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10/17/96

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Lawyers discuss innovations in mass personal injury lawsuits

STANFORD -- Mass torts, or personal injury class action suits, have become a major legal phenomenon of the last two decades. They are used as a strategy for addressing social problems as well as for individuals to collect damages for injuries from defective products, lawyers involved in tobacco, asbestos and breast implant lawsuits said at an alumni reunion weekend panel at Stanford Law School on Oct. 11.

The most recent class action suits against tobacco companies are being brought by allegedly addicted smokers, flight attendants who breathed second hand smoke in airplanes, and states and counties seeking reimbursement for their costs of treating indigent patients with lung diseases, said Robert Rabin, the A. Calder Mackay Professor of Law at Stanford. He directs the Tobacco Policy Research and Evaluation Program of the Robert Wood Johnson Foundation and is the author of casebooks on tort law and its alternatives.

Individual consumers of tobacco were mostly unsuccessful in winning judgments in the first two waves of litigation, Rabin said, but that may change as a result of new legal strategies by better organized and funded plaintiffs attorneys and because of changes in court doctrine regarding personal injury claims.

"My hope is that the [lawsuits] will create tremendous pressure for some sort of global solution" for tobacco-related social problems, he said. Uncertainty for both sides on who will win and what precedents might be set by reaching verdicts might lead to a larger settlement, he said, such as "giving some bite to regulatory strategies" of the U.S. Food and Drug Administration or the Occupational Safety and Health Administration.

Mass tort claims have two things in common, according to Stephen Neal, a partner in Cooley, Godward, Castro, Huddleson & Tatum of Palo Alto and a 1973 graduate of the law school. Each lawsuit involves 10 to hundreds of thousands of claimants asserting the same kind of injury and the litigation continues for years, creating "endless problems for big business, the judicial system and lawyers on both sides," said Neal, who has defended asbestos manufacturers.

Until the '60s, Rabin said, the courts dealt mostly with "exploding coke bottle" personal injury cases; that is, lawsuits based on one defective product rather than a "design defect" inherent in each and every unit of the product sold. Asbestos, tobacco and breast implants are the leading examples of the latter type of defective product.

A key question the class action cases raise is "how much due process can both sides survive?" said Elizabeth Cabraser, a partner in Lieff, Cabraser, Heimann & Bernstein and a leading lawyer for consumer plaintiffs in both breast implant and tobacco cases.

Judges are overwhelmed by the difficulty of administering many individual cases but also are concerned about how they can guarantee the due process of indvidiuals if they force all potential plaintiffs and defendants into a class, said David Bernick, a partner in the Chicago law firm of Kirkland & Ellis. Bernick was the first defense lawyer to successfully win a verdict for Dow Corning in a lawsuit alleging personal injury from the company's silicon breast implants. Dow Corning, he said, has voluntarily filed for bankruptcy because of the costs of defending against the volume of claims. It hopes that legal precedents in Chapter 11 bankruptcy court cases will force a final settlement on all the plaintiffs.

Breast implant litigation exploded in 1992 shortly after the FDA announced that it had organized a voluntary moratorium on the sale of silicon implants for 90 days while it reviewed new scientific documents. Hundreds of individual claims and 38 class actions were filed. Eventually, the FDA decided there was no new evidence of medical problems, but the implants remain off the market.

A class action settlement was reached for breast implant consumers, but "it failed from success," Cabraser said. So many women with silicon breast implants came forward that the joint fund set up by the manufacturers and their insurance companies to pay claims was deemed inadequate.

It also failed because lawyers representing some of the plaintiffs in Texas refused to go along, Bernick said, and because there was no scientific consensus to support it.

While the bulk of the plaintiffs, according to Cabraser, wanted a settlement that would monitor their health and look for the health effects of implants, Bernick said the bulk of the cost was in future disease claims. Since there is no scientific consensus connecting any diseases to the implants, he said, the lawyers were left to negotiate the terms of what diseases would be reimbursed. There have been proposals for courts to appoint scientific experts, but currently, he said, it is unclear "whether science informs the litigation process," including judges' and juries' decisions.

