For this week’s Five Favorites for Friday, I have a full stocking of gifts (too early for Xmas allusions? Maybe, but I was in New York for work and saw the Rockefeller Center Tree, which inspired that lede). Let’s get right into opening them up (and yes, I will probably beat that gag to death for the next few Fridays – just so you are prepared).

1. First off, you will likely have seen the news that a congressman, apparently with no prior known interest in retirement plans, has out of the blue offered up a bill to make it tougher to plead breach of fiduciary duty claims under ERISA, particularly with regard to excessive fee cases. Color me non-plussed. The inevitable tightening up of standards for bringing ERISA class action cases is already under way, by means of strict enforcement of standing requirements to dismiss cases early and increasing judicial skepticism of new class action theories under ERISA. The bill, if it ever becomes law, is likely to be targeted at a problem that has effectively resolved itself, to the extent that the goal is to reduce non-meritorious class action ERISA cases. The question will be whether the bill, as and if finally enacted, throws out the baby with the bathwater, in the sense of barring meritorious class actions claims and not just those that – in my IP days – we used to call strike suits, in other words cases filed just to get a small settlement and a fee for the lawyers. Judicial skepticism and an aggressive use of standing are unlikely to have the effect of also precluding meritorious actions, but it wouldn’t surprise anyone if the bill, as finally enacted, does.
2. And in that regard, here is a good writeup of the recent dismissal on standing grounds in Lewandowski v. Johnson & Johnson, finding that plaintiffs could not definitively enough show harm from mismanagement of health benefits to support a claim. I don’t know about you, but these types of rulings read to me like courts are moving liability issues up to the motion to dismiss stage that they would have, until recently, left open until after discovery and instead decided later on summary judgment motions. And objectively speaking, if you ignore the costs to defendants and their insurers of litigating class action claims that are plausible but end up foundering at summary judgment, they probably belong at the summary judgement stage for resolution in most cases, rather than being advanced up the rules of civil procedure to be decided instead at the motion to dismiss stage.
3. $90 million is a lot of money. Even the judge who awarded it as bad faith and Chapter 93A damages against Liberty Mutual because she found unreasonable claims handling and believed the case law to leave her with no discretion in this regard, thought it was a disproportionate award. On the flip side for Liberty Mutual and other insurers who are presumably looking at the ruling in horror, if there was ever a decision perfectly written to allow an appeals court to revisit various aspects of bad faith law in the Commonwealth and rein in some of its most debatable aspects, this is the one. And I don’t mean that in a negative way with regard to the opinion itself – the decision is an excellent analysis and presentation of the totality of a complex area of law and of decades of case law (the judge actually goes so far back that she cites a decision from the first Chapter 93A case I ever tried, back in 1995). Instead, I mean that the Court’s scholarly treatment of the issues presents the perfect trial court decision for testing the appropriate scope of recovery in such cases. I discussed the opinion here.
4. I have always been quite happy to work out alternative fee agreements with clients, including hybrids, flat fees and contingencies. Clients, however, often prefer hourly billing – and sometimes in my own practice they have been right to stick to it, spending less on cases I have won than they would have ended up paying out as a success kicker or on a pure contingency, for instance, had they elected that route instead. As someone in the insurance industry pointed out to me the other day, not all cases are susceptible to valuation using alternative fees, and sometimes hourly billing is in fact as close as you can get to rough accuracy in pricing in those instances. I liked this opinion piece to this effect, addressing the idea that AI is more likely to supercharge lawyering that is done by the hour than it is to eliminate the billable hour. Not sure the author is right, but time will tell.
5. Every lawyer I have ever met has used the movie line “I do not think that word means what you think it means” at various times. In the insurance coverage world, we often throw around the terms “tail” and “runoff” somewhat indiscriminately. I was pleased to come across this explanation of the terms in the context of D&O risks and exposures.