Yet more on aggregate settlement ethics

Via the WSJ Law Blog, there's this story about a proposed Vioxx settlement plan by which the plaintiffs' lawyers would be required to recommend the settlement process to their clients and if the client doesn't agree, the lawyer must "take steps" to withdraw.  The required "steps" are only those permitted by legal ethics rules.

(As you may know, we've had three recent postings here, here, and here about the recent defense verdict in favor of Leeds, Morelli & Brown and the new article by William Simon of Columbia criticizing the settlement procedure and the legal ethicists who opined in favor of all or part of that procedure.)

These cases highlight the tension between (1) the individualized lawyering that clients must receive from their lawyers under the traditional rules, and (2) the collective negotiations that are necessary to make aggregate litigation work.  As Stanford Law professor Deborah Rhode pointed out in the WSJ article, in some situations the incentives of the plaintiffs' lawyers can conflict with the individualized needs of the clients: "[in settling cases lawyers need to be sure that the] 'interests of individual plaintiffs aren’t sacrificed for the good of the whole, which not coincidentally serves the interests of attorney.'”

Comments

[DRH]

_____________________________________________
From: dharrison6 [mailto:dharrison6@hvc.rr.com] On Behalf Of badbonehealing@hvc.rr.com
Sent: Saturday, July 05, 2008 9:56 PM
To: 'erichson@law.fordham.edu'
Subject: Please keep up the good fight - and please read my comments on similar....

Contact Information for HOWARD M. ERICHSON (Contact Author)

Email address for HOWARD M. ERICHSON
Fordham University - School of Law
140 West 62nd Street
New York , NY 10023
United States
646-312-8233 (Phone)

Dear Mr. Erichson:

As a member of the Vioxx Education Plaintiff Education Group (VPEG), I have emailed a piece of your writing (and the link to) for:

http://www.law.duke.edu/shell/cite.pl?50+Duke+L.+J.+381

INFORMAL AGGREGATION: PROCEDURAL AND ETHICAL IMPLICATIONS OF COORDINATION AMONG COUNSEL IN RELATED LAWSUITS
HOWARD M. ERICHSON†

ABSTRACT

INTRODUCTION

I. THE RISE OF INFORMAL AGGREGATION
   A. Plaintiffs' Coordination
   B. Defense Coordination

II. THE INADEQUACY OF FORMAL AGGREGATION
   A. True Aggregation: Party Joinder and Class Action
   B. Consolidated Handling: Consolidation and Multidistrict Litigation Transfer

III. INFORMAL AGGREGATION AND THE BOUNDARIES OF THE LAWYER-CLIENT RELATIONSHIP
   A. Confidentiality
   B. Loyalty
   C. Conflicts of Interest
   D. Legal Malpractice
   E. The Problem of Informal Ethics in Informally Aggregated Litigation

IV. INFORMAL AGGREGATION AND NONPARTY PRECULUSION
   A. The Argument for Nonparty Preclusion Based on Informal Aggregation
   B. Against Nonparty Preclusion

V. THE WORST OF BOTH WORLDS
   A. Neither True Litigant Autonomy nor True Aggregation
   B. A Better Way

CONCLUSION

FOOTNOTES

ABSTRACT
Even when related claims are not aggregated by any formal procedural mechanism, the lawyers involved in the separate lawsuits often coordinate their efforts. Such "informal aggregation" raises important questions about the boundaries of a dispute and the boundaries of the lawyer-client relationship. As an ethical matter, the central question is whether a lawyer owes ethical duties to a coordinating lawyer's client. Looking at confidentiality, loyalty, conflicts of interest, and malpractice, Professor Erichson suggests that ethical safeguards for clients of coordinating lawyers are neither strong enough nor explicit enough to provide adequate protection, and the problem inheres in the nature of informal aggregation. Written cooperation agreements, however, alleviate some of the risks. As a procedural matter, Professor Erichson considers the virtual [*pg 382] representation argument for nonparty preclusion when lawyers have worked together, and concludes that such coordination generally cannot justify binding a nonparty with a judgment. Based on the inadequacy of ethical safeguards and the lack of nonparty preclusion, combined with the decline in litigant autonomy that accompanies counsel coordination, Professor Erichson contends that the rise in informal aggregation suggests the need for more thorough formal mechanisms for aggregating related claims or, at least, greater attention to formalizing counsel coordination through written agreements.

Witnessing, first hand, the many issues which MASS TORT DEFORM have wrought, and of which VPEG (355+ Vioxx Plaintiffs) has MUCH, MUCH evidence of; I am also forwarding just a few of various postions supportive of your thoughts. Let me say, and this is important – that the thougts I presented were done completely independent of anything I have read by yourself or other in regards to better methodologies. I point this out only, or maybe it is especially, because the independence of idea/theory of which you so wisely and eloquently have put, I have (I believe) independently supported via experience, and it would seem to add more credence to the ideas.

