Inside America's wildest — and most lucrative — lawsuits

Pap, as his disciples call him, isn't wrong. Mass torts have generated well over $50 billion for injury victims and their lawyers since the 1980s. Opioid prescriptions have fallen, asbestos has been phased out, and dangerous drugs like fen-phen have been pulled largely because of mass-tort lawsuits. Johnson & Johnson is making its baby powder with cornstarch instead of talc because of mass-tort lawsuits linking talc to cancer.

But for all the impact, and the money, mass torts are little known to outsiders. The "mass" part is obvious, and "torts" is a lawyerly word that boils down to any kind of harm or injury. They exist at the boundary between public harm and private resolutions: Depending on how you count, between 400,000 and 6 million Americans were part of a mass-tort case last year.

You've certainly seen the ads: Have you been hurt by Roundup, Zantac, pelvic mesh, or contaminated water at Camp Lejeune? Did your kid develop ADHD, depression, or necrotizing enterocolitis? You may be entitled to compensation.

Mass Torts Made Perfect is part of the reason the field has gotten so big. For about a quarter of a century, thousands of lawyers who handle slip-and-falls and medical-malpractice cases have attended the conference. When they get home, they spin up side hustles referring Roundup, Zantac, and hernia-mesh cases to firms like Pap's that go toe to toe with the pharma giants of the world.

But over the past several years, some lawyers — and investors bankrolling them — have found that mass torts are getting harder to monetize. Advertising is thought to eat up somewhere between 12% and 50% of the budgets of mass-tort firms. At a recent conference, Paul Cody, whose firm Counsel Financial says it has lent more than $1.5 billion to law firms, estimated that at least two dozen plaintiffs' firms each had a debt load of at least $100 million.

Settlements are often taking longer than lawyers and investors budgeted for, leaving hundreds of thousands of plaintiffs in limbo. Johnson & Johnson is trying for the third time to spin off its talc-based-baby-powder liabilities into a shell company created to file for bankruptcy protection, eight years after the cases against it were lumped together. Bayer has said it won't settle any of the 57,000 Roundup cases it's facing until they go to the Supreme Court.

In the wily world of mass torts, the maxim that America is a nation of laws is strained past its breaking point. But the outcomes, people on both sides say, still resemble rough justice. Consumers who used products without knowing the risks get paid, and businesses that hid the dangers of those products can settle cases in bulk instead of facing decades of trials and occasional billion-dollar verdicts that make investors nervous.

"A lot of the rules don't fit what we do," said Chris Seeger, a prominent mass-tort plaintiffs' attorney. "We're improvising and calling audibles all the time. There just aren't rules on point for litigation that involves 100,000 claims."

By the 1960s, that was changing. Cars became ubiquitous, and car-crash lawsuits became a cottage industry. More Americans turned to the courts, jury verdicts got bigger, and the legal system needed new ways to handle complex, high-stakes lawsuits that didn't involve every single injured, ripped-off, or discriminated-against person having their day in court.

Class actions, which allowed one person to represent millions of others, were one solution. Lawyers could win enormous payouts — for themselves, yes, but also ripped-off consumers, endangered workers, and scammed investors — based on a single representative case.

Mass torts, which are less rules-based and more opaque, were another approach. Early cases were often local, like when a few hundred people sued a toxin-spewing chemical plant or when the families of plane-crash victims sued an airline. In the 1970s, mass torts went national. Hundreds of thousands of women sued over defective IUDs, and revelations that asbestos caused cancer led to an unprecedented wave of claims that the Supreme Court eventually ruled were too different from one another to be settled as a class action.

That's the key distinguisher for mass torts: Every case gets filed individually. More than 700,000 asbestos cases have been filed, and its victims have received at least $17 billion. Some of their lawyers, who get paid a portion of each recovery, became millionaires many times over. A law professor said in 2002 that just two firms — Baron & Budd in Texas and Ness Motley (later Motley Rice) in South Carolina — represented about half of asbestos victims. If those two firms worked up the cases themselves and didn't have to split fees with anyone else, they could have made over $3 billion in fees over the years.

