Groundhog Day: Managing a Mountain of Pattern Litigation

At times, such litigation may seem like an insurmountable mountain. The authors recently faced a mountain of commercial litigation in which owners of fleets of Class 8 trucks sued the manufacturer for direct fraud, fraud by nondisclosure, and other causes related to what they claimed was an unreliable engine causing downtime, business interruption, diminution of value, and lost profits. For the trial team, it felt like the 1993 movie Groundhog Day—in which Bill Murray portrays a weatherman reliving the same day, Groundhog Day, over and over until he gets it right—because half the cases were brought by the same law firm, using the same allegations, documents, and witnesses. The plaintiff was the only variable.

On February 2, 2018—Groundhog Day—the team faced the second trial of its pattern litigation in Houston. Only six months earlier, the team had tried the first bellwether case in Jackson, Tennessee, and lost badly. At this trial, however, the team won a defense verdict with the same facts, documents, and experts. The team was hopeful that an end was in sight. They were wrong. They tried their third case the next February in Ohio, and a fourth the next February in Omaha.

This article explores the battles won, mistakes made, and lessons learned in managing pattern litigation from the perspective of in-house counsel and an outside trial lawyer.

Discover the Pattern

Pattern litigation is not always obvious, but early detection of the problem is always in the best interests of the customer and the client. One of the more famous examples is the Ford/Firestone litigation in the late 1990s. As early as 1996, lawsuits began alleging tire tread separation at high speeds in Ford Explorers. Plaintiffs’ lawyers did not report the issue to the National Highway Traffic Safety Administration (NHTSA) because they feared a finding of no defect, which the defense would use against them. Defense lawyers did what they do: defend the product. Initially, there were relatively few cases, spread out across the country, defended by multiple law firms over several years. No one saw the pattern at first. Many accidents appeared to be bald tires separating at high speeds combined with overreaction by the driver. But when all was said and done, there were over 270 fatalities, thousands of injuries, thousands of lawsuits, and a single firm representing both Ford and Firestone. When a congressional hearing occurred where Masatoshi Ono of Firestone apologized to the American people, and Jacques Nasser of Ford said, “Yeah, it’s all his fault,” the dual representation came to an end. In the end, the two companies had spent hundreds of millions on lawsuits and recalls and suffered damage to their brands.

In 2001, in response to the recalls, Congress enacted the Transportation Recall Enhancement, Accountability, and Documentation (TREAD) Act, which requires manufacturers to report information to the NHTSA in hopes the federal government can spot patterns that manufacturers miss and investigate potential defects. As a result, most major manufacturers have employees whose responsibility it is to find and evaluate these patterns, but in-house counsel should share in this responsibility.

Outside counsel can help too. Although outside counsel must represent their clients zealously, they can also:

• ask about other similar claims and lawsuits;
• keep up with industry media where plaintiffs’ lawyers advertise for victims of defective products; and
• analyze the case objectively and advise of a defect allegation with merit.

Retain Lead and Local Counsel

Retain a lead trial team early. Don’t wait until damaging documents have been produced and damaging witnesses have been deposed.

Often defendants will hire a fine trial lawyer they know and trust, or hire a big name if they don’t. Warning: hiring a talented trial lawyer is an important consideration, but finding one who also has the time or willingness to make time is really, really important in pattern litigation. Your lead counsel not only must be experienced and talented but also must be willing to devote half or all of their practice to your emergency. This has the potential to squeeze out other clients, and there is the risk that, at the end of the project, counsel will have a massive hole in their docket. It’s important to vet these potential issues ahead of time.

Not only do you need a good general, but you may also need an army. Does your lead trial lawyer have a deep bench? Do those lawyers have time for your project? Will they give it priority? If your general dies or retires (these things may last years), how do you feel about their lieutenant?

