Recognizing and Managing Serial Litigation

Among the challenges facing product manufacturers in the 21st century are recognizing and managing the legal threat posed by multiple, individual product liability lawsuits in multiple jurisdictions.

In the context of this article, “multiple product liability lawsuits” is not synonymous with mass torts, class actions, multidistrict litigation, or the other varieties of aggregated claims permitted by civil joinder and interpleader rules. Most defendant manufacturers have no difficulty identifying aggregated claims as potential bet-the-company threats deserving special attention and resources, and the management of aggregated claims has become a high art in nearly every quarter of the legal community.

Serial litigation, however ' involving smaller numbers of plaintiffs asserting unaggregated claims ' is potentially just as threatening to a product manufacturer as the high profile class action or Multidistrict Litigation (MDL). In part because of serial litigation's lower profile, and in part because mismanagement of multiple claims can balloon into a class action, serial litigation can inflict significant legal and economic damage on a manufacturer unless the nature of the danger is fully understood as soon as possible and managed to an optimal conclusion.

'Serial Litigation' Defined

“Serial litigation” is a term that describes:

• multiple, individual lawsuits,
• filed in multiple jurisdictions,
• relying on same or similar liability theories, and
• same or similar patterns of injury, asserted against a single manufacturer or class of manufacturers.

The adjective “serial” may be more familiar when used to describe repetitive murderous conduct instead of a type of civil litigation. If so, serial litigation is to the class action or MDL what serial killing is to a war or large-scale terrorist attack. The former often takes longer to recognize and usually does not provoke the same large-scale, coordinated response as the latter.

Early Recognition is Important

Early recognition of the special problems and threats presented by serial litigation is an important first step in shaping a responsive ' and responsible ' product liability defense program.

Traditional management of an individual product liability lawsuit starts with referring the matter to an in-house litigation manager or insurance carrier, securing defense counsel in the jurisdiction where the suit is filed, and proceeding with a defense tailored to the specific facts and law giving rise to the claim.

There is nothing wrong with the traditional approach if the lawsuit is unique ' or at least essentially dissimilar to pending or historical claims. If, however, an individual claim is actually part of a larger pattern attacking the integrity of a manufacturer's product line or an industry's class of products, there are palpable dangers that flow from failing to treat the claim as serial litigation.

The first step, therefore, in optimizing the management of serial litigation is to identify the potential serial threat as soon as possible. Experience teaches that much serial litigation can be anticipated. Almost any field action that repairs, retrieves, or recalls a significant number of products creates the potential for serial lawsuits, not to mention class actions.

There are less widely recognized triggering events, however, and

they include:

• field actions by a manufacturer's business partner (such as a final assembler or component supplier),
• an increase in a particular type of warranty claims or customer complaints,
• an increase in demand for a particular type of repair or component part replacement,
• case reports or survey articles in medical, technical or scientific literature,
• publication of governmental studies or statistics,
• field actions by competitors in a manufacturer's industry segment,
• publicity about accidents – including accidents involving another company's similar product, and
• the spread of disinformation by disgruntled product users.

An awareness of the litigation-causing potential of triggering events does not mean that a manufacturer should avoid remedial field actions. Rather, any company that decides on a field action, for whatever reason, should also plan for the possibility that the field action will stimulate claims that would not have been asserted but for the action itself.

Serial litigation can also be the product of a legal assembly line. Conferences and meetings for the plaintiffs' personal injury bar and their circle of forensic consultants serve as an effective word-of-mouth network for stimulating serial litigation. Periodicals pitched to these audiences also frequently contain stories, advertisements, and want ads designed to evoke a community awareness of and interest in pursuing like or similar claims against target manufacturers. These opportunities for communication can generate similar claims in far-flung jurisdictions.

Television advertising, by contrast, especially if generated by attorneys buying late-night airtime, is a cardinal sign that a company's product liability problem has been bumped up to mass tort or class action status.

The comparatively low profile of serial litigation carries both positives and negatives. Because no company wants to see itself or its product painted with a public bull's-eye, a low profile in the media can be positive. The lower profile of serial litigation can also be a negative, however, if a target manufacturer underestimates the significance of serial lawsuits until it's too late.