A mass-tort case usually starts small, with a few people hurt by a drug or a medical device. Law firms typically accuse companies of failing to warn people about a product's risks. As more and more cases are filed, federal or state courts usually decide to centralize and simplify them. Judges may charge a "steering committee" of victims' lawyers with doling out work and negotiating with the defendant about document production, trials, and settlement.

Meanwhile, a marketing machine roars to life. The data provider X Ante estimated that in 2023, mass-tort lawyers spent $152 million on TV ads and millions more on social media. Call-center operators screen potential clients to vet viable cases, and nurses and paralegals review medical records and prepare the documents needed to file suit. (Attorneys on the defense side of a mass tort often accuse injury lawyers and their marketing partners of cutting corners and of bringing fraudulent or legally suspect claims.)

The decades that followed mass torts' onset on the national stage showed the big risks and big rewards of mass torts. When more than 200,000 women brought claims over silicone-gel breast implants in the 1990s, a company that made them filed for bankruptcy. That led to a law firm representing 800 of those women to file for bankruptcy, too.

"I've seen a lot of people come and go in mass torts," Seeger says. "I could give you a list of firms that have been wiped out by them." But plenty of lawyers have repeated the successes of the asbestos barons. In the early 2000s, Wyeth, now part of Pfizer, initially budgeted $2.6 billion to settle cases over its diet drug fen-phen. Facing a volume of cases that was far larger than projected — many of which were later found to be fraudulent — it ended up paying more than $20 billion.

In a class action, a settlement is public, and the judge has to approve the lawyers' fees. Any class member can take issue with the proposed deal and fees, and judges often end up cutting the fees. In mass torts, settlements are usually secret and could vary depending on which firm someone signs up with. In the end, clients are usually offered settlements spit out by a formula based on their ages, whether they smoked cigarettes, how long they used a drug or were exposed to a potential toxin, and similar factors. Lawyers can collect a contingency fee, often about 40%, from all their clients, with no judicial sign-off required and few ways for a client to object.

Phil Federico, a Baltimore medical-malpractice lawyer, recalled deciding to go whole hog into mass torts after a friend introduced him to an attorney in a three-piece suit named Paul Hanly who'd made it big after switching from repping asbestos companies to repping their victims.

"Going around with him in NYC, in his Bentley, from the restaurant to the bar," Federico said, "I said, 'What do you do for a living?' He said, 'I'm a mass-tort lawyer.'"

Federico said he was an early mover on the famous Camp Lejeune cases, in which Marines and their families sued the US government over medical conditions caused by contaminated water at a North Carolina base. While other lawyers pumped millions into ads, Federico said, he took a cheaper route of networking with Marines, epidemiologists, and groups like the Veterans of Foreign Wars. Of the more than 200,000 people who've brought Camp Lejeune claims, he was able to sign up 2,000 with the strongest cases for about $400 to $500 each.

Federico's high-touch approach is relatively rare. Many mass-tort lawyers don't develop their own cases at all; they buy leads or sign co-counsel agreements with other firms and agree to split fees. Referrals are the coin of the realm in mass torts, and they are facilitated by connections that lawyers make at conferences like Pap's Mass Torts Made Perfect, the mack daddy of mass-tort gatherings.

"It's like the mass-tort bar's Burning Man," said Curt Miner, an occasional attendee. "A lot of cool stuff goes on there, but also a lot of craziness."

An attendee from this April's conference said that after days filled with panels about science, deposition tactics, and civil procedure, a "work hard, play hard" attitude takes hold at night. "I've seen lawyers doing coke off strippers' boobs," another said.

For years, the standup comic turned trial lawyer Don Worley unofficially kicked off the conference with his popular "little-people parties," featuring scantily clad models and boxing matches between entertainers with dwarfism. "It's ridiculous," one mass-tort lawyer who caught wind of the event said, and "embarrassing to the plaintiffs' bar."

