MDLs Led by Usual Suspects, and Not Everyone Is Happy

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By Perry Cooper

June 13 — Resentment is brewing among some members of the plaintiffs' bar that attorneys from the same firms are most often appointed to leadership roles in federal multidistrict litigation.

That can make it difficult for attorneys less experienced with consolidated litigation to break in to MDLs, which often include the biggest ticket, most high-profile cases in federal court, they say.

Elizabeth Chamblee Burch's research into MDLs—which encompass a wide variety of areas such as antitrust, securities and, increasingly, product liability—bears that out.

Burch, a professor at the University of Georgia Law School in Athens, Ga., who specializes in complex litigation, said she's troubled by the number of “repeat players” she sees among attorneys that represent both plaintiffs and defendants in MDLs.

She told Bloomberg BNA these groups of attorneys can sometimes work like a cartel, benefiting themselves at the expense of plaintiffs.

But frequent lead counsel Elizabeth J. Cabraser defends the MDL system, saying the courts have an interest in picking counsel with extensive MDL experience—and the financial wherewithal to sustain the litigation.

The problem also partly boils down to an unfortunate truth for plaintiffs' attorneys, many of whom work in their own, smaller firms because of their desire for independence and autonomy, said Cabraser, of Lieff Cabraser Heimann & Bernstein LLP in San Francisco.

“Not everyone can be the leader,” she told Bloomberg BNA.

Off-the-Record Complaints

Some prominent plaintiffs' attorneys interviewed by Bloomberg BNA were quick to share their frustrations with the MDL process. But only off the record.

They said that while the MDL system has its benefits, having a case pulled into consolidated proceedings means relinquishing control over the litigation. Unless the attorney can snag a coveted leadership role, of course.

Burch said she ran up against the same road blocks in her research. No one wants to be quoted criticizing the system or their colleagues.

And maybe it's understandable that they don't want to gripe on the record—they have to practice in front of the same MDL judges and work with the plaintiffs' attorneys that frequent MDLs.

Complaining could mean judges won't pick them for leadership roles going forward or lead counsel will restrict their cut of the attorneys' fee pie, Burch said.

Repeat Players

Plaintiffs' attorney Esther E. Berezofsky of Williams Cuker Berezofsky in Cherry Hill, N.J., told Bloomberg BNA she frequently sees the same firms named to leadership roles again and again.

Burch has numbers to back up that sentiment.

For her latest paper on MDLs, set to be published next year in the Vanderbilt Law Review, Burch looked at the 73 product liability and deceptive sales practices cases pending on the MDL docket as of May 14, 2013.

“On the plaintiffs' side, repeat players held 62.8 percent of the available leadership positions,” she found. And attorneys from 16 percent of the plaintiffs' firms involved held more than half of all leadership positions in those cases.

Below is a summary of her findings in the nine cases from her data set that resulted in publicly available aggregate (that is, non-class) settlements:

Aggregate Settlements and Repeat Player Percentages
MDL Name Consolidation Date First Settlement Date Total Actions Percentage of Plaintiff-Side Repeat Players
Propulsid, No. 1355 8/7/2000 4/30/2004 474 90% (10/11)
Vioxx, No. 1657 2/16/2005 11/9/2007 10,313 50% (14/28)
Yasmin & Yas, No. 2100 10/1/2009 3/15/2013 11,098 89% (17/19)
DePuy ASR Hip Implant, No. 2197 12/3/2010 11/11/2013 1236 80% (25/31)
Fosamax, No. 2243 11/21/2011 12/9/2013 1119 66% (8/12)
American Medical Systems, No. 2325 2/7/2012 4/30/2013 6094 100% (62/62)
Biomet Magnum Hip Implant, No. 2391 10/2/2012 1/31/2014 308 58% (14/24)
NuvaRing, No. 1964 8/22/2008 2/7/2014 1232 35% (6/17)
Actos (Pioglitazone), No. 2299 12/29/2011 4/29/2015 1585 68% (18/22)
Economic Barriers to Entry

Lead counsel positions come with a lot of perks—control over the litigation, and, potentially, a larger cut of the common benefit fund in global or large settlements.