Large Numbers are Not Important

There is no numerical threshold at which a given number of individual claims is transformed into serial litigation. Fewer than 10 lawsuits alleging that a product caused catastrophic injury or death will be, for many product manufacturers, more than sufficient to justify a serial litigation defense strategy.

Because numbers are relative, the volume of product liability claims is, by itself, an unreliable marker of serial litigation. Lawsuits and claims must always be evaluated with due regard for the number of products in the marketplace, the number of uses per product, and the total number of incidents or claims. Manufacturers with a relatively high background level of product claims must assess the filing of new claims on a relative basis. Conversely, small companies with little litigation will have a low tolerance for even a few claims.

The most reliable sign of serial litigation is substantial similarity. Substantial similarities arising from common theories of liability, similar designs or warnings, similar patterns of misuse or injury, or even recurrence of the personalities involved ' the same plaintiff's attorney or the same expert witness, for example ' all take precedence over sheer numbers in marking a serial litigation threat.

Be Prepared

The obvious benefit bestowed by early recognition is the opportunity to prepare. In traditional litigation management, the day a manufacturer is served with a summons and complaint is often the day the manufacturer begins assembling the resources necessary to mount a defense. The problem is that the plaintiff's team may have spent months or years in research and preparation.

Even if there is a prolonged interval between the plaintiff's exposure to the product and manifestation of an injury, the discovery rule corollary to most statutes of limitation will give the plaintiff the full benefit of the limitations period to refine the claim.

Early recognition of the potential for serial litigation helps the manufacturer level the playing field. Taking affirmative steps to prepare for multiple, repetitive lawsuits ' easily lasting 5 years or more ' not only enhances a manufacturer's capability to defend the claims, but it can help secure against erosion of a company's ability to defend itself over time.

As experienced trial lawyers and manufacturers know, the effectiveness of any defense can sharply diminish over time because of personnel turnover, document retention policies (throwing away exculpatory or explanatory documents), mergers and acquisitions, and facility closures. Early recognition can ameliorate the negative effects of these inevitable events.

A prudent product manufacturer, alert for the signs of serial litigation, should consider the following steps.

1) Consolidate information. Regardless of a company's size, there are likely to be multiple people, offices, departments, files, documents, and databases with relevant and valuable information. The manufacturer's job is to retrieve, centralize, and begin the analysis of this information. Project members should be interviewed by either outside or inside counsel. Employees' “personal” files should be identified and politely confiscated.

Culling information for mature products with a long history of sales and use presents a special challenge. Sometimes a manufacturer must designate an employee to relearn a product's history and become the corporate spokesperson. Nevertheless, even with products that reached the market only a few years ago, the prolonged lifespan of serial litigation makes it prudent to safeguard against personnel turnover, facility closings, and similar events that can pile up in a short span of time and seriously hinder a company's defense effort.

When a large, multilocation manufacturer is faced with the prospect of serial litigation, there is greater need for retrieving and archiving information in electronic formats. Civil rules giving litigants 30 to 45 days to respond to discovery requests arise from antiquated notions of opening a few file drawers to find responsive documents. In the real world, a request for 5 years of a company's e-mails on a particular topic can bring the harsh realization that a good faith search on the schedule expected by the court will cost tens of thousands of dollars ' or more. If the defendant manufacturer has a few months lead time, however, and can set its own schedule, it may be able to cut retrieval costs dramatically.

2) Select coordinating counsel. The advantages of coordinating counsel are familiar to sophisticated product manufacturers, but many smaller companies and their insurance carriers do not have experience with centralized representation. A company facing potential serial litigation, however, is likely to find coordinating counsel a necessity.

The jaded view is that the main reason to engage national counsel is to give cover to the company's executives at greatest risk of taking the blame if the litigation goes badly. Perhaps so, but the best managers also see the advantages of working with experienced, resourceful, and responsive coordinating counsel to optimize the effectiveness of a company's litigation strategy. Coordinating counsel are commonly involved in such tasks as:

• formulating defense theories and strategies,
• developing the factual descriptions of key events,
• researching key legal issues,
• maintaining files of relevant and discoverable documents,
• identifying and protecting privileged documents,
• providing uniform discovery responses,
• preparing company employees for depositions,
• maintaining current databases and literature files relevant to the product,
• developing and presenting expert witness testimony,
• trials, and
• appeals.