Worley isn't allowed to come to Pap's conference anymore. "The day of the cowboy lawyer is long gone," Pap said. Worley said the only reason he got the boot was that he struck up referral relationships with lawyers — about 400, he said — and Pap would rather keep that referral business for himself. Pap called that "horseshit."

But referrals alone don't get anybody paid. Nearly all mass-tort cases settle, usually for a fraction of whichever verdicts were racked up in the "bellwether trials" that lawyers run to test the waters, and the money flows in the years that follow. In federal mass-tort proceedings, fewer than 3% of cases end up getting tried. One law professor wrote that defense lawyers joke that mass torts are like "the Outback Steakhouse of litigation: 'No Rules, Just Right.'" They feel they would win if judges enforced the rules instead of trying to jawbone them into a settlement.

Some victims of corporate wrongdoing also want their day in court. But lawyers say few of them would feel that way if they realized they may have to spend six weeks in a courtroom and risk walking away with nothing to pay the bills. Mark Lanier, a Texas trial lawyer, has a saying: "Settlements feed families, trials feed egos."

Over the past few months, Pap has been blasting his Mass Torts Made Perfect mailing list with attacks on law firms that struck a deal with Johnson & Johnson to use bankruptcy to settle tens of thousands of its talc-based-powder lawsuits. Women with ovarian cancer would get $50,000 to $200,000, an amount he says is inadequate to pay for their medical care, much less to compensate them for their pain. Women with other gynecological cancers lacking as strong of an association with talc would get only $1,500.

"The numbers they have are just fantasy numbers," Pap says. He said his team hired a private investigator to call J&J posing as claimants. "We had them saying: 'I was around J&J baby powder for three weeks, and now I have esophageal cancer. Do I have a case?' And they'd say, 'Yeah, yeah, go online and get the papers for that.'"

In the talc cases, Pap's firm is on the steering committee, a coalition of lawyers appointed by the judge to allocate work for the benefit of all the plaintiffs and to negotiate with defendants. Their work is paid for by a tax on everyone's settlement, typically 5 to 7 percentage points of the contingency fee the client has already agreed to with the lawyer they retained. These taxes, known as "common benefit" fees, are contentious; one judge said in 2021 that they were "totally out of control." But Pap calls it a way to stop free riders.

Generally, there are two kinds of mass-tort lawyers: those who specialize in finding clients, and those who specialize in litigating cases and hammering out settlements. The relationship is mutually beneficial: The litigators and negotiators wouldn't have leverage without thousands of cases, and the case-acquisition specialists wouldn't know what they were doing if they had to go it alone.

The top tier can be clubby. Newcomers try to hitch their wagons to leaders — or, more realistically, to someone who knows a leader. Seeger may be the most powerful mass-tort lawyer in America. Elizabeth Chamblee Burch, a law professor at the University of Georgia, studied 73 mass torts and found that Seeger had been appointed to leadership roles in 21 of them. His clients have included NFL players with brain damage, veterans who alleged their hearing was damaged by defective earplugs, and victims of the opioid crisis.

The concentration of authority in a relatively small group of lawyers has its critics, including Burch, who argued that relying on "repeat players" had resulted in mass-tort settlements that put lawyers' interests above their clients' interests.

But Seeger and other lawyers at the top of the heap say that putting inexperienced lawyers in charge of a mass tort is a great way to get a bad deal. "This is really more art than science, and not everyone is good at it," he told me.

Ellen Relkin, a mass-torts lawyer who has sued several artificial-hip makers, put it another way. "There are doctors who fix broken bones and give steroid shots, and they learned in residency how to do hips," she said. "Are you going to go to him or her, or are you going to go to the person who does five hips a day?"

Leading a mass tort isn't just a matter of skill; it is expensive to work up cases, analyze medical records, obtain discovery from defendants, and sort through millions of pages of emails, memos, and scientific analysis. In a 2020 interview, Seeger said he and other lead lawyers suing Merck over undisclosed risks of the arthritis drug Vioxx spent $41 million before their clients saw a dime. Few plaintiffs' lawyers have that kind of money. There's also something to be said for experience: Deep-pocketed companies hire the same lawyers over and over, too, and they can run circles around inexperienced plaintiffs' lawyers.

