Madison County asbestos docket feeds off intake firm referrals

By Miles Bardell | Jan 20, 2012



As a clearinghouse for massive numbers of asbestos lawsuits from all over the country, Madison County is a prime example of a highly successful processing center.

Local judicial rules, demographics, and enterprising asbestos attorneys have built the docket over time. But the most critical ingredient for Madison County's status today as a fast settlement litigation hub: trial dates.

How lucrative are cases in the nation's busiest state court asbestos docket where most claimants are from out of state? According to several lawyers familiar with Madison County's asbestos docket, mesothelioma settlements range from $1.5 million to $5 million per case.

Legal observers say that "intake" firms spend handsomely on television, radio, Internet and print advertising to gather valuable mesothelioma cases which are then brokered to plaintiff's counsel in a processing jurisdiction where the most value can be extracted.

The brokering process includes negotiation over the volume of cases that can be handled, how quickly a case can be turned around, and of course dollars that the case will settle for.

As evidenced by an increasing number of trial dates and new case filings over the past few years in Madison County, this Illinois venue is very competitive on each metric.

The Intake System

"For me, the big issue is all the mesothelioma advertisings - obviously we have a national mesothelioma litigation market, with a lot of people who are trying to pull in the cases," said Kirk Hartley of the GlobalTort blog.

Mark Behrens, a leading voice on mass tort litigation, said in a telephone interview that some firms have no interest in actually litigating cases.

"There are some firms I have heard of that advertise on TV that don't ever handle the case," he said. "They are just out there mining for cases to broker and sell to somebody else...intake firms," he said.

The Sokolove law firm, a national firm that advertises heavily for mesothelioma cases, is an intake firm. At the bottom of its homepage, a disclaimer states: ". . .[M]ost cases are referred to other attorneys for principal responsibilty (sic)."

Behrens made clear that not all law firms that refer cases to local counsel in Madison County are simply mining cases.

"Some of them are legitimate firms that handle asbestos cases and they may not have the expertise to take on a certain case, or they may know that there are higher values for that case if it is in Madison County," he said.

On the other hand, Behrens identified problems that are inherent to the intake firm model.

"I think that it is deceptive to consumers," Behrens said. "When [people with mesothelioma] go to a lawyer they are looking for someone who is going to help them on their problem. I think most people would be shocked to find that when they hire a lawyer they are actually just hiring a brokerage firm, essentially."

We reached out to several national law firms who advertise to represent mesothelioma victims, but none responded to comment for this story.

The Processing Centers

Nationwide, a handful of jurisdictions have become magnets for asbestos litigation. These processing centers handle a vast majority of all asbestos litigation in the nation. Whether they develop because of intentional judicial policies, demographics favorable to plaintiffs, or other factors, once a jurisdiction creates a name for itself in the asbestos litigation market the cases keep pouring in.

"[I]f you look around the country, what you see is the major processing locations are Los Angeles, San Francisco, and Oakland in California; New York; to some lesser degree Delaware; Philadelphia; and Illinois. . .," Hartley said.

Another legal observer believes that Madison County's "asbestos market" was preceded by its reputation for class action litigation.

"In sum, my analysis is that first the class actions came, from all over the country. Then came the asbestos," said Lester Brickman, a professor of law at the Benjamin N. Cardozo School of Law in New York and an expert on asbestos litigation. "[T]here were billions of dollars in attorney fees created from class actions certified by Judge (Nicholas) Byron, and I think that is where some of the push came from that created the current asbestos market in Madison County.

"[Byron] accommodated the plaintiff's firms in every way possible...He [Byron] basically said 'you all come', and they came."

On top of that, the blue-collar citizenry of Madison County at one time composed a jury pool that was willing to find for plaintiffs in suits against large corporations. With sympathetic jury members coming from families who worked in the local steel, manufacturing, and refining industries it soon became clear that settling cases was highly preferable to taking a chance with a Madison County jury.

