Governing the Anticommons in Aggregate Litigation

Following the September 11, 2001 terrorist attacks, more than ten thousand rescue and cleanup workers brought individual lawsuits against New York City for respiratory and other illnesses they developed after working in the ruins of the World Trade Center. After years of litigation, the parties put together a comprehensive settlement in 2010. The defendant agreed to pay a total of $625 million so long as 95$712.5 million.\u27 In other words, to get the last 5% of plaintiffs to sign on, the defendant was willing to pay a substantial premium-more than twice the per-claimant amount for the first 95%. But, because the plaintiffs could get only 95.1% of their ranks to participate by the deadline, they left up to $87.5 million on the table. Why did the plaintiffs fail to maximize the collective value of their claims? Looking to property theory, I argue, can help us understand. As this Article will explain, there is an anticommons problem in aggregate litigation

When Peace Is Not the Goal of a Class Action Settlement

On the conventional account, a class action settlement is a vehicle through which the defendant buys peace from the class action lawyer. That single transaction will preclude future litigation by all class members. But peace, at least through preclusion, may not always be the goal. In a recent Fair Credit Reporting Action (FCRA) case, In re Trans Union Privacy Litigation, the parties agreed to a class action settlement that did not preclude individual claims. The 190 million class members surrendered only their rights to participate in a future class or aggregate action; they remained free to march right back into court and sue, as long as they did so individually. Why would the defendant shell out tens of millions of dollars in a settlement without getting peace in return? This Article argues that the negotiating parties recognized that he valuable commodity in this transaction was not peace, but aggregation itself. And they figured out a way to unbundle aggregation from preclusion of the underlying claims and transact only in the former. In effect, they crafted an ex post version of the class action waivers that have become ubiquitous in consumer arbitration clauses since the Supreme Court\u27s controversial decisions in AT&T Mobility v. Concepcion and American Express Co. v. Italian Colors. Defendants like this sort of settlement structure for the same reason they like defendant to buy off the risk of firm-threatening liability without paying for total peace. Even though individual claimants remain free to go it alone in litigation if they so choose-and the FCRA\u27s statutory damages and attorneys\u27 fees provisions make this a realistic option-the defendant is betting that most claimants won\u27t bother. This Article addresses why class counsel would be willing to go along with such a settlement structure and the conditions under which a reviewing court would be willing to approve it under Rule 23. It then uses the ex post class action waiver as a lens to critique the more familiar ex ante version in consumer arbitration clauses. Even though claimants have an empowered agent-class counsel-bargaining on their collective behalf, courts would be unlikely to accept a class action settlement that bars aggregation, but does not resolve the underlying claims, if those claims are so small that individual litigation would be unrealistic. Yet that is exactly what the Supreme Court allowed in the ex ante context in Italian Colors when it enforced a class action waiver found in the defendant\u27s contract of adhesion to bar class claims that were not viable in individual litigation

MDL in the States

Multidistrict litigation (MDL) is exploding. MDL makes up a large and increasing portion of the federal civil docket. It has been used in recent years to manage and resolve some of our largest controversies: opioids, NFL concussions, Volkswagen “clean” diesel, and many more. And, given its growing importance, MDL has come to dominate the academic literature on complex litigation. At its base, MDL is a tool to coordinate related cases across different courts in service of justice, efficiency, and fairness. These goals are not unique to the federal courts. State courts handle far more cases than federal courts, including the kinds of complex disputes that could benefit from coordination. Yet state MDL procedures are virtually absent from the scholarly literature. This Article offers a systematic study of state MDLs. Surveying the laws of every state, we find that about half the states have developed their own MDL-like procedural devices. What makes MDL distinctive is that it allows some official or institution to consolidate cases and to assign them to a handpicked judge. Therefore, we develop in this Article the first taxonomy of state MDL mechanisms based on which officials or institutions are given this substantial power. Along the way, we explore the other ways that states have tailored their MDL rules. We also provide case studies of three state MDL systems and report previously unpublished data on how state MDLs work. Building on these findings, this Article offers an institutional analysis of state MDL. We find that state MDLs distribute important cases to courts and judges in ways that depart dramatically from the default rules of judicial administration. These choices have important consequences for litigant control, judicial power, and both inter- and intrastate relations, which can be amplified in states where judges are elected. In these ways, different types of state MDLs—sometimes unwittingly—may tilt the usual balance in favor of plaintiffs or defendants, local actors or statewide ones, and voters or government officials

Aggregation on Defendants\u27 Terms: \u3cem\u3eBristol-Myers Squibb\u3c/em\u3e and the Federalization of Mass-Tort Litigation

Although it is destined for the personal jurisdiction canon, the Supreme Court’s eight-to-one decision in Bristol-Myers Squibb Co. v. Superior Court does little to clarify that notoriously hazy doctrine. It does, however, significantly alter the balance of power in complex litigation. Bristol-Myers is a landmark case because it makes both mass-tort class actions and mass joinders impracticable in almost any state court outside of the defendant’s home states. With federal courts already hostile to class actions, plaintiffs who want to aggregate their claims will have to do so on the defendant’s terms: either on the defendant’s home turf or in federal multidistrict litigation (MDL). Faced with this choice, we believe that most plaintiffs will turn to MDL. The result will be the culmination of a trend toward the federalization of mass-tort litigation in MDL, which has already grown to make up an astonishing one-third of the federal civil docket. In this Article, we examine why Bristol-Myers will have this effect and explain how MDL’s hybrid structure facilitates centralized mass-tort litigation in federal court, even as the Court’s restrictive view on personal jurisdiction prevents similar aggregation in state court. MDL cuts this Gordian knot by formally adhering to the vision of vertical and horizontal federalism underlying both diversity jurisdiction and Bristol-Myers, while also paradoxically undermining that vision in service of mass resolution. As a result, even more power over mass-tort litigation will be centralized in the hands of the MDL judge and the lead lawyers the judge selects to run the litigation—a prospect that comes with both opportunities and risks

Dissonance and Distress in Bankruptcy and Mass Torts

This Essay reviews the highly successful Fordham Law Review symposium entitled Mass Torts Evolve: The Intersection of Aggregate Litigation and Bankruptcy, held in 2022. The symposium brought together judges, scholars, and practitioners who work on multidistrict litigation (MDL), bankruptcy, or both. The symposium was successful because it brought these groups into conversation at a time when high-profile mass tort defendants are increasingly turning to bankruptcy to escape MDL, while others involved in the MDL process seek to keep them in. The symposium was also successful—and distressing, in our view—because it highlighted disturbing trends in complex litigation. This Essay makes two principal observations. First, we document the different ways that MDL and bankruptcy players view their institutions. Even if they share similar goals of achieving lasting resolutions to mass tort disputes, they come from different starting points and stress different values. Civil litigators, including those who work in MDLs, hue to traditional notions of victims, liability, and adversarial adjudication. Bankruptcy lawyers, meanwhile, focus more on creditors, preserving value, and moving on. Second, we demonstrate that criticisms of MDL’s treatment of individual plaintiffs—both in the symposium and outside it—are being leveraged by defense-side interests seeking to promote bankruptcy as a means of resolving mass torts. Taken together, these two observations reveal a dissonance between the seemingly pro-plaintiff criticisms of MDL and the seemingly pro-defendant use of those criticisms to denigrate MDL in favor of bankruptcy