American Enterprise Institute

Monday, January 7, 2008

[Edited transcript from audio tapes]

11:45 a.m.	Registration and Lunch
12:00 p.m.	Panelists:	Andy Birchfield, Beasley Allen
		George Cohen, University of Virginia School of Law
		Ted Frank, AEI
		Mark Herrmann, Jones Day
		Richard Nagareda, Vanderbilt University Law School
	Moderator:	John E. Calfee, AEI
2:00 p.m.	Adjournment

Proceedings:

John E. Calfee:  Good afternoon and welcome to the American Enterprise Institute.  I’m Jack Calfee.  I’m an economist here at AEI.  We are here to talk about what will be known, and is already known, as the Vioxx Settlement.  Let me say just a brief word about why it is that this merits a conference.

Before I do that, a little bit about the logistics; we have five speakers today; we will go through them one by one, not in the same sequence as listed in the program, each will speak for 10 or 12 minutes.  There will be a little bit of discussion back and forth.  Then when they are done, we will go to the audience for questions and answers.  I would emphasize that it is a Q&A, that is, it is a chance for you to ask questions of the speakers; it is not an opportunity to make statements or to offer points of view or personal attacks, but it is a good chance, I think, to ask the kind of questions that sometimes do not get brought up and do not get answered in the ordinary discussion.

Vioxx is a pain reliever.  It is a little bit like popular drugs like Advil and Aleve.  It is a special kind of pain reliever known for technical reasons as a COX-2 inhibitor.  Vioxx and Celebrex were both introduced around 1998 and were quite popular for treating various pains, but, especially, the pain from rheumatoid arthritis.

In the fall of 2004, Merck, the manufacturer of Vioxx withdrew its drug from the market after it got the results of a clinical trial, which showed that when compared to patients taking a placebo, Vioxx users had an excess number of heart attacks and strokes.  There had been a bit of discussion about the possible cardiovascular safety problems of the COX-2 inhibitors and Vioxx in particular.  Before their drug was pulled from the market the discussion became very heated afterwards.  There had been some litigation before that event but the litigation escalated very rapidly in the fall of 2004 and continued to escalate for sometime afterwards.

There have been a handful of trials that have reached verdicts, often resulting in appeals.  In the meantime, as happens in situations where there are literally thousands or tens of thousands of lawsuits being brought against a single manufacturer over a single product, the litigation was organized by various judges and various courts, mainly federal courts.  And at some point, some of the judges involved in this strongly suggested to the litigants that they ought to talk about some way to resolve this litigation.  The result of that was the settlement we are discussing today, and the details will be, I’m sure, discussed quite a bit by the various speakers.
But, basically, the way it works is that if 85 percent or more of the plaintiffs by various criteria agree to join in this process, then Merck has agreed to provide a sum of money, roughly $4.85 billion, which would be administered by a special group or organization and would be allocated to plaintiffs and to some extent to plaintiff attorneys.  It is a fixed amount; it is $4.85 billion.  It cannot go up or down depending on what happens later on.  Those are the brief outlines of what is going on right now.

Let me give a brief introduction of each of our speakers as they come up.  Our first speaker is Mark Herrmann who is in the Chicago office of Jones Day.  Well, I just learned from Mark that he has only been there for a few months.  Before that he was in Cleveland, which is a historic home of Jones Day, which is one of the better-known law firms in the U.S.  Mark has defended multi-district litigation and hundreds of class actions filed throughout the federal system and in most state courts.  He is the author of two books, one of which, The Curmudgeon's Guide to Practicing Law, something which I plan to read as soon as I can, and more than 50 articles on various legal topics.  He also is the host of a widely attended blog, the Drug and Device Law Blog, which by some criteria is the most widely-read law blog on the planet at the moment.

Mark Herrmann:  Product Liability Law blog.

John E. Calfee:  Product Liability Law blog.
[Cross-talking]

John E. Calfee:  Let me be more precise there.  For products liability, which is what some of us pay a lot of attention to.  Mark also has taught Complex Litigation for a number of years as an adjunct professor at the Case Western Reserve University Law School.  So, Mark?

Mark Herrmann:  Thank you very much.  As the first speaker, I thought I would talk about two preliminary topics.  The first one is whether or not Merck’s litigation and settlement strategy made sense.  And then, sort of a follow up to that, which is whether or not Merck has, in fact, bought global peace.

The first question, did Merck’s litigation and settlement strategy makes sense?  You know, Merck, when the Vioxx litigation began, swore that it was going to defend every case to the ends of the earth; millions, or if necessary, billions for defense and not a penny for tribute.  And then three years later, they settled all of the cases.  My thesis is that that strategy - vowing to defend all of the cases to the end of the earth and then ultimately folding as though you were drawn into an inside straight - is logical, correct, and was, in fact, entirely predictable under these circumstances.

There are three features of the Vioxx litigation that made that litigation and settlement strategy entirely predictable.  First is a dramatic triggering event; if you have a dramatic triggering event such as, for Merck, withdrawing the product from the market on September 30, 2004 that definitively starts the statute of limitations running.  So you know that as of September 30, 2004, if you can just fight until the expiration of the last of the statute of limitations you have beaten your way through all of the lawsuits, a dramatic triggering event.

Second, you have to have, essentially, unlimited people who can sue you.  So here that was a combination of selling $2.5 billion worth of Vioxx every year, which means there are a lot of people out there who took the drug, and having a claimed injury that is ubiquitous - heart attacks and strokes - which a ton of people are going to have whether or not they are taking pain relievers.  So by sheer random chance an awful lot of people who take Vioxx are going to have heart attacks and strokes; you have an essentially unlimited number of people who can sue you.

Then third, no latency issue.  You have to have a product that, when you were exposed to it, hurts you, if at all, in a short period of time.  So the scientific evidence suggests that if Vioxx can hurt somebody, it hurts them either while they are taking the drug or within a very short period of time after they stop taking the drug.  There is no scientific evidence suggesting, for example, you could take a Vioxx pill in 2000 and suffer a heart attack as a result of having taken that pill in 2010.  There is no latency problem with Vioxx.

With those three pre-conditions - a dramatic triggering event, an unlimited number of plaintiffs, and no latency problems - there are only two possible litigation strategies.  The first is to swear that you are going to fight every case to the end of the earth and actually do it - fight until either the plaintiffs give up or every last case is tried and judgment is paid.  Or, alternatively, swear that you are going to fight until the ends of the earth and then settle the minute the statute of limitations expires.  Those are the only two approaches that you can reasonably take.  Why? 
Because if you announced early on that you are not going to fight each case to the death, it is the equivalent of chumming the waters; if you say, “Anybody who took our drug and had a stroke or a heart attack, filed a lawsuit, and we are not going to fight very hard and we will probably pay you a lot of money,” it is an open invitation to more people to sue you.  So the first words out of your mouth must be, whether you mean it or not, “We are going to fight to the ends of the earth in order to deter being hit with more opportunistic lawsuits.”

How long do you fight?  You fight until all of the lawsuits that can be filed have been filed.  You have to collect all of the lawsuits into one place, and after they are all collected then you have to buy global peace; get rid of all of them.  How do you know that all of the lawsuits that can be filed have been filed?  Because you had a dramatic triggering event - the statute of limitations started to run on September 30, 2004, the day you withdrew the product from the market.  So you know that in any state with a one year statute of limitations, people there cannot sue you after one year and a day, and so on for each of the statutes of limitations in each state across the country.

The typical statute of limitations in a state in the United States is about two years.  So many people thought that Merck would fight for two years and then settle after two years and a day or two years and a few weeks.  But if you can hold out longer, there are some variants.  Statutes of limitations for products liability claims run from one year at the short end to six years at the long end.  And if you can fight for three years, after three years you picked up the statute of limitations in 42 of the 50 states.  So if you have enough money to fight for three years and a day, you have collected all of the plaintiffs in 42 of the 50 states.  And then you can settle.
Did the litigation and settlement strategy that Merck used make sense?  It made sense, it was logical and, in fact, it was predictable from the start.  But that leads to the second question, which is does the settlement, in fact, buy global peace for Merck?  The issue there is what I call slippage.  The idea was to get all of the cases in one place and then settle essentially all of them.  The question is, having herded all of the cattle into the valley, when you are now trying to dispose of the valley how many of the cattle are going to get away before you solve the whole problem?

There were five major sources of slippage in the Vioxx settlement.  First, intentionally excluded claims, that is, Merck knew it negotiated, that it was only settling personal injury claims.  So any claim that does not allege personal injury like claims by insurance companies for reimbursement costs or claims by state attorneys-general have not been settled; those cattle are not in the valley.

Also, non-United States claims.  Even personal injury claims filed overseas are not settled.  There are, for example, about a thousand personal injury claims involving Vioxx that have been filed in Australia.  That is not peanuts and those cases are not settled, but Merck presumably knew what the litigation environment looks like in the United States versus overseas and decided that curing the United States headache was sufficient, but non-United States claimants are not resolved.  So number one is intentionally excluded claims.

The second category of slippage is bargained for slippage.  This settlement becomes effective only if 85 percent of certain defined categories of plaintiff are accepted.  So 85 percent acceptance makes the settlement work; that means even with 15 percent rejection, the settlement is still final.  If you are looking at 50,000 claimants, if the full 15 percent reject, that is 7500 claimants who are still suing you despite the settlement.  And an awful lot of companies would think that 7500 lawsuits is not a good day.  But Merck has obviously decided that that amount of slippage it can live with and, in fact, has built into the settlement a few other provisions to try to minimize the amount of opted-out slippage that is going to happen.  But there will be some and Merck knows there will be some.