Retain local counsel that fits your needs. Often clients use the local counsel they have used for years. This can be good since they will prioritize the client. But, is local counsel a team player? Will local counsel work well with national counsel and color inside the lines? Might they be resentful and undermine the other firms? And, of course, does local counsel have local knowledge and contacts, and will they guard the client’s interests on a local level?

Create a Litigation Manual

If there’s a delay in recognizing the pattern, litigation will occur in different venues with multiple firms defending each case in different ways. This could result in inconsistent discovery responses, document production, and employee testimony. A court could also enter an overbroad discovery order that might spread to other venues. What to do? The defense team should get ahead of plaintiffs’ counsel as soon as possible and get their case in the can.

This requires an experienced and disciplined team to (1) analyze the allegations and potential allegations; (2) draft search parameters for electronically stored information and document review; (3) identify hot documents and helpful documents; (4) assess how damaging the hot documents are; (5) identify and interview employees with knowledge who may be deposed, flagging potential corporate representatives, valuable witnesses, and high-risk witnesses; (6) anticipate the plaintiff’s discovery requests, corporate representative topics, and deposition questions; (7) outline defensive legal theories, documents, and witness testimony to rebut each potential allegation; and (8) draft a few jury charges for different venues to anticipate trial issues.

Once this is done, the result is a good defense handbook that can be used in each case in the future. It’s an expensive investment up front, but it pays dividends later by eliminating the need for defense firms to reinvent the wheel over and over, reducing the risk of harmful inconsistencies and increasing the likelihood that the defense team will not be surprised by anything that comes.

Litigate for Trial

The vast majority of cases settle. Don’t they? Litigators and clients who comfort themselves with this thought are often shocked to learn that pattern litigation cases are much harder to settle and have a higher likelihood of going to trial. When cases across the country have been filed in state court or opted out of the class, the client may struggle with the fact that any individual settlement could set a floor for the class settlement. It may be tempting to settle a case for $100,000, far cheaper than it costs to try the case. But that bargain settlement, multiplied by hundreds of class members, may be impossible to pay a year later. If the manufacturer can’t get the class settled promptly, the individual cases may go to trial first. Then the manufacturer must decide whether the individual case’s settlement is riskier than a plaintiff’s verdict.

Consequently, it is important to take the threat seriously and not assume the case won’t go to trial. In pattern litigation, especially in the early discovery phases, the defense team must assume that an order to compel will be adopted nationwide, that documents produced will be used nationwide, and that the first deposition of an employee or corporate representative will be played in courtrooms across America over and over, like Groundhog Day.

Pattern litigation may take years to resolve, and employees switch jobs. The depositions should anticipate this. In the authors’ recent litigation, for example, the team had an employee who was so believable, genuine, and likable that it did not matter what he said on the stand; he always scored points. Then he switched jobs—moving to Boeing amidst the highly publicized 737 Max scandal. Prior defense counsel did not videotape his deposition and did not perform a trial direct examination. That likable former employee now carries baggage from his new employer that creates cross fodder. So assume that the first deposition of an employee is the one that will be used at trial and the one the jury will see, and make it one that includes trial testimony that will be helpful.

Provide Robust Evaluations and Monthly Reporting

Defense lawyers draft case evaluations and usually include a range of exposure, settlement value, and likelihood of success. Because pattern litigation drags on and is so expensive and the client is under the stress of the class litigation and settlement, these evaluations should include an accurate estimate of the worst-case scenario. If prejudgment interest is available, the interest over these years can be significant. Attorney fees may be recoverable, along with double or treble damages for deceptive acts, and, of course, there is typically the threat of punitive damages. What do clients say they hate the most about litigation? Surprises.

• Attorney fees. What causes of action are they available for? What is the predicted range? Check your own fees for a guidepost. But be warned: when the defense claims that a plaintiff’s fees are too high, opposing counsel could request their invoices.
• Prejudgment interest. When does it start? What is the rate? Can it be recovered? Make sure to calculate through trial.
• Postjudgment interest. What is the rate? Calculate it for the client.
• Punitive damages. What is the maximum recovery? What must they prove? Give a likelihood of that verdict.