The best coordinating counsel are the lawyers who take the time to learn the product inside and out, master the technical and scientific issues, possess a proven track record in serial litigation management, and can effectively represent the company in a courtroom.

There is no magic to the size or location of coordinating counsel's law firm. As a practical matter, the legal team needed to manage serial litigation seldom reaches double digits. More important than size are a law firm's central location (as determined by the distribution of claims), an ability to move easily from jurisdiction to jurisdiction (avoiding a strong regional stamp), and the right chemistry between the lawyers and the company's management team.

3) Establish and maintain continuity. The ultimate goal in the effective management of serial litigation is to create seamless continuity in the defense strategy. The company's explanation of a product's design, the organization and presentation of company documents and witnesses, and the relationship with co-defendants, customers, and suppliers drawn into the litigation web are but a few of the crucial issues demanding a high degree of coordination and consistency.

Some product manufacturers employ in-house litigation managers ' often utilizing the company's law department ' with the hope they can perform as coordinating counsel. The use of company personnel, presumptively viewed as costing less than outside counsel, can inadvertently result in suboptimal litigation management. Therefore, a serial litigation defendant considering use of its own employees in lieu of coordinating counsel should answer the following questions:

• Is the proposed manager experienced in litigation as opposed to other areas of the law?
• Does the proposed manager have the time, staff, and resources necessary for serial litigation management?
• How much of the manager's activity will be protected from discovery?
• Will other company employees view the manager with suspicion or resentment and balk at the manager's oversight?
• Does the manager have the personal traits necessary to select and direct outside attorneys in all the necessary jurisdictions?

If a company is satisfied that an in-house litigation manager can be as legally effective and as cost efficient as outside counsel, the choice is obvious. If there are unresolved doubts, however, serial litigation management likely will require partnering with appropriate coordinating counsel.

Among the challenges facing product manufacturers in the 21st century are recognizing and managing the legal threat posed by multiple, individual product liability lawsuits in multiple jurisdictions.

In the context of this article, “multiple product liability lawsuits” is not synonymous with mass torts, class actions, multidistrict litigation, or the other varieties of aggregated claims permitted by civil joinder and interpleader rules. Most defendant manufacturers have no difficulty identifying aggregated claims as potential bet-the-company threats deserving special attention and resources, and the management of aggregated claims has become a high art in nearly every quarter of the legal community.

Serial litigation, however ' involving smaller numbers of plaintiffs asserting unaggregated claims ' is potentially just as threatening to a product manufacturer as the high profile class action or Multidistrict Litigation (MDL). In part because of serial litigation's lower profile, and in part because mismanagement of multiple claims can balloon into a class action, serial litigation can inflict significant legal and economic damage on a manufacturer unless the nature of the danger is fully understood as soon as possible and managed to an optimal conclusion.

'Serial Litigation' Defined

“Serial litigation” is a term that describes:

• multiple, individual lawsuits,
• filed in multiple jurisdictions,
• relying on same or similar liability theories, and
• same or similar patterns of injury, asserted against a single manufacturer or class of manufacturers.

The adjective “serial” may be more familiar when used to describe repetitive murderous conduct instead of a type of civil litigation. If so, serial litigation is to the class action or MDL what serial killing is to a war or large-scale terrorist attack. The former often takes longer to recognize and usually does not provoke the same large-scale, coordinated response as the latter.

Early Recognition is Important

Early recognition of the special problems and threats presented by serial litigation is an important first step in shaping a responsive ' and responsible ' product liability defense program.

Traditional management of an individual product liability lawsuit starts with referring the matter to an in-house litigation manager or insurance carrier, securing defense counsel in the jurisdiction where the suit is filed, and proceeding with a defense tailored to the specific facts and law giving rise to the claim.