I cannot match your detail thoughts, nor writing style, and certainly that is not the point of anything. As a Vioxx victim myself – (but for bone and spine healing – not MI/heart – which is another issue, not included below, but of which you may wish to become familiar with), and learning the what’s and whys over the last several months, I merely wish to bring forth the truth and seek fairness – of which the Vioxx “settlement” surely is not…

What you see is maybe 10% or less of the total, but it may help you see where I am coming from. Any help I can be to you, you have it! Also, if you wish to help or become knowledgeable of VPEG – we are currently seeking “allies”, and I view you as one of the strongest!

Following is what I refer to:

Thank You very much for your efforts in fairness, and as I would say “fighting the beast”

Sincerely

Dennis Harrison
Member of VPEG
MBA – BGS
Catskill, NY
845-231-3272
MBA – BGS

badbonehealing@hvc.rr.com
dharrison6@hvc.rr.com

………(portion of a larger piece).

THE SETTLEMENT’s “early” days….

In early November (2007), three plus years after Vioxx litigation began, and after nearly one year of negotiations between the Plaintiff Steering Committee (PSC) subset group (Negotiating Steering Committee – NSC) and the Merck Defense Steering Committee (DSC), a private “settlement” was reached in regards to the Vioxx litigation.

The initial reaction was basically one of relief and euphoria - this ordeal seemed to be over! Litigants, (at first) without understanding the detail felt that there would finally be closure. The PSC/NSC, Merck and several large legal firms pronounced it as a breakthrough that was a fair deal for all and there was general jubilance abounding. Surely $4.85B seemed like a large amount and must be meaningful. “Large amount” and “meaningful”, however, are indeed relative terms as we shall see.

The parties involved in defining the settlement, and many Mass Tort reform minded individuals began to sing the praises of this major step in that regard (i.e. Mass Tort reform). There were also numerous references made to the possibility that this “settlement” may be the “wave of the future” for Mass Tort litigation. Oddly enough, all of this was happening while the average litigant, and even more telling, the average trial attorney seemed to have very little knowledge of the details. In its current form, this “wave of the future” should certainly not be a comfort to an individual concerned with justice and plain fairness.

Various red flags and issues also became increasingly obvious and began to fortify the suspicions which were emerging. Not gaining answers from their attorneys, seeing these “red flags”, beginning to read what they could find on the settlement, the founding VPEG members began formal dialogue. The Web site – the VIOXX EDUCATION PLAINTIFF GROUP (VPEG) was created for sharing information and other view points. Many expressed relief that they could finally begin dialogue with individuals who understood what they were going through. Virtually each and every member was, in effect, not only trying to understand the settlement, but as it turns out they were symptomatic of what was looming - the allegations of attorney-client breaches. Even while VPEG diligently reviewed and shared information on the settlement details – just to even understand them, access to the Internet began to unearth the great deal of information which certainly more often than not supported Merck’s culpability and questions Merck’s motivations.

A few of the red flags:

– Wall Street absolutely cheered the “settlement” which is normal in litigation of this magnitude as a major un-certainty and volatility factor was finally being removed from Merck. As investors indicated a sigh of relief, the stock went up. Te $5B factor, a WOW factor for the public and media, was viewed as a very inexpensive closure amount by Wall Street.

However, Wall Street and the media praised the “settlement” so extensively not only because the litigation had ended, but in fact praised Merck’s strategy and how Merck “got away on the cheap”. A valid issue of concern for the average litigant to ponder upon was born!

– Simultaneously, many litigants – and media, simply did the math. Using rough gross numbers, one quickly becomes alarmed. As per the New York Times early estimates, - the “award” to the average plaintiff would be just $100,000 before fees and expenses”. Even assuming that up to 50% of opt-ins get rejected, this is approximately $150,000 to $200,000 – BEFORE FEES and SUBROGATION and thus between $60,000 and $100,000 after fees/subrogation for the “average litigant”). Member after member appeared to be stunned as to how anyone could possibly feel that this is “fair”. Even the controversial theory of justifying some are to be valued lower than they should for the “good of the whole” just doesn’t seem to justify such inordinately small “awards”. Comment after comment referred to the “pittance”, “excessive legal fees for hardly any work”, “attorneys not knowledgeable nor caring”, aggravation of the “form letter” approach, and the sausage grinder methodology that increasingly became obvious.

There was significant concern and puzzlement over a core question - how could Merck have dominated the effort to define the Gate Process? The all important GATE process is too central to allow a very interested party such weight in its definition, and not even with reasonable independent certification. It seemed to be a conflict of interest, private or not. There are other means in which this could have been accomplished without such a weighted effort by such an interested party. One also questions the business/finance negotiating capability; especially in relation to Merck’s, of the NPC and why the NPC did not seem to utilize the leverage which it either did have, or certainly would have had more in the future.