But attorneys in MDL leadership roles are also responsible for fronting the money to fund the litigation, Cabraser said.

Cabraser has worked on “scores” of MDLs since 1980 and is currently lead counsel in the Volkswagen emissions litigation, one of three co-leads in the General Motors ignition switch litigation, and on the plaintiffs' steering committee in the Takata airbag litigation.

“The problem for getting new players into the leadership is that there are economic barriers to entry,” she said. “To be part of the leadership you have to write a check. You have to put up the money and spend the time.”

But, she said, there's been a spotlight recently on how judges pick lead lawyers, and courts are getting better at it.

She suggests that judges could include seats on the leadership committees for less experienced lawyers and those from small firms, without the financial ante expected from larger firms.

MDL Rundown: Numbers on the Rise

The Judicial Panel on Multidistrict Litigation was created in 1968 to consider whether cases with common fact questions should be consolidated into an MDL. The panel, created by 28 U.S.C. §1407, is made up of seven federal district court judges.

The idea is to streamline pretrial proceedings and avoid duplication of discovery.

Once pretrial proceedings are complete, the transferred actions are supposed to be remanded to their home courts for further proceedings. But typically cases settle and never make it back to their original forums.

The JPML consolidates more cases now than in its early years, Cabraser said. Then, most of the consolidated cases were antitrust or securities cases, or cases arising from major disasters.

She attributes the increase in MDLs to two factors.

First, an increased number of cases are pulled into federal court as a result of the 2005 Class Action Fairness Act, 28 U.S.C. §1332(d)(2). Mass tort and class actions used to stay in state court, but once defendants started using CAFA to remove them, they became subject to the MDL statute, Cabraser said.

She also points to the rise of direct marketing of pharmaceuticals and medical devices to consumers in the 1990s.

Drug and device product liability cases are ideal for consolidation because they can involve hundreds of thousands of claimants with the same alleged product defect, the same marketing, the same alleged fraud, she said.

As of December 2015, product liability actions made up a quarter of the 287 MDLs pending, and 92 percent of all the individual cases pending, according to data compiled by Samuel Issacharoff of New York University School of Law.

MDLs Require Vigilance

As the MDL system has evolved from its early days in the late 1960s, the size of consolidated proceedings have grown and more and more people are now participating on the plaintiffs' side, Berezofsky told Bloomberg BNA.

Berezofsky represents plaintiffs in environmental, drug and medical device cases, and has served in the leadership role in MDLs and state mass tort programs.

That means individual lawyers can lose control of their cases, she said. “You have to be more vigilant that the individual clients are protected.”

Berezofsky also said bellwether trials can give plaintiffs an unrealistic expectation of the value of their cases.

Such trials—which act as test-cases within a large MDL—can be useful for establishing the value of certain cases, she said. Ideally the trials establish a middle ground for the variety of claims within the MDL.

Large verdicts in bellwether trials can be great from a plaintiff's perspective, Berezofsky said, but they can give clients an expectation that the resolution of their case will be in keeping with the verdict.

“You can explain—and it’s important to explain—all the work that goes into a bellwether trial and the costs associated with it,” she said. But clients can still get the wrong idea.

Problems With Global Settlements

The MDL process also can take longer than trying cases individually, and global settlements may mean that clients get smaller awards, Berezofsky said.

For claimants in the middle of the bell curve, global settlements can be beneficial, she said. It may be reasonable for those claimants to get less money because the MDL process saves them time and resources.

But for claimants with more serious injuries, the MDL process can be harmful, Berezofsky said, as global settlements generally don't take into account their individual, specialized injuries.

Burch also raised concerns that clients whose claims don't fit neatly into a settlement agreement can get stuck in no-man's-land.

She gave the example of a recent deal over defective DePuy hip implants, In re DePuy Orthopaedics Inc. ASR Hip Implant Prods., N.D. Ohio, MDL No. 2197 (16 CLASS 210, 2/27/15).

The $3 billion global settlement didn't cover people who can't have surgery to replace their implants.

They aren't covered by the settlement, but they can't get their cases remanded to their home court either, she said.

