WASHINGTON (Legal Newsline) - Millions of dollars pumped into billboard, TV and internet advertising as a come-on to sign mass tort plaintiffs is drawing in a high percentage of claimants with no basis for the claims, lawyers say.
The trumped-up numbers, business defense lawyers say, increase pressure to settle the lawsuits that could result in payouts to many with no injuries -- some collected without ever having used the product at the center of the claim.
“We’ve seen a dynamic change in the past decade with the increase in third-party litigation funding driving the advertising,” Phil Goldberg, managing partner of Shook, Hardy & Bacon’s Washington, D.C. office, told Legal Newsline. “In some cases, we’re seeing unsupported claims as high as 50 percent.”
The scenario is playing out in multidistrict litigation (MDL), created by Congress in 1968 to handle tort cases across multiple jurisdictions more efficiently. MDLs now account for more than 70 percent of all pending federal civil cases.
Last March, the U.S. Judiciary Conference's Advisory Committee on Civil Rules proposed a way that could help screen the claims in Rule 16.1, but the defense bar says the language falls well short, and it’s more guidance than directive.
“(U)nlike other provisions of the Federal Rules of Civil Procedure (FRCP), the Preliminary Draft contains no requirements; to call it a ‘rule’ is aspirational,” Alex Dahl, general counsel to Lawyers for Civil Justice, told committee members in testimony submitted in October during the first of three scheduled hearings hosted by the Committee on the proposed rule.
It “merely offers advice and options to judges,” Dahl said.
What’s more, the rule, if finalized, would not discourage settlements stemming from the sheer number of claimants, Johnson & Johnson assistant general counsel Deirdre Kole said in testimony submitted to the Committee.
“Indeed, even this draft rule directs MDL judges to contemplate settlement at the outset of the litigation-before addressing the merits, including whether or not the claims are valid,” Kole said.
What’s needed, she said, is a rule that “provides clear instructions for the early vetting of cases to ensure that claims in an MDL have, at minimum, a facial factual basis- i.e., the plaintiff actually used the product at issue and medical records show they experienced the injury they allege.”
She cited the 3M Combat Arms earplug litigation, settled in August for $6.01 billion, with 3M admitting no liability.
“Of 500 Wave 1 plaintiffs in that MDL, 126, 25.2% reportedly produced no evidence and dropped out of the case, and nearly three-quarters of the Wave 1 plaintiffs had no record of ever using the product at issue. Those cases should not have been filed," she said.
Goldberg said that the lawsuits are part of what’s become a “mass tort machine.”
“Traditionally, someone alleging an injury would find a lawyer and seek compensation in court for the injury,” he said.
“Now, what we’re seeing is a disturbing trend where plaintiffs’ lawyers get investors to pay for advertising, hire sophisticated marketing firms to generate leads, and file lawsuits without examining whether the leads generated are legitimate claims.
"The courts think that when there is that much smoke, there must be fire. But, it’s often just a trial lawyer smoke machine. The resulting settlements are often costly and unfair.”