WASHINGTON, D.C. (Legal Newsline) – Individual lawsuits that end up being consolidated in federal courts are being treated like class actions, a Skadden Arps attorney said Tuesday.
John Beisner released his firm’s report on Multi-District Litigation proceedings and spoke to the issue at the U.S. Chamber Institute for Legal Reform’s 16th annual Legal Reform Summit.
“One of the worst-kept secrets is our MDL, or mass tort, proceedings really are class actions,” he said. “I call them ‘non-class-action class actions.’”
MDLs are created when there are numerous, similar individual lawsuits filed. An MDL panel picks a federal court in which to create the MDL.
Judges don’t need to certify a class like they would in a class action, he said, but still treat the cases like they are.
Beisner said a 2014 study showed that 45.6 percent of all pending civil lawsuits, excluding prisoner and social security cases, are in MDLs.
“The biggest problem with this is cases don’t receive individual attention.”
Because the lawsuits are frequently the result of trial lawyer advertising, Beisner said, they often aren’t vetted. A recent Southeast Texas Record report showed that one firm purchased a bulk amount of pelvic mesh cases, taking more than $90 million in financing to do so.
“You read the allegations, and it’s like selling commodities – like bushels of wheat, not lawsuits,” Beisner said.
Beisner cited a settlement in the Vioxx MDL that provided compensation to plaintiffs if they could show they took the drug and if they suffered a heart attack or stroke.
Forty percent of the plaintiffs in the MDL could not, he said.
Plaintiffs attorneys have little incentive to investigate the merits of their clients’ claims at the outset of litigation, Beisner feels.
MDLs have no gatekeeping hurdle that individual cases need to pass in order to join, he wrote, noting cases involving Bendectin, silicone gel breast implants and Digitek.
“The dubious scientific theories underpinning these litigations were ultimately uncovered, but not until after years of expensive litigation, burdensome discovery, and, in one case, bankruptcy,” the report says.
Also, an excessive focus on settlement can distort the value of the claims, the report argues. Judges who are able to steer the sides toward quick settlements are often rewarded with new MDL assignments, it says.
“Paradoxically, however, pressuring defendants to settle without digging into the merits of a case is at odds with the goal of obtaining final resolution of mass tort litigation, because many defendants will not seriously consider settlement until meritless claims are weeded out,” the report says.
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