Mass Tort Litigation: Is It For the Masses?
By: Dennis VanDerGinst
Mass tort litigation is an area of law that has traditionally been very lucrative for trial attorneys, but is that trend continuing? In “The King of Torts”, John Grisham wrote about a fictional attorney who was lured by the prospect of easy money in mass tort litigation only to discover, too late, that all that glitters is not gold. Perhaps we are now seeing a case of life imitating art. Many attorneys who were caught up in mass tort hysteria over the past few years are now finding that this is an area of law that is not nearly as attractive as it once may have appeared.
Some people, even attorneys, confuse mass torts with class actions. Indeed, there can be overlap. In both situations a number of people are seeking compensation from a single defendant or a small number of defendants. In both situations, the claimants or plaintiffs have usually been injured or harmed in a similar fashion. In both instances, the possibility of consolidated and coordinated pretrial proceedings and discovery through multi-district litigation (MDL) exists. Both types of litigation also lend themselves to the possibility of an eventual global settlement agreement.
However, there are important distinctions between class actions and mass torts. Class actions are established through very specific procedural requirements at a state or federal level.1 Once established, the interests of plaintiffs are all presented as a class and any settlement would apply to all members within the class unless individuals decide to “opt-out.” With mass tort litigation, the participants are typically part of a larger group for settlement discussions but maintain their individual rights with respect to litigation. That is not to say that discovery might not be conducted through an MDL and, indeed, that is often the case. While class actions typically emerge from mass tort litigation, not all mass torts lend themselves to the development of class action litigation.
In recent years, mass torts have generated billions of dollars in settlements. Most mass torts have been in the areas of medical devices, pharmaceuticals and environmental litigation. One need only turn on the television to see evidence of mass tort hysteria. In the past few years attorneys have advertised for dozens of mass torts including Fen-Phen, Meridia, Protogen Vaginal Slings, Baycol, Vioxx, Celebrex, Bextra, hormone replacement therapy drugs and numerous others. The Internet has likewise become filled with information about various mass torts. No wonder so many lawyers have jumped on the bandwagon. Indeed, many attorneys have made millions of dollars by capitalizing on this type of litigation. However, some of those attorneys have seen significant changes in mass tort litigation and anticipate more still.
Leila Watson is a partner in the mass tort firm, Cory, Watson, Crowder & DeGaris, PC, located in Birmingham, Alabama. She paints a bleak picture of the mass torts landscape. She feels that landscape has changed considerably. “Ernie Cory and I got our start in mass torts with the breast implant litigation and with round one of the Fen-Phen litigation. Back then, you would work with defense counsel to select a few cases to work up towards trial and agree to tolling statutes while you ‘inventoried’ the rest of your cases. After working up a case, or a few cases, you would get a sense of the relative value of all the cases and eventually get them all settled.”
She goes on to say, “Now, the only thing ‘mass’ about mass torts is the document production and party depositions that are done through multi-district litigations. Inventory deals are dead and gone.”
She is concerned that rulings in Daubert hearings do not have that “mass” impact any longer, either. “Defendants don’t seem to care about Daubert rulings anymore. Judge Barbara Rothstein (U.S. District Court, Western District of Washington) ruled after a Daubert hearing that PPA could cause ischemic strokes.2 However, one of the defendants, Bayer, decided they don’t care. They aren’t going to settle those cases. They will only settle hemorrhagic stroke cases. Therefore, the ischemic stroke cases have had to be and will continue to be pursued, and likely tried, on an individual basis.”
Watson is also concerned about federal preemption issues that seem to be more prevalent. “The FDA is revving up its own engine in medical device cases and is intervening and filing its own preemption requests. Essentially they are saying, ‘we approved this device and feel that we did a good job’. Some of the intervention requests have been denied but there is no denying that it is another concern that mass tort litigators must face.” Watson feels that federal preemption in pharmaceutical cases may be just around the corner.
So what does this mean? To Watson it means that it will eventually become impossible to pursue mass tort litigation when a medical device or drug is still being distributed and has not been recalled. She feels that firms like hers will have to devote their resources only to large cases due to the strain on finance and human resources.
Other major firms do not paint as bleak a picture. Tom Methvin, managing partner of super-firm, Beasley, Allen, Crow, Methvin, Portis & Miles, PC, in Montgomery, Alabama, feels that mass tort litigation will continue to thrive for the next few years.
“There will continue to be hurdles thrown at us, such as the Vaccine Bill,” he says, “but I don’t foresee anything that would stop us from pursuing these kinds of cases.” Methvin agrees that many of the potential defendants in mass tort cases have changed their strategy with respect to the handling of claims, “It will likely be a rare situation that you will see what we saw early on with something like the Fen-Phen litigation, where the manufacturer settles with anyone who has taken the drug. Many defendants have now dug in their heels. They may still settle the larger cases but they are making us try the tough cases.”
This makes it much harder for smaller practices to justify handling this type of litigation. But Methvin states that his firm and others like it will continue to wage war on this battlefield. In fact, Methvin says, “The two areas that I feel will continue to grow are drug litigation and environmental litigation.” With respect to mass tort litigation in the environmental arena, Methvin believes that property damage cases will be a hot bed. “It is often difficult to prove that contaminants and pollutants caused injury to large numbers of people. But, it isn’t so difficult to prove that such contaminants leeched onto someone else’s property and needs to be removed.”
