Wondering about YOUR case?
This morning I received a link from a woman who felt very disheartened about being in a mass tort lawsuit and she wondered if everyone else would be paid well except for her. I can understand her feelings and decided to share these articles so that others could read it. It is a very sad disillusionment for many women who are seriously injured and wonder what will happen to them over time. I also wonder the same thing because once you are maimed by an implant product, you rely on others to help take care of you but wonder where the money to pay someone to help you, will come from. I have copied the entire two parts just in case over time the link will disappear because many do and it is written for law students.
I wish all lawyers were ethical and really cared about their clients instead of try to close a deal on a massive pay day for themselves, but sadly I think more lawyers think the latter. Sadly the world is all about greed these days and it is very hard to accept. So read and learn.
Prof Zitrin on How to Handle Mass Tort Conflicts
Viewpoint: How to Handle Mass Tort Conflicts
This article is reprinted with permission from the Dec. 7, 2012 edition of The Recorder. Editor’s note: This is the first article in a two-part feature examining ethical considerations in mass tort representation.
by Richard Zitrin
What happens when lawyers find themselves with cases that look like class actions, with high numbers of individual plaintiffs, but are not eligible for class action treatment, usually because each case is unique on its facts or has unique damages? Mass cases — usually but not always tort claims, such as allegations about toxic pollution or defective drugs — have become more and more common, but the ethical rules that govern them remain unchanged. Despite multiple parties with similar complaints, these cases are individual representations, not class actions, and the same ethical rules that apply to lawyers who represent two clients will apply equally to lawyers representing hundreds.
Take, for example, a toxic tort case: A large number of people on one side of town sue for damages, alleging that a local plant deposited toxic waste into the town’s groundwater. Given the scientific sophistication of such cases and the specialized area of law, it would be almost impossible for each potential victim to find a separate lawyer. And plaintiffs without the most serious symptoms or prognoses might not find lawyers at all.
As a result, it makes sense for plaintiffs to band together in a single lawsuit. For each plaintiff, proximity to the “plume” of toxicity is different, and damages may range from the sniffles or a rash to cancer. Disparate damages and disparate proof problems mean ineligibility for class action treatment.
Some of these lawsuits are national in scale and result in consolidation under federal rules governing multidistrict litigation (called MDLs). These cases often involve close judicial oversight, with some judges even calling them “quasi-class actions.” That term itself is controversial. In class actions, of course, the lawyers represent the class itself through its class representatives, and cases are settled without individual passive class members’ approval. But because mass tort cases remain an accumulation of individual actions, lawyers cannot escape the fact that they represent individual clients, no matter how many there are, even in MDLs.
But the focus here is on the many cases, often in state court, which — like Erin Brockovich-style toxic torts or the lawsuits that followed this summer’s Chevron refinery fire — are handled by a single or small group of law firms. For these plaintiffs, as with any client, each individual has the autonomous right to settle, the right to have his or her lawyer negotiate the best possible resolution for that individual, or, in the alternative, to go to trial, and the right to have the lawyer give considered, particularized advice about what is best for that client.
But if a lawyer or group of lawyers represents 300 individual plaintiffs, or 1,000 or more — yes, this happens, and with increasing frequency — how can they possibly do their best job for each, fulfill their fiduciary duties to each, and advise each on what is best for that particular person without compromising their representation of everyone else? The flip answer is “with great difficulty.”
Still, this difficulty is not a good reason to prohibit such cases. Thousands of members of the public are well-served by lawyers taking large numbers of similar cases where taking individual claims would be financially untenable. Cases such as mass toxic tort or defective drug claims are often extremely expensive to litigate and frequently remain problematic as to proof. While the rewards are high, so are the risks, especially causation. Lawyers may invest millions in developing their own scientific proofs. Individual clients’ $50,000 claims would be very unlikely to garner individual representation.
Still, under current rules in both California and under the ABA, a law firm with a high number of individual plaintiffs has an almost impossible task conforming to the ethics rules. One big roadblock is that defendants and their counsel are not in the business of cooperating with the needs of plaintiffs lawyers. In settlement, they want to buy global peace for a lump sum, not deal with individuals, which is simply not their responsibility. That leaves plaintiffs’ counsel with a whole host of sticky ethical issues.
First, what can the lawyer do with this “lump sum,” which under the ethics rules is called an “aggregate settlement”? Under both California Rule of Professional Conduct 3-310(D) and ABA Model Rule 1.8(g), a lawyer is explicitly forbidden from accepting an aggregate settlement. That means getting each and every plaintiff to agree to not just the total amount, but his or her individual amount. Without that agreement, the whole settlement could fail. One recent New Jersey case allowed one of 154 plaintiffs to change its mind and refuse settlement, thus destroying the settlement for everyone.
Besides, getting each plaintiff to agree is not as simple as taking the settlement number and dividing by the number to plaintiffs. Some plaintiffs inevitably will have suffered more or less harm, while others have more proof problems than others. It’s common to place plaintiffs in different categories, or “matrixes,” depending on these issues, and other factors such as their location in the plume of toxicity or the degree of exposure to defective drugs.
