mass torts

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

With federal courts in New Jersey and the Eastern District of New York facing almost 2,000 cases in which insurers are being sued over Hurricane Sandy claims, one judge said that his court is focused on resolving cases.

U.S. Magistrate Judge Ramon E. Reyes Jr. of the Eastern District of New York said he and other judges have asked plaintiffs’ lawyers and defense counsel to get cases ready in order to winnow them down to the most problematic.

What the next phase of litigation will look like after that process is still to be determined, Reyes said.

“I’m the type of judge that acknowledges that I don’t know it all … you folks are the experts. You have to educate me on the best way to handle these things,” Reyes said at a conference held last week about Sandy insurance litigation.

Earlier on, the Eastern District tried to “bucket cases involving the same legal issue, the same policy exclusions,” but lawyers advised that the cases were not ready to be organized that way, Reyes said.

On the one hand, some district judges were ready to start trials without discovery, but, on the other hand, “we were told point blank to forget about arbitration, that no carrier will go to arbitration,” Reyes said.

Now each side has 60 days to respond to n automated discovery process, Reyes said. And the court has a mediation training scheduled for the end of May.

Jared T. Greisman, the defense liaison counsel for Superstorm Sandy cases in the Eastern District and with White Fleischner & Fino in New York, said the Eastern District hopes to get mediations rolling in June.

U.S. Magistrate Judge Lois H. Goodman of the District of New Jersey said her court’s priority also is to get cases moving.

The New Jersey federal judges are aware that people were displaced from their homes and have a right to know if they are entitled to insurance recovery, Goodman said.

Mandatory discovery disclosure was set up for 30 days, Goodman said. “It was giving the attorneys heebie jeebies that we were going to make them go forward without the discovery,” she added.

The federal courts are viewing the process of mediating and settling cases as a way to winnow out cases and then get cases divided into “legal issue buckets,” said Tracey Rannals Bryan, the plaintiffs liaison counsel in the Eastern District and of Gauthier, Houghtaling & Williams, LLP, in Metairie, La.

Reyes said it will be important, once cases are categorized by legal issue, to have the same judges handle cases involving similar legal issues.

Otherwise, cases with conflicting results just wind “up in the circuit [court] and it just creates more work,” Reyes said.

Some of the Sandy litigation has involved class actions, including a lawsuit filed in 2012 accusing several insurance companies of wrongfully denying claims and misinterpreting the term “basement,” a lawsuit over the loss of power in Long Island, and an unsuccessful effort to certify a class about the loss of power in New York City.

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.

One plaintiff's lawsuit in Louisiana federal court over allegations that diabetes drug Actos increases the risk of bladder cancer resulted in a $9 billion verdict. What might a jury do in a case consolidating claims by two plaintiffs?

Takeda Pharmaceuticals America Inc. is at trial over combined claims by Delores Cipriano and Bertha Triana, who allege they received inadequate warnings about Actos. Cipriano's attorney, Robert Eglet, said he plans to seek a multibillion-dollar verdict, the Las Vegas Review Journal reported.

Before the trial started, attorneys Kelly Evans, Chad Fears and Justin Hepworth, of Snell & Wilmer in Las Vegas, with other defense lawyers, asked the Nevada Supreme Court to bar consolidation of the two cases.

“Consolidation causes prejudice on the issue of causation by creating false cancer clusters which, in turn, magnifies juror sympathy for each individual plaintiff,” Takeda's counsel wrote. “Magnification of such juror sympathy should be a real concern in mass tort litigation in light of the colossal verdicts entered recently in consolidated trials in Nevada.”

The state high court rejected the defense petition for extraordinary writ relief. The consolidated case is expected to run until May.

Actos plaintiffs haven’t always met with success in Nevada. One such trial resulted in a defense verdict. But in Louisiana federal court, last week’s the verdict in Allen v. Takeda Pharmaceuticals USA Inc. was the first of nearly 3,000 lawsuits coordinated for pretrial purposes in federal multidistrict litigation.

In that case, the jury awarded $1.475 million in compensatory damages. Takeda was found 75 percent liable and Eli Lilly & Co., which co-promoted Actos, was found 25 percent liable. The jury awarded $9 billion in punitive damages, with $6 billion against Takeda and $3 billion against Lilly.

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.

The U.S. Supreme Court disfavored setting individual damages through statistical sampling in Wal-Mart Stores Inc. v. Dukes. But Alexandra Lahav, a University of Connecticut School of Law professor, argues there remains a role for sample trials in mass torts.

"Right now, the way the law is, you couldn't have a mandatory sampling regime" of cases picked by the plaintiffs and cases picked by the defendants and award damages based on the average of verdicts in those cases, Lahav said in an interview.

But academics have argued that the use of sample trials could comport with due process if used to establish a rebuttable presumption of what damages awards should be, said Lahav, who focuses on due process concerns in class actions and mass actions.

"One of the biggest issues facing courts today in civil procedure is the massive influx of cases," Lahav said—whether in the Deepwater Horizon case or litigation over products that have been mass-distributed.

There are problems with winding up mass-torts through accords in which plaintiffs' law firms settle their inventory of cases separately, Lahav said. Some lawyers are better at negotiating than others and can reach better results for their clients.

Then too, defendants sometimes offer more to plaintiffs with lower-value claims to persuade them to settle at the expense of plaintiffs with higher-value claims and greater injuries, Lahav said. Legal ethicists have “expressed the concern that some plaintiffs will be sold out in favor of other plaintiffs," she said.

If there were more transparency to settlements, Lahav said, she would worry less about whether plaintiffs are getting fairly compensated. Inventory settlements "may be perfectly fair,” she said. “They may be fabulous."

And sample trials would allow for plaintiffs to feel they have been heard, she said.

“Everybody else can look at those [sample] cases and see what happens,” Lahav said. “It's almost like a representative or surrogate. [While] they won't get their catharsis of having their very own trial, they'll get to feel that, at least, the defendant was called to account.”

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.