The third kind of slippage is statute of limitations slippage, and I have subdivided this into two categories.  There is, first, sort of the non-tactical statute of limitations slippage; that is, Merck knows the statute of limitations ran in 42 states.  That means in eight states there is a statute of limitations more than three years.  So if you live, for example, in Maine or in North Dakota or Minnesota where the statute of limitations is six years, you are still entirely within your rights to sue Merck, and Merck knew that; it did not buy peace in the eight states where the statutes of limitations have not expired. 

But the second kind of statute of limitations slippage is the tactical statute of limitations slippage that is driven by forum-shopping.  Assume that you have a plaintiff who lives in California; ingested Vioxx in California; was injured, if at all, in California; was treated in California; and seems to all appearances to have been time-barred by the California one-year-statute-of-limitations, and the California plaintiff then chooses to sue Merck in Minnesota court.  If the Minnesota court applies the choice of law rules that, I think, frankly, make sense, California law applies to that claim and the plaintiff is time-barred. 

But if the Minnesota court permits forum-shopping to change the statute of limitations and applies Minnesota’s six-year statute of limitations, then the California plaintiff was not time-barred.  And if that argument works, nobody was time-barred because everybody from every state in the country can file the lawsuit in Minnesota and ask to apply the Minnesota six-year statute of limitations and evade what was the intent of the settlement.  I’m not saying that should happen; I’m not saying it is a position that I think courts should adopt.  I’m just saying, as a theoretical possibility, it is an opportunity for real slippage - forum-shopping statute of limitations slippage.

The fourth type of slippage is class action tolling slippage.  While a class action lawsuit is on file, the statute of limitations is generally tolled for all members of the class.  There were some personal injury classes filed relating to Vioxx, and so some plaintiffs will say, “Even though I am technically barred by the statute of limitations in my state, if you subtract out the period of time for which a class action was pending on my behalf, I am not yet time-barred and so can still sue.”  So you will see some class action tolling.

Then, last, but not least, what I call latency slippage.  I said about 10 minutes ago that there is no scientific evidence that you can take a Vioxx pill in 2000 and suffer a heart attack as a result of having ingested the pill in 2000 in 2010.  Of course, despite the fact that there is no scientific evidence suggesting that, there are surely expert witnesses who would testify that you could take a pill in 2000 and suffer a heart attack in 2010.  And then since those witnesses will exist, what Merck is counting on is courts enforcing the laws against allowing junk science in the courtroom because if even one judge decides that that testimony that a 10-year latency period is sufficient to take a case to trial, then Merck can be hit with claims for latent injuries, even though all of the science suggest that those claims should not exist.

So ultimately, I reached two conclusions.  First, Merck’s settlement strategy was absolutely logical; it was correct.  In fact in many ways it was predictable from the start.  But, second, whether or not the settlement will ultimately be viewed as a success or a failure depends on the amount of slippage that we see; how far Merck actually strayed from its goal of buying global peace.

John E. Calfee:  Well, thank you, Mark.  That was very useful.  Our next speaker is George Cohen, who is not a songwriter as far as I know.

 George Cohen:  Not to my knowledge, either.

 John E. Calfee:  He is the Brokaw Professor of Corporate Law at the University of Virginia Law School.  He has also taught at the University of Pittsburgh for a number of years and at the University of Virginia since 1992.  The areas in which he teaches and researches are in Professional Responsibility, Contracts, Agency and Partnership.  He is the co-author of the widely used case book, The Law and Ethics of Lawyering, and another book called the Foundations of the Law and Ethics of Lawyering.  He has served as an expert in number of legal matters.  I strongly suspect that Professor Cohen will discuss the legal aspects of the Vioxx settlement.  George?

George Cohen:  I’m going to talk about, as I said in the title here, some ethical and legal issues concerning the Vioxx settlement issues that I think raise some very troubling questions, at least, with respect to certain parts of the so-called “settlement.”  And you will notice that I put the word “settlement” in quotes because this is not really a settlement at all.  What it is -- as the document that was agreed to says, it is a proposal; it is a program for a proposed settlement which becomes a settlement when 85 percent of the plaintiffs sign on to it.

 But let me start with what the program is.  These are all direct quotes from the settlement document, what is called the “settlement agreement.”  In this recital at the beginning of the document we are told that a group called the NPC, standing for Negotiating Plaintiffs’ Counsel, and Merck has reached this agreement to establish what is called a structured private settlement program to resolve the pending claims, as we were told, for a substantial sum of almost $5 billion.

Now, the first thing to note about this is that this is not a class action; this is a proposal to settle a large number of individually filed lawsuits.  That has important implications because class actions have a law or a bunch of rules governing them.  Whether and how effectively those rules are enforced is another question.  But there are a variety of certain procedural protections; there is an entitlement to have a settlement approved by a court, which does not exist for this settlement; there are protections for opting out; there are guarantees of adequate representation by class counsel.  None of those things is present here and that is an important thing to keep in mind because it raises questions, first, of what exactly is the role of the negotiating lawyers in this case who have signed on to this agreement?  In what capacity had they signed this agreement? 

They are not class counsel.  Are they representing the plaintiffs?  Are they lawyers for the plaintiffs?  Are they trustees?  What exactly is their role in signing this document?  What are they trading, in the contract jargon?  And that is an important question.  If you read the document carefully, as I tried to, there is not one word about what the obligations of these lawyers are to anyone.  So that is an important consideration, I would think, for anyone who is thinking about signing up their clients to participate in this settlement and that is an issue that, I think, needs to be discussed.

Okay, so that is recital A.  The next thing, again, is just to say that when you do get settlement is when you have people signing in to this program, claimants who are represented by their own counsel; many of these counsels have hundreds, thousands of clients individually.  So, essentially, this is an offer to settle.  So it is an offer that becomes a binding contract once you settle, once you agree, once you enroll -- submit an enrollment form to the company and then 85 percent of the people turn out to have signed it.  All right, so that is the way the mechanism works with respect to the settlement and so the disagreement itself is not a settlement; it is just a proposal. 

Now, there is another important recital at the beginning of the document that I want to put up here.  It actually is so important, I think, to the document that it gets repeated in a later section almost verbatim, but I’m putting this one up here.  It is important to read this carefully because it has very important implications, I think, for what this settlement is trying to do.  It says, “A key objective of the program is that with respect to any counsel with an interest in the claims of any enrolled program claimant, all other eligible claimants in which such counsel has an interest shall be enrolled” - and I have italicized them myself – “shall be enrolled in the program.”

 Now, the way a settlement or any other contract usually works is that you make an offer to someone, and if the person to whom the offer is made likes the terms, they accept it; if they do not like it, they do not accept it.  That is what voluntary agreements are all about, and settlements are contracts just like any other settlement.  This provision does not say that that is what is going to happen here.  In other words, it does not say, “We are going to offer terms -- we, Merck, are going to offer terms and if 85 percent of the people like these terms, there is a deal.”  What is says is if lawyers enroll their clients in this deal - any one of their clients - then the other clients who those lawyers represent shall be enrolled. 

Now, that is not entirely clear what that means; it is made clear later on as we will get to in a second.  But I think if you read it fairly the only possible meaning of it is that this is designed to coerce people into a settlement that they do not want to be in because if that was not the case, if you were only interested in enrolling people who wanted to sign up for the settlement, you would not need this provision in there; you would just make the proposal and if 85 percent of the people or whatever signed up for it, then you have a deal.  If not, you would not have a deal.

 So what could this possibly mean?  Well, we are told what this means in a little bit, and the key provision that implements this goal is found at the very beginning of the document in a section called 1.2.8, which has a number of parts to it that did not all fit on one slide, so I am breaking it up into several slides, and I’m going to talk about them in pieces.  But the first part of the slide says, or the first part of this clause in 1.2.8 basically says that, “Nothing in this agreement is intended to operate as a ‘restriction’ on the right of any claimant’s counsel to practice law within the meaning of Rule 5.6 of the ABA Ethics Rules.”  And I’m going to talk about 5.6 in a little bit, but that is a statement.

 Now, it is important to note that regardless of any statement of that sort, you cannot make an agreement that, of course, you are going to violate law; you cannot have an agreement that says, “We do not intend to steal anything but we are going to implement a settlement that involves stealing.”  That is not enforceable; it is not allowable.  So the mere fact that you say you do not intend to violate the law does not do you any good if, in fact, the settlement does violate the law or, in this case, the Ethics Rules.  And in my view there is a problem with both under this provision, which I will get to. 

All right, so that is the introduction.  The next part -- there are then three different things that Section 1.2.8 does.  So here is Point One, the first part, which basically says that if you want, as a lawyer, to participate in this settlement on behalf of your clients, you do so by submitting an Enrollment Form.  And if you do that, you affirm that you have recommended or will recommend to 100 percent of the eligible claimants - the clients that you recommend, represented by you, the enrolling Counsel - you become an Enrolling Counsel when you submit the first form that such eligible claimants enroll in the program.  So basically, this is an “in for a penny, in for a pound” provision; if you put anyone of your clients in this program, you have to recommend it to all of them, all right?  So that is the first thing that is required under Section 1.2.8.  This in itself, I believe, is a problem under the Ethics Rules, which I will get to in a second.  But I just wanted to at least show you what the language looks like.