“They are just left languishing in the MDL,” she said.

‘Not a DIY World.'

Cabraser said it's possible for an individual to recover more going it alone than in an MDL, but that's “random and fortuitous.”

“That's a very lucky lawyer,” she said.

The major cost is experts, she said, whether it's medical experts for drug and device cases, or economists for consumer cases.

“This is not a DIY world,” she said. It makes sense for plaintiffs to band together to share these costs.

She says complaints from some in the plaintiffs' bar about MDLs stem from discomfort with the large transformation that's taken place in this area of the legal culture as more and more cases enter the consolidated system.

“We all became plaintiffs’ attorneys because we didn’t want to work for big firms—we wanted to do our own thing,” she said. “But in an MDL everything is by committee.”

It's a huge adjustment for lawyers to give up some control, she said. “It takes a toll on how we would prefer to run our own cases.”

Risk of Collusion?

Repeat players are present on the defense side as well as the plaintiffs side. Burch found that attorneys from the same defense firms occupied 82.3 percent of the leadership roles.

Defense counsel are rarely judicially selected, but having repeat players on both sides increases the risk of collusion among attorneys that have worked together in the past, she said.

The trouble is the attorneys “appear to be scratching each other’s backs and exchanging whatever it is that they most want—whether it’s closure for defendants or fees for plaintiffs’ lawyers,” she said. “And they aren’t adequately representing the people that they are tasked to represent.”

MDLs don't include many of the checks on power that class actions provide, Burch said.

In class litigation, judges have to evaluate whether the attorneys are adequately representing class members and acting in their best interests at both the class certification and class settlement stages.

Cabraser, however, rejects the closure-for-fees allegation as “both counterfactual and counterintuitive.”

“Courts evaluate and control fees. Defendants don’t,” she said. “Defendants want to pay lower, not higher, fees, and more and more settlements now provide for fees paid by the defendant in addition to, not deducted from, the plaintiffs’ or class benefits.”

Dangers of Dissent

Another cause for concern with repeat players is that attorneys that can't break into leadership are “forced into a backseat driver role,” Burch said.

“They have no ability to object when they feel like the leadership is disserving their clients,” she said. And they may worry if they object they won't get chosen for leadership roles in the future or will get short-changed on attorneys' fees.

But again, Cabraser disagrees.

“Courts set the fees, and do award fees to those in non-leadership roles who serve the common benefit,” she said. “And MDL courts, not lawyers, decide who will be appointed to leadership positions.”

She called the concerns “more historical than contemporary,” saying the process has been refined over the last nearly 50 years.

The judge presiding over an MDL is tasked with appointing lead counsel and steering committees for the plaintiffs. The judge may have attorneys apply for each of these positions, or use the “consensus model” under which the judge directs the plaintiffs to file a proposed leadership slate.

The consensus model is no longer the prevailing norm, Cabraser said.

“Today and certainly into the future, the courts most often take an affirmative and independent approach to leadership selection,” she said.

“Applicants file directly and publicly with the court, and the court decides the size and shape of the leadership structure, and who will populate it, usually after a public hearing. This process includes the opportunity to object to applications.”

So What's the Answer?

Burch said the answer to concerns over repeat players lies with how judges select and compensate attorneys. Allowing lead counsel to pick the rest of the leadership team through a consensus just isn't going to work, she said.

Fee awards in MDL cases should be based on the amount actually paid out to claimants, not just the sticker price of the common benefit fund, she said.

She also argues that when there's a global settlement, the panel should automatically remand the potential claimants who don't want to settle to their courts of origin. That avoids the problem of the DuPuy deal.

Cabraser, however, is confident that the system is improving on its own.

“The good news is that more judges are becoming interested in MDLs,” she said.

Judges have to agree to take on MDLs, and many judges like them because they are where the most exciting and important legal questions are, she said.

“We’re at the beginning of great innovation and improvement in the MDL process,” she said. “As they get more attention, judges have to justify themselves.”

To contact the reporter on this story: Perry Cooper in Washington at

To contact the editor responsible for this story: Steven Patrick at