Plaintiffs Would Suffer From Proposed Ending of Class Action Lawsuits and Multidistrict Litigation

 
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Class Actions
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Multi-District Litigation Bill

By Lynn Shapiro, Staff Writer

Representative Bob Goodlatte’s (R-VA), Fairness in Class Action Litigation Act of 2017, threatens to single out personal injury plaintiffs and their attorneys for slaughter.

On February 15, the House Judiciary Committee passed H.R. 985, by a vote of 19 to 12. The House is due to vote on it any day now.

Goodlatte’s bill aims to restrict the procedures in Federal court class actions and multidistrict litigation (MDL’s) that ensure fair and efficient outcomes for plaintiffs when they’re involved in suits against the same company in multiple jurisdictions.

According to Alison Frankel, writing for Reuters, in an article entitled “The Most Intriguing Idea in House Republicans Bill to Gut Class Actions”, The Fairness in Class Action Litigation Act would place a chokehold on class action and MDLs that include the following:

  • “The bill would limit class certification to class actions, where plaintiffs all “suffered the same type and scope of injury,” Frankel says.
  • Class action lawyers would not be able to sue on behalf of relatives and employees—or any other client with whom they have an ongoing contractual or attorney-client relationship.
  • The bill seeks retroactive application, meaning that if it passes, the law could eliminate MDL’s that have already been filed.
  • In MDLs, personal injury plaintiffs would have to submit evidence of their injury within 45 days of their case being transferred to the multidistrict court, or else risk dismissal.
  • Judges would have to assure that plaintiffs receive 80 percent of their recovery, presumably restricting their lawyers’ fees contingency fees to 20 percent.

Frankel says she writes “all the time about abuses in class actions and MDL’s and can certainly understand why defendants want reforms—and why various provisions of the Goodlatte’s bill seem appealing.

“The Judiciary Chairman described his proposals as a way to maximize recoveries by deserving victims and weed out unmeritorious claims that would otherwise siphon resources away from innocent parties,” Frankel says.

Bill Would Disrupt Complex Litigation and Attorney Client Relations

However, Frankel calls the Goodlatte bill “overly specific and underdeveloped.”

She says “it would interfere with judges’ ability to manage complex litigation in all kinds of ways, from interfering with decades of precedent on the range of injuries that can be resolved in the same class action to requiring MDL courts to assess injury evidence at the very beginning of complex cases.”

She notes that “the proposal would federalize contingency arrangements, which are private contracts, and would remove from state bar associations the regulation of relationships between plaintiffs’ lawyers and their clients.”

Outrage among Civil Rights and Environmental Groups

H.R. 985 has resulted in swift condemnation among civil rights, labor and environmental groups,

The organizations protesting the pro-business, anti-consumer legislation are: the AFL-CIO, the National Disability Rights Network, the National Employment Lawyers Association, and Public Citizen.

The letter states, “If this bill were enacted into law, it would obliterate class actions in America.

“The fact that the Committee would even consider such a sweeping, reckless legislation without holding a single hearing is an outrage.”

Class Action Suits are Called a Win-Win, says Attorney Roy J. Konray

Roy J. Konray, a partner Tobin, Kessler, Greenstein, Caruso, Wiener and Konray, in Clark, N.J., explains why class action suits and MDL’s are a win-win for plaintiffs and defendants.

“I had a client who took Actos for 18 months to help with his Type II diabetes.

“Years later he developed bladder cancer.  Sometime after he stopped taking Actos, the FDA required the manufacturer to add a warning to Actos about the increased risk of developing bladder cancer.  

“My client was a long time cigarette smoker. Smoking is one of the leading causes of bladder cancer, and from what I could see in the records, my client also appeared to be an alcoholic.

“It would be a daunting task for me to take on a major drug manufacturer by myself under these facts.  However, I knew that there was an Actos MDL.  

“I filed suit in Federal District Court for the District of New Jersey. 

“The manufacturer quickly moved to transfer my case to the MDL pending in Louisiana. There were thousands of other plaintiffs who were consolidated into the litigation.

“The court made it easy for me to be admitted pro hac vice as a member of the Louisiana bar (that type of admission is for one case only.)

“It was win-win for both sides. The advantage to the plaintiffs was that they could consolidate resources and pool expenses, which might otherwise be prohibitively high for an individual plaintiff with less than a perfect case and huge damages. 

“The advantage to the defendants was that they would not have to individually defend over 9,000 lawsuits covering 50 states.

“Rather than having to answer interrogatories, submit to depositions and obtain expert reports in thousands of cases, the defendants only had to deal with a plaintiff's committee that took the lead in serving discovery and conducting depositions on liability and causation as if it were one case. 

“The parties agreed on the selection of some so-called bellwether cases to be tried on behalf of some individual plaintiffs. Each side used premier lawyers who had been immersed in the details of the case for more than a year.

“Eight cases were tried: three returned verdicts in favor of the defendants, and five returned huge verdicts for individual plaintiffs (although some were overturned on appeal.)  

“At that point, defendants agree to contribute more than $2 billion to a settlement if at least 95% of the plaintiffs agreed to settle.”  

“More than 95% did agree.  

A matrix was created that awarded or subtracted points to each individual plaintiff using factors  such as length of time the person took Actos, the amount of time between taking Actos and the development of bladder cancer, the person's age, the nature of the injury (e.g., death, removal of bladder, etc.), and the person's smoking history.

“Under the matrix, my client scored 270 points.  

“The amount of the settlement was divided by the total number of points given to all plaintiffs in order to calculate the value of a point, which turned out to be approximately $1,000 per point,” Konray says.

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