– As time went by a bit, the growing alarm within VPEG was simultaneously exacerbated as legal scholars and attorneys began weighing in:

Legal Scholars and attorneys begin to have major concerns with the Vioxx Settlement

George Cohen: a law professor at the University of Virginia and a critic of the settlement, said that the deal ran afoul of a fundamental ethics rule prohibiting lawyers from promising not to handle certain cases in exchange for settlement money. Worse, Professor Cohen said, it amounts to an antitrust conspiracy in which plaintiffs’ lawyers have ganged up “to coerce claimants into joining the settlement even if they don’t want to do so by depriving them of the ability to be represented by the best qualified lawyers,” as he put it in an informal complaint to the Federal Trade Commission on Jan. 9. – NY TIMES SIDEBAR – Jan. 22, 2008.

Adam Liptak - “If Professor Nagareda and his colleagues have their way, the ideals of the legal profession will collapse before anyone notices they are gone. The new Maginot Line is the Vioxx settlement, and the blitz is on…. Professor Nagareda is right that the Merck litigation is different from an ordinary injury case, and he is honest enough to say that its settlement is at odds with traditional ideas about what lawyers do. The solution, though, is not to let money warp the law…if clients in mass injury cases are hiring lawyers who will not put their interests first, they should be told that up front and not as their lawyers are salivating over the payday of a lifetime” – NY TIMES SIDEBAR – Jan. 22, 2008.

Ronald Benjamin's appeal to the 5th ckt. court - “This is not a private settlement,” Benjamin said. “The people I represent never consented to attorneys in Louisiana consenting to an agreement on our behalf.” He said the plaintiffs' negotiating committee had no right to reach the settlement because the district court had rejected class certification in the case, which under Rule 23 of the Federal Rules of Civil Procedure would have allowed lead counsel to negotiate a settlement. “So they decided to simply ignore the rule and do it anyway, which as far as I'm concerned, is preposterous,” Benjamin said. “The issue the [appeals] court has to decide is whether they are going to let a group of private lawyers settle claims on behalf of clients they don't represent” Content Copyright 2007, Portfolio Media, Inc.

By the way, as Mr. Harrison recently reviewed the PTO 28 appeal in detail it appears that the basis of appeal appear to be supported by actual experience.

Anthony Sebok, a mass torts professor at the Benjamin N. Cardozo School of Law at Yeshiva University, said there would be questions about whether the recruitment of plaintiffs lawyers to reach a settlement will be permitted in the future. “I think the idea of plaintiffs lawyers making side deals with the defense is a very controversial idea,” Sebok said. - Content Copyright 2007, Portfolio Media, Inc.

Litigants, scrambling ever more for information, and stunned with the lack of legal representation, let alone any real interest being shown by their attorneys, continued to attempt contacting their lawyers. It appears that attorneys and firms were more often than not incapable or unwilling to provide information of any substance – let alone individual representation. In many cases members expressed dismay that their lawyers were still not even knowledgeable of the settlement terms. There came to be a feeling that attorneys were shifting their own resources from representing clients to representing how they could continue the sausage grinder methodology, and yet claim “ethical” conduct.

This lack of (attorney) knowledge added suspicion that the attorneys clients were not, after all, interested in their clients best interests. Calls were not returned – the inadequate knowledge and what often seemed a somewhat scornful attitude of many attorneys was chilling. Eventually attorneys began to contact some of their clients (mostly to just pass on the NPC “form letter” attitude). There are some cases – though apparently very rare; where attorneys did attempt to properly counsel their clients. However, for the most part, it seems clear that most (90%?) of the time attorneys realized that it was more lucrative, and involved less cost and risk, for them to simply suggest to their clients to submit to the settlement rather than to continue litigation. More than being in their clients’ interest to settle, it became apparent that it was in their attorneys interest to gain their clients “opt-in”. This was often done with an arrogant “take it or leave it attitude” and wielding a threat that it will be far too difficult to find another attorney.

The group had some hope that the early Motions in re to ethics would allow a more rational environment. It seemed obvious that if there were not such high hurdles to gain another attorney that more often than not the litigants would opt-out. However, nothing of real substance resulted from such Motions and their withdrawals. The threat of finding another lawyer is a significant club to force submission. The situation is made worse as most lawyers obviously were just NOT going to assist their client in obtaining new legal representation, and the fact that most had done no real work which could have been used by the client to help gain that much needed new representation.

Adding much fuel to the fire, and wrapping their “recommendations” in an often hostile manner – it became apparent that most attorneys had done virtually NOTHING over the last 3+ years to work on the issue(s) that they could have – medical records and causation. The dawdling of these attorneys has placed their clients in a further bind and no doubt significantly jeopardizes their client’s cases as the opt-outs need to gain causation evidence (“expert witness”, medical records, etc. per PTO 28). It became under suspicion that the litigants were not only “boxed” in, but that their ability to “opt-out” was effectively closed off.