 The second part of 1.2.8 -- again, I have broken this up into two different slides and, again, we have this language at the beginning that says that what we are about to require the lawyers to do, we intend to be consistent with the Ethics Rules and to the extent permitted by these Ethics Rules, including the formally cited 5.6, which as I said we will get to, and Rule 1.16, which has to do with withdrawal.  Lawyers have to do certain things and the main thing that the lawyers have to do is to withdraw if any of their clients, having had the settlement recommended to them, decide that they do not want to do it.  The lawyer must withdraw from representing -- continuing to represent that client.  So if the client wants to file an individual lawsuit against Merck they cannot be represented by any lawyer who participates at all with respect to any of their clients in this program.

 Now, before I move on to talk about the withdrawal provision, I just want to highlight one thing that has not gotten, really, much attention.  And that is the fact that the withdrawal requirement does not simply apply to clients who decline to participate in the settlement, but it also says, “Or for any other reasons,” you will see at the beginning, “fails or has fail to submit a non-deficient and non-defective Enrollment Form.”  Now, if you read that literally, what that means is that if a client, for example, negligently omits something that is required to be a part of this Enrollment Form, the lawyer is required, as we will see in the next section, to withdraw from continuing to represent them, all right? 

So it is not just if a client does not want to participate in the settlements; if they mess up even accidentally, even unintentionally, the lawyer is required to withdraw.  And here is where the withdrawal requirement is stated in 1.2.8 sub-section 2:  If the client withdraws or if they submit a defective form for any reason, the lawyer is required to take all necessary steps to disengage and withdraw from the representation of such eligible claimant and forego any interest in such eligible claimant, and then not only do that but, also, in subsection 2, “cause each other enrolling counsel and each other counsel with an interest in an enrolled claimant, which has an interest in such eligible claimant to do the same.” 

Now, that is also a very interesting provision.  What does that mean?  What does it mean that you are supposed to cause other people to uphold their obligations?  That is not spelled out, but it basically sounds to me like a conspiracy, which I believe it is; you are being asked to essentially enforce this provision with other plaintiff’s lawyers.

 So that is Section 2.  Then Section 3 of 1.8 says, “Each enrolling counsel, by submitting an enrollment form, agrees to abide by Section 1.2.8.2 in relation to any eligible claimant in which such enrolling counsel is another enrolling counsel, referenced in Clause Two of said Section 1.2.8.2.”  Now, what does that mean?  Well, that seems to mean, as I read it - I could be corrected - but it seems to mean that if you are an enrolling counsel and some other enrolling counsel’s client rejects the settlement, you cannot represent them either.  So if the other lawyer withdraws from representing them, you are not allowed to take them on as a client, either.  That is what that seems to say.

 Okay.  Now, how is this going to be implemented?  Well, we already saw one way in which it is implemented; it is implemented by other lawyers coercing or enticing or somehow getting your fellow plaintiff’s lawyers to agree and uphold these provisions.  But that is not the only way; we are also told that in Section 1.2.9 Merck can ask someone called the chief administrator to determine whether or not an enrolling counsel has failed to comply with any of these requirements, namely the recommending requirement and the withdrawal requirement, the two key ones.  And the chief administrator’s decision shall be final, binding and non-appealable.

 Now, the chief administrator who is named in this settlement happens to be one of the judges before whom these cases are pending.  He is named as the chief administrator and I believe that Merck has touted this feature of the settlement as judicial oversight.  Now, this is not judicial oversight; what this is is a judge who is moonlighting, and in a private capacity, to serve as an administrator, an administrator who possibly could be compensated.  We are not told -- there is supposed to be some kind of separate agreement dealing with administrators and how they are dealt with.  But who can also be fired at any time by Merck and a majority of the NPC, presumably, if the chief administrator does not do what Merck and the NPC lawyers want that person to do. 

So this is not judicial oversight in my view in any meaningful sense of the term, and I think the settlement also raises troubling issues for the judge, should he decide to participate in this settlement.  We are also not told how exactly these determinations are supposed to be made.  What kind of evidence is going to be considered?  Are you going to be talking to the lawyers, talking to the clients?  And if you are going to be talking to them, you are going to be asking questions like, “Well, what did you tell your client?”  Well, that sounds like something that in ordinary procedure would be a problem under the attorney-client privilege.  Is the attorney-client privilege going to be honored in these things?  Or is the evidence going to come from hearsay?  Are there any procedures at all that have to be followed?  We are not told anywhere in the document about that.

 Okay.  But that is what is supposed to be one of the enforcement mechanisms, and if the chief administrator finds that this is done, then what can Merck do?  Well, Merck is allowed to reject -- if it turns out that a lawyer has not complied, has not recommended to 100 percent or has not withdrawn from a rejecting client, Merck is allowed in its sole and absolute discretion to reject any or all enrollment forms submitted by an enrolling counsel in relation to any or all of the program claimants covered thereby. 

Now, what that means is that if a lawyer continues, let us say, to represent a client who has rejected the settlement, despite having agreed, otherwise, in this provision, Merck is allowed to deny the claims of all of those clients who have enrolled in the program, if it so chooses; all of them.  Any or all, we are told.  Merck is allowed to reject all of those claims.  Now, so that is visiting the sins of the lawyer on the innocent claimants.  Okay, so that is an enforcement.
 Now, there is one other enforcement mechanism I will just mention briefly, and that is for certain lawyers in this program, if they violate this rule, Merck is allowed to walk away from the deal entirely if they are found to have violated this rule.  There are certain named lawyers in this Section; I do not have time to go into that right now. 

Well, let me just mention briefly, because I know the time is short, what some of these Ethics Rules that are a problem for this settlement and then I will leave it to the others to defend these things.

 One rule that has been mentioned in some recent filings by some of the claimants’ lawyers in these cases is a rule called Model Rule 2.1, which basically says that, “in representing a client, a lawyer is required to exercise independent judgment and render candid advice.”  And the argument is - and I think it is a perfectly plausible one - that if you are being told, if you want to recommend this settlement to anyone of your clients, you must recommend it to all of them.  That is interfering with your ability to render candid and independent advice; unless, it turns out that you somehow look at all your clients’ claims and say to yourself, “Well, I can, in fact, in good conscience and according to my ethical obligations recommend this to all my clients.  And so I will do so.”  If that is truly the case, then it is fine. 

But if it is not the case or if, perhaps, you do not know whether it is the case until, let us say, you talk to your clients or investigate it more, well, it could turn out that one of your clients could say, “Well, actually, I do not like this deal anymore.”  And then you are stuck because then, if you want to enroll any one of your clients in this deal, you then have to withdraw from representing these other people.  So the temptation will be, I fear, that lawyers will want to recommend this to people even when they do not really think it is necessarily in their best interests.  And if they do that, that will be a problem under 2.1.

 Secondly, this is Model Rule 1.2A:  “A lawyer is required to abide by a client’s decision whether to settle,” which means that if a client decides the client does not like the settlement, a lawyer is supposed to abide by it.  Now, what does that mean?  Well, it is not entirely clear; it could just mean a lawyer is not allowed to go and settle the case unilaterally without the client’s consent.  But most interpretations of this say it is not limited to that.  It also includes things like if you try to, let us say, write a fee agreement that changes the fee, whether or not the client accepts the settlement or not, that is putting a thumb on the scale; you cannot do that, either.  That, also, is a violation of the client’s absolute right to decide whether or not to settle the case.
 Well, what about withdrawal?  Well, you are allowed to withdraw in certain kinds of cases.  This is Model Rule 1.6, which allows withdrawal in situations where it can be accomplished without material adverse effect on the interest of the client.  Well, is that going to be the case here if the client is essentially fired by the lawyer and all of the good lawyers are already in this settlement?  And so basically, if you want to go and find someone else to represent you, you may be able to do that but it will not be a person who has the experience, the know-how and the ability to sort of get the case going right away.  So that is a potential problem as well.
 Then, finally, to 5.6, which is the one that is mentioned in the Rule 1.2.8.  5.6 basically says you are not allowed, as a lawyer, to participate in offering or making an agreement in which a restriction on the lawyer’s right to practice is part of the settlement of the controversy.  That includes agreeing not to represent someone as part of a settlement; that is, this provision that says if your clients do not want to be in the settlement, you cannot continue to represent them.  That seems to be a pretty clear violation of Rule 5.6.

And I know I’m over my time, so I will stop here.  I have other things I could say but I will say one other thing about these problems.  They are not just ethical problems; they are legal problems as well.  In my view, in particular, this provision 1.2.8 that basically, in my view, tries to get lawyers to enforce among each other this provision that they will not represent people who do not agree to this settlement is a very serious potential anti-trust violation because what this is is a concerted refusal to deal with people who do not agree with your program.  And that is something that the Supreme Court has found to be per se illegal. 

And not only per se illegal but per se illegal as applied to lawyers right here in D.C. several years ago in a case called Superior Trial Lawyers where a bunch of lawyers for very good reasons tried to essentially strike on behalf of higher wages because they were not able to successfully represent their clients.  The Supreme Court said, “It does not matter.  It is a per se violation of the anti-trust laws.”  This is a completely private agreement.  There is no government involved at all, so there are no exceptions that apply to state action or petitioning the government.  So, in my view this is not only an unethical provision; it is illegal as well.
John E. Calfee:  Well, thank you.  George, since you may end up being the only significant dissenter on this panel on this settlement, I do have a couple of things I want to ask, but I’m going to wait until everyone else is done.  But the obvious question is whether you think there is any way it is ethical and legal to achieve roughly the goals of this settlement?  But we will get to that later on.  Another question that naturally arises is whether or not litigation on this scale can even be handled in more or less ordinary ways or whether it is an activity that is so large, so complex and so momentous that you really need a different set of rules for the game, which brings us to Richard Nagareda, our next speaker.

