Cutting-Edge Approaches for Managing Mass Tort Litigation in the New Millenium

Mass tort products liability litigation has caused the demise of nearly one hundred U.S. manufacturers in the past two decades. Asbestos litigation alone is believed to have led to bankruptcy filings by over 70 companies. In many cases the failure to recognize the magnitude of a mass tort problem or to timely adopt a sound litigation management plan significantly contributed to a company's demise.

There are few articles and no authoritative texts to help U.S. companies and their insurance carriers recognize and respond to the unique problems created by mass tort litigation. This is unfortunate because regardless of the product, liability theory or scope of litigation, a disciplined, coordinated defense can make the difference between a company's bankruptcy and its continued viability. The following is a synopsis of our detailed article entitled "Cutting-Edge Approaches for Managing Mass Tort Litigation in the New Millenium,"which provides a framework for such an approach especially well-suited to the 21^st century and its technology tools. To review our full publication you can click on this link http://www.wkgshare.com/NCC.pdf.

When Centralized Management Becomes a Necessity Rather Than Just a Good Idea

Manufacturers and their insurance carriers have long recognized the need to establish guidelines for managing high volumes of litigation with various individual law firms spread around the country. But in mass tort situations, that structure is often inadequate. What's needed instead is a centralized litigation management structure that develops a successful, sustainable defense and returns dividends from one lawsuit to the next.

How do you know when centralized litigation management may be essential to your company's survival? When one or more of the following situations exist you should think about taking control of your mass tort litigation before it takes control of you and your company:

• Widely-distributed products with alleged common design defects capable of causing similar injuries to hundreds or thousands of product users;
  
  
• Industry-wide litigation where bankruptcies or limited resources of many industry members may put other industry members at risk of having to bear greatly disproportionate liability;
  
  
• Litigation potentially large enough to create a substantial risk that insurance may be insufficient to cover all current and projected future claims;
  
  
• Large self-insured retentions and the possibility of claim volumes that could create an annual cash flow drain equal to corporate net income.

Early Recognition is Essential. It's important not only to recognize when centralized litigation management is needed, but also to recognize this need early. Otherwise, plaintiffs' lawyers may achieve an insurmountable advantage over your company. Key tools in early recognition include warranty claims, field service reports, accident reports and Consumer Products Safety Commission recalls.

Perhaps the clearest warning sign of a product in danger is that it has attracted national "deep pocket"plaintiffs' firms. These firms will use initial cases to develop discovery information to support later, more successful lawsuits. If your product is drawing their attention, take this matter very seriously.

Avoiding Traps. Many companies don't recognize the threat of mass tort litigation soon enough because they fall into one or more of the following traps:

• Dismissing the litigation as a fad, thinking it will go away if you win the first few cases;
  
  
• Assuming you can keep the litigation quiet by settling the first cases to avoid the publicity of a trial;
  
  
• Believing the insurance carrier shares your interest and will take care of the litigation;
  
  
• Underestimating plaintiffs' lawyers or their experts' ability to create a design flaw in what seems to be a perfectly fine product with widespread commercial acceptance.

Don't fall into these traps. It is better to err on the side of crying wolf than to risk your company becoming a corporate carcass divided among various classes of debtors at a bankruptcy slaughtering.

Can You Manage Your Own Potential Mass Tort Problem?

In answering this question, consider the following points:

• Do you have the expertise and staffing in-house to dedicate to the problem?
  
  
• If you currently lack the expertise and staffing, is it realistic to try to add that expertise and staffing in-house?
  
  
• Will your Board of Directors or upper management be more comfortable answering to shareholders (and will you be more comfortable answering to the Board or upper management if things start to go sideways) when you've tried to manage the problem internally as opposed to retaining the most qualified outside help?

Note to Reader: The scope of this issue alone requires more detailed discussion than can be included here. For the complete text, go to http://www.wkgshare.com/NCC.pdf.

Do You Need National Coordinating Counsel?

If you answer "yes"to one or more of the following questions, your company is a strong candidate for a National Coordinating Counsel (NCC) that uses state-of-the-art technologies to cost-effectively manage multi-state litigation.

• Are you involved in multi-state litigation?
  
  
• Are the lawsuits against you increasing on an annual basis?
  
