Settlement and Trials of Mass Torts - Module 5 of 5

Settlement and Trials of Mass Torts

As we have seen in previous modules, nearly all mass torts are aggregated into Multidistrict Litigation or MDL cases.  Furthermore, nearly all MDL cases are resolved, when they do finally get resolved, by way of settlement.  The individual cases in an MDL are supposed to be transferred back to the original court for individual trial.  However, the MDL court has the authority to oversee resolution of the cases in the MDL by motion to dismiss, motion for summary judgment or settlement.[1] 

Settling a Class Action or MDL

     Settlement classes, covered in module 4, and the settlements they impose, come in a very particular chronological order. First, the lead counsel for plaintiffs and defendants in the MDL negotiate a settlement and only then, they can seek to have the class certified.  When the MDL judge is considering whether to certify a class and at the time all the various MDL plaintiffs have the chance to object to or opt out of the class, that judge and those plaintiffs know what the terms of the proposed settlement will be.  If the MDL judge does not find the settlement satisfactory, she will not certify the class.

A key distinguishing factor between settling of a class action and settling a typical individual claim is that in a class action the judge must approve the settlement. The approval requires a process that is intended to ensure that all class members are treated fairly and given an opportunity to be heard.  This is true whether a mass tort is first filed as a class action or aggregated into an MDL and later the MDL judge certifies a settlement class.

            First, the attorneys who are proposing the settlement must provide sufficient information to the judge to enable the judge to decide what notice should be sent to class members. The judge must notify all members of the class who would be bound by the settlement.  The judge will then set a hearing on the settlement, where all class members have the opportunity to present objections.  Only after that hearing will the judge be able to approve the settlement.[2]

            The judge may approve the proposed settlement only if he finds that it is fair, reasonable and adequate.  The court must find that the class counsel and class representative adequately represented the class, the negotiations for the settlement were at arm’s length and that the relief provided is adequate.  Determining that the relief is adequate requires the judge to consider the costs, risk and delays of trials and appeals, the effectiveness of the method proposed for distributing relief, whether the proposed attorneys’ fees are fair and whether class members are treated equitably relative to each other.[3] The judge also must consider any side agreements made in connection to the proposed settlement.[4]

            Not only are class members allowed to object to the proposed settlement, but the judge may require the settlement to provide a new opportunity for class members to opt out.[5]  In a settlement class formed within an MDL, each plaintiff, and thus every member of the class, already has an attorney and is on the service list, so the opportunity to object and seek to opt out of the settlement is very real. 

MDL plaintiffs who are part of a constituent settlement class often take advantage of the opportunity to object to the settlement and to opt out.   For example, in 2013, in an MDL concerning the way in which the National Football League handles concussions, the NFL reached a class action settlement with lead counsel representing former players to which many former players objected.  Nevertheless, the courts approved the settlement.  Many of the former players then chose to opt out, so the litigation is still active, as of 2019.[6]

Bellwether Trials   

Before it is possible to reach a reasonable settlement acceptable to plaintiffs, defendants and the court, the parties and the court must obtain sufficient information to allow them to evaluate the probabilities of success, the risks of loss and the costs of trial. Each party must judge that settlement makes sense as compared to continuing on through trial, factoring in the costs, time and possibility of adverse result.   In all litigation, much of this information is obtained through discovery, and that is true of MDL and class action cases as well.  However, in an MDL, the judge and the parties have another tool for evaluating the probable results of trials for all the constituent cases.  That tool is the bellwether trial.

            Bellwether trials are a small set of the constituent cases from the MDL that the judge selects for trial.  The results of these trials are binding only on the parties to each particular trial, but they can provide valuable information for all the parties, their lawyers and the judge about what sorts of verdicts to expect from a trial of the typical case.  This information then is used as a basis for negotiating an acceptable global settlement.  For example, in the Vioxx Products Liability MDL, which concerned a drug intended to relieve pain from osteoarthritis, rheumatoid arthritis, menstrual pain and migraine headaches, the judge selected six cases for trial.[7]   After these trials reached verdicts, the parties were able to evaluate those verdicts and what they possibly foretold of the likely results of other pending actions. Consequently, they achieve a wide-ranging settlement of some of the claims.[8]

If the bellwether trials are to provide an example to rely on for settling the other cases, it is important that bellwether cases that fairly represent the whole group are chosen.  In selecting these cases, the MDL judge seeks to select representative cases from each general category of claims that may have been established earlier in the case.   

For example, assume the MDL concerns a medicine with dangerous side effects.  One group of plaintiffs might have suffered those side effects already. Another group might be suffering only some of those side effects. Still another group might not have developed any such side effects yet, although there is a reasonably high probability that they will do so.   These different categories of claims can be grouped separately and may require different discovery plans.  When it is time to select cases for bellwether trials, the judge will try to select typical cases from each group.

Even where the MDL judge has decided not to certify a limited class within the MDL, the proposed class might still be a useful way to group cases for discovery and trial selection. The judge may have chosen not to certify a proposed class within the MDL, but still recognize that a proposed class forms a substantially similar subset of the entire set of plaintiffs. Therefore, the MDL judge may select a bellwether case that fairly represents that proposed class.  Of course, if there are actual certified classes within the MDL, the judge is likely to hold at least one bellwether trial for the class and others for each of the other certified classes.

