Attack on lead counsel in GM switch case critiques MDL system

January 27, 2016

(Reuters) – Anyone who has ever entertained fantasies of being in charge of a really big case – and, as we know from the lead counsel contest in the consolidated Volkswagen litigation, that’s an inclusive group – ought to be required to read a motion filed Monday in federal court in Manhattan by Lance Cooper, the plaintiffs’ lawyer who broke open GM’s ignition switch scandal.

Cooper accuses the three lawyers appointed to lead the GM multidistrict litigation – Robert Hilliard of Hilliard Munoz Gonzales, Steve Berman of Hagens Berman Sobol Shapiro and Elizabeth Cabraser of Lieff Cabraser Heimann & Bernstein – of putting their own interest ahead of victims’. He claims the disastrous outcome of the first bellwether trial against the automaker was the direct, foreseeable result of Hilliard’s greed and ambition, abetted by the acquiescence of Berman and Cabraser. Cooper wants U.S. District Judge Jesse Furman of Manhattan, who is presiding over the GM multidistrict litigation, to remove all three lead counsel and reschedule the next five bellwether cases.

“This is no easy motion,” he wrote. “The co-leads will no doubt chalk it up to disgruntled lawyers and the fact that you simply cannot make everybody happy when trying to control a large and complex litigation such as this. When considered in its totality, however, the co-leads’ conduct goes far beyond what can be considered normal and acceptable behavior for lawyers in their position.”

The co-leads do, of course, say Cooper’s accusations are unfounded. Berman called the removal motion “unwarranted” in an email to Reuters on Monday. Hilliard forwarded Reuters an email chain suggesting that he and Cooper have been at odds since at least last April. Judge Furman had appointed Cooper to the GM plaintiffs’ executive committee, but according to the emails Hilliard forwarded, Cooper resigned from the committee in April.

Hilliard, who said he has not spoken to Cooper since then, called Cooper’s motion “inaccurate and untrue,” and pointed out that no other member of the executive committee signed the filing.

Judge Furman considers Cooper’s allegations serious enough to enter an order Tuesday calling for a response from lead counsel to be filed by Feb. 1. In particular, the judge said, he wants to know whether Cooper “had an opportunity to be heard” before the lead lawyers made a decision last Friday to dismiss their first bellwether case. As you surely recall, the dismissal came after GM turned up evidence suggesting the plaintiff, Robert Scheuer, and his wife gave misleading testimony about his injuries and the financial consequences of his accident while driving a 2003 Saturn Ion.

I’ll get to the specifics of Cooper’s allegations about why Hilliard and his co-leads picked the Scheuer case as their first test of personal injury claims against GM and Hilliard’s response to those allegations. It will be up to Judge Furman to decide whether there is any substance to Cooper’s accusations. But I don’t think there’s any denying the truth of something Cooper said at the end of the filing. “This motion gets to the heart of the (multidistrict litigation) process and what should be the expectations for lead counsel,” he wrote. “All MDLs ultimately are about the parties – all parties, not just the parties who happen to be the clients of a co-lead.”

According to Cooper, Hilliard, Berman and Cabraser breached that responsibility. Berman and Cabraser are two of the most experienced MDL lawyers in the U.S. Cabraser was just picked as the sole lead counsel in the Volkswagen emission cheating case, in which Berman was appointed to the steering committee. Yet Cooper alleges these two allowed Hilliard to take advantage of the complexities of the MDL process to the detriment of all GM victims.

Cooper claims the trouble began with the lead counsel selection process, accusing Hilliard of filing weak personal injury suits to pump up his case volume and win a lead appointment. “Mr. Hilliard and his firm signed up whoever they could as clients, regardless of the merits of their cases, in order to convince the court that he was ‘the GM defect ignition switch lawyer,'” Cooper wrote.

Once Judge Furman put Hilliard, Berman and Cabraser in charge, Cooper said, they parceled out assignments to members of the plaintiffs’ executive committee without input from those other lawyers. Cooper complained (as he has previously) that lawyers with state-court cases against GM were ignored in the MDL.