Richard holds the Tarkington Chair in Teaching Excellence and is the director of the Cecil D. Branstetter Litigation and Dispute Resolution Program at Vanderbilt University Law School.  He teaches courses on evidence and complex litigation and researches the impact of class action lawsuits on the pursuit of legal rights.  He has previously taught at the University of Georgia Law School and is a visitor at the University of Texas School of Law.  He was previously with the Justice Department and most notably at the moment, he is the author of a new book entitled Mass Torts in a World of Settlement, which seems like a relevant topic today.  Richard?

Richard Nagareda:  Thanks a lot, Jack and thank you, Ted, also, for inviting me to this very timely panel.  What I would like to talk about today is what the Vioxx deal tells us about the settlement of mass tort claims today.  I think we can start from a basic descriptive observation, and that is that there is not a lot of disagreement about one starting point here.  The point of agreement is this, and that is that the endgame of mass tort litigation is to bring about a particular kind of substitution.  The idea is to substitute some sort of compensation grid for ongoing litigation in a tort system.  The idea is basically to create and enforce what is a kind of miniaturized version of workers’ compensation, that is, an arrangement that moves claims out of the tort system and into some sort of private, administrative compensation scheme.
Now, recognition here that settlement is basically the endgame does not mean that trials are irrelevant.  I think Mark Herrmann’s comments underscore that; certainly, trials are still highly significant in the mass tort world.  A big part of the Vioxx litigation, I think, consists of not only the trial strategy that Merck general counsel, now Vice-President, Ken Frazier executed along the lines that Mark described; another part of the story that is related to that is the control that was exercised by a number of key judges before whom large numbers of Vioxx cases were pending, control over the timing and the nature of trials such that trials were actually used as a method for more accurate pricing of the grid.  That, I think, is a largely positive development of this litigation.

So there is not a lot of disagreement here about the notion of having some sort of compensation grid as the endgame, having settlement as a denouement of the litigation, if you will.  The hard question is this, and that is how do you actually enforce the peace?  That is, what gives this grid the authority to replace the preexisting rights of action that people have in the tort system, replace it with some other set of rights spelled out in the settlement agreement?  And here I think it makes sense to see the Vioxx deal from a somewhat larger institutional perspective. 
There is basically a menu, an array of ways that real lawyers in the real world have sought to enforce a compensation grid.  And the basic menu - I put it up in a somewhat simplified form - but the basic menu ranges from private contracts on the left-hand side of the continuum all the way over to public legislation on the right-hand side.  The most common sort of contracting, George, quite rightly in his remarks, mentioned the notion of contract.  The most ordinary sort of contract would be an ordinary individual settlement agreement.

By contrast, if you look over to the extreme right, there is the possibility, I suppose, of public legislation as a way of resolving a given area of mass tort litigation; as we all know, that turns out to be exceedingly rare.  There are things like the 9/11 Compensation Fund Legislation, which has somewhat of a mass tort balance.  But, again, a full scale of public legislation is quite rare and, probably, rightly so, or at least understandably so.  So where are we in the law today?  The contested terrain turns out to be the terrain in the middle, and it is contested precisely because it involves a curious uncharted mixture of both public and private dimensions.  So what does this tell us about the Vioxx deal and how this fits into the larger world of mass litigation today? 

I would offer a couple of points on that score.  First is, as George, again, rightly pointed out, this is a contract but it is an unusual form of contract though not exactly an unprecedented form of contract.  It is not a contract like a conventional individual settlement; it does not actually settle any individual claim; it is not even a contract between Merck and any actual Vioxx plaintiff.  It is contract between Merck and lawyers with a large market share of Vioxx claims, if you will. 

Now, I said this is not unprecedented because it turns out there was something much like this that was used in the late 1990s in the asbestos litigation, in something that became known as the Owens Corning National Settlement Program, or the Owens Corning NSP.  And well, there are certainly some differences, the Owens Corning NSP had the same basic structural feature that is the focal point of much of the controversy here; that is, the deal took the form of contracts between Owens Corning and the major firms in the asbestos plaintiff’s bar that obliged those firms to recommend - that is the language - to recommend to their clients to resolve their claims through what was basically a privatized grid administered by Owens Corning.

Well, why is this sort of contract rearing its head again in the world of mass tort litigation?  Why, as referred earlier, why no class action, for example?  Well, the reason is this:  This is not the product of lawyers cleverly looking for some loophole by which to skirt the law; it is the position in which the law itself has placed lawyers and responsible companies today.  The biggest reason why we are in this position today has to do with the Supreme Court’s 1997 decision in a case called Amchem Products v. Windsor.

Amchem Products made it exceedingly difficult - not actually impossible, but exceedingly difficult - to settle mass litigation involving claims based on state law through the middle method of class settlement.  That is why we see two basic moves being made in mass tort litigation; that is, moves to proximate nearby vehicles as a way of making peace.  So in the asbestos litigation, for example, the major development after the Amchem case was the gravitation over to bankruptcy proceedings under Section 524G of the bankruptcy code.  That is in the asbestos context.  The Vioxx litigation is an example of a move in, really, the opposite direction toward the other extreme of contract.  It is to use a form of private contract that attempts to use the very concentration of representation in the Vioxx litigation as the glue to hold the settlement together.

Now, think about it this way:  These settlements, as Mark and Jack have pointed out, are multi-billion-dollar business transactions.  Who in their right mind would, say, let us construct a legal system in which the first order oversight with these sorts of deals is either an Article 1 judge if you are willing to put the company into bankruptcy, or, at least, no formalized judicial oversight along the lines that George described?  Oh, but if you want to actually tee this up in front of an ordinary Article 3 judge, that is a no-no.  You cannot do that. 

Second point -- and that has to do with what I call the inevitability of aggregate representation and what it says about the direction that the law should proceed in in the future.  There have been considerable ethical and other controversies about this Vioxx deal, and I certainly would leave the specifics of that to people like George, who know a whole lot more about legal ethics than I do.  But let me, again, try to situate this in a larger context.  The central thrust of the ethical critique, as I understand, rests on individualized notions of lawyer loyalty, the notion that each individual client is entitled to a lawyer of her very own that is loyal to her alone and that is rendering advice that is tailored to that client’s own best individual interest. 

There is a long and distinguished tradition to this notion; it did not come out of nowhere.  It is deeply ingrained in our civil justice system today.  There is just one problem:  The nature of representation in mass litigation, particularly in mass torts is increasingly bypassing these individualized notions of loyalty.  What I mean by that is even if there is not any formal sort of aggregation, even if there were no such thing as class actions, representation in these areas is aggregate by its nature because of the underlying similarity of claims.  What a claimant gets - indeed, what a claimant ought to get - is not a lawyer that is loyal to her alone but, rather, a lawyer who is positioned to market that person’s claim for settlement along with large numbers of other claims that are similar in some regards and dissimilar, at least, to a degree. 
Marketing claims on an aggregate basis even if there is no formal class action is what adds value to the claims.  And it is also, for defense side folks, what enables the defendant to seriously contemplate the prospect of reaching a genuine peace.

Now, for those folks who are versed in 20th century European history, I daresay that there is a kind of precedent of sorts for the position that we find ourselves and that is this:  Speaking of individualized notions of lawyer loyalty is sort of like the mindset of the French military around about 1940, okay?  The French generals hunkered down in a series of reinforced bunkers along the German border called the Maginot Line.  Meanwhile, the new world of warfare literally blitzed past them. 

What we need, I think, in the world of mass litigation is what I would call an enlightened law of settlement, a body of law that sees the various mechanisms that I put up in my earlier slide, not as these kind of hermetically sealed categories, but is much more contiguous, much more overlapping in nature where representation in this area and others, for that matter, is inherently aggregate in nature.  The right move, I think, for the law is to make that aggregate nature more transparent, and to subject it to sensible limitations.  But the important point is that sensible limitations do not choke off the creativity that is needed to make peace a real value-generating transaction for everyone involved.

Now, there is a point coming in the future that actually crystallizes the sort of debate that I’m talking about and that is in May of this year is going to be the first of a series of votes on portions of the American Law Institute’s Proposed Principles of Aggregate Litigation.  That document covers a number of different topics but one of them is an effort to take a first cut at a kind of law of settlement.  Now, a number of people in this room are involved in this project, as am I.  I would hope that we can certainly have a full discussion of that document in the appropriate setting.  But I hope we could all agree on one thing, and that is that the law needs to deal much more explicitly with mass production in a mass society.  We can get rid of class actions but we will not in the foreseeable future get rid of the problem of making peace for mass claims.  So a big part of the project for the law in the 21st century is to grapple with that reality in a sensible way.

John E. Calfee:  Thank you, Richard.  My amateurish understanding of the Amchem decision is it that that was one occasion in which the Supreme Court begged Congress to pass a law that would permit class action settlements because, as I recall, the Court said, “This is a great settlement.  It just happens to be illegal.”  Is that what is finally people are working towards now, 10 years later?

Richard Nagareda:  Well, I think, you know, we are 10 years after Amchem and, as in so many other areas of law, 10 years does give people a certain sense of perspective, and there is a great deal of controversy over Amchem.  But as we see the places where the law is gravitating to now, I think the conclusion by a lot of people - certainly, not everyone - is are we really better off in a world in which plaintiffs’ lawyers and in-house lawyers for a company say, “Look, our choice is either put the company into bankruptcy or sort of test the outer limits, at the very least, of these laws of legal ethics or perhaps, anti-trust laws in these largely uncharted areas.”  That is a deeply unsatisfying and unstable menu of choices.  And so whether we label it as class settlement, what the law is sort of struggling for is a way of injecting some appropriate level of oversight to these sorts of arrangements while, I think, quite rightly, leaving a great deal of latitude for creativity and savvy and value creation on the part of private lawyers.
George Cohen:  And it is worth noting that there is a game of chicken going on here with the plaintiffs’ side hoping that they can bring these cases -- if the cases can be settled, then they will be brought.  If they can be settled, they will be brought, so a lot of defendants, sort of, wish the cases could not be settled, thinking if they were unsettleable, the plaintiff’s bar would go away, and people on the plaintiffs’ side want them to be capable of being settled because it keeps the money in the game.  So getting something like this through Congress becomes extremely difficult because people on both sides, they do a funny dance when their knees jerk in both directions at the same time.

