Ethics Rules in Practice: An Analysis of Model Rule 5.6(b) and Its Impact on Finality in Mass Tort Settlements
Gomez, Ronnie, The Review of Litigation
I. INTRODUCTION............. 467
II. WHAT IS FINALITY AND HOW HAS IT TRADITIONALLY BEEN ACHIEVED?.................... 469
III. NO-SUE PROMISES AND MODEL RULE 5.6(b)........... 475
IV. CONSULTATION AGREEMENTS AND MODEL RULE 5.6(b).......... 477
A. Judicial Treatment of Consultation Agreements............... 478
B. Policy Implications of Consultation Agreements......... 483
V. NON-BINDING COMMITMENTS AND RULE 5.6(b)........... 486
A. Judicial Treatment of Non-Binding Commitments.......... 487
B. Policy Implications of Non-Binding Agreements.......... 489
VI. CONCLUSION: FINALITY IN MASS TORTS AND THE ETHICS Rules ................492
As the late Richard Nagareda, a leading scholar in mass torts, explained: Settlement is the "endgame" of mass tort litigation.1 But a settlement alone is insufficient; in the mass tort context, defendants require that their settlement include some sort of finality. Defendants require finality in mass tort settlements because they want to ensure that they do not pay money to one set of claimants and their lawyers only to have those same lawyers use the money to finance the lawsuits of another set of claimants. 3 This Note 1. Richard A. Nagareda, Mass Torts in a World of Settlement ix (Univ. of Chi. Press 2007) ("As in traditional tort litigation, the endgame for a mass tort dispute is not trial but settlement.").
2. Howard M. Erichson, The Trouble with All-or-Nothing Settlements, 58 U. KAN. L. Rev. 979, 979 (2010) [hereinafter Erichson, All-or-Nothing Settlements] ("A settlement that leaves significant exposure-or worse, that invites new claimants to join the fray by displaying easy money-holds little appeal.").
discusses one way that parties in mass tort litigation have attempted to achieve such finality, often in spite of ethical rules.
One way that parties can ensure this sort of finality is to enter into a "no-sue agreement." A no-sue agreement is an agreement made between plaintiffs' lawyers and defendants' lawyers, in which the plaintiffs' lawyers agree not to represent future claimants, or "not to sue the same defendant on behalf of a later client with a substantially related claim."4 Unfortunately, such an agreement would be a direct violation of Model Rule of Professional Conduct 5.6(b).5 However, parties in mass tort litigation have continuously found ways to achieve this valuable finality despite ethical rules. This Note is an analysis of the ways in which both plaintiff and defense lawyers attempt to subvert Model Rule 5.6(b). Additionally, by analyzing how courts treat such attempts, this Note will show that states should rethink their application of similar rules because lawyers' attempts to get around these ethical rules will lead to other, often more problematic, ethical considerations.
Part II of this Note discusses what finality in the mass tort context entails, why it is so important, and how it has traditionally been achieved. Part III is an analysis of Model Rule 5.6(b) and explains why a no-sue agreement would be a violation of the rule. Part IV introduces one way in which parties attempt to subvert the ethics rule: consultation agreements. Additionally, Part IV will discuss the ways in which courts have treated such agreements and will outline the policy concerns of consultation agreements as opposed to no-sue agreements. Part V discusses the practice of non-binding commitments as a way to pass Rule 5.6(b) scrutiny. Again, this section will analyze the treatment of these commitments by the courts and assess their policy implications. Finally, Part VI argues that because of the implications of Rule 5.6(b) in practice, specifically the ethical concerns that result from its subversion, states should reconsider their support for such a rule.
II. WHAT IS FINALITY AND HOW HAS IT TRADITIONALLY BEEN ACHIEVED?
The concept of finality-the knowledge that a significant portion of the defendant's liability has been capped-plays a significant role in the ultimate settlement of mass tort cases. …