On February 25, the Fordham Law Review held its annual symposium to discuss the recent trend of large corporate defendants filing for bankruptcy to resolve mass tort liability. The symposium, “Mass Torts Evolve: The Intersection of Aggregate Litigation and Bankruptcy,” brought together leading scholars, jurists, and practitioners in the fields of aggregate litigation and bankruptcy to explore recent developments in tort law.
The symposium focused on issues raised by a forthcoming article in the Law Review, written by Samir Parikh, professor of law at Lewis & Clark Law School. Parikh was a co-organizer for the event, along with Professors Andrew Bradt of UC Berkeley School of Law, Zachary Clopton of Northwestern University’s Pritzker School of Law, and Sergio Campos of University of Miami School of Law.
In the article, “The New Mass Torts Bargain,” Parikh details recent shifts in the resolution of mass tort claims. Historically, these claims would be resolved through multidistrict litigation, a years-long process with the potential to incur high legal fees. In recent years, defendants have exited this process by filing for bankruptcy. While many scholars have argued bankruptcy is the optimal venue to resolve mass tort claims, the ultimate effect of this shift on victims is unclear.
A new tactic, the “divisive merger,” takes this maneuver one step further: corporate defendants can isolate their mass tort liabilities in one subsidiary, which then would file for bankruptcy, keeping the rest of the company out of the process. While proponents argue that divisive mergers allow victims to receive settlements more quickly, victims’ rights groups argue the process reduces the overall settlement amount and silences victims.
“It’s a relatively new maneuver that has some intended and unintended consequences,” said Grant Emrich ’22, the Law Review’s executive symposia editor. “It struck us as important because it could become the standard going forward. Given the attention that these cases are getting, more corporations may follow suit, reshaping the future of what mass torts look like.”
The symposium offered perspectives from many sides of the issue. The keynote address featured panelists Elizabeth Cabraser, a founding partner of plaintiffs’ litigation firm Lieff Cabraser Heimann & Bernstein; the Hon. John Dorsey of the Delaware Bankruptcy Court; and the Hon. Patti Saris of the U.S. District Court of Massachusetts. The panelists discussed the future of mass torts from three key angles: victims’ rights, bankruptcy, and multidistrict litigation.
Other panels included “The New Mass Torts Bargain: Pulling the Bankruptcy Lever,” “Settlement Dynamics in Mass Torts,” “Interest Representation and the Inconvenience of Due Process,” and “Reassessing Litigation Objectives Through the Prism of Victims’ Rights.”
The differing perspectives created lively debates among the panelists, a highlight of the event according to Emrich. “In my experience in law school, most of what you get is the academic perspective from the professors,” he said. “However, this symposium provided the practitioner’s perspective on both the plaintiff and defendant side, as well as the judge’s perspective, who may not all see eye to eye.”
For the first time since the start of the COVID-19 pandemic, the symposium was presented in a hybrid format, with panels being held both in person and virtually, which added to the experience.
“It was great to see so many bright minds gathered in one room,” said Emrich. “Not all the panelists were able to attend in person, but having the energy of the crowd there was great both for the audience and for the speakers.”
“The event shed some light on an issue that is certainly overdue for discussion and critique, given its importance,” added Emrich. “While this is the first major symposium on this topic, something tells me it will not be the last.”