Litigation Commons^™

Mass Tort Bankruptcy Goes Public, William Organek -- Assistant Professor Of Law

Vanderbilt Law Review

Large companies like 3M, Johnson & Johnson, Purdue Pharma, and others have increasingly, and controversially, turned from multidistrict litigation to bankruptcy to resolve their mass tort liability. While corporate attraction to bankruptcy’s unique features partially explains this evolution, this Article reveals an underexamined driver of this trend and its startling results: government intervention. Governments increasingly intervene in high-profile bankruptcies, forcing firms into insolvency and dictating the outcomes in their bankruptcy cases. Using several case studies, this Article demonstrates why bankruptcy law should subject such governmental actions to greater scrutiny and procedural protections. Governments often assume multiple incompatible roles in these …

Efficiency At The Price Of Accuracy: The Case For Assigning Mdls To Multiple Districts And Circuits, Isaak Elkind

Vanderbilt Law Review

28 U.S.C. § 1407 allows for the centralization of unique cases into a single forum for pretrial purposes. The product is multidistrict litigation, known colloquially as the “MDL.” While initially conceived as a means of increasing efficiency for only particularly massive, complex litigation, MDLs have become pervasive. Today, over fifteen percent of all civil litigation—and fifty percent of all federal civil litigation—is consolidated into MDLs. Yet, MDLs are commonly overconsolidated, such that only one judge presides over hundreds, thousands, or even hundreds of thousands of individual cases at a time. Fewer than three percent of such cases return to their …

A Machete For The Patent Thicket: Using Noerr-Pennington Doctrine’S Sham Exception To Challenge Abusive Patent Tactics By Pharmaceutical Companies, Lisa Orucevic

Vanderbilt Law Review

Outrageous drug prices have dominated news coverage of the American healthcare system for years. Yet despite widespread condemnation of skyrocketing drug prices, nothing seems to change. Pharmaceutical companies can raise drug prices with impunity because they hold patents on their drugs, which give them monopolies. These monopolies are only supposed to last twenty years, and then competing lower-cost drugs like generics can enter the market, driving down the costs of pharmaceuticals for all. But pharmaceutical companies have created “patent thickets,” dense webs of overlapping patents surrounding one drug, which have artificially extended the companies’ monopolies for years or even decades …

Lead Plaintiff Incentives In Aggregate Litigation, Charles R. Korsmo, Minor Myers

Vanderbilt Law Review

The lead plaintiff role holds out considerable promise in promoting the deterrence and compensation goals of aggregate litigation. The prevailing approach to compensating lead plaintiffs, however, provides no real incentive for a lead plaintiff to bring claims on behalf of a broader group. The policy challenge is to induce sophisticated parties to press claims not in their individual capacity but instead in a representative capacity, conferring a positive externality on all class members by identifying attractive claims, financing ongoing litigation, and managing the work of attorneys. We outline what an active and engaged lead plaintiff could add to the civil …

The Arbitration-Litigation Paradox, Pamela K. Bookman

Vanderbilt Law Review

The Supreme Court's interpretation of the Federal Arbitration Act is universally touted as favoring arbitration. Its arbitration cases and decisions in other areas are also viewed as supporting the Court's more general hostility to litigation. These pro-arbitration and anti-litigation policies can be mutually reinforcing. Moreover, they appear to be mutually consistent, in part because the Court describes the essential features of arbitration as being "informal," "speedy," "efficient"-in short, the categorical opposite of litigation.

This Article contends that the Court's approach is not as "pro- arbitration" as it appears. On the contrary, the Court's pro-arbitration and anti- litigation values sometimes conflict. …

Public Relations Litigation, Kishanthi Parella

Vanderbilt Law Review

Conventional wisdom holds that lawsuits harm a corporation's reputation. So why do corporations and other businesses litigate even when they will likely lose in the court of law and the court of public opinion? One explanation is settlement: some parties file lawsuits not to win but to force the defendant to pay out. But some business litigants defy even this explanation; they do not expect to win the lawsuit or to benefit financially from settlement. What explains their behavior?