……..again, part of larger effort

How does public support fit into this equation? Simply put, the public is very much confused and it seems that the Mass Tort reform proponents are able to leverage this. Rightfully so, the public feels that general legal reform is necessary. Cases such as a major award for hot coffee spilling – a famous but perhaps also misunderstood case by the way – get intertwined with the concepts of general legal reform imbedded in that public opinion. However, the issue of Mass Tort reform is a different breed, and the reform issues are quite different. Rather than support improving/tuning the MDL process and maintaining both the defendant’s and plaintiff’s proper representation, hawkish behavior radically looks to discard it via privatization and disproportionate laissez faire, and along with it discard the rights of proper representation – legal and otherwise. The public, not educated in the true legal reform issues needed, merely nods its approval and categorizes, in the same view as hot coffee, the vast number of maimed and deceased Vioxx victims as “parasitic” in nature (quote from a well known Mass Tort reform blog). It is a tragic and dangerous environment, and certainly public opinion continues to be a tool of the business defendants. Imagine being a litigant, with so much evidence of Merck culpability and the science of Vioxx available, your life damaged forever in so many ways, and as you are awarded what you feel really is a pittance, having to read that much in the public eye considers one a “parasite”! Yes, it often gets this sad.

Mr. Harrison does not express a preference of whether or not privatization efforts should move forward, but via some past writing excerpts, he attempts to construct a higher level view and framework of important items which must be considered in order for fairness to be imbedded into the privatization concepts. This includes argument for active involvement by the courts, a few words which follow:

“… if privatization ultimately comes about, it must be done so in a manner ensuring fairness and justice for BOTH the defendants AND litigants interests. Legal rights will be lost if a typical business “laissez faire” approach is taken, there are degrees of “laissez faire, and a proper balance must be achieved...legal rights and representation are at severe risk. Corporate interests – with their vast arsenal of legal AND business resources, simply benefit from their Darwanian advantages and aggressiveness. When, years from now, the public awakens, it will be too late to put “Humpty Dumpty” back together again in any reasonable timeframe or cost. These vast corporate resources, and they are, simply outgun the limited legal resources in the teams that don’t have the broad resources and depth of business in the negotiations. Even the PSC within the Vioxx litigation seems to have acknowledged this at times. Privatization, as currently viewed, unacceptably dampens or eliminates most legal rights and concepts of fairness/justice and stimulates a very dangerous environment that is not in the public’s long term interests…. judicial supervision of privatization is necessary to ensure a level playing field. Mr. Harrison acknowledges that his view is different view than the “norm”. The “norm” – which is still immature, is long in zeal, and short in thought. Privatization is actually a convergence of legal and corporate entities… thus the court has a vital role in defining privatization goals, ensuring that legal rights are not dissolved, ensuring a level playing field for negotiations, ensuring the actual Plaintiff’s are represented, assessing progress as it relates to the goals, and protecting all parties legal rights at each step.

Mass Tort reform “hawks”, as well as many trial attorneys appear hopeful that the MSA is a “model”. However, surely their intellectual capacity ought to recognize that a rigorous, or at least a reasonable and fair set of standards should be the rule. The Vioxx settlement does not rise to these thresholds.

The Vioxx settlement, effectively being the most significant “first attempt” at this privatization effort, should be re-assessed, under more rigorous review, and subject to modification to bring it up to standards suggested. Otherwise it should be nullified and the cases should be remanded back to the states.

Mr. Harrison has indeed heard the court indicate that a number one priority is to ensure that attorneys “sit down” and explain the “settlement” in detail to their clients. He strongly feels that the court is seeking fairness and in no way question the intent of the court to do so. The court is doing what is generally encouraged, settlement of the parties. Mr. Harrison is more than aware of the court expressing the need to ensure that the settlement was explained, etc. properly to the potential participants.

Mr. Harrison also understands that the PSC/PNC’s position, as well as the very large legal firms, is that this has occurred. However, for whatever reasons – inadvertent and perhaps insufficient in follow-up/verification, a “sausage grinder” approach that has not been effective, etc. this just does not seem to have occurred. Proper, individual consultation has not taken place, in spite of the communications of a general view that all was fine and the vioxx victims are very happy with the settlement.

This site was found by ALMOST….I noticed on the bottom are some of the other KEY THINGS, if I was an OPT-IN, I WOULD START building my case for the future…unless you are happy/satisfied with having opted-in (and though most certainly seem not to, some may, that is understandable also). Obbiously, if you are happy with the settlement and have opted in, it is not applicable.

Unconscionability
From Wikipedia, the free encyclopedia

http://en.wikipedia.org/wiki/Unconscionability

The 3 items I refer to are:

Duress (contract law)

Undue influence

Non est factum

Some MASS TORT REFORM excerpts and observations
Content Copyright 2007, Portfolio Media, Inc.

“The uptake of the settlement seems to confirm, and if the program does succeed, people will look at this and learn from this as a positive example,” said Ted Mayer, an attorney with Hughes Hubbard & Reed who is a member of Merck's coordinating defense counsel.

