Print Edition
September 2010 
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Managing Mass Tort Litigation |
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Pauline Renaud, December 2009 |
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Page 2 of 3 |
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Plaintiffs are also asserting statistical modelling as a means of determining the ‘diminished value’ of a product as a result of an allegedly fraudulent statement. Mr Jackson explains that the problem with consumer fraud claims is that if a court is asked to apply the consumer fraud laws of all 50 states in a nationwide class, the case becomes unmanageable due to the fact that these laws vary substantially. “Plaintiffs have been attempting to eliminate this problem by pleading fraud under the federal organised crime statute (RICO), thus allowing the court to apply only one law to a nationwide class,” explains Mr Jackson. “This has resulted in a series of mass tort decisions involving the required elements of this statute and whether they have been met.” Other legal developments have included several US Supreme Court decisions: one on rejecting the rule that allegations of the complaint must be accepted as true – regardless of the actual facts – and another one on punitive damages that should not be disproportionately excessive.
Both those decisions benefit defendants. However, a decision in the Wyeth v. Levine case has, reportedly, severely restricted the federal pre-emption defence for mass tort defendants.
Other high-profile cases have made the headlines in recent months, either due to the record number of plaintiffs in a case, or given the potential short- and long-term impacts of the verdict for both plaintiffs and defendants. In Austria, for example, the AWD case is expected to substantially impact the legal landscape going forward. Last June, Austrian consumer protection agency VKI filed the first of two class action-type lawsuits against financial adviser AWD Gesellschaft für Wirtschaftsberatung GmbH for systematic false consultancy. Around 2300 persons, who suffered damages through AWD totalling €40m, have conveyed their claims to the VKI for the purpose of filing those lawsuits. On 19 November, the lawsuit was admitted by the Commercial Court of Vienna. “The impacts of this decision are tremendous,” believes Mr Geréd. “Not only does the admission of the suit encourage similar mass lawsuits against banks or other providers of financial services for alleged misinformation, but it also means that the criteria of ‘same facts’ and ‘same points of law’, which under the current draft of Austrian class action proceedings are essential for the admissibility of a class action lawsuit, are broader than previously thought,” he explains. The US has also seen several large cases in the financial sector, as a result of the financial crisis. But the country has also been marked, in recent years, by an increasing number of suits being brought against the food & drink sector for marketing products as presenting certain health benefits. These include Cheerios, for statements about lowering cholesterol, as well as Frosted Mini Wheats, for claiming that eating these cereals reinforce children’s concentration at schools. Some explain that companies can avoid a significant amount of litigation risk by not making health-related claims in their product marketing.
Several high-profile lawsuits have also targeted pharmaceuticals companies. “Historically, pharmaceutical mass torts did not begin until a drug was recalled from the market. Recently, however, more pharmaceutical mass torts have begun to be filed involving drugs that are still on the market and are still considered to be safe and effective by the FDA,” highlights Mr Meyer. Such litigations include HRT and Accutane/Isotretinoin, which have led to several verdicts across the country, many of which are now being appealed. The resolution of those appeals is expected to have a significant impact on whether there will be more trials looking ahead or whether parties will instead seek to achieve a global settlement. The pharmaceutical industry has been impacted by other groundbreaking developments. Vioxx, a pain killer alleged to cause injury to the heart, was a striking example of mass tort litigation that mainly settled without the use of a class action device. Instead, the settlement was based essentially on buying the ‘inventory’ of claims held by several plaintiffs’ law firms. Other large cases have included medications which, allegedly, did not work at all, were over-promoted, or presented undisclosed risks, such as Zicam, Chantix and Yasmin.
Other industries such as environmental, industrial and manufacturing have also seen large lawsuits, based upon a large variety of products and chemicals, including asbestos, silicosis and carbon emissions. Even baby bottles have resulted in mass tort litigation. Mr Rosenberg notes that “numerous class actions have been coordinated as part of a multidistrict litigation, claiming unspecified damages against nearly every manufacturer of baby bottles and ‘sippy cups’ arising out of the use of bisphenol-A in those products.” The lawsuits allege that manufacturers were aware that the chemical could pose a serious health risk.
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