And it's not just wealthy asbestos lawyers who call the shots anymore. The composition of the power players of mass-tort lawyering is changing, said Lucian Pera, a legal-ethics advisor who has clients in mass torts. "There are way more of them, and there are way more categories of them" than there were 10 or 15 years ago, he said.

A new entrant to the top tier is Keller Postman. It popularized "mass arbitration," which turned the arbitration clauses that big businesses bury in their terms of service to avoid lawsuits into a weapon to use against them. But the firm also litigates more-traditional mass torts: It has signed up people by the thousands to sue over products like Enfamil and Similac, Zantac, and 3M's Combat Arms earplugs.

One of the lawyers who help Keller Postman find clients is Jeremy Troxel, who spends at least six figures a year on Facebook ads to drum up clients for Keller and others. The value of his work is clear in fee agreements seen by Business Insider: A retainer for a victim of the toxic water at Camp Lejeune specifies the 40% fee will be split 50-50 between Troxel and Keller. A retainer for Keller to pursue Intuit over TurboTax fees says Troxel gets 10%.

It appears to be going well for Troxel. He was recently spotted buying a $15 million home once owned by Rihanna in Beverly Hills, California. He didn't reply to emails.

Law firms have trouble getting banks to lend to them for all but the safest cases, so much of the capital flows from nonbanks seeking higher returns. Funds managed by the likes of Fortress Investment Group and Gramercy Funds have poured hundreds of millions of dollars into law firms.

Some of these investments, however, have been costly blunders that toed the line of criminality. Lenders and surgeons who teamed up to remove pelvic meshes from women in hopes of collecting money from whatever the women were able to get in a settlement with mesh manufacturers faced prosecutions and civil lawsuits. An attorney who used borrowed money to bring a case on behalf of thousands of Vietnamese fishermen whose livelihoods had been destroyed by the Deepwater Horizon oil spill was criminally charged after it was revealed that their names had been copied from a phone book; he was acquitted, but two codefendants were convicted of fraud and identity theft.

"Attorneys have gotten more cautious about what they will buy, and financiers have gotten pickier about what they will finance," Morning Investments' president, Michael McDonald, said in an email.

Warren Postman of Keller Postman said his firm and others spent "tens of millions of dollars" on marketing in a case against makers of acetaminophen, arguing that manufacturers hid the risk that kids exposed to the drug before they were born could develop ADHD and autism. A federal judge dismissed the cases on evidentiary grounds — but, Postman noted, a successful appeal can turn everything around.

In the meantime, interest is mounting for those firms borrowing money at rates that reflect the big risks involved in many cases; Morning Investments' data indicates lenders' internal rates of return in the past three years have ranged from 21% to 25%. It's not clear how long these firms can keep rolling over their debt. Some lawyers are worried that the process makes it harder for clients to switch firms and puts undue pressure on lawyers to settle. But others are confident that indebted mass-tort lawyers can bounce back from a few bad bets.

America has long been laissez-faire about regulating products that can harm people, and about the business of lawyering. Ethics codes and safety rules exist, but enforcing them is hard, especially when both sides can fund a robust defense.

But absent an overhaul of how Americans' medical bills are paid, what Pap preaches seems to be true. Mass torts are the best way the US has to right a wrong: Big businesses hurt people, and nobody makes them pay until lawyers step in.

Pap is skeptical of anyone who thinks they can become a mass-tort millionaire without paying their dues. And he's worried that the ills that have afflicted so much of modern American life are also coming for mass torts: complex financial machinations, outside investment that interferes with professional judgment, and old-fashioned greed.

"You can do well by doing good," he says. "You don't have to be a pig at the trough."

Additional reporting by Kelsey Vlamis.

Jack Newsham is a correspondent on Business Insider's national desk.