products liability

I'm writing several times a day about products liability for Law.com/The National Law Journal. Occasionally I cross-post a blog I find particularly interesting.

A bankruptcy judge, who found “demonstrable misrepresentation” by plaintiffs' lawyers in several asbestos cases, denied the motions of asbestos defendants and a media outlet to access that sealed evidence.

Ford Motor Co., joined by Volkswagen Group of America Inc, Honeywell International Inc. and Crane Co., filed a motion to unseal that evidence. In a separation motion, news outlet Legal Newsline sought to unseal the trial testimony and exhibits on which the judge based his Jan. 10, 2014, order, finding that plaintiffs' lawyers withheld evidence of their clients' exposure to other sources of asbestos in the bankruptcy case of Garlock Sealing Technologies, LLC.

Those cases included two that resulted in a $9 million verdict in California and a $1.35 million verdict in Texas, the judge said.

By denying the motions, U.S. Bankruptcy Judge George Hodges of the Western District of North Carolina said in a hearing on March 27 that he was hoping to “get all of us to an answer as simply as I can” on whether that evidence should be publicly accessible.

By denying the motions on their merits, the judge said he hoped that would get the motions to the U.S. district court on appeal for resolution at the same time.

Legal Newsline already has an appeal pending in the district court on being denied permission by Hodges to attend the hearing during which he heard evidence on the estimated liability Garlock faces for asbestos claims.

“The practical problem I have is this: if I granted the motions to unseal filed by Ford and Volkswagen and Legal Newsline it would essentially moot the appeal,” Hodges said.

Trevor Swett III, a plaintiffs attorney with Caplin & Drysdale, Chartered in Washington, argued that Hodges did not have subject-matter jurisdiction anymore because Legal Newsline has appealed the sealing of the evidence and the closing of the courtroom.

“They mean to unseal the evidence going to the supposed misrepresentation and suppression of evidence,” Swett argued. “That’s the same evidence implicated in their demands on appeal.”

Legal Newsline's attorney, Steven Pflaum, argued that jurisdiction was not divested because the district court only has to decide if the courtroom should have been closed during the estimation hearing.

Unsealing the evidence would allow public understanding of who has been victimized by a pattern of misrepresentation, said Pflaum, of Neal, Gerber & Eisenberg LLP in Chicago.

It is “vitally important that the public understand the courts,” Pflaum said.

Hodges ruled on a separate motion that insurer Aetna, Inc., and Rawling Company LLC, a cost containment vendor for insurers, brought to have access to Federal Rule of Bankruptcy 2019 statements. Those statements must be filed by anyone participating in bankruptcy cases.

Hodges said that social security numbers and the retention agreements law firms enter into with clients can't be disclosed.

“It appears to me ... that the interests of the opposing parties are not superior to the public rights to access and that there is a legitimate interest here on behalf of the movants” to protect their subrogation rights against asbestos defendants and reimbursement rights against members of insurance plans, Hodges said.

Read more: http://www.nationallawjournal.com/id=1202648736269/Judge-Denies-Access-t...

I'm blogging several times a day about products liability for Law.com. Occasionally I cross-post an excerpt of a blog I find interesting:

The Mississippi Supreme Court has ruled against a plaintiffs' attorney for the second time in a dispute with two former clients over who owes money for discovery undertaken on the behalf of all plaintiffs in the massive federal diet-drug litigation.

Herbert Lee Jr. represented 13 plaintiffs who settled their claims that they were injured by taking diet drugs for around $32 million, according a recent opinion by Justice David Chandler. Lee agreed that six percent of the “gross amount of recovery” of each of his clients would be paid for the discovery materials generated in the diet-drug multidistrict litigation in the Eastern District of Pennsylvania.

Lee, however, billed the $1.92 million MDL fee to the plaintiffs. The federal court ordered one-third of all “common benefit fees” refunded.

