In my first post on Monopolies in Multidistrict Litigation, I noted that lead lawyers and defendants seem to benefit in tandem from the settlements they negotiate. This second post, Part II, explains how repeat players on both plaintiff and defense sides have perfected a fundamental shift in settlement design.

As I elaborate on pages 19-21, the demise of the mass tort class action makes it more difficult for defendants to achieve holistic closure, for MDL settlements technically bind only those litigants before the court.  But defendants have been able to regain a greater degree of finality through a foundational shift in settlement construction: unlike traditional settlements between plaintiffs and defendants, all twelve deals in the dataset were agreements between lead lawyers and defendants.

As such, these deals position lead plaintiffs’ lawyers as settlement gatekeepers, for defendants will not make better offers to others without the threat of trial; doing so would work against their closure goal. These new deals then serve as a mandatory gateway for anyone wanting to settle, and typically require non-lead attorneys to become signatories alongside their clients. Accordingly, all master settlement agreements in the dataset aimed some provisions at plaintiffs’ attorneys and some at their clients. As a later post will explore, it’s the provisions targeting plaintiffs’ attorneys that raise the most ethical problems.

Making deals with plaintiffs’ attorneys masterfully furthers defendants’ end game in two ways.

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