Settlements Project Workshop

About the Workshop

The Health & Environmental Settlements Project has evaluated mechanisms that have been used by state attorneys general, the U.S. Congress, and others to address and resolve several of the toughest large-scale health and environmental liability and compensation challenges over the last fifty years. On March 12, 2019, the State Impact Center's Health & Environmental Settlements Project held a workshop at NYU School of Law on four major health and environmental settlements. The workshop informed the development of the Settlement Project’s final product, Looking Back to Move Forward: Resolving Health & Environmental Crises.

The workshop featured expert panel reviews of four major health and environmental settlements, keynote remarks by Kenneth Feinberg, a nationally-recognized expert in mediation and alternative dispute resolution, and a presentation by Dr. Cheryl Healton, Dean and Professor of the School of Global Public Health and the Director of the Global Institute of Public Health at NYU.

Tobacco Master Settlement Agreement

Panelists

Michael Hering — Director and Chief Counsel, National Association of Attorneys General (NAAG) Center for Tobacco and Public Health

Michael Hering was appointed NAAG tobacco chief counsel in April 2013 after working for six years as NAAG deputy chief counsel of Master Settlement Agreement (MSA) payments. Prior to joining NAAG, Mr. Hering served as an assistant attorney general in the Consumer Protection and Antitrust division of the Massachusetts Attorney General’s Office, where he worked on a number of initiatives relating to tobacco, including the action that ultimately resulted in the MSA.

Joelle M. Lester — Director of Tobacco Control, Public Health Law Center, Mitchell Hamline School of Law

Joelle M. Lester, co-author of “Chapter 3: A Complex Achievement: The Tobacco Master Settlement Agreement,” directs the Public Health Law Center's commercial tobacco control program, supporting tobacco control policy change throughout the United States. The Center seeks to improve health and advance health equity through the power of law and policy.

Mark Greenwold — Senior Consultant, Campaign for Tobacco-Free Kids

Mark Greenwold worked as Senior Consultant to the Campaign for Tobacco-Free Kids with regard to federal and state regulation of tobacco products and litigation concerning the regulation of tobacco products. Previously, Mr. Greenwold served as the first Chief Counsel for Tobacco for NAAG, where he was responsible for coordinating the activities of all the states under the Tobacco MSA of 1998 and enforcing the agreement.


Panel Summary

The first panel of the Health & Environmental Settlements Project’s workshop discussed the Tobacco MSA of 1998. The MSA resolved claims that states brought against major tobacco manufactures for the advertising, marketing, and promoting of cigarettes.

Michael Hering, drawing from his experience leading the Center for Tobacco and Public Health at NAAG, provided an overview of the major aspects of the MSA. As a result of the settlement agreement, tobacco companies must make payments to states in perpetuity on an annual basis, currently amounting to approximately $7 billion a year; follow marketing and advertising restrictions; and fund an anti-tobacco organization (the Truth Initiative). As part of the agreement, the tobacco manufacturers received releases for claims brought by the states.

Joelle M. Lester spoke about how the MSA fits in with other litigation against the tobacco industry and focused on how the release of tobacco industry documents under the terms of the settlement has led to further tobacco industry restrictions. The released documents showed that the tobacco industry was aware of the adverse health impacts of smoking while, at the same time, testifying to Congress that there was no link between smoking and lung cancer. Documents also showed how the industry’s advertising strategy targeted specific groups. The document repository established under the settlement helped inform follow-up state and federal government regulation of the industry, and litigation that smokers brought against the industry.

Mark Greenwold discussed how the primary goal of the state-initiated litigation and settlement was to address a public health epidemic, and not to compensate states (or individuals) for health-related damages. More specifically, the MSA sought to sharply reduce youth smoking rates by placing advertising and marketing restrictions on tobacco companies, especially related to marketing to children. These restrictions could not have been achieved through legislation due to First Amendment issues.

The MSA has successfully reduced youth smoking rates, but other aspects of the settlement have been disappointing, including: the diversion of tobacco payments to states to programs unrelated to tobacco prevention; unforeseen securitization of payments to states; the failure to include American Indian and Alaska Native tribes in the settlement; and the creation of a perverse incentive for states to protect the market share of the tobacco companies, so as to continue the flow of payments from companies to states.

The panel concluded its discussion by answering questions from workshop participants.

The Gulf Oil Spill Settlement

Panelists

Brian Israel — Partner, Arnold & Porter

Brian Israel is chair of Arnold & Porter’s Environmental practice group. Mr. Israel is lead counsel to BP in relation to the Deepwater Horizon natural resource damages (NRD) claim, and also he was one of the trial attorneys at the Deepwater Horizon Clean Water Act (CWA) penalty trial.

John C. Cruden — Principal, Beveridge & Diamond PC

John C. Cruden is a principal at the environmental law firm Beveridge & Diamond PC. Mr. Cruden led the Environment and Natural Resources Division (ENRD) of the U.S. Department of Justice (DOJ) during the settlement of claims stemming from the Gulf of Mexico (Gulf) oil spill. 