The answer is reputation. This Article explains that certain types of litigation can improve a business litigant's reputation in the eyes …

Federal Regulation Of Third-Party Litigation Finance, Austin T. Popp

Vanderbilt Law Review

Third-party litigation finance has become a powerful and influential industry that will continue to play a significant role in shaping the legal landscape for years to come. The opportunities-and challenges-introduced by this burgeoning industry are legion, and with them has come a swath of disparate state regulations. These regimes have failed to balance important consumer- and commercial-lending protections with facilitation of the growth of an industry that is essential to increasing access to the courtroom.

In response, this Note contends that a federal agency, the Consumer Financial Protection Bureau, should be delegated the authority to promulgate regulations (1) capping interest …

Discovery Disclosure And Deterrence, Sergio J. Campos, Cheng Li

Vanderbilt Law Review

Courts, practitioners, and scholars have recently expressed concern over the ex post costs of discovery in civil litigation. In this Article, we develop a game theoretic model of litigant behavior to study an overlooked phenomenon-the ex ante effects of discovery on a defendant's incentive to engage in unlawful conduct. We focus on motions to seal, which limit the disclosure of discovered information to the public, but permit disclosure to the court and parties. Specifically, we examine the effect different rules regarding such motions have in deterring defendants from engaging in unlawful behavior. We show that as a rule becomes more …

Discovery And The Social Benefits Of Private Litigation, Paul Stancil

Vanderbilt Law Review

In the era just before the Federal Rules of Civil Procedure went into effect in 1938, federal civil litigation was a different animal.' Although Congress had created several private statutory causes of action before the 1930s,2 the federal civil docket prior to enactment of the Rules consisted primarily of diversity jurisdiction common law cases, labor injunctions and receiverships, and miscellaneous cases brought by the United States, including Prohibition-era "liquor cases" as well as internal revenue and food and drug enforcement. 3 Occasional exceptions notwithstanding, pre-New Deal federal courts hearing private claims functioned primarily as forums for the resolution of discrete, …

A Taste Of Their Own Medicine: Examining The Admissibility Of Experts' Prior Malpractice Under The Federal Rules Of Evidence, Neil Henson

Vanderbilt Law Review

Medical malpractice litigation is challenging for both plaintiffs and defendants. The intersection of legal issues with complex medical theories creates a dispute focused on expert witnesses, which leads to greater litigation expenses and cumbersome legal proceedings.' As one scholar observed, "medical malpractice has proven to be ... an unpleasant quagmire of unending skirmishes and full-scale engagements spread across a shifting battlefield." That analogy is fitting considering the stakes of a medical malpractice case-the injured patient's emotional, physical, and financial well-being may be contingent on a successful outcome, while the doctor may perceive even the threat of litigation as detrimental to …

Monopolies In Multidistrict Litigation, Elizabeth Chamblee Burch

Vanderbilt Law Review

When transferee judges receive a multidistrict proceeding, they select a few lead plaintiffs' lawyers to efficiently manage litigation and settlement negotiations. That decision gives those attorneys total control over all consolidated plaintiffs' claims and rewards them richly in common-benefit fees. It's no surprise then that these are coveted positions, yet empirical evidence confirms that the same attorneys occupy them time and again.

Anytime repeat players exist and exercise both oligopolistic leadership control across multidistrict proceedings and monopolistic power within a single proceeding, there is concern that they will use their dominance to enshrine practices and norms that benefit themselves at …

The Litigation Budget, Jay Tidmarsch

Vanderbilt Law Review

Because of fears that litigation is too costly, reduction of litigation expenses has been the touchstone of procedural reform for the past thirty years. In certain circumstances, however, the parties have incentives-both rational and irrational-to spend more on a lawsuit than the social benefits that the case provides. Present and proposed reform efforts do not adequately address these incentives, and, in some instances, exacerbate the parties' incentives to overspend. The best way to ensure that the cost of a lawsuit does not exceed the benefits that it provides to the parties and society is to control spending directly: to require …