But how does the lawyer place these people on the matrix, much less explain to each the reasons for that placement and get consent to the settlement before it’s consummated?
Second, just to complicate things a bit more, the defendant’s offer may be conditioned on getting at least 85 percent or 90 percent of the plaintiffs to agree to their settlements, without which the offer goes off the table. That means that not only does that percentage of plaintiffs have to accept their amounts, but the lawyer has to fairly and impartially advise each plaintiff as to what’s best for him or her.
May the lawyer try to persuade the minority to climb on board because the settlement offer is good for the vast majority of plaintiffs? If so, how is counsel properly advising those what is right for them even if the deal is not good for them personally? Is it possible to ever give a true, honest opinion to all clients in these circumstances without the whole deal cratering? If not, who gets the attorney’s best advice and who loses out?
Today, conflicts of interest are common, and waivers of those conflicts are almost as common. But what does a conflict of interest waiver look like in a case like this? Is it even possible to construct a waiver that protects the individual rights of 300 plaintiffs and provides informed consent? And how can plaintiffs lawyers, with their huge investment of time and money, avoid the conflicts of interest that face them personally? After investing millions, it is understandable that a lawyer may take sides on whether to settle, favoring big-damages clients over small, and may be tempted to take short cuts around the ethics rules.
I have nothing but questions this week. I hope to provide some answers next time after explaining why the current ethical rules can foster unethical lawyering.
Prof Zitrin on Full Disclosure in Mass-Plaintiff Cases
Viewpoint: Full Disclosure is Key in Mass-Plaintiff Cases
This article is reprinted with permission from the Dec. 14, 2012 edition of The Recorder. Editor’s note: This is the second article in a two-part feature examining ethical considerations in mass tort representation.
by Richard Zitrin
How can mass-plaintiff lawyers handle 300 or more individual cases ethically? Last week, I suggested that the answer is “with great difficulty” (“Viewpoint: How to Handle Mass Tort Conflicts,” Dec. 7). But the answer more accurately may be “they can’t.” As I suggested, if a lawyer has to truly give individual advice to all 300 clients — those who would, for example, benefit from a settlement, and those, perhaps a small minority, who would be harmed — it seems that a law firm could not fulfill its fiduciary duties to each and every client without giving conflicting advice.
The California and American Bar Association ethics rules both throw two major ethical roadblocks in the way of mass-plaintiff lawyering: the right of every individual client to agree to all the terms of a settlement, and the prohibition against lawyers accepting “aggregate,” or lump-sum, settlements that are not specifically accepted by each client. Lest my call for reform be misunderstood, these are both important client-protective rules. But they are inflexible given the reality of litigation practice today.
Both California and the ABA have had recent opportunities to provide some flexibility in mass-plaintiff cases, but neither has done so. The recent California rules commission never seriously considered the issue. And in 2006 the ABA strongly reaffirmed and arguably extended the existing ethical limitations of its Rule 1.8(g) in Formal Opinion 06-438: Not only does the rule “protect a client’s right in all circumstances to have the final say,” but plaintiffs lawyers must disclose all “information relevant to the proposed settlement,” including “the total amount or result of the settlement or agreement, the amount and nature of every client’s participation in the settlement or agreement, the fees and costs to be paid to the lawyer from the proceeds or by an opposing party or parties, and the method by which the costs are to be apportioned to each client.”
Whew! That doesn’t leave much room for innovative solutions.
The result has been that lawyers wanting to use this useful vehicle feel compelled to take ethical shortcuts. And among more unscrupulous lawyers, their clients often become their victims.
Take the case of the law firm of Leeds, Morelli & Brown, or LMB, described in the 2011 case Johnson v. Nextel Communications, 660 F.3d 131, at the U.S. Court of Appeals for the Second Circuit. LMB represented 587 individuals on employment discrimination claims against Nextel. Instead of pursuing these claims, LMB entered into its own private side agreement with the defendant.
Nextel agreed to pay LMB $2 million if it persuaded its own clients to drop all pending lawsuits and agree to be bound by the settlement procedure Nextel created. Upon resolution of the claims, Nextel agreed to pay LMB another $7.5 million and LMB agreed to take no more Nextel cases. Almost all of LMB’s trusting clients signed off on this procedure.
If anything, the Johnson court understated LMB’s vitiation of its fiduciary duties to its clients: “Viewed on its face alone, the [plan] created an enormous conflict of interest between LMB and its clients.” But importantly, the Johnson court reminded us all of the distinction between class actions and mass-plaintiff individual representations:
“First, because LMB was not lead counsel in a class action, the class-protective provisions of Fed. R. Civ. P. 23 were not triggered. Therefore, LMB’s clear duty as counsel to the parties seeking relief from Nextel was to advise each client individually as to what was in his or her best interests taking into account all of the differing circumstances of each particular claim.”
