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As Lawsuits Take Flight, Boeing Facing Burgeoning Legal Bills. Plus: Lit Funders Gain Ground in NFL Concussion Deal

Welcome to Critical Mass, Law.com’s weekly briefing for class action and mass tort attorneys. Here’s what’s happening this week: Find out what Boeing's CEO said as more lawsuits land over last month's Ethiopian Airlines crash. The Third Circuit reversed a key part of U.S. District Judge Anita Brody's outside funding order in the NFL concussion case. Class actions have called Fisher-Price's recall of 4.7 million Rock 'n Play sleepers inadequate, but the CPSC's announcement was unusually up front.

Send your feedback to abronstad@alm.com, or find me on Twitter: @abronstadlaw



Boeing's Burgeoning Legal Bill

More families of victims of last month's Ethiopian Airlines crash have sued Boeing, but its CEO's statements have caused turbulence among the plaintiffs' bar.

On Monday: Cotchett, Pitre & McCarthy and Clifford Law Offices teamed up to file 10 lawsuits on behalf of two Canadians who lost entire families who were on the flight, and Velasquez Dolan Arias brought a case on behalf of a Kenyan mother who lived in Austria.

The suits come as Boeing CEO Dennis Muilenburg on Monday attempted to address shareholder concerns that a software defect could have caused the crash. The same defect is alleged to have caused a separate crash in Indonesiaon Oct. 29 involving a Lion Air flight. Both crashes, which together killed 346 people, involved the same aircraft: a Boeing 737 Max 8, which the FAA has grounded.

Earlier this month, Boeing accepted responsibility for the Ethiopian Airlines crash. But on Monday, Muilenberg appeared to change gears, and Boeing released a statement identifying an elective safety alert tied to malfunctioning sensors. Many of the lawsuits name the manufacturer of those sensors, Rosemount Aerospace Inc.

Boeing’s new position sent plaintiffs’ lawyers reeling. Steve Marks (Podhurst Orseck), whose firm has filed lawsuits over both crashes, said “no question there’s back peddling.”

“It’s an outrageous statement that the company would make -- once doing the responsible thing and acknowledging fault and now trying to back off the position. It’s a response to the criminal grand jury, Congressional hearings, and shareholder suits, that has made Boeing dramatically change its position.”



Brody Order Tackled for Loss in NFL Cases

U.S. District Judge Anita Brody of the Eastern District of Pennsylvania continues to issue orders to combat potentially fraudulent claims in the $1 billion NFL concussion settlement, her latest of which limited which doctors ex-players could use. But her most controversial ruling, so far, nullified arrangements that third-party lenders had with ex-NFL players -- an order that went too far,according to a decision last week by the U.S. Court of Appeals for the Third Circuit.

The Third Circuit ruling was a big win for third party financiers, which have been fighting to enforce their contracts with ex-NFL players. Apparently, the Third Circuit found that Brody was within her authority to ban portions of the arrangements that allowed funding companies to seek settlement funds directly, but she couldn’t void the entire contracts, which may be enforceable.

Law.com’s Max Mitchell, who has been covering this issue, told me:

“What this means going forward is that arbitrators, or courts - depending on the contracts - are now going to have to sort out which agreements are enforceable, which means parties are going to raise a whole new host of issues, like whether these are usurious or whether the ex-players (who all suffer brain injuries) had the capacity to enter into the agreements to begin with.”

CPSC: Don't Sleep Through This Recall

Mattel’s Fisher-Price recalled 4.7 million of the popular Rock ‘n Play sleepers this month, following reports of more than 30 infant deaths, and offered full refunds to anyone who bought the product starting on Oct. 12. Yet at least four class actions now claim the recall was inadequate. The suits claim the April 12 recall came too late and excludes sales of the product on Amazon.com and other secondary markets, and that the refunds don’t cover everyone.

But Fisher-Price and the Consumer Product Safety Commission went “above and beyond the typical practice” for the recall, said Christie Thompson (Kelley Drye). For one thing, she said, the recall announcement mentioned the deaths in the headline. For another, the CTSC issued a video statement that the Acting Chairwoman Ann Marie Buerkle posted prominently on the CTSC home page. Christie told me:

“It’s pretty rare. I don’t remember the last time that a commissioner, an official of the CPSC, or the chair, would have issued a separate statement encouraging consumers to participate in the recall and identifying the seriousness of the recall. I think they were concerned about the seriousness of the potential hazard and wanted to ensure that consumers had sufficient notice and increased awareness about the product so that they would know about the recall and then participate in it.”

Here’s what else you need to know:

Mesh Milestone: Johnson & Johnson got hit with a $120 million pelvic mesh verdict in Philadelphia last week. The award includes $20 million in compensatory damages and $100 million in punitive damages to Susan McFarland, a 68-year-old woman who ended up with chronic urinary tract infections after having a pelvic mesh device made by Johnson & Johnson’s Ethicon surgically implanted to treat incontinence. It’s the seventh jury verdict in the Philadelphia Court of Common Pleas against Ethicon over its pelvic mesh devices, but the first over $100 million. Tracie Palmer and Braden Lepisto (Kline & Specter) represented McFarland, and Ethicon’s lawyers were Kate Skagerberg (Beck Redden), Adam Spicer (Butler Snow) and D. Alicia Hickok (Drinker Biddle).

Breach Leaders: A federal judge in Maryland has appointed 14 lawyers to lead the consumer class actions brought over Marriott’s data breach, which impacted hundreds of millions of its Starwood guests. U.S. District Judge Paul Grimmappointed three lawyers to be co-lead counsel: Andrew Friedman (Cohen Milstein), Amy Keller (DiCello Levitt) and James Pizzirusso (Hausfeld). The three had submitted a proposed leadership team, but Grimm selected other lawyers to be liaison counsel and members of a plaintiffs’ steering committee. He also appointed leadership teams to handle cases brought by shareholders and financial institutions over Marriott’s breach.

Another Bristol-Myers?: Another case to test whether the U.S. Supreme Court’s jurisdictional holding in Bristol-Myers Squibb Co. v. Superior Court of Californiaapplies to class actions is before the U.S. Court of Appeals for the Seventh Circuit. The Washington Legal Foundation and the U.S. Chamber of Commercehave filed amicus briefs supporting IQVIA, a Pennsylvania company in Illinois court that is fighting to uphold a district judge’s order. It’s the second case in which an appeal court could rule on the issue: Whole Foods has a similar argument pending before the U.S. Court of Appeals for the D.C. Circuit.

Thanks for reading Critical Mass! I'll see you next week.