The Litigation Budget, Jay Tidmarsh

Vanderbilt Law Review

Because of fears that litigation is too costly, reduction of litigation expenses has been the touchstone of procedural reform for the past thirty years. In certain circumstances, however, the parties have incentives--both rational and irrational--to spend more on a lawsuit than the social benefits that the case provides. Present and proposed reform efforts do not adequately address these incentives, and, in some instances, exacerbate the parties' incentives to overspend. The best way to ensure that the cost of a lawsuit does not exceed the benefits that it provides to the parties and society is to control spending directly: to require …

How Much Is That Lawsuit In The Window? Pricing Legal Claims, Maya Steinitz

Vanderbilt Law Review

Assessing the value of legal claims is the sixty-four thousand dollar question (no pun intended) of civil litigation. Clients, as every litigator knows, often come into their attorneys' offices with a belief that they know how much their claim is worth. The attorney is then asked to validate that number. Alternately, clients can come to their attorneys with a grievance-I have been injured, a counter-party breached its contract with me, I have been fired, our rainforest has been devastated by a mining company-and ask the attorney for an assessment of how much their grievance might be worth. Contingency lawyers, who …

Screening Legal Claims Based On Third-Party Litigation Finance Agreements And Other Signals Of Quality, Michael Abramowicz, Omer Alper

Vanderbilt Law Review

The advent of third-party litigation finance introduces a new gatekeeper to the legal process. Before deciding to lend money to a plaintiff, a litigation finance company will conduct at least some review and make an assessment of the quality of the case.' Since litigation finance loans are generally nonrecourse, a litigation finance company is likely to refuse to loan money to plaintiffs with the weakest cases. Such voluntary claim screening may improve social welfare by reducing the incidence of frivolous claims. But the volume of frivolous claims may still be higher than it would be in a world without third-party …

Litigating Bp's Contribution Claims In Publicly Subsidized Courts: Should Contracting Parties Pay Their Own Way?, Bruce L. Hay, Christopher Rendall-Jackson, David Rosenberg

Vanderbilt Law Review

In this Article, we focus on an important problem involving mass-accident cases that was highlighted by the Deepwater Horizon litigation: overuse of courts to enforce contribution claims. These claims seek to shift incurred or expected liability and damages between the business and governmental entities that participated in the activity that gave rise to the mass-accident risk. Participants in such ventures generally have the option to determine by contract beforehand whether to subject themselves to contribution claims and, if so, whether such claims will be resolved by a publicly funded court or by a privately funded process, such as arbitration. Because …

Taking Great Cases: Lessons From The "Rosenberg" Case, Brad Snyder

Vanderbilt Law Review

The most watched case of the 1952 Supreme Court Term was not Brown v. Board of Education, but the case of convicted atomic spies Julius and Ethel Rosenberg. Sentenced to death in April 1951 for passing atomic secrets to the Soviets, the Rosenbergs dominated the news and divided the country. Their case came at the height of Cold War America's obsession with Communism. Senator Joe McCarthy and the House Un-American Activities Committee were exposing alleged Communists in the federal government and Hollywood, and the U.S. military was fighting the Korean War to try to stop the spread of Communism abroad. …

The Quasi-Class Action Method Of Managing Multi-District Litigations: Problems And A Proposal, Charles Silver, Geoffrey P. Miller

Vanderbilt Law Review

This Article uses three recent multi-district litigations ("MDLs") that produced massive settlements-Guidant ($240 million), Vioxx ($4.85 billion), and Zyprexa ($700 million)-to study the emerging quasi-class action approach to MDL management. This approach has four components: (1) judicial selection of lead attorneys, (2) judicial control of lead attorneys' compensation, (3) forced fee transfers from non-lead lawyers to cover lead attorneys' fees, and (4) judicial reduction of non-lead lawyers' fees to save claimants money. These procedures have serious downsides. They make lawyers financially dependent on judges and, therefore, loyal to judges rather than clients. They compromise judges' independence by involving them heavily …

