Mass Tort Secrets # 2 – Learn, Then Earn: Studying Your Opponent

Mass Tort Institute founder Terry Dunken has literally written the book on how to succeed as a mass tort attorney. Mass Tort Secrets provides end-to-end guidance for attorneys who want to build their own mass-tort practice, and for current mass tort practitioners who hope to become more artful businesspeople: better profits, not just better results. Dunken offers many pointers in Mass Tort Secrets. This article discusses one of them.

Part of the allure for attorneys and paralegals seeking to establish themselves within the mass tort industry is a chance to beat the bad guys, so to speak. Naturally, there also is the allure of realizing the significant profit margin of a slam-dunk case.

Yet, just like it took years for elite basketball players to master their own slam dunks, winning justice at scale and partaking in the windfall of a nine-or-ten-digit settlement is neither simple nor easy.

To succeed, you must study. A critical part of this is to “know your opponent,” as Mass Tort Institute founder Terry Dunken puts it in his book Mass Tort Secrets. No two corporate tortfeasors are alike.

“This is serious business. This is big stakes” writes Dunken in Mass Tort Secrets. “And deeply embedded within every one of these battles is the issue of mortality. If you look at it any other way, you may underestimate the defendants’ determination to block a fair settlement. Defendants’ perception of ‘fair’ is very different from yours. Each case is unique, so you should think about the moral underpinnings of every new litigation you consider pursuing.”

In other words, before you earn, you must learn.

Every Equation Has Variables           

The process of knowing your opponent effectively begins as you select your mass tort. We covered the basics of mass tort selection in the first article in this ongoing series.

Just before or just after you select, your research and reconnaissance efforts will speed up immediately.

Here are questions you must ask and have a confident sense of the answers for as you study the parties on the other side of the “v.”:

1. How much gold is there (or isn’t there) in the pot at the end of the rainbow?

This has become a trickier analysis in recent years. The growth of the use of multidistrict litigation (MDLs) and diversity-based class actions in federal court in recent years broadens the coverage further beyond alleged products liability, drug-induced injuries, and toxic torts (think of data breaches or systemic sexual abuse, for instance).

Even so, some elements hold true across the board:

• Remember, there are usually parent companies, not just subsidiaries. Which entities are actually being sued? Or can be sued? In an ideal world, plaintiffs’ attorneys can include all the related companies in the mass tort action. That’s why you’ll find both Johnson & Johnson and Janssen Pharmaceuticals as defendants in Risperdal-induced gynecomastia claims, which were settled late last year. However, as Dunken points out in his book, you may run into obstacles such as incorporation in a foreign country that shields one or the other from liability.     
• Who are the final arbiters of the decisions that proximately caused injuries? At minimum, you must identify the CEO. Otherwise, study as much publicly available information on other potential players (R&D heads, marketing executives, day-to-day C-level managers, and others) as you can prior to discovery.
• What’s the financial condition of the defendant? Public companies by law must file what is known as a 10-K report annually with the Securities and Exchange Commission. Here, you’ll find information on up-to-date listed assets, liabilities, net income, cash flow (or liquidity), leverage, future projections and recent spinoffs or sales of product divisions. That’s a good starting point. Also be sure to check whether a defendant has any recent history of bankruptcy filings. If possible, determine what levels of insurance exist; you may be able to ballpark this by studying the details of past litigation settlement activities. 
• Regarding bankruptcy, what’s the likelihood of a defendant using a related filing as sword rather than a shield to hold up or dilute the payment of settlement funds? While this has been a hot issue of late, Dunken explains in detail in Mass Tort Secrets that this is nothing new, offering a detailed history of Dow Corning’s exasperating bankruptcy action that affected widespread claims alleging breast-implant injuries. The larger the pool of claimants becomes, the more likely this factor may come into play. Dunken offers a mass tort truism that held true then, and now: “The bell has been rung, and no amount of damage control on the defendant’s part can un-ring it.”    

• How much gold does your firm have (or does not have) at the beginning of the rainbow?

