Ken Feinberg Discusses Mass Torts and the VW Emissions Scandal

The VW diesel emissions problems made big news in 2015 (see LBN’s report on the problems Volkswagen of America is facing). Volkswagen hired Kenneth R. Feinberg to design and administer a program to handle claims against the company arising out of the diesel testing scandal. The move by VW underscores the advantages of bringing in an outside expert to handle claims resolution expeditiously. Feinberg’s other mass tort resolution programs include the September 11 Victim Compensation Fund, the BP Oil Spill in the Gulf of Mexico, the GM Ignition Switch Compensation Program, the Foreign Exchange Benchmark Rates Antitrust Litigation, and the Agent Orange product liability litigation. Feinberg discusses how these programs work this interview by Mark Wahlstrom, CEO of Sequence Media Group.

Ken Feinberg

Ken Feinberg

The VW case is different from some other cases Feinberg has handled, he notes, because no one was injured or killed. Even the BP Oil Spill involved some injuries and deaths on the rig. The VW case is strictly a claims program to compensate people with valid claims. It is the same as the other cases in that Feinberg will, “over the next few months, draft a final protocol that will lay out the terms and conditions of the program.” Any voluntary submission of a valid claim will result in compensation if the claimant is willing to sign a release.

An example of how the process works is how Feinberg handled the GM Ignition Switch Compensation Program. In that program, 400 valid claims were identified. Claimants were told how much money they would receive if they waived their right to sue GM. As of the time of this interview, 93% of the claimants had taken the offer. As for the other 7%, they are able to pursue their claims against GM in courts and have a jury decide what awards they should receive.

Feinberg says that the most single most challenging aspect of handling these mass torts is emotion. Claimants are “angry, frustrated, disappointed, uncertain, and very emotional.” The most difficult part of it is trying to listen to the emotional anger of the claimants and to ameliorate some of the anger with monetary compensation. Money is not the best way to compensate people for loss, but it is the system we have in the U.S.

The victim compensation programs like the ones Feinberg has administered are a fairly new development. In years past, class actions and multidistrict litigation were almost the only remedies in mass tort cases. He does not see any movement towards a wider use of these programs. He notes that there have only been four such programs in ten years as compared to the thousands of cases litigated in courts. On the other hand, Feinberg notes that the U.S. Supreme Court has expressed dissatisfaction with aggregating tools like Federal Rule 23 (class actions). Aggregating claims poses a real challenge.

You pick your lawyer, I pick my lawyer, judge and jury will decide, that’s the American way.

Not everyone is happy with programs like the ones Feinberg has administered. He notes that lawyers are trained in law school to litigate cases for their clients. “You pick your lawyer, I pick my lawyer, judge and jury will decide, that’s the American way.” Feinberg emphasizes that claimants who choose not to take an award and sign a release are free to proceed as though they had never applied. The programs are purely voluntary. No one is foreclosed from litigation by reason of having entered the claims process. People participate because the programs are generous, cost-effective, certain, and expeditious. The whole thing can be done in three or four months.

As to the future, Feinberg thinks that there will be greater use of programs like the ones he has administered. As long as the courts remain skeptical about Rule 23 as the Supreme Court was in Wal-Mart Stores, Inc. v. Dukes, Feinberg says, there will be a growth in multidistrict litigation and other creative ways to consolidate claims for resolution in one forum.

Kenneth R. Feinberg is the Founder and Managing Partner of the Law Offices of Kenneth R. Feinberg. He has been key to resolving many of our nation’s most challenging and widely known disputes. He is best known for serving as the Special Master of the Federal September 11th Victim Compensation Fund of 2001, in which he reached out to all who qualified to file a claim, evaluated applications, determined appropriate compensation, and disseminated awards. He shared his extraordinary experience in his book "What Is Life Worth?," published in 2005 by Public Affairs Press, and in his follow-up book Who Gets What, published by Public Affairs Press in 2012. He has been appointed to two presidential-level commissions because of his experience and expertise, and has had a distinguished teaching career as an Adjunct Professor of Law at Harvard Law School, Georgetown University Law Center, the University of Pennsylvania Law School, Columbia University Law School, New York University Law School, and the University of Virginia Law School. The Legal Broadcast Network is a featured network of Sequence Media Group.