Aggregate Litigation Across The Atlantic And The Future Of American Exceptionalism, Richard A. Nagareda

Vanderbilt Law Review

In long-running debates over civil justice reform, two points remain broadly shared: the legal regime for civil litigation in this country is exceptional by comparison to European systems as a positive matter, and the United States is much the worse for it in normative terms. The positive dimension of this account pinpoints several exceptional features of the U.S. civil justice system: class actions, primarily on an opt-out basis; contingency-fee financing of litigation; rejection of Euro-style "loser-pays" rules that link responsibility for the fees of both sides to the outcome of the litigation; extensive reliance on juries as fact finders; costly …

Small Claim Mass Fraud Actions: A Proposal For Aggregate Litigation Under Rico, Leah Bressack

Vanderbilt Law Review

Assume that, tomorrow, a large company advertises a "miracle pill" that it claims will cure all forms of cancer. The company uses a sophisticated national marketing campaign to convey a strong health assurance message, which it tailors to specific audiences: women with breast cancer, men with prostate cancer, older adults with intestinal cancer, and children with leukemia. In response to the national campaign, consumers across the country purchase the pill, which costs $10. Only then do consumers discover that the pill is worthless and that the company intentionally defrauded them.

The Racketeer Influenced and Corrupt Organizations ("RICO") statute provides a …

Insurers, Illusions Of Judgment & Litigation, Chris Guthrie, Jeffrey J. Rachlinski

Vanderbilt Law Review

Insurers play a critical role in the civil justice system. By providing liability insurance to parties who would otherwise be untenable as defendants, insurers make litigation possible. Once litigation materializes, insurers provide representation, pay legal fees, and often play a central role in resolving disputes through settlement or adjudication. In this paper, we explore empirically how these key litigation players make important decisions in the litigation process, like evaluating a case, deciding whether to settle, and if so, on what terms. We find that insurers, though not entirely immune to the effects of cognitive illusions that have been shown to …

Medical Malpractice Litigation And Tort Reform: It's The Incentives, Stupid, David A. Hyman, Charles Silver

Vanderbilt Law Review

Health care providers and tort reformers invariably claim that the medical malpractice litigation system is rife with behaviors that are irrational, unpredictable, and counter-productive. They attack civil juries, asserting that verdicts are skyrocketing without reason, are highly variable, and bear little or no relation to the merits of plaintiffs' claims. They complain about patients, arguing that the few with valid claims sue rarely, while the many who receive non- negligent treatment sue all the time. They attack greedy lawyers, alleging that they rake in obscene profits by routinely filing frivolous complaints. They complain that compensation flows almost randomly, winding up …

Pretext, Transparency And Motive In Mass Restitution Litigation, Anthony J. Sebok

Vanderbilt Law Review

On February 23, 1993 The Washington Post published an article entitled, "Tobacco's Last Gasp? Towards a Smoke-Free Society." The article tested the hypothesis that in the near future no one would smoke in the United States. Its focus was on means: how would America reach a point when virtually no one smoked? The predictions ran the usual gamut of policy devices. Although their order of appearance may be random, the list was as follows: legal prohibitions on smoking in public, taxes, social pressure, increased health insurance costs to smokers, and (finally) litigation.

The Washington Post article noted that just one …

Doing Good, Doing Well, Howard M. Erichson

Vanderbilt Law Review

On the fiftieth anniversary of Brown v. Board of Education,' it is fitting that we should take account not only of what has become of school desegregation but also of the heroic public interest lawyer figure embodied by Thurgood Marshall. For his role as "the chief litigator for the civil rights movement," Marshall is widely regarded as a preeminent role model for public interest lawyers. Descriptions of Marshall's career as a public interest advocate emphasize not only his ability to "use the legal system as a tool for social change," but also his personal sacrifice as a lawyer who persevered …