John E. Calfee:  Well, then, perhaps, we should hear from someone on the plaintiff side.  As far as I know, there is only one person on this panel that has been directly connected with the Vioxx litigation, and that is Andy Birchfield, who is a partner at Beasley Allen, where he manages the mass torts work at that office.  Andy has also spoken widely on mass torts, various aspects of it in seminars for public consumption, newspapers, et cetera, on a number of radio and TV appearances.  He is someone who has been active and thinking about and talking a lot about what we now call, or some of us call, mass torts.

Andy is also the co-lead counsel of the Plaintiffs’ Steering Committee, the infamous or notable PSC that has sometimes been mentioned in this discussion, the Plaintiff Steering Committee for the federal Vioxx litigation, and has been the lead or co–lead counsel in five of the Vioxx trials.  He is a member of the American Association for Justice, et cetera, et cetera.  Andy?

Andy Birchfield:  Thank you, Jack.  This afternoon I want to talk to you about the Vioxx litigation and the settlement process, the course of negotiation, and put this in context.  Through the comments so far, you have heard some hot-button terms; you have heard conspiracy and design to coerce and junk science.  And I want to put these in proper context.  I think that as I do this, as we look at actually what took place in regards to the Vioxx litigation and the settlement process, the negotiation process, and we see that the Vioxx litigation, including the settlement, is a model; it is an example of how our judicial system works and works well.  The Vioxx litigation worked well for Merck and the Vioxx litigation and the settlement has worked well for the plaintiffs. 

Mr. Herrmann mentioned, you know, that if there is a settlement available then lawsuits will be brought.  I think that it is very critical that we step back and not put this in esoteric terms but look at what is at the core of this litigation.  That is that you had individuals who suffered a very serious injury as a result of taking a pharmaceutical drug.

Now, the litigation as it played out over five years showed the strengths and the weaknesses for both sides.  That is what led us to a place where we could reach a compromise that worked well for both sides.  You know, when Vioxx was pulled off the market in September of 2004, there was a tremendous amount of attention drawn to the safety issues regarding Vioxx.  At that time and in the months following you had plaintiffs’ lawyers speaking out, talking about individuals that were hurt; you had defense lawyers speaking out, saying, “It is junk science.”  In fact, one of the members of this table wrote a piece describing the science from the plaintiffs’ stand point as junk science and it was cited as authority by another member here at the table.
But, you know, now after the course of the litigation we have seen that is not the case; I mean, the science supports that Vioxx actually causes heart attacks and strokes.  You know, the American Heart Association has demonstrated that; the FDA had an advisory committee that voted 32 to 0 that Vioxx significantly increases the risk.  From the science standpoint, it was not a situation where plaintiffs were putting forward junk science.

Now, we tried a number of cases; there were actually 17 cases that went to trial.  And Merck won the majority of those cases, won about 2/3 of the cases.  Plaintiffs won 1/3; defense won 2/3.  So we see through the course of this, the strengths and the weaknesses of each side.  I mean from the plaintiff’s standpoint we felt that one of our strengths was the science and the medicine was on our side and the liability documents were on our side.  One of the major challenges that we had was the specific causation; there are multiple causes for heart attacks.  All of us in this room have had a friend or a relative that has suffered a heart attack.  It occurs whether someone is on Vioxx or not and so that makes it challenging; it does not negate the fact that Vioxx causes heart attacks but it makes it challenging. 

And so through the course of this litigation, through being informed by jury trials and the results of jury trials and going through the evidence that is contested by advocates on both sides, we were able to assess what are the strengths and the weaknesses of both sides and what needs to be the next step. Now, when Vioxx was pulled off the market in September of 2004 when it was voluntarily withdrawn by Merck, there had been litigation ongoing for about three years.  Our firm filed a case in 2001; a handful of other firms had been litigating for a number of years.  But once it was withdrawn from the market there was an avalanche of lawsuits, you know, that were filed.

And the litigation was consolidated on the federal level, to the federal judge, Eldon Fallon in eastern district of Louisiana, New Orleans.  And there was ongoing litigation coordinated in New Jersey and there was coordinated litigation in Texas and in California.  And at that time, once Judge Fallon was assigned the multidistrict litigation, when all of the cases that were filed or removed to federal court were transferred to New Orleans and they were all consolidated in Judge Fallon’s court, he appointed a plaintiff steering committee and it was 12 members and I was named as co-lead of that plaintiff steering committee. 

And he charged us with the responsibility of marshalling the evidence on the plaintiff side and he met with the plaintiffs’ leadership and he met with the defense leadership, the defense lawyers and he said, “Here is what we are going to do.  We are going to try a number of cases, a number of representative cases - four cases, maybe six cases - and then after we have learned lessons from those representative cases we are going to meet back around this table and we are going to discuss, is there interest in finding resolution, if so, we will find a way to resolve this litigation.” 

“If there is not interest in finding resolution, then my job is done; we will have gathered the evidence; we will have put it in a form that can be used by courts and lawyers across the country.  My job will be done and I will send these cases back to the courts in which they were filed.”  And Judge Fallon -- the litigation was formed in the spring of 2005 -- and in July or August, he set the actual first trial date for November; very quick timetable.  And if you remember, Katrina hit.  Katrina hit New Orleans but Judge Fallon was not deterred; he pressed forward with his trial schedule.  We moved the court to Houston and we tried the case.  And he kept that timetable. 

We ended up trying six cases in the federal court in New Orleans and at that time that the last jury returned the verdict, or the jury returned the verdict in that last MDL trial, Judge Fallon had convened the parties; he had convened the leadership from both sides.  A representative from Merck was there; their lawyers were there; the plaintiffs’ lawyers were there and Judge Higbee from New Jersey.  There was cooperation across the federal state line and the judges had cooperated and they convened the parties and they said, “We think we should pursue resolution.”  The parties agreed. 

And the judges instructed us that this must remain very confidential for obvious reasons.  We know if word got out there would be no way that you could fashion a reasonable resolution.  So we began that process, and from the very first day we met Merck said, “Our primary objective must be that there is no second round.  There cannot be a second round.”  We looked at litigation, mass tort litigation in the past and we have seen how that can be disastrous for a company.  So Merck says there cannot be a second round.  We must - as Richard and George talked about - we must have global peace, and Mark was talking about the slippage. 
Merck insisted objective number one is there must be global peace; there can be no round two.  So that means that lawyers on the plaintiff side cannot be in a position where they are presented with an offer and we can say, “Okay, well, I will take it for these clients but I’m going to hold these clients out because I like the jurisdiction that I’m in in this case; I like the particular facts of this case; I think this case will be better presented to a jury.  These are my weaker cases.  I will settle those; I will hold out my better ones.”  That does not work for a company.  And so Merck says, “We cannot have that.”  The plaintiffs then said, “Our primary objective must be that it must be a settlement program, a settlement offer that actually serves the best interest of each and every individual client.” 

That means that it must work.  It must be a settlement that is in the best interest of a 42-year-old with relatively few risk factors and several children who suffers fatal heart attack; it must be in the best interest of an 88-year-old who suffers a heart attack and is out of the hospital in three days.  It must cover the spectrum and it must work in the best interest of each and every individual from one end of the spectrum to the other.  And so for 11 months we negotiated an agreement that we believe met that criteria.  It was a settlement agreement that would be in the best interest of each and every individual client.  It also protected Merck’s primary objective; that is, it is a situation where lawyers are not in a position to put their weaker cases in and keep their stronger cases out. 

Now, in looking at the master settlement agreement - and I think this is a very important note - you will not find a mass tort settlement that is more transparent than the Vioxx settlement.  At the time of the Vioxx settlement, the time that it was announced - the agreement was signed at 4:15 in the morning on November 9th, Kent knows well - it was announced in open court in New Orleans at 9 a.m. that morning.  The settlement agreement was available to lawyers; it is available to plaintiffs; it is on a website; it is accessible to anyone.  The terms of the settlement agreement are there.  It is a settlement agreement that provides for objective criteria and a plaintiff can go to the settlement agreement and can calculate how they will fare under the settlement agreement.  The most transparent settlement agreement in mass tort history; I’m confident of that. 

So now, you look at the settlement agreement, the document, and you could say, “Well, how do we approach this?”  There could be circumstances where a lawyer is coerced into putting all of his clients into the deal, or a lawyer could be facing financial incentive to negate his duty to his client to exercise independent judgment.  That is not the way the settlement was designed; in fact, the plaintiffs’ negotiating committee and Merck’s negotiating counsel -- we presumed that a lawyer will honor his duty, his fiduciary duty, to his client to exercise independent judgment, and he will do that regardless of whether there is financial pressure or not.  Those are circumstances that lawyers face every day, whether they are settling a mass tort litigation of the magnitude of Vioxx, or they are settling car wreck case with three passengers in the car. 
Lawyers face circumstance where they must make a decision about rendering independent advice that may run counter to their financial interest; it happens every day.  We presume that lawyers would honor that. 

