The late Richard Nagareda once noted that global settlements in mass tort litigation present a “Field of Dreams” problem – “if you build it, they will come.” In the movie, people came to the Iowa baseball field in the corn fields because it was “money they had, but peace they lacked.” The opposite is true in mass tort litigation. In most cases, multinational corporations and plaintiffs’ firms with large inventories of claims typically achieve peace through a global settlement resolving all of the victims’ claims. It is money that the individual victims lack, and it is why the victims consistently come in droves, many with claims that are specious at best.
In his excellent article Specious Claims and Global Settlements, Todd Brown examines three comprehensive settlements in mass tort litigation to identify the cause of the “Field of Dreams” problem. He contends at the outset that the problem is caused by more than adverse selection, in which asymmetries in information allow plaintiffs with dubious claims to try to collect. (P. 20.) Instead, Brown provocatively argues that the problem arises from how the parties define what a compensable claim is in negotiating the settlement, using the settlement to “supplant[] tort law with a negotiated grid for compensation.” (P. 23.) Brown shows that the parties negotiating the settlement define grids because they only care about the size of the settlement, not the distribution of the proceeds. But by failing to establish more accurate distribution procedures, global settlements allow a thousand specious claims to bloom. Continue reading "Striking Out Specious Claims in Mass Tort Global Settlements"