  
• Are you facing lawsuits in problem jurisdictions such as Mississippi, California, Illinois, Texas, Maryland or New York?
  
  
• Are settlement demands increasing?
  
  
• Are plaintiffs' counsel well-heeled and capable of taking your company to trial to extort maximum settlements or to "roll the dice"for the big payday?
  
  
• Are you concerned about inconsistent company discovery responses and potential sanctions that result from multiple local counsel handling discovery issues?
  
  
• Are you concerned that plaintiffs' firms may try to pierce the corporate veil to reach a parent company's assets?
  
  

What Should You Look For In Outside National Coordinating Counsel?

Answering this question can be difficult because gut instincts can lead to an excessively expensive or ineffective choice. Consider the following traditional myths, each of which must be critically examined:

Myth No. 1: This is big litigation so shouldn't I hire a big firm?

Maybe yes, maybe no. What you really want is the most efficient lean-and-mean "high performance"team that allows you to play big. The largest firms can devote the greatest amount of resources to your problem. But having a large number of lawyers from a mega-sized firm spend a small percentage of their time on your matters is far less efficient than having a smaller number of dedicated attorneys from a smaller-sized firm spend a greater percentage of their time on your matters and functioning as a well-oiled team.

If you feel the need for the large firm to handle your large problem, insist on a stable, well-defined lean-and-mean team. If a large firm cannot assure you of this, find a smaller one that can.

Myth No. 2: Doesn't it make sense to use my outside counsel who are handling the largest volume of my cases and are thus most knowledgeable about the litigation?

Maybe yes, maybe no. Many companies and their carriers have followed this line of reasoning to their detriment. The sheer scope and growth of mass tort litigation can turn your NCC into a group of firefighters putting out today's local area fires rather than a group of problem solvers seeking to prevent or control the spread of tomorrow's nationwide blazes. You definitely should use the acquired knowledge and expertise of the firm(s) handling the greatest volume of your mass tort litigation. But you should also consider having NCC from a jurisdiction where they are less likely to become swallowed up by a rapidly growing local area caseload.

Myth No. 3: Doesn't it make sense to hire a firm located close to corporate headquarters or located in one of the largest cities in the country?

Maybe yes, maybe no. It may be convenient to have your NCC nearby, but todays technology enables counsel anywhere to be in touch with you anytime. As a result, counsel thousands of miles from corporate headquarters can be more responsive than counsel across the street. Technology can also produce dramatic cost savings by allowing you to use equally competent counsel from markets smaller than New York City, Los Angeles and Chicago where there can be differences in prevailing hourly rates of $100 an hour or more.

So if you don't look to the biggest firms in the biggest cities or the firm handling the greatest volume of your mass tort cases, then what should you look for in choosing your NCC?

Questions You Should Ask Candidates for National Coordinating Counsel

In assessing the capabilities of NCC candidates, here are some of the more significant questions you want to address:

• Are they currently serving as NCC and successfully representing "target"or even peripheral defendants in other mass tort litigation?
  
  
• Are their NCCpersonnel available to service your national needs? Or are these individuals stretched too thin with large volumes of cases for other clients in their own local jurisdiction?
  
  
• Are they accessible 24/7 to clients, local counsel and experts to handle emergency matters?
  
  
• Do they have close working relationships with the "Five-Star"regional and national experts who will defend you?
  
  
• Have they developed and successfully presented witnesses to tell their company history with the use of juror-friendly interactive demonstrative exhibits?
  
  
• Have they developed cost-effective e-technologies to manage company documents, client discovery, expert transcripts, local counsel training, national motions and demonstrative exhibits?
  
  
• Have they developed client-specific secured extranet systems to manage national and local counsel tasks, high-profile case monitoring, case reporting and expert selection? Have they developed customized client-specific secured extranet systems for instant 24/7 client executive summary case e-reports, settlement trends and cost trends nationally, by jurisdiction, plaintiffs' firm and/or defense firm?
  
  
• Have they successfully thwarted plaintiffs' attempts to pierce the corporate veil to reach a parent company?
  
  
• Do they have national trial counsel or access to regional trial counsel who have successful tried multiple cases to verdict? Ask to review a summary of those trials.
  
  

Do they have systems and an organizational structure that will produce significant cost savings to clients?

