Welcome to Critical Mass, Law.com’s weekly briefing on class actions and mass torts. I’m Amanda Bronstad in Los Angeles. The first trial over whether Monsanto’s Roundup causes cancer wrapped up on Tuesday, and plaintiff’s lawyers weren’t shy about what they wanted: $412 million. A New Jersey Supreme Court ruling set the bar higher for admitting expert evidence. And the Seventh Circuit came out with some key decisions in class actions.
A Big Ask in the Roundup Trial
A plaintiff’s lawyer in the first trial alleging Monsanto’s Roundup caused cancer asked a San Francisco jury on Tuesday to come back with a $412 million verdict. I covered closing arguments by plaintiff’s attorney R. Brent Wisner (Baum Hedlund) and George Lombardi (Winston & Strawn), via Courtroom View Network’s broadcast of the trial.
Jurors were expected to begin deliberations on Wednesday.
Lombardi insisted that 40 years of studies and regulatory reviews concluded there’s no link between the primary chemical in Monsanto’s weed killer and plaintiff’s cancer. Wisner, insisting otherwise, asked jurors to award $39 million in compensatory damages and $373 million in punitive damages—a verdict that “will be heard around the world.”
So how did he come up with that figure? The compensatory damages include more than $2.2 million in economic expenses for the plaintiff, a former school groundskeeper diagnosed with non-Hodgkin’s lymphoma after spraying weeds with Monsanto products for two years. Punitive damages are based on the $62 million that Monsanto makes each year in interest multiplied by the six years that the plaintiff was expected to live beyond his first exposure in 2014.
A Slam Dunk for Daubert
The New Jersey Supreme Court issued its long-awaited decision on whether plaintiffs’ experts in more than 2,100 lawsuits over anti-acne drug Accutane should have been excluded from a mass tort case against the drugmaker.
The court’s answer? Yes.
The unanimous ruling (covered here) is a big loss for plaintiffs lawyers Bruce Greenberg of Lite DePalma and David Buchanan of Seeger Weiss, who had managed to win last year on appeal. But it’s a victory for Hoffmann-La Roche and its lawyer, Paul Schmidt of Covington & Burling. It’s also a win for business groups that filed amicus briefs asking the court to shift New Jersey’s expert admissibility standard to the stricter but more widely used Daubert standard.
I reached out to Edward Fanning of McCarter & English, who represented those business groups. He told me the decision is a “huge turning point.”
“The perception that New Jersey law on expert admissibility standards was weaker than the Daubert standard, combined with New Jersey being home to so many pharmaceutical and medical technology companies, had made this state a magnet for mass tort litigation. This landmark decision sends a clear message that our trial courts need to apply much more scrutiny to questions of expert admissibility.”
Since Richard Posner abruptly retired last year, the U.S. Court of Appeals for the Seventh Circuit has been pretty quiet on the class action front—until now.
In a pair of rulings, the appeals court outlined its views on attorney fees. An Aug. 2 ruling weighed in on one of the most heated debates in class action law: The practice of objector lawyers dropping their appeals in exchange for fees. Here’s my story on the ruling, which reversed an order that had rejected fees to objector counsel Ted Frank of the Center for Class Action Fairness in a settlement over Southwest Airlines drink vouchers.
CCAF senior attorney Melissa Holyoak told me: “Attorneys’ fees should always be based upon and proportionate to the relief actually received by class members—that’s something we fight for on a regular basis.”
Then, in a July 27 ruling (see here), the Seventh Circuit affirmed a $73,000 fee award to plaintiffs lawyers who had sought $233,000 in a class action settlement. The panel based its award on the $220,000 in claims.
Here’s why it’s important, according to Loeb & Loeb’s Laura McNally :
“This ruling strikes a blow against attorney’s fee gamesmanship in class actions. Class counsel have long been obtaining high fees based on a percentage of a hypothetical maximum claim payout, knowing that in all reality, the number of actual claims will never approach that maximum claim payout. This structure has allowed class counsel to obtain a third or more of a fantastical extra-large pie, knowing full well that the true pie will end up being more like the size of a MoonPie.”
P.S.: For more on what Posner has been up to in his post-bench career, check out this update from my colleague Jenna Greene at Litigation Daily:
Who Got the Work?
Hughes Hubbard & Reed represents Denmark’s taxing authority, SKAT, in its bid to coordinate 140 lawsuits it filed to recoup $2.1 billion allegedly lost in a tax fraud scheme. On July 23, New York partner Sarah Cave filed a motion before the U.S. Judicial Panel on Multidistrict Litigation to coordinate the lawsuits before U.S. District Judge Lewis Kaplan in the Southern District of New York. She was joined on the brief by New York partners William Maguire, Marc Weinstein, Neil Oxford, and counsel John McGoey.
Here’s a little more from the week …
➤ A bushel of fees: With the Syngenta corn settlement worth $1.5 billion, it’s no surprise that lawyers would ask for a large fee award—$500 million to be exact. But it’s starting to look like that still won’t be enough to go around. As I reported this week, plaintiffs’ attorney Mikal Watts filed a motion for $150 million for his firm, Watts Guerra, which represented 57,000 farmers with contingency fee contracts. Lead plaintiffs lawyers in the MDL have earmarked the fees for other firms. In an email, Watts was quick to point out that his request wasn’t just for his firm: “It is for 332 different law firms who are seeking enforcement of their private fee contracts with over 57,000 individuals.” According to court documents, those firms, mostly small businesses along the Corn Belt, spent most of their time communicating with their clients and going to town halls with Watts to discuss the case. In declarations, they stated that Watts Guerra was lead counsel.
➤ Razorback Review: The Arkansas legislature is looking into a $4.1 million referral payment at the heart of a special master’s report in securities class action settlements with State Street. According to this Law.com story, Arkansas legislators have contacted the special master, Gerald Rosen. Rosen recommended slashing $10 million from a $75 million fee request, in large part due to an undisclosed payment that one of the plaintiffs firms, Labaton Sucharow, made to a Texas lawyer—ostensibly to secure an Arkansas pension fund as a client in the case.
➤ Unlucky Number: The U.S. Judicial Panel on Multidistrict Litigation had 13 cases to consider at last month’s hearing in Santa Fe—but granted transfer only in three cases. That’s a large number of rejections. But, in recent years, the panel has denied more requests and raised more questions during oral arguments. Among those it denied was the American Bar Association’s petition to coordinate three accreditation lawsuits (see here). Among those the panel transferred were 100 lawsuits over Merck’s shingle vaccine, Zostavax (see here).
Thanks for reading Critical Mass. See you next week!