Add it up. Let the client know the worst-case scenario. Then advise what a reasonable or likely verdict will be.

Most clients manage more cases than their outside counsel manage. How does outside counsel make internal counsel’s job easier? Create a spreadsheet and update it continuously. Send it monthly. Make it available directly to the client as needed. This spreadsheet will be a highly condensed version of the evaluation report and may be used as a quick reference guide. It may have columns for the following information:

• Case name
• Customer(s)
• Court name and cause number
• Venue
• Dispositive motions filed, status, deadline
• Trial date
• Litigation dismissed without prejudice
• Litigation resolved by judgment
• Litigation resolved by settlement
• Mediation
• Damage amount/exposure
• Settlement status
• Recommendations
• Retained experts
• Opposing counsel
• Local counsel
• Allegations
• Punitive damages
• Attorney fees
• Consumer Protection Act
• Offer of judgment

Be Early and Aggressive in Responding to Discovery

Before a discovery request. Responding to discovery in pattern litigation can be costly both financially and in terms of revealing damaging documentation. Be early and aggressive in your approach. Start before you are served with discovery. Here are some tips on what you should think about in pattern litigation before any discovery is served:

• Have a robust document retention program. Every manufacturer should have a document retention program. Storing documents is expensive. Not knowing what you have and what you do not have can be more expensive. Searching and producing 10 years of emails under a court deadline leads to disaster. Avoid the headache, have a policy, make sure that the policy complies with all applicable laws, and enforce the policy.
• Train your employees. A client might send emails with intimate photos attached or emails that include hyperbolic language blaming others within the company. Show the employees examples of terrible emails. Describe what it’s like trying to explain away terrible emails in trial. Human resources may have examples of malicious or unprofessional emails. Use them in training.
• Know the evidence beforehand. Draft search terms and collect and review documents before you are asked. This way, a short fuse on an order to compel doesn’t force you to hand over documents to the plaintiff without reviewing them. This gives you the advantage of knowing what you have and don’t have, and when the time comes, your responses can be strategic rather than blanket objections that courts hate. Furthermore, you never want to be in depositions and see your own bad documents for the first time. You want to develop themes, identify the evidence that supports your themes, and know the evidence that undermines your themes.
• Invest in good software. One of the ways to know your documents well is by investing in good e-discovery software. You can save thousands on attorney fees by spending more money on user-friendly e-discovery software.
• Outsource document review. Another way to save cost is to outsource the document review. Document review companies employ lawyers to review under the guidance of an attorney handling the case. The advantage is a substantial cost savings; the disadvantage is that the reviewing attorneys are not the ones who will be trying the case. Thus, the trial lawyers will later need to review all responsive documents.

After a discovery request. After you have been served with discovery requests, you will need to be even more vigilant. Here are some tips on responding to discovery:

• Ask first; answer later. Some plaintiffs’ lawyers will cast a broad net without specifying what the alleged defect is, and make the defect allegation after receiving your discovery to tailor that allegation around your bad documents. Send discovery early, requesting specific allegations of defect and alternative designs. Respond with documents related only to those disclosed defect theories.
• Inadvertent productions. In massive discovery endeavors under time constraints, mistakes happen. Pattern litigation cases can be across multiple jurisdictions with many different law firms. Get an agreement in place with a clawback provision, and exercise it promptly when a mistake comes to light.
• Protective orders. Strong protective orders are critical in pattern litigation. Ensure that there are no sharing agreements between plaintiffs’ counsels. A loss in one discovery battle, even if improper, could result in those documents spilling into other lawsuits. Additionally, ensure that after a trial, the protective order still has teeth such that a gloating press release will not disclose the content of confidential information.

Document production is often the most contentious and costly battleground in pattern litigation. The key is to be early and aggressive.

