new players into the leadership is that there are economic barriers to entry,” she said. “To be part of the leadership you have to write a check. You have to put up the money and spend the time.”  Cabraser also links the developments in MDLs to changes in the legal culture.  As Cooper quotes her: “We all became plaintiffs’ attorneys because we didn't want to work for big firms—we wanted to do our own thing,” she said. “But in an MDL everything is by committee.”  

The article also has some good tidbits on Bellwether trials.  One plaintiffs lawyer explains: "Large verdicts in bellwether trials can be great from a plaintiff's perspective, Berezofsky said, but they can give clients an expectation that the resolution of their case will be in keeping with the verdict."  This lawyer says that for claimants in the middle of the bell curve, an MDL saves money and time, but not for claimants who have more severe injuries because "global settlements generally don't take into account their individual, specialized injuries."

You can find the paper detailing Burch's findings, Monopolies in MDL Litigation, on SSRN. 

 

 

 

Coleman on Procedure for the 1%

Brooke Coleman (Seattle) has posted "One Percent Procedure" on SSRN.  Here is the abstract:

In this election year, political rhetoric about the one percent is already pervasive, as those with the greatest concentrated wealth prosper and the remaining population stagnates. Because of their affluence, the one percent exercise disproportionate control over political and economic systems. This Article argues that federal civil procedure is similarly a one percent regime. The crème de la crème of the bench and bar, along with equally exclusive litigants, often engage in high-stakes, complex civil litigation. It is this type of litigation that dominates both the elite experience and the public perception of what civil litigation is. This litigation is not particularly common, however; while expensive and well known, it is in the minority. Yet this litigation and the individuals engaged in it have an incongruent influence on how the Federal Rules of Civil Procedure and procedural doctrine develop. They create one percent procedure. 

This Article interrogates and connects disparate phenomena related to civil litigation, including the recent discovery amendments and the rise of multidistrict litigation. It demonstrates that the elite — those who are deeply steeped in complex, high-stakes litigation — are setting the agenda and determining the rules for how the entire civil litigation game is played. It further argues that the benefits of a one percent procedure system — notably expertise of the participants — are not worth the costs; indeed, that expertise can be detrimental to the design of a civil litigation system.

As in politics and economics, a system that gives too much control to the one percent risks undervaluing and underserving the remaining ninety-nine. Using social and political science, the Article argues that the homogenous policymaking of one percent procedure creates suboptimal results. The Article concludes that the structures giving rise to one percent procedure must be modified and proposes a set of reforms intended to allow the ninety-nine percent representation in, and access to, the process of constructing our shared civil litigation system.