This unchecked mass tort deal making has bulldozed legal process into a forum for mass settlements at the cost of legitimacy.
“Is ours a government of the people, by the people, for the people, or a kakistocracy rather, for the benefit of knaves at the cost of fools? — Thomas Love Peacock
Proceedings moving apace before Ohio U.S. District Judge Dan Polster bode the worst of all solutions to the opioid crisis – a swift global settlement modelled on the tobacco settlement of the 1990s. The result will inflict lasting damage on our constitutional order and do virtually nothing to solve the opioid crisis. Opioid abusers, just like smokers in the infamous tobacco settlement, stand to receive nothing. A single unelected federal judge will have feigned to have “solved” opioids, levied billions in unlegislated taxation, made drugs more costly and harder to secure for non-abusers while leading abusers to turn to heroin and fentanyl, and filled state and local coffers with revenue-by-judiciary while richly endowing trial lawyer barons – hand-picked by the judge – with billions in public funds. A swift education of the American public about this abuse of the judicial process is in order, not a swift settlement.
Judge Polster seeks not just a speedy global settlement of the 200 federal opioid lawsuits that have been transferred to his Ohio courtroom under the mantle of Multidistrict Litigation (“MDL”). Conceding that he lacks jurisdiction over some thousands of related state court cases, the judge has nonetheless invited state attorneys general who have brought such suits or are contemplating state suits, to join: “I can pick up the phone and call any state attorney general I want and invite him or them to be involved, and I’m sure they will,” the judge said in a later hearing. “My objective is to do something meaningful to abate this crisis and do it in 2018.”
The Least Likely Branch
Judge Polster is candid about his arrogation of power: “Ideally…solutions should come from federal and state government. But…. They haven’t seemed to have done a whole lot. So, it’s here.”
The aptly named Judge Polster (with one l), puts his finger to the wind, declaring, “I don’t think anyone in the country is interested in a whole lot of finger pointing at this point, and I’m not either,” his observation directed, ironically, to a courtroom of lawyers to whose clients he is about to assign blame.
We Don’t Need No Education
Summary judgment follows with the modest judge protesting too much: “In my humble opinion, everyone shares some of the responsibility, and no one has done enough to abate it.” Don’t bother the good jurist with pesky things like law or evidence: “We don’t need briefs and we don’t need trials…. None of those are going to solve what we’ve got.” Judge and jury have spoken.
On to the executioner. The judge’s settlement “involves the reduction of pills to those who abuse them, rather than just a monetary payment.” Just how a court is to administer this settlement is unspoken. Never mind that Congress has already spoken by heavily regulating the use and distribution of these drugs. Or that the judge has sworn an oath to follow the law and defend the powers of those coordinate branches of government. The judge rebukes these coordinate branches of government, displacing their powers with his own facile judgment. Oh, and keep your eye on that throwaway line “just a monetary payment.” That came to a quarter of a trillion dollars in the tobacco settlement, with $20 billion siphoned to the trial lawyers.
What we are witnessing is a prelude to an unlawful and corrupt diversion of public funds into state and local government treasuries and to lawyers. This judge’s predetermination of the merits of the case are the disturbing and predictable proof of what disgraced tobacco lawyer Dickie Scruggs once confessed – “it doesn’t matter what the evidence or the law is” – when setting forth the mechanics that made him a state-created billionaire.
Regulation by Litigation brings the wrong political actors to the table
That process, known as regulation by litigation, has three legs:
- Alliances with coalitions of government officials that sell their enforcement powers en masse to private lawyers in exchange for campaign contributions who are then awarded lucrative – and unlawful – contingency fee deals;
- Amassing of lawsuits at every level of government, state, local, municipal, county, tribal and foreign; and,
- Demonization of the targets through a concerted lobbying, public relations and media campaign that generates public hysteria and exerts crippling pressure on stock price.
The aim is not to go to trial on these legally unprecedented claims, but rather to overwhelm the targets with industry-busting costs, bad PR and depression of stock price.
Regulation by litigation brings the wrong political actors to the table. Unlike in legislative hearings, opioid abusers, medical, public health, taxpayers and government officials on the front line of this crisis are utterly unrepresented. Instead the political interests of ambitious state attorneys general and the monetary interests of their donors, the trial bar, will prevail.
A Pulitzer Gone to Waste?
In 2014, the New York Times published a Pulitzer prize-winning series of articles that laid bare the raw politics where lawyers create big paydays for themselves by approaching attorneys general with deals to pay for the costs of the investigation in return for a contingency fee, typically 20-30% of the state’s recovery:
While prospecting for contracts, the private lawyers have also donated tens of thousands of dollars to campaigns of individual attorneys general, as well as party-backed organizations that they run. The donations often come in large chunks just before or after the firms sign contracts to represent the state, campaign finance records and more than 240 contracts examined by the Times show.
