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Yamaha and Merck win high-profile bellwether trials

Corporate defendants' bellwether victories can predict or resolve similar cases

In 2003, Japanese power sports equipment company Yamaha Corp. introduced a new all-terrain vehicle called the Rhino, which was designed to allow two passengers to sit side by side. The model quickly became popular with recreational sports enthusiasts, hunters, farmers and other consumers. A few years later, Yamaha added some safety modifications to the Rhino, including half doors and grab bars.

That’s when the lawsuits started rolling in.

Plaintiffs lawyers asserted that Yamaha redesigned the Rhino because the vehicle was dangerous and had caused serious injuries to riders. Many lawyers used the Internet to recruit plaintiffs claiming to have suffered Rhino-related injuries, and firms filed hundreds of lawsuits in hopes that Yamaha would settle for millions of dollars.

But Yamaha opted to litigate. The company pointed to Consumer Product Safety Commission investigations, which found that many of the reported Rhino-related injuries and fatalities involved riders who weren’t following the safety guidelines and warnings that the company issued with the vehicle. For instance, about one-third of the accidents involved more than two riders in the vehicle. Three quarters of the reported injuries involved riders not wearing seatbelts. And one-third of the incidents involved unlicensed drivers younger than 16 years old.

“Yamaha, as most companies would, I hope, in that situation, chose the option of aggressively defending this litigation, recognizing that the path to resolution was through bellwether trials,” says Bowman and Brooke Partner Paul Cereghini, who represented Yamaha in the Rhino litigation.

In layman’s terms, bellwether trials are the first cases to be tried in a group of similar cases. Typically, these trials will set the trend in terms of how similar cases might transpire.

In July 2010, a jury delivered a 12-0 verdict in Yamaha’s favor in the first bellwether case to be tried out of hundreds of consolidated cases involving Rhino-related injuries across the country.

“That case sent a very powerful message throughout the litigation,” Cereghini says. “Following that trial, hundreds of cases were resolved, and hundreds of cases since then have simply been dismissed or abandoned.”

At press time, Yamaha had won all 10 of the Rhino-injury cases that had gone to trial.

Other corporate defendants, such as Merck & Co., also recently have been obtaining victories in major bellwether cases. Litigation experts say that securing legal wins in these high-profile trials can help companies defend their reputations and ensure that they don’t become targets for plaintiffs firms looking to make quick money through settlements.

Evolving Term

Bellwether trials refer to the old shepherds’ practice of belling a wether, or putting a bell around the neck of a male sheep chosen to lead a flock. Similarly, the law community traditionally has used the term “bellwether” to refer to a trial that guides or governs the outcome of other similar lawsuits that are part of pattern litigation, including mass tort litigation, consolidated cases, multidistrict litigation and litigation in which individual cases involving similar issues are filed in multiple states.

But Butler Snow Partner Christy Jones says the term’s meaning has evolved.

“What we really have in practice today are cases that are tried first, not for the purposes of necessarily determining the outcome of future cases, but that give you an idea of the value of the cases, and whether the cases can successfully be defended,” Jones says.

Cereghini agrees with Jones’ interpretation. “The bellwether trial is a high-visibility trial that sends a message,” he says. “The parties on both sides are looking at this trial to gauge the strength of the majority of the other cases and claims that are pending or might be filed.”

Plaintiffs examine the outcomes of bellwether trials in order to decide whether similar cases should be abandoned or settled for nominal amounts, or whether the litigation might proceed to a point that could result in a significant settlement from the defendants. On the other hand, defendants evaluate bellwether cases to assess how strong the defense is, and what their strategy should be going forward.

Professor Alexandra Lahav of the University of Connecticut School of Law says more judges have been structuring consolidated mass tort cases into bellwether trials over the past five years. “Since the Vioxx litigation was resolved [in 2007], it’s become increasingly popular,” particularly in pharmaceutical cases, she says.

In the Vioxx litigation, nearly 50,000 plaintiffs claimed Merck’s painkiller Vioxx caused heart attacks, strokes and other major health problems. Merck fought the claims and prevailed in four of five total Vioxx bellwether trials. The company then agreed to settle the remaining cases for $4.85 billion, which was much less than the initial liability estimates of $50 billion or more.

Lahav says individual settlements in the Vioxx litigation were easily computable because plaintiffs lawyers created an online calculator in which people who claimed to be harmed by Vioxx could input their personal conditions and damages and receive a prediction of the amount to which they were entitled. The calculator is still posted online.

Picking Cases

There are no concrete rules about how cases should be selected as bellwether trials, which worries some scholars (see “Concerned Observers”).

“Sometimes it is the facts of the cases that determine how cases are selected,” Jones says. “In other cases, the judges sometimes will say, ‘This is the oldest case on the docket, and therefore it ought to be tried first.’”

Many judges allow both the plaintiffs and defendants to suggest potential cases to proceed to trial, so corporate defendants should carefully weigh the pros and cons of recommending certain cases as bellwethers.

“The defendant has to consider how tough a case it wants to take on as its first bellwether trial,” Cereghini says. “On one hand, a very strong plaintiffs case presents a higher risk of a plaintiffs verdict. But on the other hand, trying one of the plaintiffs’ strongest cases first also sends the strongest message.”

Cases that will have the maximum value to corporate defendants are ones that involve the lead plaintiffs counsel, a typical fact pattern and plaintiff claims, and the lead expert witnesses. “When the first bellwether trial or trials involve those ingredients, then the litigation is likely to be resolved with fewer bellwether trials,” Cereghini says. But, he notes, corporate defendants shouldn’t assume that one trial will end all pending cases. “It’s rare that major pattern litigation would be resolved on one bellwether trial.”

Defendants also should decide whether they want to seek out or avoid cases involving punitive damage claims.

“Sometimes it can be an advantage to have the first early bellwether trials involve punitive damage claims because plaintiffs have the opportunity to present every bit of evidence that they think goes to that claim,” Cereghini says. “The plaintiffs are swinging the bat as often and as hard as they can for a punitive damage award, and if the plaintiffs strike out, that will hopefully discourage the filing of additional cases and claims.”

Trial Time

Experts stress that corporate defendants should make sure they secure the appropriate resources and experts to put forth the best defense possible during bellwether trials. These factors will be important in determining how related cases unfurl.

“Evidentiary rulings become extraordinarily important [in bellwether trials] because, once the court has ruled on whether or not an expert can testify or a document ought to be admitted into evidence, very often that decision is followed in subsequent cases,” Jones says.

Overall, companies involved in bellwether trials must remember to be prepared and realistic.

“A company may be very confident in its ability to defend a particular case to a successful verdict, but there are no guarantees,” says Cereghini, whose firm will be representing Toyota Motor Corp. in bellwether trials related to the hundreds of unintentional acceleration lawsuits the company has been facing during the past two years.

At press time, the first Toyota bellwether trial was tentatively slated to begin as early as April, but experts estimate that date will be pushed back to February 2013, as the case hadn’t yet been determined. Although he wouldn’t comment on the pending litigation, Cereghini hinted that the defense would be taking a tried-and-true approach to the Toyota bellwether trials. “People who have followed [the Yamaha litigation] are well aware of Yamaha’s strategy, and it’s been widely regarded as having been very successful.”

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