TortsProf Blog

Editor: Christopher J. Robinette
Southwestern Law School

Monday, February 13, 2023

Engstrom & Venook on Common Benefit Fees and MDLs

Nora Freeman Engstrom & Todd Venook have posted to SSRN Common Benefit Fees to Promote MDL Integrity.  The abstract provides:

Multidistrict litigation (MDL) has long been dogged by worries about illegitimate—or even fraudulent—claims. These claims, and public concern about them, damage the system; they erode confidence in judicial processes, increase costs, and contribute to rising caseloads. But, while many have noted the problem, and some have even sought to address it, so far, judges’ arsenals have been limited. Some judicial efforts (such as Lone Pine orders) amount to overkill: The entry of a Lone Pine order threatens to chill the vindication of important rights, not merely the initiation of bogus claims. Other efforts, such as plaintiff fact sheets and census orders, suffer from the opposite problem: Because they lack teeth, these orders can encourage a game of judicial whack-a-mole, as some nonmeritorious claims may be rooted out even as more such claims are ushered in.

Against that backdrop, we offer an innovative and practical solution to address this problem head-on. In particular, we explain how MDL transferee judges can harness common benefit fees to induce plaintiffs’ lawyers to improve their screening practices, encouraging lawyers to cull invalid claims before they are filed. By assessing common benefit fees on a sliding scale, judges can financially reward those lawyers who meaningfully vet would-be clients—and penalize those who don’t. Over time, through tailored and targeted efforts, judges can ensure that attorneys are properly incentivized to review the factual basis of suits while also keeping courts open to claims of uncertain-but-possible merit.

https://lawprofessors.typepad.com/tortsprof/2023/02/engstrom-venook-on-common-benefit-fees-and-mdls.html

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