Wednesday, August 16, 2017

What duties do lead counsel owe plaintiffs in multidistrict litigation?

There is a persistent question in multidistrict proceedings: what duties do lead lawyers owe to individual plaintiffs who have no direct attorney-client relationship with them?

That's the question at the heart of a recent opinion by Judge David Herndon in the Yazmin/Yaz litigation, although the opinion itself is about whether remand to state court is appropriate. (Spoiler: Judge Herndon thinks it's isn't.)

After the negotiating parties in the underlying MDL reached a global settlement for the ATE (arterial thromboembolism) cases, Judge Herndon issued a series of orders designed to usher plaintiffs into the deal.  One of those was a Lone Pine order that required every non settling plaintiff to produce fact sheets, over three years worth of pharmacy and medical records, and a case-specific expert on general and specific causation--all within three months.  Those who didn't comply faced dismissal.

As you might guess, the plaintiffs currently suing missed that deadline and their various attorneys failed to respond to Bayer's motion to dismiss.  As such, with new counsel, they are now suing lead counsel (Micheal S. Burg, Roger Denton, Michael A. London, and Mark R. Niemeyer) for legal malpractice under Illinois common law.

What question lies at the heart of the case?  You guessed it: what duties do lead lawyers owe to non-client plaintiffs in a multidistrict proceeding?

Returning for a moment to the question of federal jurisdiction, given the way that the complaint is framed, jurisdiction appears to lie under CAFA, 28 USC 1332(d)(2) (it's pled on behalf of a class).  But the parties take different routes.  Disgruntled plaintiffs argue that it's a mass action that contains fewer than 100 people (despite it being pled as a class action), and defendants argue that it presents federal question jurisdiction under 1331.  Relying on Grable and Gunn, the court agrees.

I confess, I'm not yet convinced that these state-law malpractice claims implicate a federal issue under Grable.

Either way, as Judge Herndon (and lead lawyers) framed it, even if the dissatisfied plaintiffs sued individually, federal question jurisdiction would lie over their claims, thereby allowing defendants to remove and send it to Judge Herndon. Judge Herndon, you may recall, presided over the original claims and appointed the leaders in the first place.

There hasn't been a ton written on the fiduciary question, but Professor Charlie Silver's work comes readily to mind.  In his article, The Responsibilities of Lead Lawyers and Judges in Multidistrict Litigation, he writes:

Given that both lawyers who represent individual claimants and lawyers who handle class actions are fiduciaries, it would be surprising to discover that lead lawyers in MDLs were not. . . . Given the dearth of authority directly on point, judges may take guidance from other bodies of law.  If they do, they will quickly conclude that lead attorneys are fiduciaries.  Mass tort lawyers are fiduciaries, and so are lawyers who represent plaintiff classes.  These examples are the most analogous to lead counsel. 

My own view is similar.  Without imposing fiduciary duties on lead lawyers, all sorts of mischief could result.  Of course, whether lead lawyers in Yasmin/Yaz breached those duties in a way that amounts to malpractice is a separate question.  But, given the lengths they've taken to have the malpractice claims heard before Judge Herndon, leaders clearly think they have a much better chance there than in IL state court.

Casey et. al. v. Roger Denton, et. al. is worth following.  Here are a few of the relevant documents:

Download Casey v. Denton - 53 - 08.11.17 - Order on Motion to Remand

Download Casey v. Denton - 1 - 05.16.17 - Ex. 2 Casey Complaint

Download Casey v. Denton - 1 - 05.16.17 - Notice of Removal

August 16, 2017 in Aggregate Litigation Procedures, Current Affairs, Mass Tort Scholarship, Products Liability | Permalink | Comments (0)

Monday, August 7, 2017

For Journalists Reporting on Bellwether Trials

Bellwether trials are a mass tort phenomenon that is often reported in the media, but too often journalists put more emphasis on an individual trial or even a small set of trials than is warranted.  This post tries to explain why more care and nuance is needed in reporting on these trials.  

A bellwether is a kind of test trial, a vehicle for  the judge and the parties to obtain information about a mass litigation in order to settle a large number of lawsuits at once.  That settlement might happen through a settlement matrix, in groups as lawyers settle their "inventory" of cases, through a class action, or all three.  Often cases where we see bellwether trials are MDLs -- multi-district litigation that has been transferred to a single federal judge for resolution.  If you are a journalist writing about complex litigation, all this will be familiar to you.  

