Welcome to Critical Mass, Law.com’s weekly briefing on class actions and mass torts. I’m Amanda Bronstad in Los Angeles. The judge in the federal opioid cases has ordered disclosure of third party litigation financing arrangements. Twitter tussles over class certification in a gender bias case. Lawyers in the Apple MDL trade biting criticism over who should be in charge.
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Opioid MDL Judge: Tell Me About Your Funding Arrangements
A judge overseeing hundreds of opioid lawsuits has ordered lawyers to disclose their third-party litigation financing arrangements. My story (see here) highlights Monday’s order by U.S. District Judge Dan Polster in the multidistrict litigation.
Lead plaintiffs lawyers and litigation funders are saying they’re OK with it – even though it has an unusual requirement that plaintiffs lawyers and funders submit sworn affirmations that the arrangements won’t cause conflicts of interest. But disclosures would be in camera, and the order barred discovery. That prompted groups like the U.S. Chamber of Commerce’s Institute for Legal Reform and Lawyers for Civil Justice to find fault with the order’s lack of transparency. (The latter group, by the way, set up this website last month to advocate for a set of “clear, uniform” MDL civil rules–including litigation financing disclosures.)
One interesting ethics twist: Travis Lenkner (Keller Lenkner), who co-founded Gerchen Keller Capital, which is now part of Burford Capital, told me that litigation financing issues “are adequately addressed in the attorney ethics rules” and that the elements of Polster’s sworn affirmations “are already things that attorneys are bound to do.”
That’s true — but it might not be enough, said Milan Markovic, a professor at Texas A&M School of Law. He told me:
“A lawyer who accepts payment on behalf of a client from a third party cannot ethically allow the third party to control the representation, which includes the duty to preserve client confidences and to not allow the funder to interfere with the lawyer’s independent judgment. However, the nature of litigation finance is such that the nominal client may only have a small stake in the outcome, and the funder is usually the one with the pre-existing relationship with the lawyer, and no one is going to complain to a state disciplinary agency.”
Do Men Get More Promotions at Twitter?
Twitter was in court before a San Francisco judge today to argue why a gender discrimination class action shouldn’t be certified.
Plaintiffs lawyers, including Jason Lohr (Lohr Ripamonti & Segarich) are hoping to certify 135 female engineers who claim they were denied promotions because of their gender.
Twitter lawyer Lynne Hermle (Orrick), known for successfully representing venture capital firm Kleiner Perkins in Ellen Pao’s discrimination trial, told the judge the plaintiff can’t show that the company’s promotion practices caused a disproportionate number of women to be passed over.
The case is the latest class action to hit tech firms over gender bias in pay and promotion. A San Francisco judge certified a class action against Google earlier this year that used a company-wide policy to argue pay was unequal. (See that story here.)
Erin Mulvaney, who covers employment issues for Law.com, previewed the hearing. She told me: “It’s the same strategy with Twitter, just a different target.”
“The attorneys argue that the tech ladder within the company is not transparent and has subjective criteria, amounting to a ‘shoulder tap’ for a male pal and women do not always have access. They will have to prove that the promotion system itself leads to a discriminatory and unbalanced outcome. Their expert report suggests that as you look at the tiers of the engineering department, there are fewer and fewer women represented, and that is a result of the unfair promotion system.”
A Core Dispute Among Apple MDL Plaintiffs’ Lawyers
Lawyers vying for leadership roles in the multidistrict litigation against Apple are far apart on a core issue: How many attorneys should it take to run the case? One group, led by Hagens Berman, says four. The other, led by Cotchett Pitre and Kaplan Fox, says more than 40. Here’s my story.
About 80 class actions allege Apple intentionally slowed down iPhones to force consumers to buy new devices. Mark Molumphy (Cotchett Pitre) said the MDL could be “one of the largest consumer class actions in America — perhaps one of the largest in history.” But Steve Berman (Hagens Berman) called that proposal the “Full Attorney Employment Act of 2018.” He said it ran counter to U.S. District Judge Lucy Koh’s order in the Anthem data breach case this year hiring of a special master to review a $38 million fee request by 53 law firms. (For a refresher, read here, and here’s an update.)
U.S. District Judge Edward Davila has scheduled a hearing for Thursday.
Who Got the Work?
Six class actions have been filed over a data breach that compromised the credit and debit cards of millions of shoppers at Lord & Taylor and Saks Fifth Avenue (here’s Law.com’s story). Parent company Hudson’s Bay Co., which disclosed the breach on April 1, brought in Gregory Parks of Morgan Lewis, who appeared this month before the U.S. Judicial Panel on Multidistrict Litigation. Parks, who is based in Philadelphia, is co-leader of the firm’s privacy and cybersecurity practice and retail and e-commerce industry sector. He is due to respond by May 23 to a request to send all the cases to New York. Other Morgan Lewis lawyers who’ve appeared for Hudson’s in individual cases are New York partner Kenneth Schacter, Los Angeles partner Joseph Duffy and Jody Barillare, who is of counsel in Wilmington, Delaware. (Here’s coverageof the Delaware lawsuit.)
Here’s what else you need to know this week:
Yahoo Discovery: Depositions are going forward in the Yahoo data breach MDL. According to a statement filed ahead of a hearing today (see here), plaintiffs deposed Yahoo’s former chief information security officer, Bob Lord, on April 13. Others are planned for May and June, and additional depositions still to be scheduled include former CEO Marissa Mayer and Ron Bell, former general counsel. The plaintiffs executive committee also filed a motion to bring in four additional law firms to depose plaintiffs (see here). That’s in response to a Feb. 1 order by U.S. District Judge Lucy Kohrequiring her approval to do so.
Cha-Ching: Wells Fargo has agreed to pay $480 million to settle securities class actions brought over its fake accounts scandal. Here’s Law.com’s story. Plaintiffs firms were Bernstein Litowitz, Klausner Kaufman and Robbins Geller. Sullivan & Cromwell represented Wells Fargo. The bank already has settled consumer class actions for $142 million (a final approval hearing is set for May 30) and $190 million to various governmental entities over the scandal.
And Then There Was One: Remember the suit that a Philadelphia lawyer filed against Morgan & Morgan alleging the Florida firm falsely advertised that it had a substantial personal injury practice in Pennsylvania? Well, it’s settled. Here’s Law.com’s report. Rosenbaum & Associates settled its case just after Morgan & Morgan hired injury lawyer Kevin Clancy Boylan as the managing attorney of its one-person Philadelphia office this month (see here).
When asked if Boylan’s hire had anything to do with Rosenbaum’s suit, a Morgan & Morgan spokesperson told my colleague P.J. D’Annunzio: “The hire is part of Morgan’s growth plan for Philadelphia.”