What’s Wrong with the MDL System of Conflict Resolution?

‍Mesh Medical Device News Desk, Part One, June 27, 2017 - University of Georgia School of Law professor, Elizabeth Burch, is not a fan of multidistrict litigation or MDLs.  Burch studies mass torts, such as the Kugel mesh case, and is currently working on a book about the MDL system.

According to her research, collecting data from 72 product liability pending as of May 2013, 70 law firms had attorneys who were named to five or more leadership roles in the MDLs.  Calling them  "repeat players," Burch writes that 16% of the involved law firms held nearly 54% of all leadership positions.

What’s created is a two-edge sword.
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This is Part One, Please follow up with Part Two here.  

On one hand, high-stakes multidistrict litigation is managed by lead lawyers with trial experience who are best equipped to bring cases to settlement. On the other hand, the judges are relatively powerless to police these private settlements created by the MDL.

Professor Burch published, Judging Multidistrict Litigation in April 2015, and she talks to Mesh News Desk about her findings. This is Part One, Part two is here.

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Q: Akre - The MDL steering committees, you call them repeat players since the same law firms represent 63% of all mass torts. How do they get into those enviable positions?

A-”The judge is the one who decides who will lead the litigation. There are a lot of different methods to decide. Some will say - pick your own people and bring me the consensus and the judge then confirms the slate.  The slate could be heavily populated with people who have done this before.  

"They have the pull and capital to get everyone to vote for them.

"Long before there even is an MDL they are posturing so they know the most about a particular lawsuit.”

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Q-Should that be a concern for the plaintiff?

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A-“On one hand repeat players have done this before.

“After litigation against JNJ (Johnson & Johnson), you have lawyers who have dealt with them on talc, strategy, hip implants, and that’s the upside.  

“The downside potentially is you have repeat players on both the defense and plaintiff side. JNJ uses the same lawyer over and over again and they deal with each other and may develop a quid pro quo relationship.  

“I don’t want to say they go into a back room, but you develop these working relationships where “You know what I need….”  

“The plaintiff lawyers negotiate to increase their common benefit fees, so every plaintiff agrees to settle also agrees to the increased fees they’ve negotiated with the defendant.

"The defendant, in return, can negotiate for things it wants.  You want finality, for example. You can have a walkaway provision, where basically it says, 'Unless we get x percentage of the plaintiffs to agree to this, we walk away from the deal and the deal is off. ' That ranges from 85% to 100% of plaintiffs who must agree to the deal.  

“Some of the provisions aimed at the lawyers say you must recommend this deal to 100% of your clients.  Some plaintiffs might not be in the same boat, but by agreeing to this settlement, you’re agreeing to recommend it to everybody!

"Some other settlements say if you have a client who doesn’t want to settle you have to drop them like a hot potato. It’s unethical yet it’s done.  That’s the tit-for-tat I’m talking about.”  

Q-In the mesh MDL the common benefit fund is 5% and Judge Goodwin has not specified who is to fund it.  Most plaintiffs are told they must pay the 5%.  At the same time MDL lawyers are charging plaintiffs 40%. Are these costs excessive?

A- “Different states set caps on what an attorney can charge. I don’t know where 40% came from.  Thirty-three percent is typically the norm.

“With a common benefit fund, every plaintiff has to put 5% into the kitty. Some lead attorney are also forcing them to pay to package claims together.  

"If I’m in Athens, Georgia, I represent only five plaintiffs, and Bard says I will only settle if you bring me 1,000, I can’t do that.

“The lead lawyers are charging them between 25% of individual attorney fees to process claims together on top of 5% common benefit fee.

“The problem comes when I try to figure out how to best represent my client. The only way to settle is to pay $3,000 a case and I can’t go to trial then and I can’t press for a better settlement.  I have no leverage, you’re stuck in huge MDL yet you can’t do anything other than package for a small settlement.

“In theory the Plaintiff fees - if I charge you a 30% fee and lead lawyers are charging me. It should come out of the attorneys’ fees. There have been judges who have stepped in and cut individual attorney fees, for example in Vioxx, Judge Fallon and Zyprexa litigation. They’ve gone in and said your individual lawyer has not done 40% worth of work, it’s an unjust fee and I will come in and cut it.”

Q-Is it fair to say you’re not a fan of the MDL system?

A-“I’m not a fan of how they are handled. Some judges do a better job of policing the repeat player than others. But there are systemic problems in MDLs.  One example – there was litigation on Propulsid, an earlier MDL and in my database.

“The lawyers recovered over $22 million in common benefit fees. There were over 6,000 claimants in the MDL proceeding.  The lawyers negotiated a strict process for settlement. First, a panel of doctors decide on causation.  As soon as you opt into the settlement, you don’t know if you will recover, but you’ve given up your right to sue in court.  

“Of those 6,000 plaintiffs, 38 recovered money…they recovered $6.5 million in total.  The lead lawyers made over $22 million, $8 million went to Canada’s program and $8 million to the Louisiana Public Health Initiative, since Judge Fallon is in Louisiana.

"Only $6.5 million went to the plaintiffs. The rest of the fund went back to JNJ, the defendant.  The lawyers said that was the template for all mass torts.  And they never tried to get the products off the market.”

Part Two- How does the SCOTUS  decision Monday might affect the MDL?