Trial verdicts in bellwether cases seem like they should be big news.  After all, if the case really is "representative" of the run of cases then the verdict should help us predict what will happen in settlement.  It can help us understand what risks a company faces, for example.  

The problem is, that bellwether trials will rarely tell you what the run of cases are like or how they will come out.  This is true for several reasons.  It is good to keep them in mind when you are reporting on bellwether trials:

1. Mass tort cases are often heterogenous.  The bellwether trial is just one trial out of a larger, varied group.  Even if everyone was injured by the same toxin or drug or product, they likely different injuries and different levels of injury.  So picking one of them doesn't tell us much about the others.  The same is true not only for the injury itself but for other elements of the legal claim, especially causation. 

2. Bellwether cases are picked by the parties.  The parties try to pick their best cases. For defendants this means cases they are likely to win; same for plaintiffs.  So we would expect bellwether cases to be outliers.  They do not necessarily reflect the run of cases.  What do we (the public) know about the run of cases in the litigation? Often very little.  The parties tend to know a lot, but they are not likely to share that information.   We can assume that the cases are varied.  See point #1.

 3. The universe of cases is not always the universe of cases.  This is because cases will settle.  A defendant might decide that it is in its best interest to settle out the most high value cases, leaving low value cases to be tried.  This might create the misleading appearance that the run of cases are very low value, and that there is little litigation exposure for the defendant.  It is important to ask about what cases have been settled as well as what cases are tried.

4. The trial verdict is not the outcome.  One reason is that cases will settle.  For example, the parties may have reached a high-low settlement before trial, so that the defendants' payout has a ceiling above which it need not pay and the plaintiff has a floor, below which he or she will not lose.   Another reason is that cases will be appealed.  Or retried.  Or the verdict remitted.  Reports of high verdicts without nuance are shocking and exciting, but they misrepresent what really goes on in the justice system. 

When you report on bellwether trials and there is an exciting verdict -- either because the defendant won or the plaintiff did -- I hope you will remember that while it is very interesting how the bellwether came out, it doesn't really tell us very much about the defendant's exposure.

See this article in the New York Law Journal as an example of what journalists should do when reporting on bellwether trials.    If you want to know more, you can check out my primer for judges on SSRN. 


August 7, 2017 | Permalink | Comments (0)

Sunday, August 6, 2017

James Henderson on the Impropriety of Punitive Damages in Mass Torts

Professor James Henderson (Cornell Law) has posted to SSRN his article, The Impropriety of Punitive Damages in Mass Torts, 52 Ga. L. Rev. (forthcoming).  Here is the abstract:

Punitive damages have been around for centuries in classic one-on-one tort actions and are here to stay. Mass torts, of more recent origin and not without difficulties, have matured to the point that this article is comfortable referring to most of them as traditional. Notwithstanding the legitimacy of both institutions when employed separately, loud warning signals should sound when, as with drinking and driving, they are combined. Potentially destructive mixes of punitive damages and mass torts have, unfortunately, been prevalent in traditional, fault-based mass tort actions. The difficulties are mostly administrative. Although punitive damages are conceptually compatible with fault-based mass torts, courts administer punitive awards in ways that are so capricious as to generate gross unfairness and inefficiency. And if for that reason the warning signals should be loud in connection with punitive awards in traditional mass torts, they should be downright deafening if and when courts consider awarding punitives in what this article refers to as emerging, nontraditional, enterprise-liability-based forms of mass tort.

Given that these serious difficulties cannot be eliminated by marginal reforms, this article argues that punitive damages are manifestly inappropriate in, and must be eliminated from, all forms of mass tort. Of course, a broad proscription would require courts to overrule precedent in connection with traditional mass torts, and this article explains how this could be accomplished. By contrast, such a proscription would come early enough in the development of emerging forms of mass tort to nip punitive awards in the bud without the need to overrule longstanding precedent. Thus, if courts are going to eliminate punitive awards in mass torts, now is the time for them to act.

August 6, 2017 in Mass Tort Scholarship, Products Liability | Permalink | Comments (0)

Recent Judicial Panel on Multidistrict Litigation Hearings in Los Angeles