Here is the way the settlement is designed.  We negotiated it to be in the best interest of each and every individual client; it is a settlement offer.  The mass tort settlement agreement is an offer and it is presented to plaintiffs and plaintiffs’ lawyers with currently filed or tolled cases.  So a lawyer is then to take a look at that settlement agreement and apply it, apply the terms of that agreement to each and every individual client. 

It is not a panel where you do not know how a client is going to be treated.  It is a settlement protocol that takes into account individual factors of each client.  You look at the age of the client, the plaintiff at the time of the injury; you look at the degree of the injury; you look at the risk factors that came into play.  These are all factors that were guided and developed by careful analysis of the science and the medical literature, and what we have learned through the course of litigation, what we were informed by juries -- you know, what really matters in this litigation.  So as a lawyer you can take that settlement agreement and go one by one through your clients and you make a determination.  Is this in the best interest of this client?  Yes or no?  If you do that and we are confident if you do that and this objective criteria that you will have, and the client knows, then you will reach a conclusion, one by one, it is in the best interest of each and individual client.  If you do that, the settlement is available to you; the settlement offer is for you. 

If you go through that process and you make the determination that it is not in the best interest of one or more of your clients then the settlement offer is not for you.  It is that simple.  That is the way the settlement process is designed.  And then Prof. Cohen talked about the obligation to withdraw and the role of Judge Fallon.  Let me explain how that works, and it is in the document; it is a transaction document.  It is difficult to read and it is understandable how someone could go through and get the wrong impression about how this settlement actually works. 

But here are the circumstances:  Okay, you have got a lawyer who goes through and recommends to each of his clients, so he participates.  But you have got one client that says, “Hey, the first Vioxx verdict was a $250 million-verdict; I want $250 million.”  What is a lawyer to do?  That is not reasonable.  The law and the rules of professional conduct do not require a lawyer to continue in representation in those circumstances.  A lawyer can then seek to withdraw from representation; that is a decision that is made by the judge that is handling the case.  So the lawyer would file a motion to withdraw; the judge says, “Yes, under these circumstances it is appropriate for you to withdraw.  I’m granting you a motion to withdraw.”  Fine. 

But then there are circumstances where it would really not be in the best interest of the lawyer to withdraw.  Let’s say that a lawyer recommends the settlement agreement to a client; the client says, “Yes, I think it is in my best interest.”  But the client is in bankruptcy, and so you must get the bankruptcy trustee to approve the settlement; it may take some time.  Or there may be an intervening debt and so a personal representative must be appointed so there may be a time lag between the time you should enroll that client and the settlement agreement comes into place.  Those are concerns that we have from the plaintiffs’ standpoint. 

So there were clearly circumstances where a lawyer should be able to put clients in even though they could not sign the enrollment plan on a timely basis.  And that was something we want to guard against from a plaintiff’s perspective but Merck, on the other hand, wanted to guard against lawyers gaming the system.  Merck would not want a circumstance where a lawyer with a wink and a nod says, “I think you should recommend -- I think you should accept this settlement but you are in a premier venue and if you do not accept it that is okay.”  Merck wanted to make sure that a lawyer was not gaming the system, holding out a handful of cases in premier venues that would be in their best interest.  And so we needed a mechanism that would guard against both circumstances.  How do you create a protocol that will allow a lawyer to pursue the case  when he should - like in bankruptcy or a state needs to be opened - but yet prevent him from just cherry-picking or holding out his best cases?  And that is what you have in the settlement agreement. 

There is a mechanism where if Merck believes that a lawyer -- a lawyer is not required to go in and withdraw if a client is trying to participate in the settlement or if there would be an ethical reason why the lawyer could not or should not seek to withdraw.  And the lawyer provides the reasoning there.  If Merck looks at that reasoning and says, “I do not think you are operating in good faith, Mr. Lawyer.”  Then Merck can take that lawyer to the chief administrator, which is Judge Fallon, and say, “Here is why we believe this lawyer is not operating in good faith.”  If Judge Fallon then determines that the lawyer is trying to game the system, then that lawyer is out.  That is the mechanism. 

And then one last provision that Prof. Cohen raised, and that is the conspiracy, and it is not really conspiracy.  We are not talking about lawyers have to go out and coerce all other lawyers.  But in the Vioxx litigation, lawyers represent a significant number of clients; many do.  And there are what is called referral arrangements, or co-counsel arrangements, where lawyers have joined together, have reached an agreement where they will work together to represent clients.  And they will take on different aspects of the case.  Well, there cannot be a situation where I, as primary litigator, say I will recommend it to my clients.  But my co-counsel, he is not going to recommend it.  So that is the purpose there. 

When we say it is an agreement where you and the lawyers with an interest, it is talking about lawyers with a financial interest with their co-counsel and referral arrangements.  When you look at this settlement agreement in the context of how the litigation played out and how the negotiations played out, you will see that this is a settlement agreement that protects the best interest of the clients and it protected the best interest of Merck.  You have heard them -- Prof. Nagareda discussed -- look bankruptcy is not a viable option.  There must be a way that we can resolve mass tort litigation that works to protect the injured victims and the company.  And we found that solution with the Vioxx litigation.  Thank you.

 John E. Calfee:  Thank you, Andy.  I turn now to my colleague Ted Frank.  Ted is the director of one of the newer components of the AEI organization, the Legal Center for the Public Interest.  And Ted for quite for a while was also a practicing lawyer; as you can see from his short bio he was a litigator for roughly 10 years, 1995 to 2005.  In the meantime he has done quite a bit of writing and research for law reviews, Wall Street Journal, Washington Post, et cetera.  And he has paid a lot of attention to the Vioxx litigation; he is now working on a book on the topic and we are pleased to have him here.  Ted?

 Ted Frank:  Thank you, Jack and I’ll start with a disclosure.  When I was in private practice in 2005 for several weeks, in the first third of the year, I did work on some of the aspects of the Vioxx litigation, mostly in the pre-trial stage.  And because of that I should add a disclaimer: I do not speak for Merck or its attorneys and they do not speak for me. 

Today I am going to sort of talk about the law and economics of the litigation that led to the settlement and the settlement itself.  And it is late in the day; it is sort of the dry topic and I am after a charming speaker like Andy Birchfield, so I thought I would start with a humorous anecdote. Since we are talking about drugs today, I thought the humorous anecdote should be drug-related, so it is going to be about baseball.  And baseball pitcher, Yankee pitcher, Roger Clemens -- and if you saw 60 Minutes last night, you saw Roger Clemens talking about his Vioxx usage, and I thought I would take a look.  How did the Vioxx withdrawal affect Roger Clemens?  And you can see that while Vioxx was on the market, Roger Clemens was winning 17 games a year but afterwards he dropped to about half that amount.  And one might conclude from that that the Vioxx withdrawal caused Roger Clemens to become a much less effective pitcher. 

“Now, wait a minute,” you might say.  You might be a little bit skeptical about that.  There are probably other factors there, right?  He was old and old people are more likely to have a decline in pitching performance and he might have had other health problems that caused the decline of pitching performance.  So maybe you cannot just say that one came before the other, that one caused the other.  And I would say, “Yeah, you know something?  You are absolutely right there.”  The fact that B follows A does not mean that A caused B, and in fact the Romans way back when had a very clever name for it; they called the “post hoc ergo proctor hoc.” 
And what is very interesting about the Vioxx litigation has been very much under-reported is how much of the plaintiffs’ specific causation evidence was based on this fallacy recognized thousands of years ago that just because something comes after another thing does not mean that the first thing caused the other thing.  Now, Andy Birchfield and some of you might say, “Well, you are just a tort reformer complaining about junk science and that ignores things.”  But this is not just me; this is Judge Fallon.  In an opinion he wrote in the MDL in November 18th a couple of years ago, where he writes that the plaintiffs’ expert reports are wholly conclusory rather than explanatory; Dr. Baldwin’s testimony reveals his lack of understanding of the subject - and Fallon’s conclusion?  He will let him testify.

 Now if we are holding this discussion in the Greek agora, Cephalus raises his hand and says, “But, Socrates, isn’t there a Daubert opinion out there that says experts are not allowed to have this sort of testimony out there?”  And I would say, “You know something?  You are absolutely correct.  There are not.”  And the Fifth Circuit said that; the Supreme Court said that; the Texas Supreme Court has said that.  And where the plaintiffs have won in the federal court and in the Texas courts, those cases are going to be reversed.  I cannot promise you that with 100 percent certainty, but I’m very confident that you are going to see reversals there. 

And if you look at the economics of the settlement you are talking $4.85 billion with 61,000 claims; we have heard some smaller numbers here but there are 27,000 cases with 46,000 in plaintiffs and then another 15,000 tolling agreements and the tolling agreement is where a plaintiff agrees with Merck: “I will not sue you now and you will not hold the statute limitations against me, but I reserve my right to sue you later.”  And, in fact, these tolling agreements are permitted to participate in a settlement - it was Judge Fallon’s way of getting around the Supreme Court case called American Pipe - far too arcane to get into now.  But if you look at the trial lawyers’ business model with the trial in the box, they publicly stated that it would cost them $50,000 to try a case.  So if the average case is worth just $300,000, the trial lawyers are going to make a huge profit trying these cases.  There were four jury verdicts under this judgment, all of them multimillion dollar cases.  Even after they were capped to account for Texas law on punitive damages, we are talking an average of $24 million per plaintiff’s verdict for the four cases that went to judgment.  Now, of $24 million per plaintiff verdict, you have a settlement of $4.85 billion for 50,000 to 60,000 cases; that is less than $100,000 a case or less than a penny on the dollar. 