The MDL judge and the lead counsel for both sides work together to select the pool of bellwether cases.  The trial-selection process should accurately reflect the categories of cases, provide information about the likelihood of success and possible damages within each category and provide information about the forensic and practical challenges of presenting certain types of cases to a jury.  There is no one procedure used to select these cases. Instead, judges have used all sorts of different methods, from random selection to careful case-by-case analysis of different candidates for selection.  Sometimes the judge personally selects the cases, and at other times the judge allows the attorneys to negotiate which cases go into the pool.  This selection takes place after much of the discovery has been done. After selection, the parties must focus on more case-specific discovery to prepare the bellwether cases for trial.

The plaintiffs in the selected cases must agree to be bellwether cases.  After all, most of the constituent cases in the MDL were transferred into the MDL from other districts, and normally would be transferred back to the original transferor court for trial.  The MDL court cannot try these cases on its own unless the parties consent to trial before the transferee court.[9]

            Bellwether trials may be chosen to obtain verdicts on particular issues, rather than to try to settle the entire dispute.  For example, the MDL judge may then bifurcate the cases into liability and damages phases, or perhaps even trifurcate them into liability, causation and damages phases.  For example, where plaintiffs have alleged a product’s danger comes from a failure to warn of its potential side effects, the judge might have bellwether trials only on whether defendants failed to warn product users adequately, and other trials only on whether the products caused the alleged side effects and still other trials only on the extent of the damages suffered by the plaintiffs.[10]

Bellwether Mediations

Another tool MDL judges may use is bellwether mediation.   In mediation, the lead counsel for both sides negotiate in front of, and with the assistance of, mediators the judge appoints to guide the process.  The mediators do not tell the parties what results to reach, but they do provide structure, opinions about the strength and admissibility of evidence and other guidance that may help the parties reach resolution. This is a tool developed only recently, but it has been used in cases like the Stryker Hip Implant Litigation in the United States District Court for the District of Minnesota.[11]  In that case, plaintiffs alleged that Stryker Orthopedics’ hip implants were defective.  After ten of these cases went through extensive mediation processes, the results of those mediations were used as a template to settle thousands of similar cases

            After discovery, bellwether mediations or trials and negotiation between lead counsel, a proposed global settlement may be reached.  This proposed settlement could be presented to the judge and all the various parties in the MDL as part of a motion to certify a settlement class.  If there is no settlement class, the proposed global settlement still could be reached if sufficient numbers of the plaintiffs and their counsel agree to accept it. The global settlement agreement is usually conditioned on some pre-agreed percentage of the plaintiffs accepting it. 

            Yet, not all mass tort cases are resolved by settlement or pretrial motion.  Despite the heavy emphasis on settlement for mass torts, whether part of a class action or an MDL, some need to be tried.  The trial process is where MDLs and class actions take very different paths.

Trial

            If a class action must go to trial, the representative plaintiff for the class will present the case for all class members, and that one trial will bind all members of the class. That trial is very similar to the trial of an individual action.  As one federal appellate court has explained, “Class actions are rarely tried, but when they are, the trial proceeds the same way it does in an ordinary case – there are no special trial procedures for class actions as such.”[12]

Limited issue classes, however, will have a trial only on those issues that are part of the class. The results of that trial will bind all members of the class, but only on those issues that are part of the class action.  For example, if there is a limited class on the issue of the adequacy of the manufacturer’s warnings about a product, the trial for that class will only address the warnings. Assuming that the verdict of that trial is that the warnings were inadequate, there still would need to be separate, individual proceedings that address whether that lack of warnings caused particular plaintiffs harm, and what damages those plaintiffs suffered.  All claims outside the class would need to be tried individually, plaintiff by plaintiff, as would all issues outside the class. 

      If there is no class, but simply aggregation in an MDL, trials are handled quite differently.  Unless the parties in a given constituent action within that MDL agreed to trial as a bellwether case, the trial in each case must be held in the court where the case was first filed.  The constituent cases are transferred to the MDL only for pretrial proceedings, and the cases must be transferred back to the transferor courts for trial.  Just as it is the responsibility of the Judicial Panel for Multidistrict Litigation to transfer cases into the MDL, it is that Panel that must transfer the cases back to their original courts. 

When a constituent MDL case is ready for trial, a party may request that the MDL judge file a "suggestion of remand" with the Panel recommending that the case be remanded to its transferor court.[13]  The Panel’s rules state the Panel is reluctant to order a remand unless the MDL judge suggests it. Still, the Panel may go over the head of the MDL judge and order remand if justified by the parties’ requests.[14] When the Panel accepts the request for remand, it files a “conditional remand order” which gives interested parties seven days in which to object to such remand. After the seven days, the case will be transferred back to the original court in which it was filed.[15]

The complete record of the pretrial proceedings is then sent to the transferor court in the form of a pretrial order. The order contains a summary of rulings, a chronology of proceedings, an outline of issues that remain undecided and an indication of the present state of the case.[16] The remanded cases then proceed to trial in their respective districts just like normal cases. In that event, a trial package containing the common elements of the case developed during the MDL, such as depositions and key exhibits, is available for use at trial.

Conclusion

            Thank you for participating in LawShelf’s video-course on mass tort actions. We hope that you now have a better understanding of the landscape of mass tort litigation and the mechanics of class action and multidistrict litigation proceedings. We hope that you will also take LawShelf torts classes, such as product liability and vicarious liability, that focus on the substantive rules governing common causes of action. Please let us know if you have any questions or feedback.