A complex mass tort action may take years…and years…to fully play out. Determine whether your firm has the capital to fund:

• Client intake
• Screening via medical record review and plaintiff fact sheets/census forms
• Discovery, including depositions
• Bellwether trials, should you earn such an assignment
• Settlement negotiation and related expenses
• Your ever-accruing overhead

If the mass tort is not your firm’s first-ever selection, or if it’s your only active case, have you collected enough in fees settlement funds elsewhere to cover yourself and not literally go for broke? If the case is your first-ever mass tort, how confident are you in your initial war chest?

You do not want to find yourself running out of money or find yourself staring down an “insolvent” defendant. You certainly do not want to find your firm facing both possibilities concurrently. Crunch your own numbers wisely up front and as you go.

Related closely to this one:

• What is the defendant’s demonstrated willingness to settle past mass tort actions against it? What if there is no past history or precedent?

We covered this in our first Mass Tort Secrets article. There, we focused more on the top line value than on the mechanics or nuance involved.

Maybe a defendant has a few large settlements on its record, but how hard did it fight before then? Were they able to make a dent, or get an MDL outright dismissed, using certain defenses? Did they win enough bellwether trials to lower expectations? Did they drag out the process, or did they settle within a short time frame?  

All of this must be discerned and analyzed because the $3 billion settlement there might not equal the $3 billion settlement there. What if one was quick and clean and the other was a drawn-out brawl? (Johnson & Johnson is a big fan of the latter.)

Speaking of there, what if there is no there, there? Perhaps your defendant has neither made a large, complicated settlement before or the mass tort itself is unique enough to where you need to look elsewhere for precedent. Dunkin uses a wonderful example in his book: the disturbing mass shooting in 2017 at the Mandalay Bay Resort. Because the hotel had a tortious duty to provide reasonable assurance of safety, a cause of action for victims and their families existed. Parent company MGM Grand foresaw settlement possibilities that far outweighed the value of its insurance. This, plus a poorly received pre-emptive effort on their part to sue victims, led to a quick settlement.

While many would pray that such a case does not arise again, that one is probably rare enough to serve as an important precedent.

• What is the track record and reputation of the various opposing counsel that have represented or currently represent the defendant?       

Generally, in a mass tort case, you’ll interact with attorneys on the other side from the general counsel’s office, a prestigious or billable-hour-hungry outside law firm, and the insurance companies. You should also expect the involvement of vendors, whether in managed review, forensics, actuarial firms, and others.

Put them all together, and this can become pretty complicated, what with communication protocols, insurance layers, missed deadlines, billing disputes, and other possible snags.

Beyond that, you must understand the pecking order of the legal team and any individual tendencies. The combative hothead across from you in chambers might not be the leader setting the strategies. Conversely, maybe lead counsel does have a happy trigger finger, and may give you bait you can use.

Either way, assume all of these attorneys know what they’re doing. Make sure your own presentation style and preparation is top-notch. Leave as few holes left to poke as possible.   

For paralegals, consider how cooperative or cordial opposing firms are as you manage cases. You’ll likely make just as much if not more contact with that firm than your attorneys. What’s the word on their efficiency and cordiality—or lack thereof? This will help you set and reset reasonable expectations for clients. Your counterpart paralegals and associates handling settlement administration for the defendant will be your pipeline for information, including when to expect payment.

One way or another, always be sure to read the room and tailor strategies, approaches, and attitudes.

A Final Thought   

What we’ve laid out here takes as much art as it does science. You will work hard, and you will develop a better sense of where you stand as your selected mass tort winds along its path.

Dunken drops a final punchline in Mass Tort Secrets that may provide some comfort and confidence as you come to “know your opponent”: “Their definition of winning is the beguiling bit.” If you prepare and then can hang in there, endure a few lost battles, and maintain composure, then there’s a good chance your own win awaits you in the end. 

Ready to make the leap into mass tort practice? Let Mass Tort Secrets be your most authoritative how-to resource. Buy this important book today.     

About the Author

The Mass Tort Institute

The Mass Tort Institute is a consortium of industry leaders dedicated to providing education, training, and networking opportunities for those advocating on behalf of mass tort victims.