Adam Zimmerman, Professor of Law, Loyola Law School, has published his new article “Bellwether Settlements” to SSRN. The abstract is below:
This article examines the use of bellwether mediation in mass litigation. Bellwether mediations are different from “bellwether trials,” a practice where parties choose a representative sample of cases for trial to decide how to resolve a much larger number of similar cases. In bellwether mediations, the parties instead rely on a representative sample of settlement outcomes overseen by judges and court-appointed mediators.
The hope behind bellwether mediation is that different settlement outcomes, not trials, will offer the parties crucial building blocks to forge a comprehensive global resolution. In so doing, the process attempts to:
- Yield important information about claims, remedies, and strategies that parties often would not share in preparation for a high-stakes trial.
- Avoid outlier or clustering verdicts that threaten a global resolution for all the claims.
- Build trust among counsel in ways that do not usually occur until much later in the litigation process.
The embrace of such “bellwether settlements” raises new questions about the roles of the judge and jury in mass litigation. What function do courts serve when large cases push judges outside their traditional roles as adjudicators of adverse claims, supervisors of controlled fact-finding, and interpreters of law?
This article argues that, as in other areas of aggregate litigation, courts can play a vital “information-forcing” role in bellwether settlement practice. Even in a system dominated by settlement, judges can help parties set ground rules, open lines of communication, and, in the process, make more reasoned trade-offs. In so doing, courts protect the procedural, substantive, and rule-of-law values that aggregate settlements may threaten.
Following is the introduction:
A curious thing happened in a Bergen County court in New Jersey. In a case involving thousands of people with defective hip implants, the parties reached a $1 billion global settlement in record time through an unprecedented series of “bellwether settlements.”
For years, courts have relied on “bellwether trials” to resolve large numbers of similar lawsuits. In a bellwether trial, the parties select a small group of cases for jury trial out of a larger pool of similar claims. Steering committees of plaintiff and defense lawyers then use information gleaned from those trials to resolve the remaining cases. Bellwether trials have been used in many high-profile cases—most famously in the Vioxx litigation— and, most recently, in General Motors’s litigation over its defective ignition switches. As multidistrict proceedings begin to take up a larger portion of the federal docket, the use of bellwether trials will only grow.
But instead of bellwether trials, the Bergen County court organized a system of bellwether mediations. In a bellwether mediations, no jury decides the merits or value of the case. Rather, the parties—supervised by the court—rely on a structured sample of mediated settlements involving representative plaintiffs. The different settlement outcomes, much like a series of bellwether trials, are intended to offer the parties crucial “building blocks” of information to globally resolve the remaining cases.
Judge Brian R. Martinotti, the New Jersey state court judge designated to handle the selected cases, was incredibly successful. Following forty representative mediations, the parties resolved more than 2,000 lawsuits in New Jersey state court and a similar number of pending lawsuits in a parallel federal multidistrict litigation in Minnesota—all in one fell swoop. In the end, over 95 percent of the potential plaintiffs accepted settlement offers based on the global agreement.
The court’s complete embrace of a bellwether settlement scheme raises new questions for juries and judges. What do bellwether settlements mean when the procedures and outcomes lack any connection with a jury trial? By dispensing with the jury entirely, the parties arguably give up procedures that are thought to (1) encourage vigorous advocacy before neutral fact-finders, (2) promote fidelity to law by ensuring that settlements correspond to the merits of the dispute, and (3) provide a democratic bulwark against unelected judges who may harbor biases about what makes for a fair outcome.
Zimmerman, Adam S., The Bellwether Settlement (March 15, 2017). Fordham Law Review, Vol. 85 (forthcoming 2017). Available at SSRN.