If the plaintiffs actually believe that these cases are worth $24 million a pop, why is that?  What is happening there?  Why would they agree to so little if these are such terrible cases and Merck did such a terrible thing and there is so much smoking-gun evidence against them that they can prove these cases?  And if you actually look at the trial record and what is out there, we hear that there are 15 cases but there are really 32 cases scheduled for trial in that 2005 to 2007 range and 14 of them plaintiffs withdrew from trial calendar on the eve of the trial, within a week or so of trial.  This is a really extraordinary event when that happens.  That does not happen.  You do not dismiss a case with prejudice flimsily.  You have briefed the case already; you have done all the work.  And now it is just a matter of going in front of the jury and arguing and putting the witnesses on and letting them decide. 

And instead of doing that, you say, “We are going to take zero; we are going to walk away and take zero.”  I count that as a Merck victory.  You might differ on that; you might have another excuse for why that happened.  But when you have a case scheduled for trial and you decide not to bring it, it is because you are so worried about the results that you do not want the bad publicity from them.  Out of the other 18, Merck won 10; the plaintiffs won five.  There are two mistrials that are still pending, one that Merck won that was struck because of some shenanigans they pulled and it is going to be retried. 

Going back to the baseball metaphor, you look at that 5-for- 29 record; that is a .172 batting average.  And, again, with the baseball metaphor, that is below the Mendoza line.  And that does not even include those future reversals that I talked about in Texas and in the federal courts and, possibly, even then in New Jersey.  Why not look at that a little bit more?  But why would the trial bar agree to so little?  Now there are two possibilities.  They are settling for under a penny on the dollar, so either you have the best trial lawyers in the nation who have made billions of dollars from asbestos, from tobacco.  But this time, they are going to give Merck a pass and leave tens of billions of dollars on the table so that they can get a quick payday instead of going for the gusto.  Or this is the best settlement they could get because the cases were worthless and it is essentially a nuisance settlement for under $100,000 a case in their inventory. 

Now, Andy Birchfield is a nice guy, but I do not think that he lacks the killer instinct and would leave that much money on the table.  And even if he did, there are certainly other plaintiffs’ attorneys out there who would be taking up the cudgel and bringing in these cases. 
But when you consider the number of cases that were about to be reversed, you consider the losing record that they had in cases that they did bring or in cases that they chose not to bring because they must have been fairly confident they were going to lose, you look at the fact that the Supreme Court is about to decide the Warner Lambert v. Kent case, a preemption case that is effectively going to strike down punitive damages in the state of New Jersey for any pending Vioxx cases, you are talking about an inventory of 60,000 cases where the value to the clients is the fact that they have 60,000 and can force Merck to spend billions of dollars defending themselves.  It is win-win in that sense.  The plaintiffs can get almost $5 billion instead of zero.  Merck -- even if they thought they are going to win every single case, it would cost them more money to fight than to settle, probably.  I do not have the exact numbers of what it would cost Merck to defend but it would probably be much more than the trial in a box case for the plaintiffs. 

And that leads us to the question of the public policy implication here:  If you have these cases that are not worth anything -- you either have cases that are not worth -- you either have a set of plaintiffs’ attorneys agreeing to just walk away from billions of dollars on the table, or you have cases that are essentially worth nothing except what is effectively legalized extortion to take billions of dollars away from innocent shareholders and investors, the widows and orphans that own Merck stock and the teachers’ funds. 

Majority of Americans are shareholders but it does not just affect, of course, the shareholders; it affects everybody that wants to use prescription drugs in the future because you cannot count the drugs that are not developed.  I do not see Dan trying the audience.  He mentions the case of Bendectin; this is a perfectly safe drug used to treat morning sickness.  It was withdrawn from the market, even though something like 40 percent of American pregnant women were using it, because they were constantly being sued for alleged birth defects.  The drug has been pulled from the market. The rate of usage has gone from 40 percent to zero; the birth defect rate has not gone down.  It is being safely used in Canada. It is being safely used in Europe.  In United States, the litigation fear has pulled it from the market and the number of hospitalizations for dehydration of pregnant women has doubled since it has been pulled. 

And that is only the drugs that we know about.  We do not know what drugs are not being developed. We do not know whether there is a cure for Alzheimer’s disease that we are missing, a cure for cancer that we are missing.  These are real impacts that affect real people even if you cannot see them with the same tangibility that you can a Vioxx plaintiff.  And as it is, Merck has paid over a billion dollars defending itself. They are out over $6 billion.  I will stop there so that we can go for questions, but there are some real public policy implications for what led to this settlement.

 John E. Calfee:  Thank you, Ted.  I sense there might be some response to some of these things.  Andy, before I give you a shot, I wanted to get back to George Cohen with my original question, which is whether or not he thinks there is an ethical way to deal with mass torts of this type, this Vioxx.

 George Cohen:  The answer is yes.  I do not see why there would be any problem in making an offer that if a certain percentage of people accept then you have a deal and if they do not accept it then you do not have a deal.  There is nothing wrong with that.  There is nothing wrong with the lawyer representing a group of clients; there are things, as Richard mentioned, called aggregate settlements.  There is a specific rule, ethics rule, which I have in my slides but I will not get to now, dealing with aggregate settlements where if a lawyer wants to settle a whole bunch of cases of their client at one shot, they can do that as long as they get unanimous agreement of all the clients and the clients are made aware of all the terms of the settlement and how it is going to be divided up and everything. 

So there is nothing wrong with that.  You are allowed to do that.  What you cannot do is force people into a settlement that they do not want to be in; that is what you cannot do; that is what is unethical.  I do not have a problem with a lot of what Andy and Richard said, but if the deal is so good then the people should take it.  If the deal is not good, if the cases are worthless, then what is Merck worried about with these people getting out of the settlement? 

If cherry picking is an issue -- I mean cherry picking is just another way of saying this is our legal system.  If you have a good case and you are entitled to bring it and you are not allowed to have that taken away from you, whether it is securities fraud or any kind of fraud there is no right that anyone has to take that away from you.  So cherry picking - that is our system.  You want to change the system?  Then pass a statute; have a law.  But you cannot just do it on your own without any permission from these people.  That is my view.

John E. Calfee:  But that seems to leave in doubt as to whether or not there is an ethical way out of this because it sounds, from what Andy was saying, it sounds like guarding against cherry picking was essentially the essence of most of the operative issues of parts of the settlement.

 George Cohen:  But that is what they say.  That is their position but that could be talking.

 John E. Calfee:  Okay.

 Andy Birchfield:  That is exactly the circumstances here.  It is not a matter of you saying whether you can bring a case or not, that is not the circumstances.  The circumstances are Merck wanted to avoid a situation where they made an offer where the plaintiffs or the plaintiffs’ lawyers could have their cake and eat it too.  It has to be a situation where you look at each and every individual client and you make a determination:  Is this in the best interest of each and every individual client?  If so, then the cake is available to you.  But you cannot say, “Look, I can maximize the value on behalf of my clients by resolving 95 of the 100 clients but holding out for five more.”  That was the circumstances that this settlement agreement was intended to avoid and each lawyer is obligated to exercise independent judgment.  The settlement provides a timetable to allow lawyers time to evaluate their cases under the settlement protocol and make that determination.

 John E. Calfee:  What are the odds that 85 percent mark will be met?

 Mark Herrmann:  I’m voting in favor; you will get 85 percent approval.

 Andy Birchfield:  I agree.  I agree that it would probably be in excess of 85 percent that will participate in the settlement

 Mark Herrmann:  Of course, one reason why you are likely to get that is because of the provisions that the ethicist has trouble with because you have to bring everybody and if you are bring anybody in.  But that is meant -- the issue -- I express no opinion one way or the other on the ethics side but for reasons -- I just am not free to speak about it, but one way to reduce the slippage problem that I talked about would be to coerce more people to participate in the settlement by having provisions like that that give an ethicist pause.  So that increases your participation by inducing more people to participate and basically guarantees you get more than 85 percent.

 John E. Calfee:  Richard, I cut you off a minute ago

 Richard Nagareda:  Yeah, there are a few things that I think we need to bear in mind here, and that is the nature of any sort of grid-based compensation system, whether we are talking about workers compensation or, indeed, any sort of mass tort settlement device that I’m aware of: the nature of a grid is to compress, cut off the outlier outcomes on both ends.  You cannot allow the sort of persistent strategy that I think Andy described as a major concern for Merck because it allows the tail-end but only on one side to be pursued.  So if we want to talk about public policy here, let’s talk about public policy.  Unless we want to deny the extant science here on Vioxx, there appears to be some elevated risk of certain sorts of medical conditions that can be detected on an aggregate basis. 

Do we want a system that basically says, well, some individual plaintiffs in some, perhaps, aberrant jurisdictions can get the really big pay-off but a lot of plaintiffs are going to lose?  Even though, as far as I can tell, there is not a great deal of medical difference here, well, this happened before.  This happened in the early 20th century and the late 19th century in industrial workplaces.  And the basic policy response there was grid type of system and the reason why a grid type of system is the point to which the legal system gravitates is that it is a value-generating transaction.  The value that is generated by the grid is directly related to the degree of closure that the grid brings.  Now if the approach that Prof. Cohen mentioned -- everyone is aware that that option is available.  It has never been attempted seriously in any mass tort litigation and it has never worked.  And that ought to tell us something.

 Andy Birchfield:  In response, I think that Richard is right that a grid-type system works well in resolving mass tort litigation.  But I am convinced that that is a grid type system that must be developed after you have had the opportunity to litigate the issues.  And I do not want to get too far away from my friend Ted’s comments on the policy issue here.  I think that his presentation illustrates very well the reason we need our litigation system. 