When a state attorney general gives a private law firm a direct personal stake in the outcome to prosecute an industry, he violates due process. When he accepts private financing of a public prosecution, he has broken state fiscal laws. Shaking down an industry on legally dubious theories in concert with other states and government entities effectively imposes taxation on a disfavored industry, a power reserved to legislatures alone. Paying the private attorneys out of the state’s recovery flagrantly violates laws common to all states that constitutionally require all funds to be deposited into the treasury, to be expended only by lawful appropriation. That these deals are often preceded or followed by political donations from the favored firms to the state attorney general or other governmental official raises constitutional, statutory and ethical concerns that won the New York Times a Pulitzer Prize.
Using the opioid addict’s plight as a foil for these multi-billion-dollar wealth transfers, with complicit AGs breaking laws and ignoring constitutional requirements on the handling of public money to hurry these funds into the pockets of trial lawyers and to bail out insolvent states, is nothing short of scandalous. Jonathan Swift’s observation, “Falsehood flies, and truth comes limping after it, so that when men come to be undeceived, it is too late; the jest is over and the tale hath had its effect” all too aptly describes this unfolding travesty.
Joe Rice, one of the lawyers hand-selected by Judge Polster, states that he “shares” the judge’s feelings of urgency. Of course, these lawyers want these cases quickly settled. A cert petition now at the U.S. Supreme Court is challenging the legality of the contingency fee deals. And, as the Wall Street Journal shows, the plaintiffs are struggling with the merits of these unprecedented claims, repeatedly amending their complaints and seeing their causes of action dismissed. Only a quick, dirty settlement will shore up this unlawful kleptocracy masquerading as litigation to cure the opioid crisis. The thousands of suits now summoned before Judge Polster must be settled and speedily, before anyone has time or awareness to deconstruct the heist.
Massive Diversion of Lucre
MDL, more aptly named Massive Diversion of Lucre, has become a star chamber for industries haled into its embrace, where the merits of the lawsuit are taken out of the equation, the rules of civil procedure are suspended, and defendants bear grossly disproportionate costs of what inevitably becomes a victim compensation fund. The actual victims, just as in the tobacco settlement, get nothing. When governments are the plaintiffs, as here, a MDL settlement becomes an unlegislated tax on the product, and the billions in recovery swell government coffers without the state attorneys general paying any political price or subjecting themselves to accountability for such unlegislated taxation engineered by lawyers taking a 20-30% cut of the tax increase.
Under the non-reviewable – because it is a settlement – discretion of a single federal judge, multi-billion-dollar wealth transfers are steered to the plaintiffs’ bar and local governments without representation by the people paying for this largesse. Though Joe Rice “shares” the judge’s sense of urgency, what he is brazenly unwilling to share is how much public money he has taken.
Here an unelected judge with authority only to decide the case before him after permitting evidence and law as required by his oath, announces that he knows what the public wants, he knows what the answer should be, acting in open partnership with the plaintiff’s bar to engineer a rush to settlement.
Judge Janice Rogers Brown recently put her finger to the pulse of this problem:
Class counsel [is] eager to receive a big payday working to ensure a vastly-overinflated settlement to “remedy the evil”… [but] lost in the midst of their self-congratulation is the plight of the American People that pay for the outsize misadventure and class counsel’s fee feast…. This conduct proves how little the Constitution will matter when good character ceases to be informed by adherence to one’s oath of office, and is primarily defined by how generous you are willing to be with someone else’s money.”
In short, if such a global settlement ensues and follows the template of the tobacco settlement, the American public will have had foisted upon it a billion-dollar wealth transfer financed by all Americans. This unlegislated tax increase constitutes a judge-imposed hike to already stratospheric health care costs, and a scandalous transfer of billions of dollars in attorney’s fees doled out to the politically powerful trial bar by state attorneys general who are their prime recipients of pay-to-play campaign contributions.
These initiatives are not unstoppable. Their purveyors like to portray them as so – “too big to fail” was used to describe the tobacco Master Settlement Agreement. Public understanding, outrage, and swift judicial and legislative muscle is called for to stop this gravy train for the trial bar and state governments bloated by these raids on industry – and thus grown flaccid in exercising fiscal discipline at a time when steep health care costs are already adversely affecting the economy, productivity and the general welfare of those unknowingly taxed to finance these unlawful, unconstitutional and unethical deals.