Discovery team meetings. Pattern litigation often includes massive document searches, electronic production, inconsistent deficiency letters and motions to compel, and a variety of requests for production and duces tecum requests. Too often discovery distracts trial lawyers from being proactive and focusing on developing themes and bolstering defenses.

The discovery team should include at least a lawyer and paralegal from outside counsel; an in-house discovery coordinator from the client; and outside vendors for e-document production and document review and screening. A representative from each should meet weekly or monthly to discuss various discovery demands, motions, and production to ensure that all are informed and on the same page. This avoids the need to respond to fire alarms.

Prepare to Defend Depositions

Use mock depositions. One of the key differences in pattern litigation is the art of defending depositions. In ordinary litigation, the purpose of the deposition is for the plaintiff to get information from your witness. If opposing counsel does not ask the right questions, they don’t get good information. Opposing counsel often sets traps in depositions but doesn’t spring the traps until trial.

In pattern litigation, opposing counsel may be taking a trial deposition, even in venues that don’t have such a thing. They may intend to play excerpts of the deposition at trial, and may ambush your witness in deposition with reptile questions and jury arguments and morality questions, rather than save these for trial. If opposing counsel has multiple suits, they may be able to depose your employee several times, each time obtaining a few more sound bites for trial. Consequently, your deposition preparation should also include preparation for trial testimony.

Many defense lawyers are not rigorous in preparing corporate representatives. Sometimes they just lecture and warn and expect the witness to absorb their knowledge and wisdom. It is essential to activate that passive knowledge by putting the witness through mock deposition. This process will make the witness better, lower the witness’s stress level, identify homework the witness needs to do, and enable you to locate the landmines before the actual deposition.

Further, you may have critical or high-level employees who will have left the company by the time of trial, or will not be available to attend 10 different trials. So it’s worth considering taking direct trial testimony at the conclusion of the plaintiff’s deposition. This prevents “Boeing situations” described above, prevents disgruntled wild card employees from exacting revenge, and avoids the inconvenience of witnesses being required to testify multiple times. Finally, if your witness is called in the plaintiff’s case in chief, you’ll have deposition designations you can play that allow you to get your story out early.

Likewise, in pattern litigation, the corporate representative’s role is expanded. An admission in one case could be played in every subsequent case. Counsel should spend considerable time selecting the right person to be the corporate representative. The person with the most knowledge may be too squirrelly and evasive to be a representative, or may be too aggressive and defensive. This person will be played over and over again in trials. It’s best to select a good witness, work with them to get up to speed on any necessary information, and properly train them on how to be a witness at deposition and trial.

Instruct a witness not to answer. Along those same lines, don’t be afraid to instruct your witness not to answer when the deposition exceeds the designated scope or when a dangerous question is asked. If you allow the witness to answer, you may be stuck with a gift that keeps on giving—a damning sound bite that you’ll hear played to the jury in each trial. Instructing the witness not to answer may result in a recess and/or a call to the court to compel an answer. Even if the witness is compelled, it will give them time to consider the question and formulate a better answer than one from the top of their head.

One of the oldest plaintiffs’ tricks is to ask the testing team about marketing, or the marketing team about testing. If marketing doesn’t know, it’s because testing withheld the information. If marketing speculates wrong, the testimony will be used as an admission against the company generally. It’s essential that the corporate representative stays in their lane and defers to other witnesses on questions beyond the representative’s topics.

Be Early and Aggressive in Requesting Discovery from Plaintiff

Once again, aggressive, but strategic, discovery is the key. Often, plaintiffs’ counsel will attempt to build a portfolio of lawsuits regardless of the merits of the individual cases. It can be tempting to avoid fighting all the cases and fall back to defending only the lawsuits the plaintiffs are actively prosecuting. This is a critical mistake. If the plaintiffs file lawsuits accusing your product of being defective, they should have a valid basis. Send out discovery requests early. Each plaintiff should have actual damages with documents supporting it. Each plaintiff’s story should match the allegations in the complaint. Get the plaintiffs on record early with depositions before opposing counsel has an opportunity to influence their testimony. This is another instance of spending money that can produce dividends at a later trial. The best defense is a good offense.