Mikal Watts of The Watts Law Firm in Houston, Texas, agrees that things have changed in the mass torts arena; however, he does not believe that every defendant is reacting the same way in every case.
“Defendants have generally dug in their heels,” he says, “However, different companies read things differently. Typically, I think that most companies want to come out somewhere between where Wyeth was in Fen-Phen round one and where they were in Fen-Phen round two, meaning they don’t want to spend a lot of money paying off every claimant as Wyeth did in round one. However, they also don’t want to spend a lot of money defending every claim as they have been doing in Fen-Phen round two.”
In any event, Watts has conceded that he and his firm are handling mass tort litigation a bit differently in response to what he describes as “death by a thousand cuts” when referring to the numerous hurdles that mass tort litigators have had to face in recent years. As a result, internally he has moved intake up earlier in the process, “scrubbing” cases in depth to be sure that he is taking only good cases.
“After Rezulin and Fen-Phen, stockpiling cases is not paying off anymore.” Like Watson, Watts agrees that the specter of federal preemption is always an issue. “Federal courts are usurping jurisdiction a lot more than they used to be. However, we are seeing that exceptions are being made with the Vioxx litigation.”
Jerry Parker of Parker & Waichman, LLP, of New York, believes that mass tort pharmaceutical litigation will continue to thrive as long as corporate America does business in a greedy fashion. “The people of the United States have tuned into the fact that these pharmaceutical companies are driven by greed. For instance, the news has reported that Merck hid two deaths which would have raised the adverse event ratio considerably in the COX II inhibitor litigation. News like that has doctors even changing their opinions about drug companies.”
He believes, unlike Watts and Watson, that the tide of public opinion in these cases should keep the FDA at bay with respect to intervention issues. “I don’t think they will be intervening too much. They need to focus more on getting things in order internally. The intervention issue should become too political for them to worry about.”
Parker’s is one of the most successful firms in using the internet to garner cases. As he points out, “It is a cost-effective way to secure cases. However, case acquisition is just one of many steps involved in handling mass tort cases. The biggest deterrent to most law firms and lawyers in handling these cases is cash flow. The infrastructure required to handle these cases is extremely expensive. Paydays are infrequent and widespread. It is simply not possible for most law firms. However, the larger firms that are equipped to handle such cases do occasionally have lucrative payouts.”
Methvin, Watts, and Watson likewise agree that capital expenditures is the number one impediment with respect to pursuing mass tort litigation. Watts finances what he describes as his “mass tort habit” with a more run-of-the-mill products liability practice. He also limits the number of mass tort litigations that his firm is involved in to no more than five.
So what about other law firms? Is it worthwhile for lawyers to market for mass tort cases and simply refer them to larger law firms? Sam Bernstein in Detroit, Michigan, and Jim Adler in Texas are two of the largest advertising attorneys in the country. Their advertising campaigns generate thousands of inquiries each year. However, they have differing opinions as to mass tort litigation.
Sam Bernstein states, “Because of the laws in Michigan, it’s not as lucrative an area for us as it may be in other states. We have been involved somewhat in the Vioxx litigation and a few others. However, we are not set up to handle the litigation ourselves. So we may have to refer a lot of these cases out. That concerns me because if you refer the case out, you have very little control over what happens with the case. You put your license in another attorney’s hands. That attorney or that firm may be very good at what they do. However, I’m still more comfortable when I have more control over the outcome of the case. I also think there are ethics issues that come up in that kind of situation and it makes me feel very uneasy.”
Jim Adler has tried to work around some of those concerns by making sure that his office stays involved in the litigation even if he associates with another firm.
Interestingly, Adler points out that the average age demographic has risen considerably since he has been involved in mass torts. “When we first got involved in Fen-Phen, our average client was in the 18-35 year-old demographic. These were people who were wanting to lose weight, wanting to look trim and slim. Then as we got involved in Vioxx, Bextra, and Celebrex, we found that the average age was 50 plus. That continues with Guidant and some of those types of medical devices.”
Greg Bubalo of Bubalo & Hiestand in Louisville, Kentucky, sums up the situation very nicely. “Mass tort litigation may appear from the outside looking in as easy money, but that’s not the case. It takes a great deal of money to acquire the cases. It takes a great deal of money and expertise to learn the science behind the cases and to manage the cases. And you have to be much more pragmatic when picking your battles. You can’t simply sign up every potential claimant that calls you and think that you have a worthwhile case with them. You have to pick and choose your clients and pick and choose the litigations that you intend to get involved in. Then you also have to pick the right venue in which to pursue the case.”
Leila Watson adds that in addition to the considerations that Bubalo mentions, any serious mass tort litigator should also do everything he or she can to get the best positioning possible in the relevant MDLs, “Even if you are unable to get on a steering committee and/or be very active in the MDLs, you want to do everything you can to be present at every important hearing and be as active as possible so that you can be up-to-date and also influence the outcome of the important hearings and pretrial proceedings.”
The consensus opinion among these experienced mass tort litigators seems to be that mass tort litigation will continue to thrive in the areas of pharmaceutical, medical device, and environmental litigations. However, on a case-by-case basis, plaintiffs’ attorneys must be prepared for battle. It will be rare indeed that cases will settle without a large expenditure of time, money and resources. Their advice to any law firm considering involvement in mass tort litigation at this date is to tread cautiously and be prepared to spend a lot of time and a lot of money getting your infrastructure in place. It would be a good idea to partner with a more experienced firm before trying to tread into these tumultuous waters.