Coattail Class Actions: Reflections on Microsoft, Tobacco, and the Mixing of Public and Private Lawyering in Mass Litigation

Ask anyone who follows legal news to name the two biggest litigation news stories in the United States at the start of the twenty-first century, and they will answer without blinking: Microsoft and tobacco. The Microsoft litigation, they will tell you, claims a place in the pantheon of antitrust landmarks that includes Standard Oil, Alcoa, and AT&T. The tobacco litigation is the most massive in a string of mass torts including asbestos, Dalkon Shield, and breast implants; it is arguably the most important public health matter ever litigated. Microsoft and tobacco each fit so well and so interestingly in their own line of antitrust or product liability cases that it would be easy to miss what the two stories have in common. The Microsoft and tobacco litigations each involve allegations of wrongful conduct causing widespread harm, committed by actors so powerful they seemed immune to attack by private litigants. In each case, government lawsuits broke down the barriers to successful litigation, and private litigants, particularly those pursuing class actions, rode the government\u27s coattails. This pattern is not limited to tobacco and Microsoft, nor is it new; in antitrust, securities, civil rights, and consumer fraud litigation, private plaintiffs have been riding government coattails for years. This Article examines coattail class actions and related developments in Microsoft, tobacco, and other recent litigation involving widespread harm. It does not address whether the government entities and private plaintiffs have valid claims in the Microsoft and tobacco cases, nor does it consider whether the underlying substantive law itself is just or wise. For purposes of this discussion, my interest in these cases is not to enter the raging debate over the legal and factual issues in them,9 but rather to look at whether their procedural structure of interdependent public and private actions offers a sensible model for the resolution of claims of widespread harm. Part One looks at the Microsoft antitrust litigation and the tobacco litigation as illustrations of the relationship between government litigation and subsequent class actions. Part Two examines two related developments that mix public and private lawyer roles: the use of private litigators to prosecute government lawsuits, and the nature of recent government recoupment actions. Part Three considers the differences between government lawyers, who owe duties to government entities and face largely political incentives, and class action lawyers, who owe duties to the class and face largely fee-based incentives. With the idea that government lawsuits and private class actions serve different purposes even when targeted at the same conduct, I turn to several specific implications. Part Four looks at implications for government suits. I suggest that government lawyers should consider the issue preclusive value of adjudications, the public value of discovered information, and the impact of settlement agreements that compromise private litigants\u27 remedies or procedural mechanisms. I also suggest that contingent fees are generally inappropriate for government retention of private litigators. Part Five turns to implications for coattail class actions themselves. I contend that while prior government litigation does not render a class action illegitimate, the government action does matter for the outcome of the coattail class action. Prior government litigation substantially increases the likelihood of successful prosecution of the class action, but in some cases it should reduce the likelihood or amount of punitive damages, as well as the amount of legal fees awarded to class counsel. While much of what I discuss in this Article is equally true of individual lawsuits that piggyback on government litigation, I focus on class actions because as representative litigation they share an essential attribute of government actions, and thus present most starkly the question of who should represent the interests of injured citizens in litigation: government officials or class representatives and class counsel

Doing Good, Doing Well Symposium

Rather than focusing on the differences between tort lawyers and activists as they ally with each other, this Article focuses on the motivations and explanations of the tort lawyers themselves. Positioned at the intersection of big-money practice and social change litigation, mass torts provide a useful study in multiple motivations. While financial incentives for plaintiffs\u27 lawyers explain much of what happens in mass torts, policy objectives come into play as well, at least in the lawyers\u27 rhetoric. Despite the obvious difficulty distinguishing reasons from rhetoric and rationalization, it is worth exploring the significance of mixed motives for lawyers who are committed to both policy objectives and the potential for large fees. Part I of this Article explores the possibility of multiple motivations of mass tort plaintiffs\u27 lawyers, as well as the alliances among activists and trial lawyers that have emerged in several recent mass torts. Part II addresses the conflicts of interest that arise when considerations other than maximizing clients\u27 recovery motivate lawyers. While such conflicts exist, a mix of monetary and policy motivations may reduce, rather than exacerbate, the lawyer-client conflicts that inhere in mass representation. In mass collective representation, mixed motives more accurately reflect the combined interests of groups of similarly situated individual clients. Part III turns to questions of professionalism, the prevailing conception of public interest lawyering, and the possibility of serving the public good while pursuing private gain. The standard conception of public interest law practice, although rarely articulated with precision, tends to focus on market-undervalued legal work. While this definition makes sense for determining whether certain legal work ought to be subsidized, the prevailing conception may have an unintended consequence once internalized by lawyers and law students. Paradoxically, the prevailing conception of public interest lawyering may discourage lawyers in most of their work from considering the public good. In this sense, a vision of professionalism that acknowledges the possibility of significant private gain while serving the public interest may better serve the profession. On the other hand, self-serving bias may influence lawyers to view their own fee-generating work as public-serving. The benefit or harm of a broader understanding of public interest law practice depends on the extent to which, when lawyers perceive themselves as serving the public interest, they merely have persuaded themselves of the goodness of their own pursuit of wealth. Mass tort plaintiffs\u27 practice, situated at the crossroads of public law and private tort litigation, combines notable public policy objectives with unmistakable fee potential. Because it presents mixed motives for lawyers more palpably than most other areas of practice, it offers a useful starting point for thinking about fee-generating work in which lawyers seek to advance the public interest

