Proposed Changes to the MDL System - How Did it Work for You?

Jane Akre
|
January 18, 2021
Byrd federal courthouse, Charleston WV

Mesh Medical Device News Desk, January 18, 2021 ~ Was your transvaginal mesh (TVM) case moved to the federal court in Charleston, West Virginia to be readied for litigation or settlement?

Multidistrict Litigation (MDL) is a legal proceeding established to move a large number of similar complex cases under one court before one judge. That way discovery can be coordinated, and presumably with no conflicting lower court rulings, justice will move quickly.  

When the judicial panel on multidistrict litigation (JPML) established the transvaginal mesh MDL in January 2012, no one had any idea the numbers would swell to approximately 107,000 actions against seven manufacturers, becoming the second largest number of cases ever consolidated in one MDL court, after asbestos.

But there been problems.

A half dozen bellwether cases tried in the Charleston court, under the Honorable Judge Joseph Goodman, resulted in multimillion dollar verdicts as did parallel state court verdicts in New Jersey and Pennsylvania.

Still, defendant corporations - Johnson & Johnson, Boston Scientific, American Medical Systems and C.R. Bard primarily, among the largest - failed to offer any mass settlements, instead choosing individual law firms to clear their "inventory."

After six years, the pelvic mesh (TVM) MDL closed and told new cases to file in their individual states.

With some exceptions, the pending cases were offered settlements more closely resembling a “nuisance” event such as a car accident, and in no way resembled the average $20 million verdicts juries awarded to mesh-injured women in Philadelphia and New Jersey.

Ultimately, many women gave up and took what was offered. They were often incentivized by threats that their law firm would no longer offer representation if they did not.

With few exceptions, many women would agree that the MDL system did not work for them. It cost them time and money. Many cases are still not resolved, way past the eight years that’s typical for resolution. In many cases, the settlements saw the law firm walk away with more money than the client.

 

Kline & Specter

Kline & Specter is a Philadelphia plaintiffs law firm that has tried more pelvic mesh cases than any other firm.  Kline & Specter won 9 of them in the Philadelphia Court of Common Pleas. There was one mistrial and two verdicts for the defendant.

Altogether Kline & Specter secured in excess of $347 million for its pelvic mesh clients.

But the MDL system did not work for the esteemed law firm either.

The firm says its fees were shorted by the MDL executive committee in West Virginia, even though they were supposed to be working together in sharing fees collected from settlements and jury verdicts. The common benefit fees, a portion of the$7.24 billion in mesh settlements, are predicted to deliver $550 million to law firms involved with the MDL executive committee.

Those fees were supposed to cover the hours spent readying cases for trial. Instead, Kline & Specter, along with three other law firms (Mazie Slater, Anderson Law and Bernstein Liebhard) appealed the decision of the MDL executive committee to cut their hours and rates.  

Meanwhile, some law firms who tried no cases, yet were close to the executive committee, walked away with their hours being fully compensated.

U GA law professor Elizabeth Chamblee Burch

University of Georgia law professor, Elizabeth Chamblee Burch has written extensively that the same 63 law firms often sit at the head of the table in various MDLs, and enjoy the enrichment that comes from divvying up the common benefit fund.

She conducted a survey published on Mesh News Desk to gather your comments on how the MDL worked for you since the committees are made up of lawyers who listen to other lawyers. (MND will publish her conclusions when they are prepared.)

 

Rules Committee Appeal

After many complaints, the MDL rules committee is considering reforms. The proposed rules changes were published October 16, 2020, the Advisory Committee on Civil Rules [See pages 171-173] here.  

In an 18-page letter, dated December 18, 2020, Shanin Specter of Kline Specter adds his proposed amendments to the Federal Rules of Civil Procedure on multidistrict litigation. Specter has experience as a plaintiff’s attorney in Vioxx litigation and the transvaginal mesh MDL.