OBSERVATION: A program which has placed so many attorney-client relationships in such disarray cannot be considered successful. While a purposeful laissez faire methodology is often useful in a business environment/negotiations – the Vioxx settlement is not purely a business negotiation – it is the convergence of business and legal. Both interests must be preserved and not get “lost”. This will require active court involvement to define and protect the legal rights that are certainly at risk; the playing field will not be level without active court involvement.
The Vioxx settlement should be viewed (which is useful input) as a learning experience. It showcases what happens when active court involvement in defining the parameters is not a requirement. The Vioxx settlement can be viewed as a real life example of what can happen within private negotiations unbounded by the sheer broad strength of a major corporation, which has purely and simply maximization of profits in its soul – certainly not ensuring that the rights coming into the court system are not lost going out of the court system.
Profit motivation is the engine of innovation and motivation. However, it will clear all in its path solely in the name of profit, and often needs “optimal” (but not excessive) supervision. This not only ensures the ultimate goal of overall public interest, but paradoxically ensures the long term survival of the corporation itself. Mr. Harrison is and has always been a proponent of free markets, but recognizes the danger of an unbridled corporation.

“I propose Vioxx is the model for future cases, especially cases where you have a known injury,” said Edward Blizzard, an attorney with Blizzard McCarthy & Nabers LLP who was part of the plaintiffs' Vioxx Negotiating Committee.

OBSERVATION: how could the Vioxx settlement be a “model” at this point? It’s benefits clearly do no outweigh its risks to civil rights nor contribute towards proper corporate behavior. It is merely the first large scale effort at privatization fraught with the issues so common at first. Rather than “model”, the term “proto-type” seems more befitting. However, real people, with real problems are being severely and unfairly impacted, and that must also be dealt with. A prototype evolving into a model must be done in a manner befitting of a first attempt at privatization. This includes safeguards as mentioned, and must be followed up to assess both defendant AND litigant fairness before it could even conceivably be considered a model. This (proposing it as a “model”) seems to be a very rash statement at this stage, and sends a dangerous message to the public, to Merck and other drug companies seeking draconian measure of risk relief, and to attorneys across the land who can begin to enjoy much of their business being essentially paperwork.

“The big improvement is that this is a settlement that might actually deliver settlement,” said Richard Nagareda, a mass tort professor at Vanderbilt University Law School who wrote the book "Mass Torts in a World of Settlement." “The big difficulty the law has been encountering is developing some sort of framework, such as class settlement or bankruptcy, that brings some binding peace for litigation.”

OBSERVATION: Is it is a major improvement to deliver a settlement that “actually” delivers a very poor settlement? One where the Plaintiffs are not properly represented? One where the “reward” valuation is so low that thousands of coerced opt-ins so reluctantly accepted? One which in no way discourages the alleged behavior, and in fact encourages such errant behavior? It begs the question if goals include – justice, fairness, and incentive for good corporate behavior, or a settlement unto itself?

With the prospect of tens of thousands of cases overloading court dockets, judges overseeing Vioxx cases, including Judge Eldon E. Fallon of the U.S. District Court for the Eastern District of Louisiana and Judge Carol Higbee of the New Jersey Superior Court, had appointed six trial attorneys to represent Vioxx plaintiffs in settlement negotiations with Merck. “One of the reasons the private settlement structure works so well is that it is not bogged down in appeals,” Blizzard said. “People can get their money relatively quickly.”

OBSERVATION: Statements imply that “the private settlement structure works so well”. are quite premature. The barrage of statements seems to be more of a sales pitch than a statement of facts. Of course the docket issue needs to be addressed; and perhaps privatization has a place. Yes, it would seem to need to minimize appeals – but not by what amounts to the equivalent of coercion to sign away rights. Work the appeal issues early, by gaining defendant AND litigant agreement up-front which would minimize the appeal issues – don’t spring such an unfair settlement on litigants who essentially have been forced into a situation to have no options except to agree to the terms and sign away their appeal grounds. “People can get their money relatively quickly” is not a good excuse for such very low valuations. The insurance industry is often known to leverage the desperate financial plight of an individual, and surely Merck has let time and financial desperation be a leveraging tool also.

“The fact it is a private settlement agreement is probably the most unique factor in my experience,” said Grant Kaiser, an attorney representing several Vioxx plaintiffs. “It removes obstacles presented by a class action settlement but give the benefits of a class action settlement.” For instance, he said a court under a class action could “put their finger on the scale for one side or another,” as part of the approval process for a class action deal.

OBSERVATION: “unique” means nothing unto itself. The reference to “finger on the scale…” is quite misleading. This would seem to suggest that it is better to entirely remove the court from the scale of justice. How can one come to terms with that concept? Vanishing the court from the scales of justice is unfair, unwise and dangerous. Most certainly would rather that the “finger” be the finger of justice rather than the finger of an interested, powerful corporation as Merck. The legal “obstacles” of a class action are there for reasons of justice and fairness – the speaker here doesn’t seem too interested in an environment which protects litigant’s rights.

Ronald Benjamin, an attorney representing more than 100 Vioxx plaintiffs, has filed an appeal to the U.S. Court of Appeals for the Fifth Circuit against the agreement, arguing that the settlement is illegal. “This is not a private settlement,” Benjamin said. “The people I represent never consented to attorneys in Louisiana consenting to an agreement on our behalf.”