The Public And Private Faces Of Derivative Lawsuits, Robert B. Thompson, Randall S. Thomas

Vanderbilt Law Review

Are shareholder derivative suits at death's door? Once described as "the most important procedure the law has yet developed to police the internal affairs of corporations,"' derivative suits are today regularly portrayed as nuisance suits whose "principal beneficiaries ... are attorneys." Even if these critics are wrong, there may now be less need for derivative suits, as other forms of representative suits have grown up that do much of their work. Federal securities fraud class actions increasingly address legal claims that raise issues about management care, and fiduciary duty class actions under state law are the principal litigation vehicle to …

Taking Adequacy Seriously: The Inadequate Assessment Of Adequacy In Litigation And Settlement Classes, Linda S. Mullenix

Vanderbilt Law Review

In the past decade, the debate over settlement classes has moved considerably beyond the "sturm und drang" inspired by the epic settlement classes in Amchem Products, Incorporated. v. Windsor' and Ortiz v. Fibreboard Corporation. Whereas Amchem asked whether and on what terms federal courts were authorized to approve settlement classes, and Ortiz asked whether a mandatory, limited- fund global asbestos settlement was sustainable, the settlement class issue du jour focuses on the ability of litigants to collaterally attack settlements in remote forums and at remote times.

Because the collateral attack problem is so vital to the sanctity of settlement classes, …

Just What The Doctor Ordered: The Admissibility Of Differential Diagnosis In Pharmaceutical Product Litigation, Wendy Michelle Ertmer

Vanderbilt Law Review

In the decade since Daubert v. Merrell Dow Pharmaceuticals Inc., federal judges have exercised their role as gatekeepers of expert witness testimony to evaluate many different categories of scientific evidence. They have not done so without controversy, however. Because the element of causation in pharmaceutical product litigation is frequently dispositive, the application of Daubert to scientific evidence of causation has been particularly contentious. Plaintiffs in such cases must prove both general causation-that the product is capable of causing an injury of the type from which the plaintiff suffers-and specific causation-that the product was the actual cause of the plaintiffs injury. …

The Schizophrenia Of Risk-Benefit Analysis In Design Defect Litigation, Michael D. Green

Vanderbilt Law Review

To employ a well-worn, but nevertheless appropriate cliche, it is a genuine honor to participate in the Vanderbilt Law Review's memorial to Dean John Wade. Wade stands tall as a leading figure of legal academe in the twentieth century. While I have profited from many illuminating hours with his scholarship, I regret that my association with him personally was limited to one lengthy luncheon meeting, still vivid, despite the passage of many years. I still recall his kindliness and gentility, his dry, but very real sense of humor, his humility and vigilance in avoiding taking himself too seriously, his thoughtfulness …

Evening The Odds In Civil Litigation:A Proposed Methodology For Using Adverse Inferences When Nonparty Witnesses Invoke The Fifth Amendment, Charles H. Rabon, Jr.

Vanderbilt Law Review

A nonparty witness who responds to questioning by invoking the privilege against self-incrimination seriously can impair the party against whom the response suggests an unfavorable answer. The possible injury to a party's case is greatest when the invocation occurs unexpectedly at trial, but may cause equal damage when the privilege is relied on during discovery because the deposition of an unavailable witness may be read to the jury. In the past, courts and commentators generally opposed allowing such invocations in the jury's presence based on the belief that invocations lack credible evidentiary value because witnesses can invoke validly for a …

The Role Of Federal Safety Regulations In Products Liability Actions, Teresa M. Schwartz

Vanderbilt Law Review

Product safety is the province of both the regulatory and the tort systems. Each system has come under attack in recent years on both the federal and state levels. Through its regulatory policies, appointments, and budget cuts, the Reagan Administration has weakened the federal regulatory system.' At the same time, the Administration has severely criticized the tort system. State legislatures have enacted a myriad of statutes that weaken the tort system by cutting back on the common-law rights of victims, and additional measures are pending in Congress and in state legislatures across the country.'

For the most part, proponents of …