Torts - Cases, Principles, and Institutions Fifth Edition, 2016a

Witt & Tani, TCPI 4. Negligence Standard
mechanism for the compensation of the injured. If we could posit a world in which there are no
transaction costs and no informational barriers to determining who is actually injured and what
resources are available for payment, the process would be relatively straightforward. The ideal
resolution would be to aggregate all the funds available for asbestos injury, calculate the value of
all the potential claims based upon historic averages of awards, discount for the time benefit and
lack of risk in administrative resolution (as opposed to the litigation process), and distribute the
available funds to the injured on that basis. Assuming accurate forecasting of future claims (in
itself no small matter), full information would yield the total demand, the total compensation
available, and what pro rata discount would have to be applied should demand for compensation
exceed available funds. In effect, this is what happens on a smaller scale in the aggregate
settlements that characterize the mature mass tort arena. The question is whether the settlement
structures that have evolved to deal with the large inventory of cases can be replicated more
broadly in some coordinated fashion.
Looking back from this perspective, it is worth noting the consistency with which the
failed attempts at aggregate resolution of asbestos claims have conformed to the same basic
structure for their attempted solutions. Each relied primarily on a payout matrix defined by injury
and exposure. Indeed, for all the controversy surrounding each asbestos resolution approach put
forward over the past decade or so, there is almost complete silence on the question of how the
payout matrices were (or will be) structured or how the estimated litigation value of the claims is
to be calculated. Each of the central approaches returns to the same basic structure.
The starting point for the formal aggregate treatment of asbestos cases in litigation is
Cimino v. Raymark Industries. Cimino formalized the intuition that asbestos had long ceased to
be meaningfully addressed through case-by-case adjudication; the evidence in each case was
largely duplicative and the valuations of the individualized aspects of the harm incurred could be
predicted with a fair degree of statistical certainty. Cimino attempted to create a trial mechanism
to replicate the settlement grids that had emerged with the concentration of the plaintiffs’ bar in
the 1980s. The key was to reduce each claim to a series of variables . . . that were typically used
in settling cases, but then use those same variables to select representative cases for trial among
the cohort of all asbestos cases then pending in the Eastern District of Texas. Although this
approach was unceremoniously rejected by the Fifth Circuit, the Cimino grids were soon to be
integrated into every subsequent aggregate settlement approach. . . .
Alexandra D. Lahav, Bellwether Trials, 76 GEO. WASH. L. REV. 576, 580-89 (2008)
Asbestos is the paradigmatic story of modern mass tort litigation. Although there are some
unique features to the asbestos litigation, it raised for the first time many of the recurring issues in
mass tort litigation. This story has been told at length elsewhere, but it is worth briefly reviewing
to understand why a judge might think binding bellwether trials are the best solution to the
seemingly intractable problems posed by mass torts. . . .
In 1990, Judge Robert Parker, then a federal district court judge for the Eastern District of
Texas, had approximately 3000 wrongful death suits arising out of asbestos exposure before him.
The court could not have tried all these suits in a reasonable time frame, so he adopted an
innovative procedure: binding bellwether trials. He approved a trial plan that was to proceed in
three phases. The first phase provided class-wide determinations of failure to warn and punitive
damages. The second phase determined causation. The court intended to have a jury establish
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