Teamwork and Organization – Define It and Require It

Once you select your NCC, the next step is to build your team and develop the framework for effective "high performance"teamwork. Begin by clearly defining the respective roles of the different parts of your team. Be sure everyone understands not only his or her role but also the roles of other team members.

• Define your role as the client. How much and what are you delegating to NCC? How closely do you want to be involved on a day-to-day basis?
  
  
• Work with your NCC to define their role and scope of services.
  
  
• Define your NCC's role with local counsel. Will your NCC be responsible for hiring local counsel and supervising their work? Or is that partly or entirely your duty? Will NCC closely oversee the work-up and expert retention on the client's highest profile cases?
  
  
• Define NCC's role in individual cases. Be sure you and NCC have a common understanding of the process for developing or retaining experts. Determine NCC's role, if any, in settlement negotiations and in cases as they proceed to trial. Will you report to the carriers or is that NCC's or local counsel's duty?
  
  
• Meet with your NCC to assess the strengths and weaknesses of your team of local counsel and to define local counsel's role in the overall team. What role will local counsel play in developing and retaining case-specific experts? Are there certain types of experts that local counsel will be responsible for retaining and working with? Are there other highly-prized national "Five-Star"experts who are so valued and in such great demand that a single person from your NCC should serve as their exclusive point of contact?
  
  
• Define what role local counsel will play in providing periodic, pre-trial and other reports to you, your insurance carrier and to NCC. Define whether local counsel will be responsible for handling settlement negotiations, settlement conferences and mediations. Be sure local counsel understand what you expect from them as far as trial.

The Role of Communications

Effective communication is essential. The following communications guidelines will help you properly manage your mass tort litigation:

• Managing mass tort litigation is not a 9-to-5 job. You want as close to 24/7 responsiveness from your NCC as possible.
  
  
• Set up NCC Executive Committee conference calls that include you, your NCC and key carrier representatives. Do this on a periodic basis appropriate to the size, scope and pace of your litigation. These calls provide the opportunity for you, your carrier contacts and your NCC to discuss major issues and pending projects, identify problem cases well down the road and identify projects that need to be started in a timely fashion.
  
  
• Schedule face-to-face meetings. Do this quarterly or at least annually. These meetings provide an excellent opportunity to review NCC work product, present it to upper level management or the Board, examine budgets and accomplish more than can be done in NCC Executive Committee conference calls, which might last only an hour every few weeks.
  
  
• Communicate regularly with local counsel. More is needed than occasional phone calls, email and correspondence. One cost-effective vehicle for establishing the requisite level of communication is a secured extranet. With it, work product and developments can be regularly posted and updated and all individual case reporting can occur on a real-time basis as developments occur.

The Role of Technology

To effectively manage mass tort litigation, you need advanced technology. This could include a secured extranet system for instantaneous reporting, case management and indemnity and costs trends analysis. In addition, one should consider the benefits of a document management system that can manage electronic and digitized ancient (paper) documents in an online secured e-repository system. These repositories can house documents used for document productions as well as for trial exhibits. In addition, they can be set up so that local counsel can access trial exhibits by subject matter right in a hotel room or a courtroom. Though secured extranets and e-repositories can have some significant up-front costs, the savings of labor and communications related to these task are recovered in relatively short order (i.e., it takes very few productions on an annual basis to recapture the cost of an e-repository).

Note to Reader: The scope of this issue alone requires more detailed discussion than can be included here. For the complete text, go to http://www.wkgshare.com/NCC.pdf.

Run Your Litigation As You Run Your Business

• Insist that your mass tort litigation defense team be organized in the same way you organize your business operations.
  
  
• Create an organizational chart. Such a chart promotes "high performance"teamwork and a clear understanding of everyone's role on the team.
  
  
• Create departments, too. The defense of mass tort litigation can be broken down into a series of functions or departments. Having departments enables you to dedicate specialized expertise and resources to specific areas of the overall defense in a focused and coordinated manner. Departments also make it easier to develop accurate budgets. Let the size, scope and nature of your litigation dictate the number, size and function of departments.

An Effective Organizational Structure for Managing Mass Torts of Any Type

The department structure described below will enable even the largest mass tort litigation to be managed effectively. The structure may appear to be complicated. But many departments can be capably handled by a department chair assisted by a competent paralegal. Often the same lawyer can chair multiple departments.