OBSERVATION: Mr. Harrison has (above) presented the argument for proper litigant representation up-front in the negotiation parameter definition, safeguards throughout the negotiation, and follow-up and assessment as to the success of the agreement. Mr. Benjamin is right in vehemently protesting that his clients were not represented properly – i.e. they never consented, directly or properly indirectly, to have the NPC negotiate in their behalf. Proceeding without active involvement of Plaintiff’s directly approved counsel, who need to truly represent their clients is not consistent with the right for legal representation. The settlement was more oriented to just ending the litigation than to provide justice – the results are speaking for themselves.

He (Ronald Benjamin) said the plaintiffs' negotiating committee had no right to reach the settlement because the district court had rejected class certification in the case, which under Rule 23 of the Federal Rules of Civil Procedure would have allowed lead counsel to negotiate a settlement. “So they decided to simply ignore the rule and do it anyway, which as far as I'm concerned, is preposterous,” Benjamin said. “The issue the [appeals] court has to decide is whether they are going to let a group of private lawyers settle claims on behalf of clients they don't represent.

OBSERVATION: One can easily interpolate that the average litigant in whether opt-in or opt-out certainly does not feel that their legal rights were represented whether it be within the settlement definition/negotiation, or the decision to accept/reject the offer.

Benjamin said the deal was unfair because it excluded a large number of plaintiffs, such as those who suffered transient ischemic attacks, while also letting Merck off the hook when they could “easily” pay up to $70 billion. Anthony Sebok, a mass torts professor at the Benjamin N. Cardozo School of Law at Yeshiva University, said there would be questions about whether the recruitment of plaintiffs lawyers to reach a settlement will be permitted in the future.

OBSERVATION: part of the negotiations and seeking leverage by the litigant negotiating team should have been both what the fair reward should be and if Merck could afford the reward. This is one of the reasons why the business acumen and financial analysis capabilities, seeming to have been a missing resource within the PSC/NSC, should have been a requirement in the litigant negotiating team. The courts could assure this if private settlements do proceed are defined with active court supervision.
Mr. Harrison, with a major financial analysis background, has separately concluded that the estimates of Mr. Benjaim’s financial estimates are reasonable. Merck’s income statement continues to be very strong, and incredibly if the settlement is allowed to proceed, the cost will have been a minor blimp on Merck’s radar screen; merely a cost to be managed, not a penalty to be avoided in the future.Wall Street confirmed this. Proper financial insights within the NPC should have been concluded, and that should have been major leverage for the NPC.

…“I think the idea of plaintiffs lawyers making side deals with the defense is a very controversial idea,” Sebok said.

OBSERVATION: Agreed.

The Vioxx agreement also set up a system for pay claims based on several factors, including a plaintiff's health condition prior to the alleged injury, his age and how long he had been taking the drug. To be awarded damages, plaintiffs have to pass three gates: proof of injury, proof they took Vioxx within 14 days of their injury and proof they had been taking the medication for some time. “We wanted to design a program for the qualifying cases…

OBSERVATION: Merck does say “we” wanted to design a program for qualifying cases – that is a major part of the problem – there is too much “we” in “we”. While Merck is due input, they are not due such dominance in defining the artificial GATE process – they are too interested of a party. Proper legal safeguards could be put into place (and still can!) to ensure that the GATE process is represented upon more scientific background; post usage data could have been utilized by the NPC via statistical sampling, etc.. Merck’s biased opinion was not countered effectively by the PSC/NPC. If an active role had been defined for the court to supervise and ensure the litigants rights were not lost - then a more robust negotiating team (with the inclusion of finance, business, negotiating, statistical individuals) could have ensured that the ever so vital GATE process was at least fairly evaluated by an independent medical group, etc.

Mayer said. “We have no interest in a settlement that allows plaintiffs to cherry-pick plaintiffs, that encourages plaintiffs firms to sit on the sidelines even if the settlement is a good deal for their clients and hold up the company. “ Plaintiffs firms that initially had reservations about the settlement's details have since been converted.

OBSERVATION: “converted” in a sense that they (Plaintiffs firms) realized that it was primarily in their interests, not generally in their clients, and that they had tools available to “cover” their ethical duties…

Rein also believes the Vioxx system of evaluating injury and causation to arrive at a damage estimate would also likely be included in future settlements.

OBSERVATION: The concept of a GATE process seems to have validity. However, that said one would certainly hope that safeguards are put in place to ensure that this central go/no-go decision process was negotiated fairly as noted above, and then evaluated for fairness and supporting of a standard of medical science. There are no such real assurances in the Vioxx settlement. Also when new medical information becomes known, especially during the administration of a settlement, it is not fair to simply ignore it within a GATE process because of timing and technicality. New information must have a way to become part of the Gate definition.