The Home-State Test for General Personal Jurisdiction

This article attempts to articulate the due process test for general in personam jurisdiction. It frames the question as what gives a state sufficiently plenary power over a person that the state may adjudicate claims against the person regardless of where the claims arose, and it answers that question in terms of a home-state relationship between the defendant and the forum state. Written for a roundtable on the upcoming Supreme Court case of DaimlerChrysler AG v. Bauman, the article urges the Court to state the home-state test for general jurisdiction more clearly than it did two years ago in Goodyear Dunlop Tires v. Brown. In Goodyear, while the Court strongly suggested a home-state test, it did so ambiguously. The home-state test makes sense from the perspective of the justification for general jurisdiction and its separateness from specific jurisdiction. A corporation should be subject to general jurisdiction in the corporation’s home state, defined as the state of incorporation and principal place of business. One implication of the test is that, for purposes of general jurisdiction, a subsidiary’s contacts should not be imputed to its corporate parent on an agency theory. Also, the home-state test provides a basis to jettison the reasonableness prong that some courts have applied to general jurisdiction

The Role of the Judge in Non-Class Settlement

This commentary argues that judges lack the authority, as a general matter, to approve or reject non-class settlements. While judges overseeing mass litigation can set the stage for settlement by instituting phased discovery, scheduling bellwether trials, and other methods, they should respect the line between facilitation of settlement and control over settlement terms. The paper was presented in response to Judge Alvin Hellerstein’s and his special masters\u27 account of their handling of the September 11 clean-up litigation

Civil Litigation Reform in the Trump Era: Threats and Opportunities Searching for Salvageable Ideas in FICALA

The Fairness in Class Action Litigation Act of 2017 (FICALA) was introduced in Congress less than three weeks after Donald Trump took office as President. Supported by the U.S. Chamber of Commerce and opposed by consumer advocates and civil rights groups, the bill passed the House of Representatives one month after its introduction on a party-line vote of 220 to 201, with 220 Republicans and zero Democrats voting in favor. FICALA stalled in the Senate and, as of this writing, does not appear to be moving toward passage in its current form. But reform ideas have a way of reappearing, particularly when driven by a constituency with much at stake and plenty of resources to push an agenda. Corporations that face mass litigation are a powerful voice for change, and class actions and multidistrict litigation are prime targets. Moreover, the quick vote in the House shows that there is at least some political appetite for the proposed reforms. In anticipation of the reincarnation of the bill in some form, it is worth exploring whether it contains any good ideas

Why the Supreme Court Should Give the Easy Answer to an Easy Question: A Response to Professors Childress, Neuborne, Sherry and Silberman

This paper responds to arguments that the Supreme Court should sidestep the core questions of personal jurisdiction in DaimlerChrysler AG v. Bauman. It argues that general personal jurisdiction over a corporation should be limited to the corporation\u27s home state. As a corollary of this point, an agency relationship between a parent and subsidiary does not justify attribution of contacts for purposes of general jurisdiction. The key to the analysis is understanding the fundamental difference between specific jurisdiction and general jurisdiction, and this distinction explains several of the disagreements between myself and other participants in this Roundtable

Consent v. Closure

Claimants, defendants, courts, and counsel are understandably frustrated by the difficulty of resolving mass tort cases. Defendants demand closure, but class certification has proved elusive and non-class settlements require individual consent. Lawyers and scholars have been drawn to strategies that solve the problem by empowering plaintiffs’ counsel to negotiate package deals that effectively sidestep individual consent. In the massive Vioxx settlement, the parties achieved closure by including terms that made it unrealistic for any claimant to decline. The American Law Institute’s Principles of the Law of Aggregate Litigation offers another path to closure: it proposes to permit clients to consent in advance to be bound by a settlement with a supermajority vote. This article argues that, despite their appeal, both of these strategies must be rejected. Lawyer empowerment strategies render settlements illegitimate when they rely on inauthentic consent or place lawyers in the untenable position of allocating funds among bound clients. Consent, not closure, is the touchstone of legitimacy in mass tort settlements

Consent v. Closure

Claimants, defendants, courts, and counsel are understandably frustrated by the difficulty of resolving mass tort cases. Defendants demand closure, but class certification has proved elusive and non-class settlements require individual consent. Lawyers and scholars have been drawn to strategies that solve the problem by empowering plaintiffs’ counsel to negotiate package deals that effectively sidestep individual consent. In the massive Vioxx settlement, the parties achieved closure by including terms that made it unrealistic for any claimant to decline. The American Law Institute’s Principles of the Law of Aggregate Litigation offers another path to closure: it proposes to permit clients to consent in advance to be bound by a settlement with a supermajority vote. This article argues that, despite their appeal, both of these strategies must be rejected. Lawyer empowerment strategies render settlements illegitimate when they rely on inauthentic consent or place lawyers in the untenable position of allocating funds among bound clients. Consent, not closure, is the touchstone of legitimacy in mass tort settlements