Judge Goodwin

Among his ideas are:

1.   - LIMIT AMASSING OF CLIENTS

Attorneys involved in mass tort litigation should not represent more clients than they can adequately handle. The transvaginal mesh MDL saw a rush of lawyers advertising in late night television to corral as many litigants as possible. Many firms intended to sell their caseload while others planned on bundling and preparing them for settlement. As a result, individual plaintiff needs were overlooked, most mesh-injured women never met their lawyer. Phone calls went unanswered.  

A number of Texas law firms are being sued for legal malpractice for allegedly bundling cases with a blown SOL with more valuable cases, lowering their value. Having too many cases puts pressure on the law firm to settle because the sheer numbers become unwieldy. How can one conduct discovery, depositions, hire experts? The defense understands this and takes full advantage of a lawyer who has one hand tied behind his back understanding that he is going for the quick, easy buck of settling, not preparing to try his cases. This gives an advantage to the defense counsel when it comes to settling.

A mass number of cases makes sense when you do the math. Five-thousand cases settling for $50,000 each and law firms taking 40% means that each case is worth $20,000 right off the top. Take that times 5,000, and the firm takes home $100 million, minus whatever expenses were involved in organizing the paperwork. Add to the 40% a 5% common benefit fee and you are making even more money, without the burden and expense of a trial.

A massive number of cases makes no sense if you are providing a service to your clients.

In all, 35 pelvic mesh cases were tried with an average jury award of about $20 million per case, representing a huge gap between the case’s value and the settlement amounts.  

Specter writes: “The incentive to amass as many cases as possible is significant – many cases means a lot of money for the plaintiff’s attorney in the event of a mass settlement. The incentive to amass as many cases as possible directly conflicts with an attorney’s obligation to advocate vigorously for their clients.”

He suggests that the Federal Rules of Civil Procedure be amended to limit the number of cases lawyers can acquire to the number they can adequately represent and that judges should question firms to prevent the amassing of clients and in the extreme circumstances the court should order those firms with too many clients may associate with other counsel to remedy the situation.

2.   – REQUIRING COURT APPROVAL FOR MASS SETTLEMENTS

The Federal Rules of Civil Procedure should require lawyers to submit mass settlements in an MDL for court approval to make sure they ae fair and reasonable. Specter admits that most lawyers reject the notion of judges overseeing their final settlements:

Tom Klein, Shanin Specter
Plaintiffs’ counsel may oppose such oversight as it would prevent the nefarious conduct described above. Defense counsel may oppose such oversight because its absence allows them to settle their clients’ cases for amounts significantly lower than what is fair to the plaintiffs. Some judges may oppose such oversight in a misguided effort to ease settlement – even settlement that contravenes notions of justice and fairness --- or to avoid the additional work involved in assessing the reasonability of those settlements. All those reasons are bad.”

 

3.   – A PLAINTIFF SHOULD BE ABLE TO REMOVE HER CASE FROM THE MDL AFTER ONE YEAR

WikiCommons, woman

When a woman filed her transvaginal mesh case in her state court, it was often referred to the MDL. The reasoning was that pre-trial proceedings, such as discovery and securing experts, could be conducted more swiftly with fewer lower court conflicting opinions and with fewer resources than trying her case individually.  Bellwether cases would then be readied for trial and presumably, she would see justice sooner rather than later.

Instead, in the transvaginal mesh MDL, at home before Judge Joseph Goodwin in Charleston, West Virginia, cases stalled. Ultimately, after five bellwether trials in West Virginia, defendants still did not offer mass settlements to resolve the issue. Eventually, in June 2018, six years after the MDL was formed, Judge Goodwin disbanded it sending cases back to their original jurisdiction, often with getting no closer to trial, settlement, or resolution.  

No effective mechanism exists for timely remand of the case back to its home district for trial, as judges often do not want to send cases back, hoping for a mass resolution. Such remand motions are routinely denied. This has delayed justice for thousands of injured persons” ~ Shanin Specter

Specter says once removed back to home district, the plaintiff should not be required to provide any additional discovery instead, unless it is case-specific. Instead, she should have her day in court.