Overprepare and Overvalue the Bellwether Trials and Test Cases

When the day comes for the first trial in your pattern litigation, overprepare and overvalue. Losing the first trial does not just result in damages in that case but encourages more filings, makes class settlement and settlement of opt-out cases more expensive, creates bad press, and makes future wins less powerful. The loss in the first trial may only be $100,000—chump change for your company. But after the Law360 article, a press release, and 5,000 more lawsuits, your company could be in trouble. You may have other jurisdictions with less restrictive punitive damages and attorney fees available for the claims. Suddenly every claim is worth more. Following are recommendations for the initial trial:

• Invest in high-quality jury research. Mock trials and focus groups are effective tools in testing trial themes, graphics, and lawyers. They are also helpful in creating a profile of desirable jurors. From the client’s perspective, the research either gives confidence that their trial attorneys are adequately prepared for trial or lets them know that the trial attorneys are not ready.
• Hire a jury consultant. A jury consultant can be valuable in voir dire by creating the questions, observing body language, and listening closely while the lawyers are lawyering.
• Use shadow juries. Shadow juries are helpful in harvesting constructive feedback each day so that trial counsel knows what questions they have, what confuses them, and how they are reacting to the themes, witnesses, and counsel.
• Be strategic pretrial. Educate the judge on the issues at pretrial conferences. Usually the issues are complex and likely will be the first time the judge has dealt with a particular issue. Be strategic with motions in limine. Pretrial is a great opportunity to set your case up for a win.
• Less is more for witnesses. During trial, you only need to have a few good witnesses. You don’t need to explain every bad email or document. A few friendly and trustworthy faces to explain your company’s position will often suffice. Extra witnesses give plaintiffs’ counsel another punching bag, and every extra live witness comes with risk.
• Have top appellate counsel present. Trial lawyers have a lot to think about and are focused on winning. Appellate counsel can keep an eye on the record, assist with the charge, argue motions for a directed verdict, and help trial counsel preserve error. Having solid appellate arguments teed up after a loss can result in a reasonable post-verdict settlement; plaintiffs’ counsel does not want to go through a full trial just to be reversed.

This trial will set the pace for all future trials. An early victory could save millions in fees and settlements not associated with this particular case. It is worth it to overprepare and overvalue the case.

Learn from Your Mistakes

Once the trial is over, the team wants to relax and recover. Don’t let that happen. Immediately schedule a lessons learned conference. Brainstorm on what went wrong and what went right. How can you improve your presentation? Did opposing counsel surprise you? How can you respond better next time? Take notes for key witnesses who will be testifying again. How can they improve? Fine-tune opening and closing. Review shadow jury reports to learn if there are ways you can connect better with the jury. Have your consultant interview jurors to see what went wrong and right. Consider another mock trial if you need to retool or test a new strategy. Use this experience to prepare for the next trial, and do it while your memories are fresh. This will significantly cut the cost of the next trial prep and improve your performance. And you know plaintiffs’ counsel is doing the same.

When the day comes for the second, third, and fourth trials, you may feel Groundhog Day fatigue. You may have now been doing the same routine so long, and know the case so well, it’s possible you forget that the jury has not been with you and has no idea what’s going on. Don’t forget to explain the basics and reinforce your themes with each witness.

Conclusion

Trial lawyers say there are three closing arguments: the one they planned to give, the one they gave, and the one they wish they had given. It’s a rare occasion that trial counsel gets a do-over. They usually have one shot to get it right. The upside in pattern litigation is that trial counsel often does get the chance to try the same case again—and, like Bill Murray in Groundhog Day, each trial is a chance to improve and finally get it right.