Company History Department

The defense of mass tort litigation should not be limited to being on the defensive in managing evidence of liability. The jury must hear something more than what might be viewed as "excuses"or "positive spin"on adverse corporate documents. So the primary responsibility of the Company History Department is to collect and manage evidence that can be used to tell an accurate, well-balanced and appealing story of the history, accomplishments and societal role played by your company.

The department's responsibility also includes:

• Identifying, selecting and developing witnesses who can present the image of the company that you want portrayed to a jury and can convincingly tell the "company's story”
  
  
• Developing useful demonstrative aids for use at trial such as corporate history timelines
  
  
• Collecting appropriate company exhibits to be offered at trial and the authentication of evidence necessary to get them into evidence
  
  
• Preparing all discovery responses to ensure that they are accurate, consistent and support the historical story of the company
  
  

The importance of this department's role in humanizing a company to the jury cannot be overstated.

Product Use Department

It's common, especially in toxic tort litigation, for plaintiffs' counsel to overstate the use of and exposure to a company's products. Defense counsel can effectively minimize this overstatement by putting on evidence showing how the product fits into the trade, workplace or usage in question. The Product Use Department is responsible for developing this evidence.

Industrial Hygiene, Safety or Human Factors Department

Most contemporary mass tort litigation involves workplace exposures to various toxic substances. For products responsible for toxic exposures in the workplace, this department normally will be called the Industrial Hygiene Department. For products not involving toxic workplace exposures, this department might be called the Safety Department. When plaintiffs' claims focus on the failure or inadequacy of warnings, the department might be named the Human Factors Department.

Regardless of the name, this department will be responsible for developing evidence and witnesses that convincingly show the jury in a simple, understandable fashion:

• How the dose of exposure associated with your company's product can be estimated
  
  
• How that dose compares to doses of exposures from other sources
  
  
• How these doses compare to the historical knowledge of safe exposure levels over the exposure dates in question
  
  
• How and why alternative safety measures were not feasible or lessened some types of hazards while creating or increasing others

Science and Medicine Department

This department is responsible for identifying and developing the scientific experts needed to address issues relating to plaintiffs' diagnosis, general causation, specific causation and damage-reducing unrelated medical conditions. The department is also responsible for designing and producing effective and entertaining demonstrative exhibits that will help jurors comprehend the complexities of medical science, how causation is established epidemiologically and why plaintiffs' disease was not caused by your company's product.

Document Management Department

If large volumes of documents aren't managed well, the toll on the cost and effectiveness of the defense can be huge. Therefore in most mass tort litigation an electronic document management system is necessary. Whatever system is used, the Document Management Department is responsible for ensuring that it's implemented and maintained in a consistent, efficient and cost-effective manner.

Designated Hitters Department

Most mass tort litigation involves a relatively small core group of key plaintiffs' experts who testify in case after case and sustain the litigation's momentum. The best way to deal with these experts is to make a single lawyer responsible for a specific expert. This "designated hitter"lawyer can continually develop and refine the strategies, resources and testimony needed to effectively control the assigned expert. This approach is cost effective because the designated hitter needs only a minimum amount of time to prepare for the next deposition or trial cross-examination of the expert. The Designated Hitters Department manages the designated hitter assignments.

Special Projects Department

All mass tort litigation involves legal issues and procedures common across the country. This department's principal responsibility is to track and consistently manage these common legal issues and procedures to maximize their value to the defense effort.

Note to Reader: The scope of this issue alone requires more detailed discussion than can be included here. For the complete text, go to http://www.wkgshare.com/NCC.pdf.

Targeting and Monitoring Department

Some mass tort cases involve far more serious damage claims than others. By identifying the most problematic cases, you can dedicate your limited and best resources to cases where they will yield the greatest payoff. The Targeting and Monitoring Department is responsible for:

• Developing a case classification system and associated case handling guidelines (our firm has developed an A/B/C classification system that has proven effective in managing the largest mass tort litigation)
  
  
• Selecting cases to be targeted and more closely monitored
  
  
• Ensuring that for each such targeted case an assigned NCC attorney or paralegal monitor is working closely with local counsel to retain the best experts and otherwise marshal your best resources

Training Department

The Training Department is responsible for developing a comprehensive, user-friendly training program. Thanks to technology, training can be accomplished on an as-needed basis through confidential work product CDs or DVDs. In addition, where face-to-face training is require, web cast technologies can be used. These tools make training more effective and much less expensive than in the past, when it had to be done at periodic national or regional meetings.

