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Closure Provisions in MDL Settlements

27 Pages Posted: 1 Apr 2017  

D. Theodore Rave

University of Houston Law Center

Date Written: March 29, 2017

Abstract

Closure has value in mass litigation. Defendants often insist on it as a condition of settlement, and plaintiffs who can deliver it may be able to command a premium. But in multidistrict litigation (MDL), which currently makes up over one-third of the federal docket, closure depends on individual claimants deciding to participate in a global settlement. Accordingly, MDL settlement designers often include terms designed to encourage claimants to opt in to the settlement and discourage them from continuing to litigate. Some of these terms have been criticized as unduly coercive and as benefiting the negotiating parties — the defendant and the lead lawyers for the plaintiffs — at claimants’ expense. But closure strategies vary widely and operate on claimants in complex ways. This Article examines closure provisions in recent publicly available MDL settlements. It creates a taxonomy of closure strategies, exploring how they work to ensure claimant participation and how they affect claimant choice and welfare. And it closes with a call for MDL judges to take a more active role in supervising and evaluating the terms of global settlements in MDLs.

Keywords: Multidistrict Litigation, MDL, Settlement, Aggregate Litigation, Class Actions, Mass Torts, Aggregate Settlement

JEL Classification: K13, K40, K41

Suggested Citation

Rave, D. Theodore, Closure Provisions in MDL Settlements (March 29, 2017). Fordham Law Review, Vol. 85, No. 5, 2017; U of Houston Law Center. Available at SSRN: https://ssrn.com/abstract=2943077

D. Rave (Contact Author)

University of Houston Law Center ( email )

4604 Calhoun Road
Houston, TX 77204-6060
United States
713-743-2499 (Phone)

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