7 Habits for Running Plaintiffs MDL… Like a Business, April 2018
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Ed Gentle Discusses The Role of Special Masters in Mass Litigation and Settlement
Ed Gentle Speaks on Aggregate Settlements, MDL Attorney Battles and the Use of Special Masters at Cumberland Law School Seminar December 2014
Ed Gentle Discusses the Use of Cy Pres Funds in Settlement Distribution
The Cy Pres Distribution of a Class Action Recovery Surplus: Equity or Inequity
DESCRIPTION OF THE CY PRES PROBLEM
Imagine the settlement of a case involving the refund by Jefferson County, Alabama of employee occupation taxes that the Court finds to be illegal. There are 350,000 claimants and about $30M or about $100 a head. In paying claims, you followed a Cadillac distribution plan, first asking the employers, who kept the payroll records for occupation taxes, to provide the information to pay the employees. Then, for the employees whose employers did not participate, you gave them time to file their own claims. Throughout the process, you provided notice in the newspapers and news media and used employer name and address data provided by Jefferson County.
The dust has settled and you have paid claims to about 85% of the people, with there being about $2.5M left.
If you were to pay the remainder to the 85% of the claimants that you located, they would each get $8. And it would cost about $5 to prepare and send each check.
Where should the money go?
Courts around the country have looked at four alternative solutions:
1. Pay the excess money to the claimants who appeared, no matter how expensive.
2. Give the money back to the defendant.
3. Give it to the state or federal government, depending on what Court you are in.
4. Apply the cy pres doctrine, which would result in the money going to charity.
What seems to be the most fair? Continue reading The Cy Pres Distribution of a Class Action Recovery Surplus: Equity or Inequity
What does it take to be a good Community Mass Tort Settlement Administrator?
The toughest peacemaker challenges and the greatest rewards I’ve experienced have come in creating and administering Community Mass Tort Settlements: a PCB plant, a couple of zinc smelters, a medical monitoring plan resulting from coal slurry contamination of a water supply, two train wrecks and a factory fire. The most daunting challenges occur when the case is settled for a sum certain without a settlement structure, and the Administrator is left with the task of figuring out what to do with it.
You are the peacemaker for 5 to 30 years. The key to being a good Administrator in this context is empathy and grit.
Kenny Feinberg got it right: in mass tort settlement administration, consistency is fairness. But the deal must be created, sold and carried out as a part of the community infrastructure. The Administrator, like the cheese in the farmer in the dell, often stands alone. The lawyers are down the road and you are the claimants’ only settlement reference, for good or bad. In a real sense, they are pro se and you are like a Judge with a Courtroom full of them. You’ve got to befriend them; there’s no other path.
Ideally, the claimants design the deal. If you aren’t accepted, you fail. Example: there was a 25% opt out rate in the Blackwell, Oklahoma smelter settlement until we opened a claims office and joined the town, winning back half the exiles. Early, on the ground town meetings to listen to the claimants’ concerns are a good beginning. Counter intuitively, creating a claimants committee with the loudest critics works well. They usually welcome the leadership role and often become your biggest fans. Then spend time in the town, just as a good fisherman spends lots of time on the water. A local office staffed with locals is a must. Social events, where everyone is treated as an equal, work well. I’m Santa in three deals right now.
Over time, you bond with the community and the committee. You then continue to meet with them and thus have a sounding board to assist you in resolving the tough “tweener” issues and to counter negative gossip with positive answers. You can thereby build consensus in settlement design and implementation.
In my Anniston PCB settlement, I had 6 written death threats, but made some of my best friends. We had two or three annual fishing parties at my house, meet quarterly and have parties.
You can’t fake empathy. In the Anniston case, Judge U.W. Clemon hired me at Thanksgiving and asked me to be MonsantoClaus: all 18,000 claimants to have a check in December. Impossible was no answer. Our firm didn’t have a Christmas that year, but the claimants did. When there was griping, I took my folks to the Anniston bank to see our impoverished claimants wrapped around the block cashing their advance checks. “This is Christmas, now let’s go finish our work.”
I define grit as Johnny Football and the Black Knight in Monty Python: fully improvise within the rules and you can lose a few limbs in the process, no sweat. The grit comes in when you are faced with a settlement crisis or squeaky wheel claimant, and have to creatively problem solve without violating the above Feinberg principle. An example of resolution is having a town meeting to decide whether to use a $2 Million settlement surplus to pay everyone $100 or extend the life of the settlement medical clinic a year to help those most in need, and then convincing the group to do the right thing without bloodshed, emergency advance payments, paying the elderly first, or calming an uproar by arranging a Defendant appearance at a town meeting to give a de facto apology for the past while not calling it that.
By the way:
Major problems in long term deal administration are lack of claimant interest over time and plaintiffs’ counsel moving on while the defendant stays and advocates. On the ground claimant outreach to explain the benefits of the settlement such as we’ve undertaken in the two 30 year medical monitoring plans I administer in West Virginia is the key to keeping a deal alive, . The ideal settlement plaintiffs’ lawyer must adopt the claimants and actively participate on the ground, to keep administration of the settlement balanced.
A Dynamic Medical Monitoring Remedy
Medical monitoring is traditionally a tort remedy that allows plaintiffs exposed to a toxic substance or dangerous product to have the long-term health effects thereof monitored at the defendant’s expense. However, as the remedy is now administered, a plaintiff would have to bring a new case against the defendant if medical monitoring reveals a linkage between the toxin or product and a disease.
Currently, the remedy is accepted in 13 states.
The other states that have considered and rejected the remedy did so based on the theory that recovery in a tort case requires injury from the defendant now, while medical monitoring is inherently based on no detectable present injury. It is submitted that this is a narrow and antiquated approach to tort remedies.
In his article below, Ed Gentle suggests coupling medical monitoring with a defendant payment grid if the plaintiff develops a related illness, in order to better match the remedy to the long-term potential malady. This approach is an exquisite solution to exposure to substances or products with unknown long-term effects, which are frequently encountered in our society and already dominate the civil legal system.
The plaintiff has a form of insurance should he or she get sick, and would not have to bring a new lawsuit. It also solves the problem of a health insurance carrier denying further coverage if an injury results in tort recovery.
From the defendant’s perspective, a grid eliminates the risk of unreasonable tort recoveries and may allow the defendant to quantify and fully pay for the exposure through insurance. We are currently exploring the writing of such a policy.
In conclusion, this dynamic medical monitoring remedy is recommended as the best remedy for harmful substances or products with unknown long-term risks.
Read Ed Gentle’s full article here: