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From Products Liability Law Daily, April 13, 2016

GM MDL judge chastises plaintiffs’ counsel for in-fighting

By Pamela C. Maloney, J.D.

The judge handling the multi-district litigation involving ignition switch defects in certain General Motors branded vehicles provided, as promised, a more detailed analysis of the issues raised and his April 10, 2016 decision to deny motions by plaintiffs' attorney Lance Cooper to remove the plaintiffs’ three co-lead attorneys and to set aside a settlement fund agreement reached between co-lead counsel and New GM. The motions had been filed after the first bellwether trial fell apart when it came to light that the plaintiff might have committed perjury and fraud. The instant decision also denied co-lead counsels’ motion for a protective order seeking to prohibit Cooper from contacting clients represented by co-lead counsel (In re General Motors LLC Ignition Switch Litigation, April 12, 2016, Furman, J.).

On January 25, Lance Cooper, the Georgia attorney who uncovered the defect in General Motors ignition switches that led to the recall of 30 million vehicles,asked the court to remove Robert Hilliard, Steve Berman, and Elizabeth Cabraser as co-lead counsel, alleging that they violated their fiduciary duty in selecting the Scheuer case to proceed as the first bellwether trial [see Products Liability Law Daily’s January 26, 2016 analysis]. Robert S. Scheuer voluntarily had dismissed with prejudice all claims against the automaker on January 22, 2016 [see Products Liability Law Daily’s January 22, 2016 analysis]. Two days after asking the court to remove co-lead counsel, Copper filed a motion to reconsider the order approving the establishment of the 2015 New GM ignition switch qualified settlement fund (QSF). On that same day, GM filed a motion for partial summary judgment. In his motion, Cooper again charged co-lead counsel Robert Hilliard with breach of fiduciary duty by failing to notify the Executive Committee for the MDL or any other MDL plaintiffs or their attorneys that he was engaged in settlement discussions that allegedly could limit GM’s financial exposure in the event a jury returned a substantial verdict against the automaker.

In denying both motions, Judge Furman ruled that they were patently untimely and, to the extent they sought reconsideration of past orders and decisions, the motions fell “far short of meeting” applicable standards. The plaintiffs provided little or no evidence to support their accusations of impropriety and underhandedness on the part of co-lead counsel, nor did they cite any legal authority for setting aside the settlement between New GM and co-lead counsel.

Removal motion. Timeliness: As an initial matter, the court noted that the Cooper plaintiffs’ motion for removal, be it a motion for reconsideration or otherwise, was filed well after the 14 day period prescribed by the court’s rules. Judge Furman added that even if the motions could be considered timely, they failed to meet the stringent standards for granting reconsideration. The Cooper plaintiffs pointed to no law of facts that were overlooked by the court in issuing any of the challenged orders. To the extent that the motions sought anything other than reconsideration, they were still untimely. All of the Cooper plaintiffs’ complaints related to orders entered by the court and actions taken by lead counsel long before they were raised. Judge Furman admonished Cooper, stating that despite being on notice of and having had ample opportunity to raise any concerns, “he sat on his hands, voicing concerns only after the high-profile collapse of the first bellwether trial.”

Basis for relief: Setting aside the issues of timeliness and the standards for reconsideration, Judge Furman found that the Cooper plaintiffs failed to demonstrate sufficient bases for the relief requested, i.e. removal of Hilliard, the only member of the co-lead counsel trio they were seeking to remove. First, they failed to cite any legal authority for their claim that Hilliard owed a fiduciary duty to all plaintiffs in the MDL. Second, there was no evidence, other than Cooper’s own statement, that lead counsel had failed to include Executive Committee members in discussions about important MDL issues. This allegation was contradicted by Federal/State Liaison Counsel Dawn Barrios, who attested that significant efforts had been made to coordinate discovery and information.

Bellwether selection: Third, and at the heart of the removal motion, allegations that lead counsel violated their presumed fiduciary duties by (1) not choosing the “best” cases to be bellwethers; (2) switching the order of the cases; and (3) failing to include any state cases in the bellwether selections all missed the mark and failed to justify disrupting the bellwether trial schedule that had been in place for months. Further, the Cooper plaintiffs failed to provide evidence of Hilliard’s self-dealing. Many of the parameters of the bellwether selection process were put in place by the court. Despite the circumstances that resulted in the dismissal of the first bellwether case, it was arguably as good as, if not better than, the Yingling case proposed by the Cooper plaintiffs and, in fact, appeared to have been more representative of the other MDL cases. In addition, it was not inappropriate for lead counsel to consider Hilliard’s involvement in a particular case in selecting the bellwethers, given his greater familiarity with discovery, with the court, and with opposing counsel. Further, although Hilliard could have handled the change in bellwether trial order more deftly, there was no evidence of self-dealing in making one of his cases the first bellwether. Finally, there was no authority to support the proposition that a case pending in state court could be tried as a bellwether case in a federal MDL and the federal court had not discouraged state courts from setting trial dates in ignition switch cases.

QSF motion. Judge Furman found no basis for the allegation that the Hilliard-New GM settlement harmed the other MDL plaintiffs This was not a case involving limited resources and New GM expressed its continued willingness to discuss settlement with all plaintiffs. There was no law or logic for the proposition that lead counsel could not settle their own cases or that lead counsel should be required to step down as lead counsel if they desire to settle some of their cases. There was also no basis for the allegation that Hilliard cut a secret deal with New GM. Although most terms of the settlement had not been made public in light of the court’s order to keep the terms under seal, the settlement was anything but secret. It was announced in a public letter and press release, and Hilliard notified the Executive Committee directly about the settlement.

More fundamentally, however, the Cooper plaintiffs offered no support for their argument that high/low agreements are improper. These agreements presumably guarantee some recovery to plaintiffs who enter into them and are particularly sensible in the MDL bellwether context because they minimize the risks to both sides of going to trial while increasing the probability that the chosen cases will actually go to trial and yield useful data for purposes of settling other cases in the MDL.

Protective order motion. Contending that Cooper had communicated directly or indirectly with three of his current clients, Hilliard asked the court to issue a protective ordering prohibiting Cooper or any other attorney in the MDL from communicating with his clients. Cooper admitted that either he or a member of his firm attempted to get in touch with one of Hilliard’s clients and spoke on the phone with someone who likely was one of Hilliard’s clients. However, he contended that he did not violate the New York Rules of Professional Conduct because he did not know those parties were represented by Hilliard and because he had not contacted anyone known to be a current client.

However, according to Judge Furman, Cooper did know the names of the parties and the time of the communications and that a quick search on PACER would have yielded the counsel’s identity. Thus, Cooper and his firm arguably violated the rules. However, neither incident seemed to have caused significant harm, and the communications came in the context of the motions discussed in this opinion. Because these motions have been decided and the scope of the professional conduct rule had been clarified, Judge Furman found there was no need for a protective order, trusting that Cooper and his firm would tread more carefully with communication with potentially represented parties.

The case is Nos. 14-MD-2543 (JMF) and 14-MC-2543 (JMF).

Attorneys: Elizabeth J. Cabraser (Lieff Cabraser Heimann & Bernstein, LLP) and Robert Hilliard (Hilliard Munoz Gonzales LLP) for GM Ignition Switch MDL Plaintiffs. Andrew Baker Bloomer (Kirkland & Ellis LLP) for GM Ignition Switch MDL Defendants.

Companies: General Motors LLC; Delphi Automotive PLC; DPH - DAS LLC

MainStory: TopStory ClassActLitigationNews LawFirmNews MotorVehiclesNews NewYorkNews

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