Litigation Funding Could Tip Scales in Engle Tobacco Cases

Law360, February 14, 2014

By Nathan Hale

As more product liability cases in Florida’s so-called Engle litigation come out against Big Tobacco, a leading litigation finance company has decided to throw its weight behind the plaintiffs in what experts say is the latest sign that the scales may be tipping toward eventual settlement.

Executives with California-based LawFinance Group, a pioneer in litigation financing with 20 years of experience, said several recent decisions from the Florida Supreme Court and the U.S. Supreme Court had played a role in their determination that the timing was right to enter the Engle field by putting together a portfolio wholesale jerseys of available financing first for plaintiffs attorneys defending verdict awards on appeal by the tobacco companies and now directly for plaintiffs as well.

“What’s really interesting is this is sort of a neutral indicator that these cases are very promising from, obviously, cheap groups that thought they were too risky to get involved in,” said Professor Richard A. Daynard, president of the cheap jerseys Northeastern University School of Law’s Public Health Advocacy Institute and chair of its Tobacco Products Liability Project. “This is an independent judgment that the tobacco companies are going to be losing these cases.”

In addition to the new influx of funding, a $110 million settlement by tobacco company Liggett Group LLC in October could prove to be the a harbinger of the industry eventually ending its appeal-at-all-costs approach, experts say. The Florida Supreme Court created a situation well-suited for litigation funding when it issued its landmark 2006 decision in Engle v. Liggett Group, overturning a $145 billion verdict and decertifying a class of smokers but allowing its 700,000 members to sue the tobacco companies individually using the jury’s liability findings.

The breakup of the class meant that there could be one attorney with hundreds of cases all on contingency fee bases, said Miami attorney Jim Leshaw, who represents LawFinance Group. “There are very few lawyers who have the resources that the tobacco companies have,” he said. “None [do],” LawFinance Group founder Alan Zimmerman interjected, adding, “In many cases, without financing like this, it wouldn’t be practical – the lawyers couldn’t take on cases like this.”

LawFinance Group would not disclose how much it is planning to raise for Engle case financing, which plaintiffs and attorneys can request or the company in some cases may proactively offer. Since 1994, the company has dispersed $325 million in more than 1,000 law-related transactions, including more than 400 appeals advances, it said.

The individual plaintiffs have won more than $500 million in verdicts since wholesale jerseys China the Engle ruling, but Creating the tobacco companies have played to their advantages by relentlessly pursuing appeals and drawing out costly litigation against plaintiffs who not only lack their deep financial resources, but also, in the case of many elderly parties, lack time to wait out the proceedings. “The defendants have capital. They’ve been fighting this for a long time. The plaintiffs definitely need it,” said Daniel Bush, LawFinance Group’s associate general counsel and underwriting director.

Still, while some litigation funding became available, LawFinance Group, which touts its extensive internal legal experience, found too much uncertainty until more recently. “An initial area of uncertainty is [that] different courts have come to different conclusions about how to apply the factual findings,” Bush said.

The Florida Supreme Court sent a strong message with its March 2013 decision in the case Philip Morris USA Inc. et al. v. Douglas, saying that applying the findings from the Engle case in the progeny cases did not violate tobacco makers’ due process rights. The U.S. Supreme Court backed up the decision in October when it refused to take up an appeal from that ruling.

The tobacco companies’ losing streak at the appellate level has since continued, most recently with the Florida Supreme Court on Thursday declining to accept jurisdiction on an appeal of a $15 million ruling in favor Michelle Mrozek, who sued cheap nba jerseys Lorillard Tobacco Co. for the wrongful death of her mother, Jacqueline Swann Miller. “It’s an indication that the defendants are not going A to be able to delay the cases forever by just appealing and appealing forever,” Types Daynard said. “I think they are running out of tricks.”

Finding a comfort level in their risk assessment has been especially important for litigation funders in the Engle cases. LawFinance Group has been involved in advancing settlements to plaintiffs and attorneys involved in the litigation that came out of BP PLC’s 2010 Gulf of Mexico oil spill, but with an absence of settlements in the Engle cases, they are offering what is known as appeal funding, in which they advance payment of an appealed award. If the plaintiff loses on appeal, the funder has no recourse to collect the money it advanced. “The certainty in the cases makes it a much easier sell,” said Brian Spira, a managing member of Oxbridge Financial Group LLC, which has already provided funding to several plaintiffs law firms involved in Engle cases.

In addition to the recent court rulings, few if any of the punitive damages have been set aside, he noted, and the risk of the tobacco companies running out of money to pay the awards is minimal. However, Spira said he was not sure an influx of more litigation financing would greatly accelerate the tobacco companies toward deciding to settle. “The defense firms [are] going to run the gamut and bill as much as they can out of the tobacco companies,” he said. Daynard was more optimistic, pointing also to Liggett’s parent Vector Group Ltd. entering into a global settlement ending nearly all of its outstanding Engle cases.

That decision does not necessarily mean that other defendants such as Philip Morris USA Inc. and R.J. Reynolds Tobacco Co., which are much larger companies and face larger liabilities, will quickly follow suit. But Liggett was also the first of the tobacco companies to enter wholesale jerseys into an earlier round of settlements with state attorneys general over cigarette advertising, Daynard noted, saying the Engle cases could follow the same pattern. “At this point, it’s really a business proposition for the tobacco companies,” he said. “And to the extent that the financing increases the number of cases coming to trial, that just adds to the pressure.”

At the very least, the availability of more litigation financing, from LawFinance Group and other outfits, provides plaintiffs and small plaintiffs firms with a greater opportunity to pursue their cases and possibly collect on any verdict awards they win. “These companies that do this are terrific. Jerseys They help clients,” said Great Miami attorney Alex Alvarez, who has represented plaintiffs in 14 Engle progeny cases, including the first to go to trial, and has helped cheap NBA jerseys pick juries in four other cases. Even with the steep cost of giving the litigation financing companies a cut of the awards, for older clients and attorneys trying to make ends meet, cashing out now can make sense, he said. “If you’re not going to live long enough to collect it, I can see why some people would take it now rather than take wholesale jerseys twice later when they might not be around.”