Sanctioned Firm Seeks to Stop Court From Questioning Clients

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By Casey C. Sullivan, Esq. on May 27, 2015 3:57 PM

A large class action law firm has filed a writ of mandamus with the Third Circuit, seeking to prevent a court appointed special master from interviewing its plaintiffs. The firm, Hagens Berman Sobol Shapiro, gained prominence due to its role in the $260 billion tobacco settlement in the late 1990s, but recently received sanctions for thalidomide lawsuits which were described as "bad-faith advocacy" which "gives new meaning to 'frivolous.'"

As the cases began to falter, and sanctions began to mount, Hagens Berman sought to dismiss them en masse. That led to the special master seeking to interview the plaintiffs, in order to determine if they had knowingly agreed to abandoned their cases.

Suing For Birth Defects, at Age 60

Between 2011 and 2014, fifty-two plaintiffs sued over severe birth defects allegedly resulting from thalidomide testing by GlaxoSmithKline. Thalidomide was marketed as a morning sickness drug for pregnant women in the late 1950's and early 60's, before it was discovered that it lead to massive birth defects. The drug was tested but never marketed in the United States.

Obviously, lawsuits decades after the testing faced issues with statutes of limitations and equitable tolling. Those cases wound up before Judge Diamond in the Eastern District of Pennsylvania, who allowed discovery to determine when plaintiffs knew that thalidomide caused their birth defects.

Bad Faith, Dishonesty, Mass Dismissal

And that's where the trouble began for Hagens Berman. When it became apparent that plaintiffs would not be able to provide evidence to support fraudulent concealment and equitable tolling arguments, Hagens Berman sought to dismiss cases and withdraw as counsel. When Hagens Berman said that all plaintiffs, save two objectors, would dismiss their claims with prejudice, Glaxo agreed to stop seeking sanctions.

Special master William Hangley determined that Hagen Berman's bad faith and dishonesty warranted sanctions. Further, the court directed Hangley to determine whether the plaintiffs had knowingly and voluntarily consented to dismissing their claims. That, Hangley and the court agreed, required interviewing the plaintiffs themselves.

Hagen Berman objected, calling the proposed interviews "without precedent or any basis in law or fact" and a violation of attorney-client privilege. The court rejected their arguments last Tuesday, noting that since two plaintiffs had not agreed to dismissal, court approval is needed. Given the "highly unusual circumstances," including the sanctions imposed against Hagen Berman, the court must ensure that the plaintiffs actually consented to dismissal, Judge Diamond ruled. Further, the firm's conduct supports the suspicion that plaintiffs were not fully informed.

Hagen Berman has appealed to the Third Circuit, seeking mandamus relief. In the meantime, their troubled lawsuits remain active, though Judge Diamond notes that he will happily dismiss any, should any plaintiffs "freely and intelligently" decide that they no longer wishes to pursue their case.

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