Billy Plauché — Partner, Plauché & Carr LLP

Billy Plauché represented the states in the litigation following the Deepwater Horizon disaster in the Gulf. Mr. Plauché provides counsel on environmental and natural resource related issues, including matters involving the Endangered Species Act, the CWA, the National Environmental Policy Act, NRD actions and wetlands regulations.


Panel Summary

The second panel of the Health & Environmental Settlements Project’s workshop discussed the settlement of litigation related to the BP Deepwater Horizon oil spill in the Gulf in April 2010.

Brian Israel, drawing upon his experience representing BP, provided an overview of the largest environmental settlement in U.S. legal history. The resolution of the litigation included a groundbreaking early restoration framework between the federal and state governments and BP; a criminal plea agreement; a consent decree that resolved CWA and Oil Pollution Act (OPA) claims; and the the Resources and Ecosystems Sustainability, Tourist Opportunities, and Revive Economies of the Gulf Coast States (RESTORE) Act.

John C. Cruden shared the lessons learned from his experience in leading ENRD during the settlement. Critical parts of the settlement process included managing intra- and inter-party relationships and developing a process to move from conception to specifics in reaching a settlement with all parties. The settlement has succeeded because it was structured to avoid BP’s bankruptcy; established a governance structure for the spending of settlement funds; and set aside funds to address unanticipated harms.

Billy Plauché, who represented the states, said that it was critical to remove the litigators from the negotiation room in order to reach a settlement and that engaged neutral parties helped facilitate a settlement. Additionally, the early restoration framework helped structure the terms of the final settlement.

The panel concluded its discussion by answering questions from workshop participants.

The Superfund Legislative Settlement

Panelists

Barry Breen — Principal Deputy Assistant Administrator, U.S. Environmental Protection Agency Office of Land and Emergency Management

Barry Breen is the Principal Deputy Assistant Administrator of the Environmental Protection Agency’s (EPA) Office of Land and Emergency Management (OLEM). In that capacity, Mr. Breen works on the EPA’s Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), or Superfund, and federal facilities cleanup and redevelopment programs.

Nancy Firestone — Judge, U.S. Court of Federal Claims

The Hon. Nancy Firestone was appointed to the United States Court of Federal Claims on October 22, 1998. Judge Firestone formerly worked at EPA and DOJ during the passage and implementation of Superfund.

David Farer — Partner, Greenbaum, Rowe, Smith & Davis LLP

David Farer is Co-Chair of the Environmental Department at Greenbaum, Rowe, Smith & Davis LLP. A nationally-renowned environmental lawyer, Mr. Farer previously chaired the Environmental & Brownfields practice group at Farer Fersko, where he established that firm’s environmental practice in 1984.


Panel Summary

The third panel of the Health & Environmental Settlements Project’s workshop focused on the Superfund legislative settlement that requires responsible parties to finance the cleanup of industrial sites contaminated with hazardous substances.

Barry Breen discussed the law’s liability regime (strict, joint and several, and retroactive); the statute’s broad pool of potentially responsible parties (PRPs); the law’s coverage of cleanup and cleanup-associated costs; and Superfund’s encouragement of early settlements. Mr. Breen's slides are available here.

The Honorable Nancy Firestone discussed her role in representing DOJ in negotiations over Superfund reauthorization in the mid-1980s and the key role that public concern regarding hazardous waste pollution had in pushing Congress to enact the program. Judge Firestone noted that a traditional liability regime could not have efficiently (or at all) ensured that contaminated sites would be cleaned up. By establishing cleanup liability across a broad spectrum of liable parties, the statute’s liability regime incentivized settlements, leading to the cleanup of more than 1,000 contaminated sites. Judge Firestone also pointed to the National Childhood Vaccine Injury Act’s liability, causation, and compensation regimes—the subject of Chapter 4—as a potential legislative model for resolving claims related to the opioid epidemic.

David Farer provided the state perspective, discussing state leadership in identifying cleanup issues and establishing state-based cleanup requirements. He noted that the Superfund law’s liability provisions triggered complex allocation negotiations and litigation, leading to high transaction costs.

The panel concluded its discussion by answering questions from workshop participants.

The Volkswagen Emissions Settlement

Panelists

Seema Kakade — Professor, University of Maryland Francis King Carey School of Law

Seema Kakade joined the University of Maryland Francis King Carey School of Law as an Assistant Professor and Director of the Environmental Law Clinic in July 2017. Prior to joining the law school, Professor Kakade served as a federal government attorney, including working on the Volkswagen (VW) settlement in EPA’s Office of Civil Enforcement in the Office of Enforcement and Compliance Assurance.

John C. Cruden — Principal, Beveridge & Diamond PC

John C. Cruden, co-author of “Chapter 8: The Volkswagen ‘Dieselgate’ Clean Air Act Settlement,” is a principal at the environmental law firm Beveridge & Diamond PC. Mr. Cruden led the federal government’s work on the VW matter as head of ENRD.

