Tuesday, May 19, 2015

78 settlements Approved as WTC Cleanup Litigation Winds Down

Judge Alvin K. Hellerstein - who has heroically overseen the post 9/11 litigation which Congress assigned to the Southern District of New York  - has approved as fair and reasonable 78 of the last personal injury cases brought by remediation workers.  The claims were against the owners of 100 buildings in lower Manhattan which the workers cleaned- often suffering serious respiratory injuries.
In his March 15, 2015 order and opinion the MDL judge affirmed his assertion of inherent power to oversee and approve mass tort litigation - even absent express authority in Rule or statute.  Such assertions have been criticized by my colleagues Howard Erichson and Benjamin Zipursky as a judicial overreach violating the inherently private nature of tort claims and the right to contract and settle.  Consent Versus Closure, 96 Cornell L. Rev. 265 (January, 2011)

I defended the judge's view - even cutting plaintiffs counsel's fees - as necessary.  The plaintiffs had no real ability to control their own fate - and therefore responsibility devolved to the judge in this matter of great public importance - paid for by public funds.

Judge Hellerstein explains:
 Courts confronted with mass tort cases have an obligation to ensure the fairness of settlements entered into by the parties. See In re World Trade Ctr. Disaster Site Litig., No. 21–mc–100, ECF No. 2091 (S.D.N.Y. June 23, 2010); In re Zyprexa Liability Litig., 424 F.Supp.2d 488, 491–92 (E.D.N.Y.2006). Because of multiple representations by counsel of differently situated plaintiffs, individual settlements can raise issues of conflicts of interest, as between plaintiffs' attorneys and the differently situated plaintiffs those attorneys represent. 
An aggregate settlement may be the result of arm's length negotiations, but the allocations to individuals tend to be directed by counsel without negotiations. Because the Court has inherent authority to supervise such attorneys, see In re World Trade Ctr. Disaster Site Litig., 754 F.3d 114, 125–26 (2d Cir.2014) (“[T]he courts have inherent authority to police the conduct of attorneys as officers of the court.”), it has the duty to ensure that the settlements among plaintiffs are fair. Accordingly, I ruled by Order dated July 25, 2014 that all settlements in this ...docket would be subject to review by this Court for fairness and reasonableness. See Order Regulating Settlement Procedures and Granting, in Part, Motion to Preserve Confidentiality of Settlements, No. 21–mc–102, ECF No. 5340, at 1–2 (S.D.N.Y. July 25, 2014).

In re World Trade Ctr. Lower Manhattan Disaster Site Litig., No. 21 MC 102 AKH, 2015 WL 1262283, at *3 (S.D.N.Y. Mar. 19, 2015)

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