Anyone interested in what’s wrong with mass torts in today’s litigation landscape should read the recent article in the New York Times, “How Profiteers Lure Women Into Often-Unneeded Surgery,” which ran in the paper on April 14, 2018, and is available online here.  Briefly, the article exposes litigation (and pre-litigation) conduct that amounts, at best, to unnecessary surgery, and, at worst, to certain doctors, lawyers, and litigation funders conniving to bring about harmful surgeries that caused additional injury to their own supposed clients.  Here are some excerpts from the article – there’s lots more, but we have to limit ourselves to fair use:

• “[A] growing industry that makes money by coaxing women into having surgery − sometimes unnecessarily − so that they are more lucrative plaintiffs in lawsuits against medical device manufacturers.”
• “Lawyers building [vaginal mesh] cases . . . turn[ing] to marketing firms to drum up clients.”
• “Women with mesh implants . . . receiving torrents of unsolicited phone calls, some originating overseas” from telemarketers who “seemed to know their medical histories.”
• “[M]arketers turn[ing] to finance companies to provide high-interest loans to the [women] that have to be repaid only if the [women] receive money from the case.”
• “Those loans are then used to pay for surgery performed by doctors who are often lined up by the marketers.”
• Promises that “all [a woman’s] expenses would be covered and that she would be set up with a lawyer to help her sue the mesh manufacturer.”
• “[M]iddlemen” arranging for surgery in “walk-up clinics” in “shopping malls.”
• Doctors performing “four or five removals in a day” and pocketing as much as $14,000 a day.
• “The women generally didn’t meet the doctors who would be operating on them until shortly before the procedure.”
• Women charged $21,000 per surgery, “at a double-digit interest rate,” to be paid for from “lawsuits brought by women against the mesh manufacturers.”
• “[H]undreds, perhaps thousands, of women . . . sucked into this assembly-line-like system. . . .  The profits are immense.”
• “[P]laintiffs who do collect settlements see much of the money go to the financing firms.  Another large slice goes to their lawyers.”

Other than what’s obviously disturbing about reports of such dubious goings on, the Times article leads us to two observations:

First, the conduct described in the Times article provides further support, in the form of a compelling example, for the increasing calls for some sort of mandatory disclosure of litigation financing, at least in mass torts.  The abuses described in the article show how both the integrity of the mass tort litigation process, and the reputation of litigation financing generally, can be harmed by litigation solicitation and financing arrangements not being transparent, particularly where the litigation itself is largely solicitation-driven, as in most mass torts.

As the Times article demonstrates, solicitation, while constitutional under the First Amendment, is rife with potential for abuse.  Our colleagues on the other side might counter that so is pharmaceutical detailing.  Well, precisely to prevent abuse, the sales practices of our clients are regulated in multiple ways − including disclosure of financial arrangements between them and physicians that prescribe/use their products.  Those on the P-side with nothing to hide have nothing to fear from disclosure.  Thus, if litigation financing wants to be considered as legitimate as, say, insurance, that supports the case for routine disclosure of such arrangements in the same fashion as insurance, as Wisconsin recently decided to do:

Except as otherwise stipulated or ordered by the court, a party shall, without awaiting a discovery request, provide to the other parties any agreement under which any person, other than an attorney permitted to charge a contingent fee representing a party, has a right to receive compensation that is contingent on and sourced from any proceeds of the civil action, by settlement, judgment, or otherwise.

Wis. Eng. Asbly Bill 773 §12 (new §804.01 (2)).  Whatever the merits of the Wisconsin approach, or whether it’s necessary outside of the mass tort context, that approach has the advantage of being a simple, bright line standard.

Certainly, disclosure would be a sure and quick way to expose the kind of deals described in the Times article that women have been enticed into in the Vaginal Mesh litigation.  Existence of this kind of financing would be a red flag that the injury claims in such cases required careful investigation.

Which brings us to….

Second, the Times article strongly suggests that these abuses are widespread in the Vaginal Mesh MDL litigation.  Arrangements this elaborate are not worth the trouble for only a small number of cases.  According to the Times article, “perhaps thousands” of lawsuits have been tampered with in the ways that the article describes.

Without disclosure, the kind of aggravation of damages described in the Times article – ironically, the opposite of the accepted common-law duty to mitigate − is hard to unearth.  The Times article quotes “Magistrate Judge Cheryl Eifert in West Virginia”:

“People are claiming the Fifth [Amendment privilege against self-incrimination] and so on and so forth.  They don’t have to talk about necessarily how much money they make, per se, but if someone would just give them an idea of how the arrangement works.  But nobody’s willing to do that.”

Magistrate Judge Eifert has been overseeing aspects of the Vaginal Mesh MDLs.  E.g., In re American Medical Systems, Inc. Pelvic Repair Systems Products Liability Litigation, 946 F. Supp. 2d 512 (Mag. S.D.W. Va. 2013) (opinion by Eifert).

That’s concerning because, as we pointed out a couple of months ago, discovery in the remaining 23,000 cases in the Mesh MDLs has been ordered to be completed with:  (1) extreme haste, and (2) significant limitations on the number of interrogatories that can be propounded and witnesses deposed (see paragraph 2 of the four PTOs linked to in the prior post).  Since there may well be hundreds (if not more) of those 23,000 cases involving questionable surgeries conducted under questionable circumstances, the current rush to remand – combined with the obstructive tactics described in the Times article – creates a considerable risk of miscarriage of justice.  Defendants do not appear to have been given the time or the discovery tools needed to unearth plaintiff-side shenanigans on the scale described in the Times article.  There comes a point at which the efficiency objectives of multi-district litigation have to yield to the higher objectives of justice.

In the Diet Drug litigation – a mass tort of comparable scope – all kinds of problems arose with “the District Court [being] inundated with fraudulent benefits claims.”  In re Diet Drugs (Phentermine/Fenfluramine/Dexfenfluramine) Products Liability Litigation, 573 Fed. Appx. 184, 185 (3d Cir. 2014).  Unfortunately, the widespread fraud perpetrated in Diet Drug only became apparent after settlement – as would eventually be the case here, since contingent fee surgeries will almost surely be a topic of inquiry after the Times article.  The opportunity still exists in the Pelvic Mesh MDLs for diligent discovery to ferret out the false or inflated claims, but that can only happen if adequate discovery is permitted to occur.