The lesson for society, Cabraser contended, should be that more research must be conducted before implantable medical products or drugs that are not necessary to save life are placed on the market, and that manufacturers need to do more to disclose the risks. Companies that "promote informed choice" may reduce their sales in the short term, she said, but benefit in the long term by reducing their legal exposure and liability.

Her class action suit on behalf of breast implant consumers in Louisiana will go to trial in a state court early next year, she said. "What the appellate court system decides about [the legality of the trial] we don't know. A panel [discussion of mass tort litigation] a year from now will be completely different."

Asbestos poses a somewhat different closure problem, Neal said, noting that there is a scientific consensus that workplace exposure to asbestos can cause some types of lung disease.

A mass settlement mechanism funded by asbestos producers and insurers was approved by a federal judge in Philadelphia but overturned on appeal.

"A key ingredient was getting a court to say this system is applicable to people who don't yet know or have a [related] illness," Neal said. Likely victims include shipyard workers or insulation installers who may not develop their first symptoms until 40 years after the exposure. The 3rd Circuit Court of Appeals set aside the decision partly on grounds that it did not protect future victims' due process rights. The case has been appealed to the U.S. Supreme Court, which has yet to decide if it will review it.

Academic scholars criticized the asbestos settlement on due process grounds, Cabraser said, but were more supportive of the breast implant settlement, which also failed.

With tobacco-related suits, the outcome is even less clear. The first round of cases were filed in the 1950s shortly after a spate of studies showing more scientific evidence of the relationship between smoking and lung cancer. Most of them were dropped because the tobacco companies had the resources to overwhelm individual plaintiffs' lawyers in the pre-trial discovery and motions process, Rabin said. The few smokers that took their cases to trial found that "the courts took a constrained view" of the idea that companies should be able to foresee a risk. "They were also not yet acclimated to the notion that a product might be defective across the board."

A second wave of cases began in 1985 as a result of developments in the law that gave companies an obligation to do research and respond to risk. There was also a major change in the tort system, Rabin said, with the introduction of the concept of "comparative negligence. That meant that after 1960, while smokers might be found to have been aware of the risk of smoking, they hoped the juries would find that the risk was shared."

Again, most plaintiffs dropped their lawsuits, and those who did go to trial found juries largely unsympathetic. Tobacco companies successfully argued that smoking was a free choice and also that Congress had preempted the company's responsibility to warn smokers more by requiring producers to put a warning label on all cigarette packaging.

Rabin said the third wave of cases began in 1994. They are based on the public disclosure of internal tobacco company documents that led plaintiffs' lawyers to believe they might win on grounds of fraud and deception. They are also the result of a "a revolution in thinking about the propriety of class action lawsuits," he said. "Instead of one-on-one, groups of plaintiffs' lawyers who had cut their teeth in asbestos and breast implant cases, and in firms with more resources, came together as an aggregate."

One class action suit, alleging smokers have less choice in quitting because of tobacco's addictive powers, was certified by a federal court in New Orleans but overturned earlier this year on appeal. Many other class actions have been filed in state and federal courts, including a new round of cases filed by state attorneys general, not on behalf of smokers but governments who pay the medical costs of indigents.

The goals of the plaintiffs' attorneys have changed, Cabraser said. Instead of seeking to maximize individual recoveries, she said, they want the companies to pay for medical programs that cover the costs of quitting smoking. "These private suits seek a very public remedy, which is a medical monitoring program. That was the focus of the breast implant litigation too," she said.

But she agreed with other panelists that courts face a dilemma in trying to protect two legal doctrines ­ due process and expedient recovery. In the past year federal courts in four circuits have refused to certify classes of plaintiffs in tobacco cases. "They are unified in saying due process is not being followed," Bernick said.

Cabraser interpreted the pattern of decisions slightly differently. The appellate courts, she contended, "are sending a clear message: If you are going to bring a class action, you better figure out early how to implement a settlement and make it fair. The plaintiffs' attorneys have heard that message."

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