There is nothing wrong with the traditional approach if the lawsuit is unique ' or at least essentially dissimilar to pending or historical claims. If, however, an individual claim is actually part of a larger pattern attacking the integrity of a manufacturer's product line or an industry's class of products, there are palpable dangers that flow from failing to treat the claim as serial litigation.

The first step, therefore, in optimizing the management of serial litigation is to identify the potential serial threat as soon as possible. Experience teaches that much serial litigation can be anticipated. Almost any field action that repairs, retrieves, or recalls a significant number of products creates the potential for serial lawsuits, not to mention class actions.

There are less widely recognized triggering events, however, and

they include:

• field actions by a manufacturer's business partner (such as a final assembler or component supplier),
• an increase in a particular type of warranty claims or customer complaints,
• an increase in demand for a particular type of repair or component part replacement,
• case reports or survey articles in medical, technical or scientific literature,
• publication of governmental studies or statistics,
• field actions by competitors in a manufacturer's industry segment,
• publicity about accidents – including accidents involving another company's similar product, and
• the spread of disinformation by disgruntled product users.

An awareness of the litigation-causing potential of triggering events does not mean that a manufacturer should avoid remedial field actions. Rather, any company that decides on a field action, for whatever reason, should also plan for the possibility that the field action will stimulate claims that would not have been asserted but for the action itself.

Serial litigation can also be the product of a legal assembly line. Conferences and meetings for the plaintiffs' personal injury bar and their circle of forensic consultants serve as an effective word-of-mouth network for stimulating serial litigation. Periodicals pitched to these audiences also frequently contain stories, advertisements, and want ads designed to evoke a community awareness of and interest in pursuing like or similar claims against target manufacturers. These opportunities for communication can generate similar claims in far-flung jurisdictions.

Television advertising, by contrast, especially if generated by attorneys buying late-night airtime, is a cardinal sign that a company's product liability problem has been bumped up to mass tort or class action status.

The comparatively low profile of serial litigation carries both positives and negatives. Because no company wants to see itself or its product painted with a public bull's-eye, a low profile in the media can be positive. The lower profile of serial litigation can also be a negative, however, if a target manufacturer underestimates the significance of serial lawsuits until it's too late.

Large Numbers are Not Important

There is no numerical threshold at which a given number of individual claims is transformed into serial litigation. Fewer than 10 lawsuits alleging that a product caused catastrophic injury or death will be, for many product manufacturers, more than sufficient to justify a serial litigation defense strategy.

Because numbers are relative, the volume of product liability claims is, by itself, an unreliable marker of serial litigation. Lawsuits and claims must always be evaluated with due regard for the number of products in the marketplace, the number of uses per product, and the total number of incidents or claims. Manufacturers with a relatively high background level of product claims must assess the filing of new claims on a relative basis. Conversely, small companies with little litigation will have a low tolerance for even a few claims.

The most reliable sign of serial litigation is substantial similarity. Substantial similarities arising from common theories of liability, similar designs or warnings, similar patterns of misuse or injury, or even recurrence of the personalities involved ' the same plaintiff's attorney or the same expert witness, for example ' all take precedence over sheer numbers in marking a serial litigation threat.

Be Prepared

The obvious benefit bestowed by early recognition is the opportunity to prepare. In traditional litigation management, the day a manufacturer is served with a summons and complaint is often the day the manufacturer begins assembling the resources necessary to mount a defense. The problem is that the plaintiff's team may have spent months or years in research and preparation.

Even if there is a prolonged interval between the plaintiff's exposure to the product and manifestation of an injury, the discovery rule corollary to most statutes of limitation will give the plaintiff the full benefit of the limitations period to refine the claim.

Early recognition of the potential for serial litigation helps the manufacturer level the playing field. Taking affirmative steps to prepare for multiple, repetitive lawsuits ' easily lasting 5 years or more ' not only enhances a manufacturer's capability to defend the claims, but it can help secure against erosion of a company's ability to defend itself over time.

As experienced trial lawyers and manufacturers know, the effectiveness of any defense can sharply diminish over time because of personnel turnover, document retention policies (throwing away exculpatory or explanatory documents), mergers and acquisitions, and facility closures. Early recognition can ameliorate the negative effects of these inevitable events.

