CLEVELAND (Legal Newsline) - There will be a lot of familiar faces in U.S. District Judge Dan Polster’s courtroom in Cleveland on Jan. 31, when lawyers gather for a hearing on multidistrict litigation against the nation’s opioid manufacturers and distributors.
The prospect of the biggest payday since the $200 billion tobacco settlement in 1998 has drawn many of the same plaintiff lawyers who appear again and again in big tort cases over everything from VW diesels to Vioxx to the BP Deepwater Horizon disaster.
It’s such a common scenario that one prominent legal scholar has devoted a significant chunk of her career to documenting what she calls the “systemic pathologies” that develop when a small group of repeat players dominate the business of MDLs.
These lawyers “form what looks like an oligopoly,” said Elizabeth Burch, a professor at the University of Georgia School of Law. “The same five lawyers are involved in practically every proceeding.”
Indeed, Paul Hanly, appointed by Judge Polster to serve as one of two lead counsel overseeing the plaintiff side of the opioid litigation, is a name partner in Simmons Hanly Conroy, where fellow name partner Jayne Conroy is one of those five individual attorneys on Burch’s repeat-player list.
And five of the 16 law firms on the plaintiffs’ steering committee – the Lanier Law Firm, Seeger Weiss, Lieff Cabraser, Motley Rice and Weitz & Luxenberg – also appear among Burch’s list of the 10 firms that most often supply lead counsel to MDLs.
Proponents of the MDL process say that’s a good thing. Congress created the MDL in 1968 with a law designed to streamline many of the procedures at the outset of complex litigation, including court-overseen evidence-gathering known as discovery.
Law firms on both sides, plaintiff and defense, bring huge amounts of money and staff to bear on what has become a highly specialized, multibillion-dollar business.
“Is it the usual suspects? If that is true, there are good reasons for it,” said James Young of Morgan & Morgan, who represents a number of West Virginia counties suing opioid distributors and manufacturers. “It’s a niche practice. I'm not aware of people who are continually throwing their hats in the ring and are rejected."
Burch’s research reveals the negative side of such concentrated leadership, however. She examined 73 MDLs involving more than 312,000 individual lawsuits and found repeat players held 63% of the available leadership positions. With such close ties, plaintiff lawyers have an incentive to cooperate and squelch dissent, Burch concluded.
That can lead to settlements that provide what defendant companies want – a cessation of the litigation against them – and rich fees for the lawyers, but less-than-optimal results for their clients. A tiny percentage of individual lawsuits return to their original courts for trial once they’ve been sucked into the MDL process, even though it was designed only to simplify pretrial proceedings.
In one example that required substantial sleuthing to uncover, Burch found that lawyers who negotiated a settlement over the heartburn drug Propulsid agreed to such strict medical criteria that only 37 of more than 6,000 plaintiffs qualified for benefits. Plaintiff lawyers -- including Christopher Seeger, who also sits on the opioid steering committee -- netted $26.5 million in fees for a deal that yielded $6.2 million for their clients.
Many of the lawyers leading the opioid litigation also were involved in the Deepwater Horizon MDL in New Orleans, which was marked by acrimony between the lead plaintiff attorneys and others who felt shut out of the action. Tampa, Fla, lawyer Brian Donovan has even written a book, “Collusion: Judicial Discretion vs. Judicial Deception,” deploring the Deepwater Horizon litigation and the MDL system in general.
Donovan feels his clients have been shortchanged by a process that sucked their claims into the “black hole” of the coordinated litigation in New Orleans instead of being remanded back to courts in Florida where they can be tried. There has been little action on his cases in seven years, Donovan said, while 19 plaintiff firms have collected $3 billion in fees for negotiating more than $20 billion in settlements with BP and other companies.
“One of the prerequisites to being placed on a plaintiffs’ steering committee is you’re cooperative,” Donovan said. “You don’t make waves; you’re a dealmaker.”
So far, the opioid litigation looks similar to Deepwater Horizon: A profusion of plaintiffs, including government entities, union pensions and healthcare networks, all pursuing lawsuits at the same time as state attorneys general mount their own investigation of the opioid industry.
A settlement is likely, especially since Judge Polster supports a negotiated agreement and Purdue Pharma, one of the biggest opioid manufacturers, has reportedly floated offers with the states.
In frank comments at a Jan. 9 hearing, Judge Polster said “my objective is to do something meaningful to abate this crisis and to do it in 2018.”
“People aren’t interested in depositions, and discovery, and trials,” he told a roomful of lawyers in that hearing. “And with all of these smart people here and their clients, I’m confident we can do something to dramatically reduce the number of opioids that are being disseminated, manufactured and distributed.”
The judge said he’ll be talking to both sides privately before the Jan. 31 hearing, when it will be clearer whether a negotiated settlement is in the works. One important topic of those conversations will emerge only later: The fees private attorneys have negotiated as part of the settlement process.
In the VW diesel settlement, U.S. District Judge Charles Breyer approved $300 million in fees for Lieff Cabraser, Weitz & Luxenberg; Motley Rice; Seeger Weiss; Baron & Budd; and other firms, over objections by the Competitive Enterprise Institute that the private plaintiff lawyers didn’t obtain anything their counterparts at the Justice Department and state AG’s offices couldn’t have negotiated themselves.
Ted Frank of CEI’s Center for Class Action Fairness said the VW case provided “a perfect example of why multidistrict litigation needs a competitive bidding process.”
“Dozens of law firms colluded instead of competed,” he said, obtaining “thousands of dollars an hour for providing class members what Volkswagen and the government would have provided anyway.”
In the opioid litigation, most of the plaintiffs are government entities already. And as Judge Polster noted, government has ample resources to deal with the opioid crisis without resorting to litigation.
“Ideally this should be handled by the legislative and executive branches, our federal government, and our state governments,” the judge said. “They haven’t seemed to have done a whole lot. So it’s here.”
Again. With most of the same faces.