Anatomy of an Aggregate Settlement - Part 1

If you're a plaintiff involved in a mass tort case like those over pelvic or hernia mesh, talcum powder, etc. there are a few things you should know about what aggregate settlements often involve.

Today's post covers some basics and this series will then do a deeper dive by dissecting the one publicly available pelvic mesh settlement--a settlement that American Medical Systems struck with one law firm.

First, aggregate settlements are fundamentally different from a settlement that you might strike if you were to get into a car accident. In that sort of case, the defendant would offer you money in exchange for dismissing your claim. And you'd know exactly what you were getting--the amount, the terms, etc.

But all the mass tort deals that I've analyzed differ substantially: aggregate settlements don't offer plaintiffs a fixed amount, but a chance to recover through a settlement program that may or may not compensate them. The so-called settlement is actually a deal between plaintiffs' attorneys and the defendant, not between the plaintiff and defendant as in our car accident example.

That means that some of the terms are directed toward plaintiffs' attorneys, and some are directed at the plaintiffs themselves. As we will see, it also means that plaintiffs' attorneys might be put in a pickle: their obligations under their agreement with the corporate defendant might conflict with the obligations they assumed when they agreed to represent a plaintiff as a client.

Provisions targeting plaintiffs' attorneys can thereby push ethical boundaries that require them to act in each client's best interest.

I'm going to introduce the primary clauses that you'll find in many settlement programs (for that's what they are--programs, not actually settlements) here. Then, we'll explore each in subsequent posts.

1. Walkaway, withdrawal, or "blow" provisions. These clauses provide corporate defendants with the amount of "closure" that they can live with. They allow the defendant to walkaway from or withdraw from the deal (blow the deal, so to speak) if fewer than the designated percentage of the plaintiffs sign on. The participation percentages that I've seen range from 85-100%.

2. Case-census provisions. The dealmakers (lead attorneys on the plaintiff and corporate defendant's side) jointly petition the presiding MDL judge to issue a census. The census then requires all plaintiffs' attorneys with a case in the multidistrict proceeding to register all of their clients with related claims. It doesn't matter if that client is suing in state court (or if no suit has even been filed at all). The census then becomes the denominator for the walkaway provision.

3. Attorney-Withdrawal provisions. These clauses require plaintiffs' lawyers to take steps to withdraw from representing clients who refuse to settle. (I find them among the most ethically questionable provisions.)

4. Attorney-Recommendation provisions. All participating attorneys must recommend that all of their clients enter the settlement program and use their "best efforts" to ensure that happens.

5. New Suit Deterrence provisions. These clauses aim to prevent new lawsuits from being filed once a settlement is announced.

6. Reverter provisions. Money that is "leftover" in a settlement fund after the program doles it out reverts back to the corporate defendant.

We'll take a closer look at each in the coming weeks.

In the meantime, the survey for plaintiffs involved in women's health mass torts is still open. It asks about plaintiffs' experiences with the court system, their attorneys, third-party funders, etc. If you're a plaintiff involved in pelvic mesh, talcum powder, Mirena, Yasmin/Yaz, NuvaRing, Mentor ObTape, Protegen Sling, Fosamax, Silicone Gel Breast Implants, etc., please take a few minutes to fill it out. It doesn't ask for anything covered by a settlement's "gag" order and your identity will be kept completely confidential.