Welcome to Critical Mass, Law.com’s weekly briefing on class actions and mass torts. I’m Amanda Bronstad in Los Angeles. What are lawyers saying about the U.S. Supreme Court‘s latest blow to class actions? Find out which law firms aren’t likely to follow Milbank‘s salary hike. Plus, a look at why the 4th Circuit agreed to toss more than 3,000 Lipitor cases.
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SCOTUS Takes Another Swipe at Class Actions
The U.S. Supreme Court dealt another blow to class actions this week with its decision in China Agritech v. Resh. Law.com’s Marcia Coyle has the story here.
The unanimous ruling comes after the high court’s 5-4 decision last year in California Public Employees’ Retirement System v. ANZ Securities, which barred investors from using a 1974 precedent called American Pipe & Construction v. Utah to toll the filing of individual shareholder cases. This week’s case had to do with tolling of class actions rather than individual suits.
According to Marcia’s story, Justice Ruth Bader Ginsburg wrote that nothing in American Pipe or the court’s decisions applying it “so much as hints” that tolling extends to otherwise time-barred claims.
Here’s what some lawyers had to say: Sean Coffey (Kramer Levin): “The courts continue to chip away at the private right of action for shareholders…Today’s ruling is another limit placed on the plaintiffs’ bar and will exacerbate the fear that a federal judiciary increasingly stocked with conservative Trump appointees will further imperil their business model.”
Archis Parasharami (Mayer Brown): “The decision should give businesses confidence that they will not face an endless series of class actions over the same conduct…As a result of the decision in China Agritech, defendants will not face new class actions that are filed after the statute of limitations has expired.”
Q&A: How Does the Plaintiffs Bar Match Salaries?
A number of Big Law and boutique firms have followed Milbank’s decision this month to raise associate salaries. (Here’s Law.com’s latest story.) The new starting salary for associates at top-paying firms is $190,000. That got me thinking: How does the plaintiffs bar compete when it comes to associate salaries?
So, I asked Lieff Cabraser Managing Partner Steve Fineman. Here’s what he told me:
Q: How do plaintiffs’ firms compete with each other on salaries?
A: We have a structure we try to live with in terms of how much we pay in base salary to our lawyers, our associates, and even the non-equity partner types. We try to keep to our structure and then, when the firm has a good economic year, we’re generous in bonusing lawyers of all levels. And we talk to recruits about the fact that at plaintiffs-side firms, revenue is not constant. It goes up and down. Some years are great, some years not as good. Because it goes up and down, we’re not going to pay Milbank-type salaries to a junior lawyer. That wouldn’t work for our type of business.
Q: What other parameters do you use in competing for recruits?
A: If a person looks at us and one of our peer firms and competing firms and sees all things being equal, but the salary is higher at the other shop, it’s possible that person will say to us: ‘Can you match that salary?’ Most of the time, our salaries already are in the same ballpark or better. People pick us because of salary. People pick us because of reputation. People pick us because of location. Some people pick us because of the kind of work. We get a lot of women who like working for our firm because we have a lot of women in leadership, Elizabeth (Cabraser) and Kelly (Dermody), and that is a big selling point for us.
Not Exactly ‘Junk Science,’ But … ‘Farcical’?
The 4th Circuit affirmed summary judgment rulings blocking 3,128 lawsuits brought over cholesterol drug Lipitor. Here’s the ruling, and here’s my prior story on the case, which business groups feared would promote what they called “junk science.”
That’s not exactly what the 4th Circuit called it. The panel said the “evidence at issue isn’t especially strong.”
“To hand to a jury the evidence here and ask it to reach a conclusion as to causation with any amount of certainty would be farcical and would likely result in a verdict steeped in speculation.”
I reached out to plaintiffs attorney Derek Ho (Kellogg Hansen), who said: “We are still reviewing the opinion and our options for further review.”
Litigious Tort Reformers Called Out for ‘Hypocrisy’
New York Law School’s Center for Justice & Democracy has a new report out this week that ranks what it calls the top 30 tort reform “hypocrites” of 2018. Here’s the report, which aims to highlight how some of the biggest tort reform advocates are actually quite litigious.
So who’s No. 1? President Donald Trump, whose “hypocrisy is one for the record books.” The report says:
“Trump has tried to block the courthouse doors to others in his business dealings and during his year and a half as President. But when he believes that he or his companies have been wronged in some way, he has always run straight to court. He has done so thousands of times.” More than 1,900 times, to be exact.
Also on the list: The U.S. Chamber of Commerce’s Institute for Legal Reform(No. 2), General Motors (No. 5), Chrysler (No. 6), Bayer (No. 26), Pfizer (No. 28), and class action critic Ted Frank of the Center for Class Action Fairness (No. 22).
It also named a law firm: Covington Burling (No. 17). The report notes that senior counsel Phil Howard is a Trump advisor and proponent of legal reform. “Turns out that the D.C.-based firm – with no office in Minnesota – received a $125 million contingency fee from the state of Minnesota in its environmental lawsuit against 3MCo., which settled on February 20, 2018 for $850 million.” More on that from Law.com’s Scott Flaherty here and from Minnesota Public Radio here.
Here’s more you need to know today:
Opioid Options: Dozens of bills are going before the U.S. House of Representatives starting this week to address the opioid epidemic. (Here are stories from ABC News and The Hill.) Lead plaintiffs attorneys in the federal multidistrict litigation over opioids – Paul Farrell (Greene Ketchum), Paul Hanly (Simmons Hanly Conroy) and Joe Rice (Motley Rice) — had this to say: “The opioid crisis is a public health crisis, and it requires action from all levels of government. As that happens, we can’t forget that communities in every part of this country are still losing people each and every day, and they deserve accountability from the opioid companies that originally orchestrated the decades-long deceptive marketing campaign for their product. This litigation is about giving a voice to those communities.”
Swan Song?: Plaintiffs lawyers in the Anthem data breach settlement are due back in court on Thursday to voice their objections to a special master’s report that cut their $38 million fee request by $9 million. U.S. District Judge Lucy Koh will hear from the plaintiffs team (Altshuler Berzon, Cohen Milstein, Lieff Cabraser and Girard Gibbs) and Ted Frank, of the Center for Class Action Fairness, who says the report didn’t cut enough. Koh brought in a special master earlier this year to review potential overbilling in the fee request. If the hearing is anything like that one (see here), it should be entertaining.
Ripple Effect: Cryptocurrency exchange Ripple Labs was hit with another securities class action this week. Law.com’s story says the company’s currency, XRP digital tokens, or “Ripples,” should be registered as securities. Robbins Arroyoand Robbins Geller filed a similar case last month that Ripple’s lawyers (Skaddenand Debevoise) have removed to federal court. The plaintiff in the new case is Vladi Zakinov — a California resident who has had rough time of it lately. Robbins Arroyo also represented him in a consumer class action against Blue Buffalo that said his 4-year-old cocker spaniel-poodle mix died after eating the company’s dog food, which he alleged was tainted with lead. The class action was dismissed by a California federal district court in March.