Theodore Frank, the director of the American Enterprise Institute's Legal Center for the Public Interest, said Merck's strong position aided in reaching the deal. “Merck’s success in court and the lack of a smoking gun demonstrating wrongdoing meant they had a lot of leverage to negotiate favorable provisions,” Frank said. “To the extent future defendants can achieve such leverage in mass tort litigation, and to the extent the Vioxx settlement proves to be successful, we should see many elements be replicated.”

OBSERVATION: Yes Merck was very good at achieving “such leverage” – that is a point Mr. Harrison is trying to make – they saw the uneven playing field and went for the touchdown!
Until the court ensures fairness, one would hope that most of the elements are NOT repeated. Merck’s strong “leverage” existed because the PNC was not a competent negotiator in terms of having the proper team members and resources. The “lack of a smoking gun” is Mr. Frank’s opinion and seems to cloud the issue of weighing evidence. Must there be one single “smoking gun”?. One can certainly argue that there was some smoke here and there – that residual “smoke” came from somewhere.
Mr. Frank is a major proponent of TORT litigation reform and feels that the meager awards of the Vioxx victims are more than adequate. He has stated this in very unflattering terms. Mr. Frank seems to place much more value on the technical aspects of the legal field, and not goals of fairness and justice.
Trial experiences were not statistically valid, did not have the benefit of full discovery, were done at the peak level of Merck public sympathy, and were done before the issue of strategy consistency across (Vioxx, Fosamax, Vytorin…) and within drugs. Arguments that Mr. Frank has made in his blog that statistical reasonability is not necessary continue to perplex Mr. Harrison.

THAT IS A GREAT FIND!

To me, and it is an item of discussion and different views, but after looking at this much harder over the last few weeks, with detail behind it, It seems likely – from what I can piece together – that there will be challenges to the “beast” (“settlement”) even after it “happens”. Certain things CANNOT be appealed until they ACTUALLY happened (which is obvious, but just not something we have thought about in the past). I think Ron did also make reference that the settlement may not survive appellate review afterwards. We simply did not/ do not know things like that. Thus the tendency is to give up when in fact the “beast:” does not necessarily have an after – life…

So, were does that leave us?

1 – to continue, and increase honest dialogue about how members feel about the settlement especially for example –

            a – many feel that they were coerced – still true, do new members feel that way, over time maybe more reviewers only will provide input on that also.

            b – lack of representation

                        d – how one felt boxed in – the lawyer desertion, the high hurdles of PTO 28, the lack of medical records captured by lawyers and the short time
     frames made expert witness unreasonable.
                       
                       

2 – the MORE obvious that a successful challenge can be launched after the fact, the more leverage there is BEFORE the fact. The threat of either scuttling the whole DEAL now, and/or the acknowledgement that successful challenges can succeed, should drive certain behaviors in VPEG (which we need to figure out) which would help a re-negotiation and/or at least an acceptable level of improvements. For example the eligibility and points aspect, which is Merck’s opinion, IS ARTIFICIAL and should be replaced by a real, bonafide and independent group of people who are independent and acceptable by not only Merck but by a PSC who has to sign in blood this time – or better replace the PSC at least on this aspect.

3 – VPEG  needs to be very active – in dialogue AND trying to increase membership more, more and more…. The more that join and as long as the dialogue is honest (which they have been) and keep on kicking and screaming, IF one feels that way, the more information/evidence is available for challenging later, or leverage to renegotiate now (or lacking that, scuttle it).

4 – VPEG should continue to do all it can to GROW even more, even faster – all of the above is obviously much more useful when we have ENOUGH  members to move into be able to become “statistically significant”. It would seem that MAJOR GROWTH in VPEG is much more necessary than was apparent. In that vein, perhaps VPEG should pass the hat around and get some real media advertisements – last attempt with 30 people, not enough, but 355 members is different.

5 – we would then need to manage the GROWTH issue. We have always been aware that growing pains exist in VPEG, making it difficult for new members to get on board quickly. That CAN be fixed – needs about 2 weeks of someone’s time to do it – but who and how? We need that – should it be funded as an imperative? and in general do we start thinking of some funding for some items like that?

…and it has more implications that we must think through.

Whether we really move forward as above in great deal depends on who, and how many feel the observations in the beginning are really a potential. Those that agree with the above can still go forward, Those that do not believe – what should that role be? Should it be to then just not become actively involved or should they be turned loose to convince all to give up and all the above is worthless and should stop? We may be at a fork in the road.

bones

I meant to POST this yesterday, July 4.
July 4, 2008
Today, I can’t help but find irony in something popping up in my mind today – the comparison of:
Taxation without Representation
and
Litigation without Representation
 