Mr. Frank here would take the position that drugs do not cause injury and that Vioxx does not cause heart attacks and that because we have litigation we are taking away money from shareholders.  And one of the points that he raised was Dr. Baldwin’s testimony.  Remember the example about, well, if it occurred afterwards that that may necessarily -- did it cause the harm?  And then he put up quotes from Judge Fallon that made that point and then he came to the conclusion that said, “But Judge Fallon allowed him to testify.”  Well, Judge Fallon did allow him to testify, but he did not allow him to express an opinion on specific causation, the very point that Judge Fallon was addressing.  I disagree with that but the illustration that was put up misrepresents the ruling of Judge Fallon. 

Now why is that important?  Because you have two advocates here:  You have an advocate for Merck and the pharmaceutical industry; they can present their views.  You have an advocate here on behalf of the individual that suffered the heart attack.  We both should be able to present our views, present the science on both sides, present the facts on both sides and have ordinary citizens make a determination about where is the truth in these circumstances.  That is the foundation of our democracy and it is under attack now.  But we need that process and it was through that process that we were able to bring this mass tort litigation to a successful resolution.

 Mark Herrmann:  I hear Richard saying -- I mean, we start with “There is a problem under current ethics laws arguably with the settlement.”  And then we go down and we hear, “Well, that could be because current ethics law does not accommodate the needs of aggregate settlements.  So ethics law should change, should accommodate that.”  But what I have not yet heard is the fully articulated defense of the settlement as it exists today under current ethics law; that is, how is it that you have a plaintiff who, as you -- you called it a premier venue.  And, of course, the American Tort Reform Association would call that a judicial hellhole but that is just semantics, right?

 Male Voice:  Same place --

 Mark Herrmann:  But how is it that that a lawyer could recommend to a severely injured plaintiff in a premier venue who seems to be looking at a big verdict that this settlement grid is the thing that makes sense for them?  What is the ethics justification under existing law?

Andy Birchfield:  Well, I think, if you look at the settlement agreement regardless of the venue where the case is tried there have been cases from the plaintiffs’ side that have been tried in judicial hellholes that have been lost by plaintiffs.  There have been cases that were tried in conservative venues that have been won by plaintiffs.  So there is no -- I mean when you are looking at an individual client under the terms of this settlement there is no automatic -- okay, I’m in a good venue; that increases my chances but it does not make it automatic.  You know, this is a settlement agreement that is fair; it is based on objective criteria and it puts reasonable compensation into the plaintiff’s -- the victim’s hand.  And so I think that a lawyer can look at this agreement and he could say, “It is in your best interest to settle, to accept the settlement offer.” 

Now, if the lawyer had the opportunity under the settlement agreement to say, “Well, I only have to put in 85 percent of my clients; I can hold out those best.  I think that I could probably get better value for you.  I could negotiate better value.”  But that is not available.  That option is not available.  And so a lawyer can look at each individual client and make the determination that it is in their best interest to settle.

 John E. Calfee:  Very briefly, George.

 George Cohen:  Yeah.  Well, one interesting thing - I have no idea whether the plaintiffs’ lawyers are talking to each other about this - but one interesting possibility that I do not know if Merck and these people have thought about, but I’m sure they did because they are all smart people.  But if you are a lawyer and you had people who you thought this was not a good deal for and, therefore, you took all your clients, you did not enroll any of them in the settlement, of course you could take the ones for whom settlement is a good deal and turn them over to some other lawyer who is going to join the settlement there is nothing that prohibits that. 
And then you could, in theory, be then a repository lawyer for all the reject cases because you are not bound by this provision, 1.2.1A, because you are not part of the settlement.  And so if the lawyers were willing to get together to designate certain people who are going to be the ones who try these cherry-picked cases, then you are still going to have cherry-picking.  And so the problem is not really solved as long as these people are on the ball, which I am sure they are.

 Ted Frank:  There is a provision in that that actually blocks that section 1.2.6.3 in conjunction with exhibit 1.1, and that is already more detail than anybody here wants to hear.  To address a couple of things in response to Mark, I think if we look at the ethics rules as stringently as George does, it would preclude so much as the lawyers that are representing a thousand plaintiffs at once.  The reason we are in this bind for aggregate litigation on the ethics rules is because the ethics rules are not being enforced with the same stringency at the front end. 
That creates huge conflicts of interest when you have an inventory of a thousand clients because you are deciding who should go to trial first at the disadvantage of your other 999 clients.  You are deciding to withdraw a case on the eve of trial because you are worried that an early loss will affect the rights of your other thousand clients because the rule reduced the settlement value.  And to a great extent the settlement value exists because you have aggregated a thousand clients that you have sort of “created” value for your clients by the fact of the matter that you have signed up so many people, that you forced the defendant to come to the table.  So to the extent one is going to talk about these ethics rules, if you are going to enforce them on the back end of the settlement side, you should be enforcing them at the front side of the solicitation side. 

Responding very quickly to Andy, I’m not claiming that drugs never cause injury.  I will not even claim that Vioxx does not cause heart attacks.  I think the best evidence out there is that there is a 25-percent increase in the relative risk.  Of course, a 25-percent increase means that out of five who had a heart attack while taking Vioxx, four of them would have had that heart attack anyway, and under a more likely than not standard where you are trying to prove specific causation, they are thrown out.  And even if you could prove the specific causation, you have the underlying problem that just having a side effect is not a problem unless you breached a duty on the failure to warn, unless you withheld evidence from the FDA.  And neither of those things happened here as much as there has been publicity in claims to the contrary.  And that will be discussed in more detail in my book.

 John E. Calfee:  We are going to stop because I do want to turn to the audience for some questions.  And when we do that please identify yourself briefly; be sure to speak into the microphone, which Sara is going to provide because this is being web-archived at AEI and C-Span is also recording this for later broadcast. 

So are there any unresolved issues, any questions that anyone would like to address to the audience?  And if there is not, I know that Andy was about to speak.  Andy, why not go ahead?  Yes -- wait until you get the -- thank you.

 Jenny Pickett [phonetic]:  My name is Jenny Pickett.  I’m a plaintiff and I belong to a [audio skip] settlement at yahoogroups.com and I’m here representing them because [audio glitch] shares a common interest.  First of all I would like to know -- this question is for Mr. Birchfield:  How many plaintiffs do you and the members of the steering committee currently represent?

 Andy Birchfield:  I can tell you how many clients my firm represents, and we represent a little over 5000 Vioxx clients.  I cannot tell you with certainty how many clients would be represented by the other members of the steering committee or the negotiating committee.  Is that -- which are you asking about?

 Jenny Pickett:  Well, what I want to know is why are you so confident that you’ll get 85 percent?

 Andy Birchfield:  I’m confident because over the course of 11 months we negotiated the terms of the settlement agreement and what we did is we looked at actual individual cases, cases that I represent.  And we looked at groups of other cases -- lawyers on the negotiating committee that represented a significant number of cases -- we looked at the facts of those cases.  And Merck did the same thing; they looked at cases where they had collected medical records.  We looked at the individual aspects of each plaintiff’s case and made determinations about, okay, what factors really come into play in evaluating, one, the liability, the likelihood that a plaintiff will prevail, and impacts the level of damages. 

And so over the course of 11 months we fashioned the settlement agreement over a very careful analysis about what would work.  And given the track record of litigation, we believe that this is a settlement that wants lawyers and clients to have an opportunity to actually discuss what is going to be the net result of this litigation that -- and I’m telling you, the overwhelming response from my clients has been favorable.

 Jenny Pickett:  [Inaudible/off microphone] What will you do with the clients that want to opt-out?

Andy Birchfield:  Well, that will depend.  I mean, I do not have any clients that are telling me we are not going to participate in the settlement program.  I mean, we had clients that initially had some concerns as we walked through it and explained the settlement.  Then their view changes and you know about that.  But there will be clients that are not able to enroll because of bankruptcy and all that, and we are going to work with those to be able to get those into the settlement program. 

But one thing that is important to note in response to an issue that Professor Cohen raised and that is there is not a situation where a client is coerced into accepting this settlement agreement.  I mean a lawyer is to look at the individual facts and make a recommendation.  But if a client says, “No, I’m not going to accept the settlement,” then the client is not forced to accept that settlement.  You could remain outside the settlement.  That is a conversation that I have with my clients and when they raise that prospect, explain very carefully the risks that are involved in that. 

But that is something that I do with all my clients, whether it is a mass tort resolution or a settlement offer for an individual that is involved in a car wreck.  You go through that same process.  You analyze the risks versus the benefits of entering into a settlement agreement.  But based on our experience and how we know the settlement program works and the amount of money that has been set aside for this settlement, we are confident that 85 percent will participate.

 John E. Calfee:  If we can -- very quickly, one more -- very quickly.  Go ahead.

 Jenny Pickett:  [Inaudible/off microphone] Did all of your clients get that letter posted on the settlement website?

 Andy Birchfield:  We sent out a letter to all of our clients at the time that the settlement was announced.  And there are a number of forms, a number of letters that are available as well as a description because through the process of finalizing of negotiation, Merck looked very, very carefully at the ethical implications of this deal, and we did, too, from the plaintiff’s side.  In fact, individual members of the negotiating committee retained three separate experts in the ethical aspects of mass tort litigation to guide us, to make sure.  So it was important from the plaintiff’s standpoint; it was important from Merck’s standpoint that this settlement agreement be ethically sound and legally sound.

 Jenny Pickett:  [I