Boston University School of Law professor Nancy Moore recently put it more clearly: “Mass tort lawyers often treat their clients as if they were members of a class without affording them the judicial protections given to actual class members.” In other words, individual clients are actually at a disadvantage when compared to class action members, who are at least guaranteed disclosure in the form of class notices, the ability to opt out, and oversight from the courts.
The LMB case hardly stands alone. The actions of Southern California firm Initiative Legal Group, described in a Nov. 19 Recorder article (about a case in which I am an attorney of record), has many unfortunate similarities to the Johnson case.
Here are some more horror stories I have seen in recent years:
- Brief retention agreements that make no mention of conflicts of interest despite the hundreds of plaintiffs involved.
- Retainer agreements in which clients expressly give up both the right to settle and the right to avoid aggregate settlements, ostensibly appointing their lawyers as “attorneys-in-fact,” even though these are unwaivable rights.
- Settlements that are forged by counsel’s agreement with defendants with little or no participation of the clients, as in the LMB and ILG matters.
- Plaintiffs asked to sign “ratifications” of settlement agreements without ever being shown the agreements themselves, even being told by their lawyers that the settlement agreements that they are ratifying are “confidential” so they may not see them.
- Settlement agreements that state that if a sufficient percentage of plaintiffs agree to (or “ratify”) the settlement, plaintiffs counsel will defend the defendants against the nonsettling plaintiffs – essentially plaintiffs counsel’s agreement to switch sides and become adverse to their own clients.
No ethical lawyer would think that the methods described above “solve” anything other than making things easy and profitable for the lawyers who engage in them. But abiding by the current letter of the law is exceptionally difficult for any lawyer. We must find a way bridge the gulf between the current inflexible rules and the reality of practice: Both that mass torts and other large multiplaintiff cases are here to stay, and that they are simply not class actions.
In 2010 the American Law Institute came up with one solution through a set of “Principles of the Law of Aggregate Litigation.” But these principles not only allow the clients to consent ab initio to be bound by a supermajority of plaintiffs — a worthy idea — but also erode individual client autonomy. They allow third-party surrogates to decide for the clients; limit the extent of disclosure required of plaintiffs lawyers; and most unfortunately, allow the lawyers to drop clients who don’t agree with the majority like hot potatoes. In short, as Boston University law professor Moore noted, the principles offer an “unduly rosy” view that lawyers “ignore … the ethics rules [while] they affirmatively downplay the risks of such representation.”
Are there, then, more workable solutions? In federal court, multidistrict cases, or MDLs, proceed under a federal regulatory scheme. Wide judicial oversight is the rule. A knowledgeable, sophisticated, well-intentioned and public-spirited judge experienced in multidistrict litigation will certainly help curb some of the worst abuses described above. But many federal judges have been too ready to term these cases “quasi-class actions” in which the powerful judge replaces the lawyer as decision maker, while the clients still lose their right to decide. The “greater good” prevails over individual client autonomy. There are arguments that protecting the greater good, as in class actions, is at least much better than no judicial oversight. But there is no substantial de jure basis for the existence of a “quasi-class action.”
But what is a fair solution to the 500 plaintiffs in a state court case without a coordinating MDL mechanism and with a judge who does not have particular mass tort case experience?
Some commentators, Moore, recommend full disclosure, a sensible road to follow. But even full disclosure may not be enough unless it’s accompanied by advice tailored to the needs of each individual client — a real stumbling block considering the inherent conflicts in the circumstances of various clients.
Moore suggests as much, asking, “What ensures that the clients have been adequately informed of both the advantages and the risks of proceeding as part of a ‘litigation group’? What ensures that the decisions are truly consensual?” She then answers her own question: the rules of professional conduct, which require clients to be fully informed from the beginning about the risks of representation and conflicting interests of the prospective lawyers.
Taking this one step further, if prospective clients are fully informed at the outset that if they join the litigation group, their lawyers may make decisions that will be in the interests of the overall group of plaintiffs and not necessarily in the best interests of that individual, and going a step further, that their lawyers will recommend settlement based on a broad consensus of plaintiffs, say 75 percent or more, this disclosure is enough in my view to allow the prospective plaintiffs to give informed consent. This is particularly true if the plaintiffs are assured that even if they don’t accept the eventual settlement, their lawyers will continue to represent them to the best of their abilities.
Would such a disclosure comport with California Rule 3-310(D) or ABA Model Rule 1.8(g)? Probably not. But it makes sense to revise the current rules slightly, not to broadly allow aggregate settlements decided on by lawyers with big loyalty conflicts and huge fees at stake, but to narrowlyallow fully informed clients to knowingly and intelligently abrogate a degree of their settlement autonomy in the interests of becoming represented plaintiffs in a mass-plaintiff case.
At least that would be a start.
Richard Zitrin is a professor at UC-Hastings and of counsel to San Francisco’s Carlson, Calladine & Peterson. He is the lead author of three books on legal ethics, includingThe Moral Compass of the American Lawyer.
I can’t copy this one, but here is more you can read.