David Nachman — Counsel for Opioids and Impact Litigation, New York Office of the Attorney General

David Nachman currently serves as Counsel for Opioids and Impact Litigation for New York Attorney General Letitia James. As Senior Enforcement Counsel in the New York Office of the Attorney General, Mr. Nachman was responsible for the Office’s prosecution of the environmental and consumer protection case against VW in the defeat device matter, including New York’s coordination of the multistate investigation into VW’s conduct leading to state court settlements around the country.


Panel Summary

The fourth and final panel of the Health & Environmental Settlements Project’s workshop examined the consent decrees that resolved claims that emanated from VW “Dieselgate” scandal, which involved the installation of emissions testing defeat devices in diesel-powered vehicles sold in the United States.

Seema Kakade discussed VW’s admission of the use of prohibited defeat devices that emitted excess nitrogen oxide (NOx) in violation of the Clean Air Act and the injunctive relief provided and civil penalties paid by VW under a trio of consent decrees with EPA and DOJ. Ms. Kakade’s presentation further focused on the buyback, lease termination, emissions modification (i.e., fixing offending vehicles) and environmental harm mitigation (e.g., zero emission vehicle investment requirement and NOx mitigation trust) provisions of one of the consent decrees. Ms. Kakade's slides are available here.

John C. Cruden discussed the federal government’s work on the VW matter and applied the lessons learned from his experience with the Gulf oil spill settlement to the VW consent decrees. This included the use of two different teams of attorneys to pursue litigation while also pursuing settlement negotiations with VW; identifying the critical individuals that would have to be involved in a settlement; use of financial experts to understand VW’s finances in order to avoid bankrupting VW; and identifying the government’s settlement priorities.

David Nachman discussed the challenges of equitably allocating mitigation trust fund monies between the states and the states’ involvement in the special master-led settlement negotiations, despite not being a party to the VW multidistrict litigation. He noted that a public accounting of past abuses in a settlement is an essential part of avoidance and deterrence of future harms, and commented that combining the roles of settlement and trial counsel can lead to a more effective settlement, in his judgment.

The panel concluded its discussion by answering questions from workshop participants.

The workshop also featured keynote remarks by Kenneth Feinberg, a nationally-recognized expert in mediation and alternative dispute resolution, and a presentation by Dr. Cheryl Healton, Dean and Director of the NYU College of Global Public Health.

Keynote Speaker: Kenneth Feinberg

Kenneth Feinberg is one of the nation’s leading experts in alternative dispute resolution, having served as Special Master of the 9/11 Victim Compensation Fund, the Justice Department's Victims of State-Sponsored Terrorism Fund, and the Treasury Department's TARP Executive Compensation Program. He has been appointed mediator and arbitrator in thousands of complex disputes over the past 35 years. In 2010, Mr. Feinberg was appointed by the Obama Administration to oversee compensation of victims of the BP oil spill in the Gulf of Mexico. Mr. Feinberg is currently the court-appointed Settlement Master in the Fiat/Chrysler Diesel Emissions class action litigation in San Francisco.

David J. Hayes, Executive Director of the State Impact Center, and Richard L. Revesz, Lawrence King Professor of Law and Dean Emeritus of NYU School of Law, introduced Mr. Feinberg as the keynote speaker for the workshop. Drawing from a 35-year career focused on settling and operating compensation funds, Mr. Feinberg presented a dozen critical questions for workshop participants to consider in formulating and managing settlements. 

Mr. Feinberg split the key aspects of settlements into two parts. The first included the structure of the settlement itself (court-sponsored v. private; insurance and government involvement; claim aggregation; latent claim questions; and timing and available resources), while the second focused on the substantive matters of the settlement (eligibility; claim corroboration; release; and due process). In discussing each of these settlement features, he offered examples of what he has seen work over the course of his career in the field.

Luncheon Speaker: Dr. Cheryl Healton

Dr. Cheryl Healton is the Dean and Director of the NYU College of Global Public Health. Dr. Healton is responsible for building the College’s academic, service, and research programs, which focus on domestic and international health with an emphasis on prevention, systems intervention, and innovation in public health practice.

Previously, as the founding President and CEO of Legacy—a leading organization dedicated to tobacco control—Dr. Healton worked to further the foundation’s mission: to build a world where young people reject tobacco and anyone can quit. Prior to Legacy, Dr. Healton held numerous roles at Columbia University, worked to expand the scope of public health programs, and undertook innovative educational initiatives to advance public health practice.

Dr. Healton drew on her background with the Legacy Foundation and the tobacco settlement to discuss the applicability of the Master Settlement Agreement (MSA) to current and future public health challenges. Dr. Healton highlighted parallels between the gun industry and opioid manufacturers with the tobacco industry and how a settlement of gun industry and opioid manufacturer claims could build on the Tobacco MSA. As in the tobacco MSA, any future settlement agreement could increase the cost of the detrimental product, dictate how the relevant industry discusses their product, and avoid the shortcomings of the tobacco MSA by mandating how payments are spent. Many of the points made during Dr. Healton’s remarks can be found in Dr. Healton’s article, “The Tobacco Master Settlement Agreement — Strategic Lessons for Addressing Public Health Problems” in The New England Journal of Medicine.

Dr. Healton's slides are available here.