 

4.   – COMMON BENEFIT FEES SHOULD BE EVALUATED

MND has written extensively about common benefit fees, that come out of any verdict or settlement. In the case of pelvic mesh, it was 5%. Often the client is blindsided claiming that was not disclosed.

Specter in his letter, says that the common benefit fees “customarily comes off the top of the settlement before division of the remainder between the plaintiff and her attorney.”

However, many plaintiffs have reported to MND that the 5% came out of the plaintiff’s60% of a settlement, not “off the top”.

Never mind that a 40% compensation, above the traditional 33.3% (still stipulated in New Jersey, for example) compensation rate, might represent fair compensation if one is to go to trial, however, the vast majority of cases were bundled and prepped for settlement. Still, in most cases plaintiffs were charged 40%.  

A common benefit fee is intended to compensate law firms that did the work necessary to prepare cases for trial and therefore spent money on travel, depositions, research, discovery, hiring experts etc. While the executive committee recommended charging the plaintiff 1% and4% from the law firm to satisfy the common benefit fee, many women found the entire 5% come from their portion.   

Specter questions the need for a common benefit fee to exist since they are not the norm in state court litigation.

5.   – COMMON BENEFIT FEES SHOULD BE DETERMINED BY THE JUDGE WITHOUT COMMITTEE INPUT

Specter calls the appointment of a special master to oversee fee allocation the “wolf in charge of the chickens”.  Plaintiff lead counsel chooses its own fee allocation committee and Specter argues plaintiff counsel should have no role in the allocation of fees. Instead, it should be controlled by the MDL Judge.
 

6.   – ATTORNEYS WHO PERFORM COMMON BENEFIT WORK SHOULD BE ABLE TO APPEAL THEIR FEE AWARD

That is not what happened in the pelvic mesh MDL. The executives of the fee allocation committee decided who should receive their full hours and rates, and who should not. This pitted counsel against counsel, generally along lines of the West Virginia MDL versus the out of state MDL counsel. Those attorneys who claim they were shorted in the fee allocation process had no appellate recourse. In the end, “it will discourage good attorneys from doing common benefit work in the future,” Specter says.  

 

Want to Learn More?

University of Georgia law professor, Elizabeth Chamblee Burch, conducted research from MND readers on their experience with the MDL process. She had requested plaintiffs impacted by the MDL participate since the MDL is made up of lawyers who listen to other lawyers. Burch has written extensively about it and participated in panel on its effectiveness, most recently with the American Law Institute (with Shanin Specter, John Beisner, and Prof. Abbe Gluck) See: 485599533

The podcast version is here: https://t.co/tu2lDkgrzk?amp=1 

The Burch book, Mass Tort Deals: Backroom Bargaining in Multidistrict Litigation is available here.

 YOUR COMMENTS ARE WELCOME - PLEASE SCROLL BELOW TO BE HEARD BY OTHERS!!

LEARN MORE:

Advisory Committee on Civil Rules, October 16, 2020 (see pages 171 to 173 on proposed changes) (here)

MND, June 22, 2017, What’s Wrong with the MDL System of Conflict Resolution?

MND, December 4, 2018, Fed Up? Want to Talk to MDL Panel? Here’s How

MND, April 9, 2019, Garrard Swings Back to MDL Critics in Pelvic Mesh Litigation

MND, August21, 2019, Shining Light in Dark Places of the Pelvic Mesh

MND,  Mesh Trials so Far- Plaintiff v. Defendant

MND, March 29, 2019, Slater Comes Out Swinging in Pelvic Mesh Fee Allocation

MND, March 23, 2019  Divvy the Dollars - Common Benefit Fee Winners and Objectors

MND, February 22, 2019 ~ Common Benefit Fee 5%- Did you Pay it?

 

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