Plaintiffs Gloria Thompson, who was paid $7.4 million in her settlement, and Deborah Dixon, who was paid $3.1 million, sued Lee, arguing that he had failed to refund their portion of the MDL fee and that his attorney fee exceeded their contingency agreements by 5 percent. Lee retained 45 percent of the MDL refund and refunded each of his 13 clients 1/13th of the remaining 55 percent.

When the case got to the Mississippi Supreme Court for the first time, the court upheld the plaintiff's victory in the trial court on the MDL fee. The Supreme Court said that the federal court required the MDL fee to be paid by attorneys and that Lee “erroneously had billed the MDL fee to his clients.”

During trial on remand, the jury found that Lee breached his 40 percent contingency fee contracts with his clients by charging them 45 percent. Still, the panel returned a verdict for Lee, finding that the plaintiffs had ratified a 45-percent fee by signing their settlements free from intimidation, coercion or fraud. Still, the trial judge determined that Lee owed plaintiff Thompson $420,000 and plaintiff Dixon $180,000 for the MDL fee.

During Lee's second appeal to the Mississippi Supreme Court, the court rejected Lee's arguments that the plaintiffs “fabricated that the original contingency-fee agreements provided for a 40-percent fee,” not a 45-percent fee as he claims. The plaintiffs contended at trial that Lee forged retainer agreements providing for a 45 percent fee.

I'm blogging several times a day about products liability for Law.com. Each day I cross-post an excerpt of the day's blog I find most interesting.

Mass torts cases must not be aggregated, and plaintiffs must provide facts to support their claims through expert reports, in order to avoid having nonmeritorious cases clogging the court process, says the federal judge presiding over the federal Asbestos Multidistrict Litigation for 5.5 years.

Asbestos MDL-875 has been the largest MDL in terms of claims and cases, wrote U.S. District Judge Eduardo C. Robreno in an article published in the Widener Law Journal.

The consolidation of large number of cases not only raises due process issues by forcing parties to litigate or settle cases in groups, but incentivizes “the number of cases that can be filed, not the relative merit of the individual case,” Robreno said.

Asbestos litigation has grown to over 186,000 cases and more than 10 million claims. Only 2,979 cases are still in the MDL.During his tenure presiding over the MDL, Robreno reported he decided 528 summary judgment motions, 59 issues of substantive state law, 16 issues of federal substantive law and 16 issues of federal procedural law.

Consolidating cases also did not work to resolve the MDL, Robreno said, adding it was an open question whether a national MDL was necessary to resolve the claims.

One of the reasons aggregations of cases did not work to resolve the cases was that class certification was rejected by the Third Circuit and then the U.S. Supreme Court, Robreno said. The first asbestos MDL judge, Judge Charles R. Weiner, tried to settle the claims of 250,000 to 2 million individuals who had been exposed to asbestos. The settlement was rejected on appeal because of the “Supreme Court's concerns over the manageability of such a mixed and large class, as well as the inability of the class mechanisms to deal with the issue of future claimants,” Robreno said. Federal legislative fixes also failed.And when aggregation failed, the court and the parties did not return to the task of handling the cases on an individual basis, Robreno said. “This stage of litigation led some litigants to refer to MDL875 as a 'black hole,' where cases disappeared forever from the active dockets of the court,” he wrote.

While, “as a matter of judicial culture, remanding cases is viewed as an acknowledgment that the MDL judge has failed to resolve the case, by adjudication or settlement, during the MDL process,” Robreno said he turned away from that mindset and set a “rigorous schedule” for hearing summary judgment motions and issuing decisions.

Due to bankruptcies by the companies that made asbestos, litigation has shifted to bankruptcy courts and to the makers and suppliers of components that contained asbestos, including manufacturers or suppliers of brakes, turbines and packing. “In sum, the time between the filing of motions for summary judgment and the panel's issuing a remand order was 74 days,” he said.

More than 600 cases have been remanded to 59 districts. Most of those cases resolved without the need for a trial on the merits.

There also is an issue of fraud in asbestos fraud, Robreno said, with doctors acting as litigation consultants and making positive findings “often upwards of 50% and in some studies as high as 90%, suggesting that the readings may not be neutral or legitimate.”