Whether MI/Stroke or bone and spine litigant, all also share, in perhaps a different way but surely so, Merck’s sly methodology of both leaning on and creating methods of “litigation without representation”. A common theme of PERVERTED MASS TORT LITIGATION (cloaked and presented as MASS TORT REFORM) but also known as we find as MASS TORT DEFORM.
Someone may take an intellectual kind of offense at this on July 4th. – I could guess that many outside of being a Vioxx victim would. However – let someone be one of us, and walk in our shoes as any of the maimed, damaged, or survivors of the deceased, and they may feel differently. Any minimization of what happened here is dangerous thinking, as it surely is ammunition in a steady beat of swinging the pendulum ever farther in stripping civil right violations rights…. so bravely defended over 200 years. Make no doubt, this is not only about Merck, it is also about those Deformed Hawks (Merck, “negotiators, Deformers….) circling like pigeons, and stealing those morsals of crumbs left for the average litigant – who is lucky to receive 10% of what it would take to somewhat put their lives back together. Kind of like the British burning your house 200+ years ago and leaving 10% of it to live in….
YUP, LITIGATION WITHOUT REPRESENTATION applies here…

There is a VIOXX EDUCATION PLAINTIFF EDUCATION GROUP (VPEG) for Vioxx Plaintiffs (now 363+ and growing). Regardless of the “settlement” official position - "things are not as they always appear...", the group REMAINS very relative and is gaining increasing “name brand recognition”. VPEG concerns, etc., need to be dealt with, and VPEG is trying to become one of the lynchpins in converting a very unfair private settlement to what it should be.
…
VPEG is alive and doing well - we are really learning and helping each other. VPEG, has picked itself up by its own two feet, and accepted the task of informing and education sharing.
…
We are Plaintiffs - with much to care and share over. We work hard to provide much information and education via sharing. It also has several items, involving working "the issues" which suggest some active goals. The members are all respective of each other. You will find a great deal of empathy from vIOXX victims that are the same boat as the average vIOXX litigant.
….
VPEG has built a reputable infrastructure to share information, help educate each other, member communications, polling, providing very useful links, and MORE! VPEG is the result of a very urgent need to get this infrastructure up and running in such a short time. So, so many vIOXX victims could benefit from much of which the average VPEG member has had the opportunity too; let alone finally have someone to “talk” to.
….
Whether - whether an "opt-in" who was also "boxed-in" -or- and "opt-out" who was also to "boxed-out"; if you are a vIOXX Plaintiff and wish to become part of a dialogue of over 360 individuals and growing,. WE CERTAINLY HAVE NOT GIVEN UP and are a bunch of decent, compassionate, human beings - all damaged by (allegedly…) Merck, in the VIOXX debacle...if you are a Plaintiff feel free to submit a request to join the VIOXX PLAINTIFF EDUCATION GROUP (VPEG) - at:
…
http://groups.yahoo.com/group/MerckSettlement/
…
….
Feel free to check it out and join, nothing ventured, nothing gained. VPEG welcomes vIOXX victims that just wish information, wish to share, with to act, etc. – all Plaintiffs are very welcome to apply!
….
The link is:
….
http://groups.yahoo.com/group/MerckSettlement/
….
Sincerely
Dennis Harrison – badbonehealing@hvc.rr.com
M.B.A. - BGS
Catskill, NY
Vioxx Plaintiff

p.s. - I am a Plaintiff, with a lawsuit of (alleged) bone and spine healing problems of Vioxx. Though not MI/heart - I have learned very, very, much from VPEG. We share our thoughts, and we look for the synergies between our respective plights.
YES - it is all about BALANCE!The drug companies will simply stomp al over safety issues, and are, via PRIVATE DEALS (settlements) are looking to move the rats out of the laboratory and into the PUBLIC DOMAIN.
...
The FDA has been made a mere Paper Tiger, ever since the constant degradation when the drug companies began funding them? Huh? - yes, the drug companies fund them. Sound like the fox guarding the chicken coop.
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Now the drug companies are trying to hide behind the FDA. If the FDA approves it, then they claim they shoud not be liable! WOW! - I must be having a nightmare.
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A properly funded INDEPENDENT FDA iw what is needed to restore the proper check and balance here.
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I only hope that, as the legislature is now taking some action, that they just don't put bandaids on this failed relationship between the FDA and the drug companies.
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SO much could be done to correct the situation. Really, many people know what to do. It 'just" needs a supportive public and a legislature who responds to the public.
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Seems like things don't change until there is a disaster. We see this over, over and over in companies, government, and even our own selves.
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Lastly, let's hope that the legislature also realizes what is happening in another area; that is one of what is called MASS TORT REFORM, which is nothing less than the drug companies looking to cut their costs of litigation way down - why, well $ comes to mind. It will allow them to hardly even have to worry about the legal aspects. They will continue to develop products which just barely make it past the Statute of Limitations, then ignore the issues a couple of more years, the drag the lawsuits. Yes, it is in effect funding long term litigatin with products worried mostly about short term profits, and concerned only with short term side affects so they can be marketed....the long term problems....they will handle them as they come along, especially now that (if PRIVATE SETTLEMENT DEALS wors), are now very, very inexpensive (about 10% of what the cost should be)...
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THE FDA must be reformed and made independent.
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The MASS TORT DEFORM efforts MUST stop...in place must come a rational review of MASS TORT LITIGATION, like all things in life...