Mass Tort Litigation has emerged as the only effective check on pharmaceutical and medical device companies that make dangerous products injuring thousands of Americans. Mass tort attorneys have filed 140,000 lawsuits in 250 federal multidistrict litigation dockets as of September 2016.
Many attorneys are expanding their personal injury practices to include mass torts because the US Judicial Panel on Multidistrict Litigation has organized the litigation so effectively against the multi-billion-dollar drug and medical device industry.
“The FDA is not a check or a balance on the pharmaceutical industry,” said Mass Tort Nexus Consultant John Ray, recently teaching a four-day course about mass torts in Fort Lauderdale, FL. “Plaintiff attorneys are the only check on the pharmaceutical industry.”
In recent years mass tort lawyers have recovered $10 billion in settlements for injured Americans: $4.8 billion for Vioxx, $1.8 billion for Yaz, $1.3 billion for the Stryker hip and $2.5 billion for the DePuy hip.
“The drug companies bake these cases into their business model,” Ray said. “Defendants call it a win when they don’t put a warning on their labels, don’t get sued and don’t have to pay a judgment at all. This means they got away with it. That happens a lot.”
When a federal MDL is created, the supervising judge will approve a standard short-form or long-form complaint, plus a plaintiffs’ fact sheet which replaces interrogatories. The consolidation of cases means that a mass tort lawyer can file a notice of appearance and file cases regardless of the jurisdiction of the plaintiff, defendant company or the location of the plaintiff’s attorney.
Criteria for a viable case
Cases that are attracting many mass tort attorneys now involve Xarelto, IVC filters and Pradaxa. Among the many factors determining the viability of a mass tort are:
- Preemption. Congress has expressly preempted certain claims. Further, courts have ruled that generic manufacturers cannot be sued.
- Statute of limitations: State laws govern when the statute of limitations starts to run, but in most federal litigation, the date that the FDA issues a “black box warning” for a drug marks the date when the time limit begins to run.
- Legal viability. In many cases, research will show a connection between a drug and injuries among patients, but specific causation must be proved in a trial. Experts must be found who will survive a Daubert motion to disqualify.
- Financial viability of the defendant. While Johnson & Johnson had $46.8 billion in annual income in 2015, some small makers of IVC filters went out of business before they could sell one.
- Average case value. The average Pradaxa case settled for $160,000 in 2014, with some settlements valued up to $500,000, according to a grid created by US District Judge David R. Herndon.
- Plaintiff numerosity. Cases in the Syngenta Corn Market Crash Litigation involve every corn producer in America, and IVC Filters have been implanted in millions of patients over the last 40 years.
- Cost per client acquired. Costs can add up with Facebook advertising, website marketing, and lead generation companies. For example, The Sentinal Group will advertise for clients for a fee of $100,000 to obtain 250 calls for Xarelto plaintiffs, with 1 out of 5 calls leading to a signed client.
- Case duration. Mass torts are litigation for the long haul, with the average case lasting 5 years and 4 months before settlement, according to Ray, with 7 years being a good benchmark for the duration of a case.
- Case value. An example of a good outcome is with Pradaxa. The average settlement is $162,000. Calculating 40% in gross contingent fees would equal $64,800. Another 7% is deducted ($4,536) for the common benefit to pay the steering committee. Of the remaining fee of $60,204, a 40% referral fee of $24,015 is deducted for the co-counsel that handled the litigation. This leaves a net fee of $36,189 for the attorney who originated the case.
- Financial resources. Costs to fund a case can be in the tens of thousands of dollars, with costs reaching hundreds of thousands for members of the plaintiffs steering committee.
- Personnel resources. A law firm will have to train a small army of intake specialists to answer incoming calls when advertising is running. Additional personnel will be needed to obtain and review medical records.
There are three phases of mass tort litigation, and perfect timing will be needed to enter a particular case.
Emerging Phase Cases. In this early phase, the cost to acquire a client is the least expensive, but there many issues of case viability. For example, the courts are still considering motions to consolidate cases involving Abilify and Roundup. With Abilify the FDA has issued a safety warning but not a black box warning. With Roundup the EPA has not classified the herbicide as a carcinogen, but foreign governments have.
Litigation Phase Cases. It is considered an ideal time to enter into a mass tort when the JPML has created a multi-litigation docket (MDL). Some 250 MDLs include mature litigation involving Benicar, Lipitor, Viagra, Xarelto and Zofran, and many legal issues have been settled. The supervising judge will schedule bellwether or test cases for trial.
Settlement Phase Cases. This is the very safest time to enter litigation because all an attorney must do is find qualified plaintiffs. Example cases involve transvaginal mesh, Levaquin and Pradaxa. However at this late phase the cost to acquire a client is at its highest.
“Whatever you do, maintain your single-event plaintiff’s practice,” Ray advised. “You will have to keep paying the costs of a mass tort case until it settles, and you will need a huge cash supply or credit line.”