A prudent product manufacturer, alert for the signs of serial litigation, should consider the following steps.

1) Consolidate information. Regardless of a company's size, there are likely to be multiple people, offices, departments, files, documents, and databases with relevant and valuable information. The manufacturer's job is to retrieve, centralize, and begin the analysis of this information. Project members should be interviewed by either outside or inside counsel. Employees' “personal” files should be identified and politely confiscated.

Culling information for mature products with a long history of sales and use presents a special challenge. Sometimes a manufacturer must designate an employee to relearn a product's history and become the corporate spokesperson. Nevertheless, even with products that reached the market only a few years ago, the prolonged lifespan of serial litigation makes it prudent to safeguard against personnel turnover, facility closings, and similar events that can pile up in a short span of time and seriously hinder a company's defense effort.

When a large, multilocation manufacturer is faced with the prospect of serial litigation, there is greater need for retrieving and archiving information in electronic formats. Civil rules giving litigants 30 to 45 days to respond to discovery requests arise from antiquated notions of opening a few file drawers to find responsive documents. In the real world, a request for 5 years of a company's e-mails on a particular topic can bring the harsh realization that a good faith search on the schedule expected by the court will cost tens of thousands of dollars ' or more. If the defendant manufacturer has a few months lead time, however, and can set its own schedule, it may be able to cut retrieval costs dramatically.

2) Select coordinating counsel. The advantages of coordinating counsel are familiar to sophisticated product manufacturers, but many smaller companies and their insurance carriers do not have experience with centralized representation. A company facing potential serial litigation, however, is likely to find coordinating counsel a necessity.

The jaded view is that the main reason to engage national counsel is to give cover to the company's executives at greatest risk of taking the blame if the litigation goes badly. Perhaps so, but the best managers also see the advantages of working with experienced, resourceful, and responsive coordinating counsel to optimize the effectiveness of a company's litigation strategy. Coordinating counsel are commonly involved in such tasks as:

• formulating defense theories and strategies,
• developing the factual descriptions of key events,
• researching key legal issues,
• maintaining files of relevant and discoverable documents,
• identifying and protecting privileged documents,
• providing uniform discovery responses,
• preparing company employees for depositions,
• maintaining current databases and literature files relevant to the product,
• developing and presenting expert witness testimony,
• trials, and
• appeals.

The best coordinating counsel are the lawyers who take the time to learn the product inside and out, master the technical and scientific issues, possess a proven track record in serial litigation management, and can effectively represent the company in a courtroom.

There is no magic to the size or location of coordinating counsel's law firm. As a practical matter, the legal team needed to manage serial litigation seldom reaches double digits. More important than size are a law firm's central location (as determined by the distribution of claims), an ability to move easily from jurisdiction to jurisdiction (avoiding a strong regional stamp), and the right chemistry between the lawyers and the company's management team.

3) Establish and maintain continuity. The ultimate goal in the effective management of serial litigation is to create seamless continuity in the defense strategy. The company's explanation of a product's design, the organization and presentation of company documents and witnesses, and the relationship with co-defendants, customers, and suppliers drawn into the litigation web are but a few of the crucial issues demanding a high degree of coordination and consistency.

Some product manufacturers employ in-house litigation managers ' often utilizing the company's law department ' with the hope they can perform as coordinating counsel. The use of company personnel, presumptively viewed as costing less than outside counsel, can inadvertently result in suboptimal litigation management. Therefore, a serial litigation defendant considering use of its own employees in lieu of coordinating counsel should answer the following questions:

• Is the proposed manager experienced in litigation as opposed to other areas of the law?
• Does the proposed manager have the time, staff, and resources necessary for serial litigation management?
• How much of the manager's activity will be protected from discovery?
• Will other company employees view the manager with suspicion or resentment and balk at the manager's oversight?
• Does the manager have the personal traits necessary to select and direct outside attorneys in all the necessary jurisdictions?

If a company is satisfied that an in-house litigation manager can be as legally effective and as cost efficient as outside counsel, the choice is obvious. If there are unresolved doubts, however, serial litigation management likely will require partnering with appropriate coordinating counsel.