•  
  •  
 
Vanderbilt Law Review

First Page

105

Abstract

This Article uses three recent multi-district litigations ("MDLs") that produced massive settlements-Guidant ($240 million), Vioxx ($4.85 billion), and Zyprexa ($700 million)-to study the emerging quasi-class action approach to MDL management. This approach has four components: (1) judicial selection of lead attorneys, (2) judicial control of lead attorneys' compensation, (3) forced fee transfers from non-lead lawyers to cover lead attorneys' fees, and (4) judicial reduction of non-lead lawyers' fees to save claimants money. These procedures have serious downsides. They make lawyers financially dependent on judges and, therefore, loyal to judges rather than clients. They compromise judges' independence by involving them heavily on the plaintiffs' side and making them responsible for plaintiffs' success. They allocate moneys in ways that likely overcompensate some attorneys and undercompensate others, with predictable impacts on service levels. The procedures used in Guidant, Vioxx, and Zyprexa also lack needed grounding in substantive law because the common fund doctrine, which supports fee awards in class actions, does not apply in MDLs. Academics have not previously noted these shortcomings; this is the first scholarly assessment of the quasi-class action approach.

This Article proposes an alternative method of MDL management. It recommends implementation of a default rule that would vest control of an MDL in a plaintiffs' management committee ("PMC") composed of the attorney or attorney-group with the most valuable client inventory, as determined objectively by the trial judge. The PMC, which would have a large interest in the success of an MDL, would then select and retain other lawyers to perform common benefit work ("CBW") for all claimants. The PMC would also monitor the other lawyers' performance. The new approach would thus use micro-incentives, rather than judicial control and oversight, as the means for organizing the production of CBW in MDLs.

Download
COinS