Judge Charles Breyer, MDL disruptor?

January 21, 2016

(Reuters) – These are early days in the consolidated consumer litigation over Volkswagen’s emissions cheating software, but U.S. District Judge Charles Breyer of San Francisco has already shown lawyers that he – and not the class action bar – is firmly in charge. I have a strong suspicion that the judge will continue to ignore the usual MDL dance steps as he nears a decision on which plaintiffs’ lawyers will lead the case.

Breyer’s appointment to oversee the multidistrict litigation was the first sign that he’s running this rodeo. Plaintiffs’ lawyers had submitted briefs to the Judicial Panel on Multidistrict Litigation recommending nearly 30 different jurisdictions for the consolidated case, with a concentration of nominations for judges in Michigan, New Jersey, Virginia and California – but the Central District of California, not the Northern District, where Breyer sits. The Justice Department and Volkswagen favored consolidation in Detroit. Judges in New Jersey, Michigan and Virginia were so eager to hear the case that they refused to stay Volkswagen class actions until the judicial panel decided where to send them.

Breyer sits on the seven-judge JPML. It was not a coincidence that the panel more or less disregarded the parties’ preferences and sent the case to him.

Judge Breyer’s first order in the consolidated case called for recommendations of a special settlement master. Plaintiffs’ lawyers obliged with a long list of names, headed by such oft-appearing mediators as retired federal judge Layn Phillips and victims compensation expert Kenneth Feinberg. Volkswagen effectively took Feinberg out of the running for a court appointment when it hired him to design and implement an out-of-court settlement program for clean diesel car owners who want to resolve their claims outside of the litigation.

The judge sidestepped everyone nominated by plaintiffs’ lawyers and instead picked former FBI director Robert Mueller, now a partner at Wilmer Cutler Pickering Hale & Dorr, to serve as the sole settlement master. Mueller hadn’t been suggested by any lawyers in the VW case, but Judge Breyer said he has known the onetime San Francisco U.S. attorney for more than 40 years and is confident “there are few, if any, people with more integrity, good judgment, and relevant experience than Mr. Mueller.” Not surprisingly, after Judge Breyer’s wholehearted praise of Mueller, several plaintiffs’ firms submitted letters in the VW docket to say that they, too, have great faith in the Wilmer partner.

About 150 plaintiffs’ firms, meanwhile, have applied to serve as lead counsel or for a seat on the Volkswagen plaintiffs’ steering committee. On Thursday, the judge hosted a hearing, attended by a veritable cavalcade of class action lawyers. I wasn’t in the courtroom in San Francisco, but my former American Lawyer colleague Ross Todd live-tweeted the event. At the outset, Judge Breyer said he’s already checked with other judges who have worked with lead counsel candidates and has “made some judgments in my own mind.”

Breyer had asked lawyers bidding for leadership appointments to tell him about other firms supporting their applications. In typical MDLs, back-scratching and log-rolling among plaintiffs’ firms is a given, so lots of lead applicants successfully amassed endorsements from their colleagues. Kaplan Fox & Kilsheimer created a handy chart of candidates that includes a column denoting how many other firms back their bids. Veteran MDL player Elizabeth Cabraser of Lieff Cabraser Heimann & Bernstein led the pack with 67 supporters. Partners from Baron & Budd and Cotchett Pitre & McCarthy also informed Judge Breyer of backing from more than 60 other firms.

In the week after initial applications, a dozen or so plaintiffs’ lawyers filed followup letters to Judge Breyer, some, like Michael Hausfeld of the eponymous firm and John Quinn of Quinn Emanuel Urquhart & Sullivan to reiterate their own qualifications and others to throw support elsewhere. In particular, Mark Robinson of Robinson Calcagnie Robinson Shapiro Davis and Frank Pitre of the Cotchett firm received multiple recommendations in letters to Judge Breyer.

Steve Berman of Hagens Berman Sobol Shapiro, meanwhile, warned the judge not to put too much faith in this sort of endorsement. “While I cannot say if it is the case here, I have seen in the past where such support stemmed from agreements concerning division of work, which I believe hinder the efficient management of resources and costs,” Berman wrote in his latest letter to Judge Breyer. “Thus, I am not writing to advocate for any others, and I have not asked any other lawyers to write replies advocating for me.”

Based on what we’ve seen so far from the judge, it seems quite unlikely Breyer intends to rely on lawyers’ recommendations to inform his decision. Breyer knows the world is watching how the federal court system handles the emissions debacle (as lead counsel candidate David Boies of Boies Schiller & Flexner shrewdly pointed out during Thursday’s hearing). He’s going to pick the lawyers whose work on behalf of those affected by VW’s emissions cheating will reflect well on U.S. courts.

That’s good for VW class members. It’s also good for MDLs.

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