Those are gripes you might hear in any MDL, as Cooper himself admits in his filing. He didn’t respond to my email request for comment, but based on the email chain Hilliard forwarded to Reuters, Cooper appears to have resigned from the GM plaintiffs’ executive committee because he didn’t like the assignments he was getting from lead counsel.

But Cooper’s motion raised more substantive allegations about the selection of bellwether cases to establish settlement guidelines for personal injury plaintiffs. According to Cooper, the original plan was to try a case called Yingling v. GM first. The Yingling case, filed by Victor Pribanic of Pribanic & Pribanic, was a strong bellwether, Cooper said. A young father of five died in the single-vehicle crash of his 2006 Saturn Ion, so damages would have been substantial. And the car was preserved after the crash, giving plaintiffs’ experts plenty of evidence, according to Cooper. In a filing in July in the MDL, lead counsel informed Judge Furman that Yingling was to be the first case they tried against GM.

Their plans changed in a matter of weeks. In early August, lead counsel filed a request to try Hilliard’s Scheuer case first and to try the Yingling case as the last of the three bellwethers selected by plaintiffs. (GM also selected three bellwether cases to be tried alternating with the plaintiffs’ picks.) Judge Furman agreed to the change.

Cooper’s motion claims Hilliard switched the order of cases because the Yingling family’s lawyer refused his overtures to jointly try the case and share fees. According to Cooper, Hilliard and one of his partners separately suggested a fee-sharing arrangement to Yingling counsel Pribanic, who declined. Hilliard, Berman and Cabraser, according to Cooper, didn’t want the first bellwether to be someone else’s case. “The co-leads wanted to ensure that at least one of them tried the first bellwether trial, and they wanted to ensure that they maximized their attorneys’ fees in the process,” the motion said.

I called and emailed Pribanic to ask about Cooper’s account of his discussion with lead counsel. He did not respond. Hilliard said in an email that “fee sharing was initially discussed with Yingling counsel (but) it was made clear that we were more than willing to assist in helping him with his case without any sharing of the fees.”

Hilliard said lead counsel had good reasons to pick the Scheuer case to be tried first: Scheuer’s crash came after he followed GM’s instruction to remove other keys from his key ring to avert a defect that would prevent airbags from deploying; and the accident occurred when replacement parts to fix the defect were not available.

Hilliard also said lead counsel could not have anticipated the crippling credibility problems that arose from the Scheuers’ allegedly misleading testimony. The day before plaintiffs dismissed the case, Judge Furman told Hilliard and his co-counsel, according to a transcript, that they had “only themselves to blame for the fact that this case has become such an outlier … Quite frankly, I would have thought counsel would do more due diligence before selecting this case for trial than obviously happened.” The judge also said some of the facts of the Scheuer case, which involved a post-recall crash and a plaintiff with pre-existing injuries, made it a “poor representative” of other cases in the MDL, and “almost worthless as a settlement tool.”

To be fair, the next day, Judge Furman clarified that he did not mean to criticize lead counsel for picking the Scheuer case as their first bellwether. “I, quite frankly, don’t know enough about the cases that were in the pool of candidates,” he said. “It may very well be that given the many variables involved, this case was a perfectly rational choice to be the first bellwether selection.” The judge also praised Hilliard and his co-counsel for performing “a remarkable job of leading this incredibly complicated litigation in general and especially given the demanding schedule.”

Cooper’s filing Monday claims the bellwether process will continue to be a disaster for GM plaintiffs. Four of the remaining five bellwether cases were also filed by Hilliard, and Cooper claims it is no coincidence that all of GM’s picks were Hilliard suits. Nor is it a coincidence, he asserts, that Hilliard kept these cases out of a settlement he reached with GM in most of the suits he brought. According to Cooper, Hilliard is now positioned to collect fees from the plaintiffs whose cases he settled – and to boost his billable hours in the MDL by trying bellwethers.

These are really ugly allegations. I’m looking forward to reading a formal response by next week from Hilliard, Berman and Cabraser.

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