Technology Systems Department

Technology can be a powerful weapon that results in substantial cost savings for the defense in mass tort litigation. Unfortunately, rarely does a mass tort defense take technology to the next level. That level involves developing a master database or customized secured extranet capable of managing all case-specific data of interest to lawyers, insurance representatives, accountants, auditors and others in a single database that can run diverse database searches and produce instant reports.

This technology can be expensive. But the money is well spent if your litigation involves hundreds/thousands of cases or potentially could grow that large or could last many years. Time and time again our firm, working with clients, carrier representatives and software developers, has demonstrated the value of a customized secured extranet in managing tens of thousands of claims on a real-time basis. With such a tool, case reporting is standardized and available to company and carrier representatives, local counsel and NCC on a secured 24/7 online access basis.

Trial Teams and Resources for Mass Torts

Unless you plan to settle at any cost to avoid trial, you'll need a team of top-notch, knowledgeable trial lawyers who have the background, knowledge and expertise to tackle what are often highly technical and sophisticated areas of science and medicine. And you may need a number of these legal specialists to cover multiple overlapping trials. Our experience is that we are best able to obtain favorable settlements for our clients because of the skill and depth of our national trial counsel special forces team that is always waiting to be deployed.

If you are going to use NCC to help manage your litigation, your NCC may be able to offer you experienced trial lawyers who have tried the same types of cases as yours. This staffing option assures you of always having trial resources available with the broadest knowledge and most direct access to the NCC extensive resources you have invested in building.

Note to Reader: The scope of this issue alone requires more detailed discussion than can be included here. For the complete text, go to http://www.wkgshare.com/NCC.pdf.

Developing Expert Witness Teams

Your litigation will almost certainly require an active role by medical and other expert witnesses. Where do you find them?

For starters, look within your company or industry for leads on highly qualified industry experts. After identifying these candidates, funnel them to your NCC, or better yet, to the Company History Department.

But these witnesses won't have the depth and breadth of knowledge and experience required to address every issue that can arise at trial, which is why you'll need outside experts and why it's important to develop solid working relationships with leading experts in different fields. If you show a sincere interest in and respect for their work, many of the foremost experts will be willing to devote some time to assist you, at least on a consulting basis.

For each leading expert, it is advisable to designate someone to handle most contacts with that expert. Busy experts are more likely to say yes to someone they've worked with many times before than to one of your local counsel with whom they've never met or talked. It is essential that you develop mutually respectful working relationships with those experts who can have the greatest influence on your success at trial. Having the best experts is as important as having the best lawyers.

Is It Worth It?

If your company is big enough and your mass tort litigation is small enough without potential for rapid expansion, you may be able to manage a defense internally. But if the litigation involves a large number of potential cases or is likely to last for a long time, managing it internally may not be feasible or prudent. In that case, you should seriously consider adding qualified NCC, who will work with you to develop a consistent, cost-effective and sustainable defense that deploys specialized skills and technology.

But can you afford NCC? In answering this question, ask yourself if your company is willing to run the risk of bad early results, which could exponentially increase the number of claims or the amounts demanded from your company in future cases? Or the risk of inconsistent company discovery responses that handcuff your defense in future cases? Or the risk that local counsel defense bills will be higher because each local counsel doesn't have sufficient support or resources and has to "figure it out"on their own?

The fact is, when your company faces mass tort litigation, its very existence may be threatened. To make sure the worst doesn't happen you need a centralized case management plan so that you can successfully defend the litigation. With that plan in place, your company's future will be brighter. And you will sleep better at night.

Ken Petty and Bob Manlowe have defended dozens of clients in mass tort litigation since 1979. At Williams, Kastner & Gibbs, they have developed a unique team approach and organizational structure for handling extremely challenging matters for companies with litigation and crisis management issues in many states and regions. Both Ken and Bob have engineering degrees and gained several years' industry experience prior to becoming lawyers. Their cutting-edge approach to medical and scientific litigation defenses and their creative and liberal use of technology have led to their appointment as National Coordinating Counsel for multiple clients handling tens of thousands of mass tort cases throughout the country.