That dynamic has changed over time. The number of asbestos cases taken to trial has declined in Madison County over the past few years—the last one that went to trial occurred in March 2010 and ended in favor of defendant Ford Motor Co.

Brickman also criticized former asbestos Judge Barbara Crowder for "welcoming" new asbestos litigation.

"When Crowder stepped in she once again said 'you all come! And be sure to bring your contributions with you,'" Brickman said.

Crowder was abruptly removed from her post on the asbestos docket last month after she had accepted $30,000 in campaign contributions from the top three local asbestos firms within a week of granting them the vast majority of trial settings for 2013.

She has denied violating the judicial code of conduct.

Francis E. McGovern, a professor of law at Duke University Law School, wrote "Judges who move large numbers of . . . torts through the litigation process at low transaction costs create the opportunity for new filings. They increase the demand for new cases by their high resolution rates and low transaction costs. If you build a superhighway, there will be a traffic jam."

While Madison County's procedural gymnastics have prevented a traffic jam, the superhighway has been built and is bustling with traffic - last year the number of new filings reached 953, which matched the record number of cases filed nearly a decade earlier in 2003.

Behrens also commented that Madison County's advance trial setting is unique because it is the only jurisdiction in the country that has trial settings for cases that don't already exist.

"Because often in litigation it is the setting of a trial that causes both parties to come to the settlement table," Behrens said. "When a case is just hanging out there for a long time there may not be a lot of pressure to settle. In Madison County when you know there is a trial date coming up, that will get the discussions started."

Matching Cases To Processing Centers – The Brokerage Process

Intake firms negotiate with local counsel in processing centers to get the most value they can for the cases they generate.

"My understanding is there is some amount of negotiation that goes on between the lawyers who have captured the case through internet ads, union relationships, friend relationships, whatever, and then it is a negotiation about where is the case best processed, and with which law firm, given the facts of the case," Hartley said.

"That is the calculus."

He also said that litigating in Madison County is "relatively economical."

"[A]t the end of the day you have a machinery and a framework in place, capable lawyers, low defense rates because the defense firms are handling so many cases that it is relatively economical," he said.

On one side of the process, intake firms work to maximize the value they can get from cases. By negotiating with firms in processing jurisdictions the intake firms may be able to ratchet up the percentage of the ultimate share they receive.

On the other side, firms in processing jurisdictions market their ability to provide a good return on each case.

"There has to be a market for mesothelioma cases in Madison County that is at or above the national average," said a member of the asbestos defense bar who asked not to be identified.

Hartley said that having trial dates without a case is a clear advantage for plaintiff firms in Madison County.

"With dozens of trial dates in hand, the Madison County plaintiff's firms then use the trial dates as part of their pitch to obtain cases from other plaintiff's firms around the country," he wrote on his GlobalTort blog.

According to a member of the asbestos plaintiffs' bar, several factors are on the table when local firms market their ability to process cases. Not only are cases practically guaranteed a trial date and generally worth more here, the cases are turned around faster too.

"Volume has a lot to do with it," said the attorney who asked not to be identified.

"Intake firms cut long term deals with local counsel, so, for example over two years the local firm will promise to take all the intake firm's cases – so now, local counsel may be able to offer a discounted rate and still get the cases. Instead of taking 25 cases with 35% of fees routed back to the intake firm, the local firm may agree to take all the cases, or take 50 cases, and only pay 25% or less on each case, and it is worth it because the intake firm has stability and knows the turn around is a lot faster in Madison County.

"Their business model runs off of steady volume and certainty, and Madison County seems to have both of those metrics covered."

One point everyone who commented for this story kept coming back to was the importance of pre-assigned trial slots to the brokerage process.

"Having those cases set for trial in advance gives Madison County plaintiffs' lawyers a big advantage in the marketplace for these lawsuits- when they are competing for cases against, say, Texas or firms from San Francisco, to be able to advertise that they already have trial settings for these cases really helps those firms attract business," Behrens said.

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