SE Texas Record

Friday, August 23, 2019

Houston law firm ‘blew’ the statute of limitations for possibly ‘thousands’ of vaginal mesh clients, suit alleges

By David Yates | Jul 31, 2019

Clark Love & Hutson

HOUSTON – Clark, Love & Hutson, the self-proclaimed leaders in vaginal mesh litigation, has been hit with another lawsuit alleging the firm “blew” the statute of limitations for possibly “thousands” of clients.

Seeking tens of millions of dollars in damages, Pamela Johnson filed the suit in federal court earlier this week.

In addition to CLH, the suit names the firm’s partners, Clayton Clark, Scott Love and Shelly Hutson, as defendants – along with several other attorneys, including Lee Murphy, James Lee and Erin Murphy.

This case stems from one of the largest multi-district litigations in history – the transvaginal mesh mass tort cases in the U.S. District Court for the Southern District of West Virginia, which involved more than 100,000 plaintiffs, seven separate MDLs against assorted manufacturers, and hundreds of law firms.

TVM suits allege the product was poorly designed and dangerous, necessitating surgery to repair or replace the device. Dozens of cases have been tried, 26 of which have resulted in jury verdicts against mesh manufacturers totaling more than $545 million. 

The vast majority of individual TVM cases settle, frequently as part of an aggregate settlement in which a law firm bundles together all of its clients who had claims against a particular manufacturer.

The firm’s individual clients can choose to participate or continue with their lawsuit.

“That did not happen here,” the suit states. “Instead, the Defendants, lawyers who were handling approximately 26,000 individual cases just with respect to TVM alone, missed the statute of limitations filing deadlines for hundreds, and potentially thousands of cases, and then, rather than disclosing that problem, included those time-barred cases in aggregate settlements totaling nearly a billion dollars.” 

Johnson alleges the defendant lawyers did this without telling her and believes they did the same to their other clients.

“As a result, the Plaintiff and Defendants’ TVM clients participated in the settlements without understanding that the aggregate settlement included many time-barred claims,” the suit states. “The facts and ramifications about the inclusion of time-barred cases were material and necessary facts that must have been disclosed by Defendants to Plaintiff and Defendants’ other TVM clients in order to obtain their informed consent to proceed with lump sum aggregate settlements. 

“These facts were never disclosed.”

Johnson maintains the defendant lawyers committed a breach of fiduciary duty by failing to disclose the statute of limitations issues.

“Plaintiff brings this case to recoup the attorneys’ fees received by the Defendants for their breaches of fiduciary duty in handling Plaintiff’s claims which were included in TVM aggregate settlements,” the suit states. “Plaintiff also brings this case to recoup damages for the value of their claims had they been timely filed and properly handled by Defendants.”

Johnson estimates the value of those claims at $20.9 million each, or collectively $83.6 million.

And the total amount of attorney’s fees collected by the defendants in the aggregate settlements are estimated to exceed $250 million, according to the suit.

CLH claims that has obtained TVM settlements and verdicts of more than $1.5 billion.

The suit says the firm worked with the other defendant lawyers on mesh cases and formed their own litigation support company, Litigation & Records Services, which enabled them to collect attorneys’ fees and then also charge for additional back office support, data entry, records retrieval and medical review services – all of which would normally be included as part of the work covered by attorneys’ fees.

“In other words, LRS (Litigation & Records Services) enabled CLH and LM to share in additional payments to the clients above and beyond the attorneys’ fees,” the suit states. “Not only did CLH and LM form LRS, they staffed it with their own people.” 

LRS was formed on Dec. 20, 2011, shortly after CLH and LM began advertising for TVM clients. QTAT BPO Solutions was hired to perform the outsourced litigation support LRS was unable to do, the suit states.

The relationship between the two firms has since soured, as LM sued CLH for failing to pay fees allegedly owed on TVM claims in 2018.

Because of the large volume of TVM cases being filed, the MDL judge issued an order requiring plaintiffs to temporarily discontinue filing new cases in the MDLs, and instead serve a short form complaint on the applicable defendants. 

The delayed filing order specifically provided that if the complaint was not filed by Feb. 14, 2014 in the MDL, then absent an agreement between the parties in writing, the complaint would not be deemed filed as of the service date, but would instead be treated as filed on the actual date of filing.

“Upon information and belief, CLH served hundreds, if not thousands, of cases during the 2013 moratorium on filing,” the suit states. “This provided a significant cost savings to CLH since it could serve the complaints without having to pay a filing fee for each complaint—but also created a significant future expense.” 

In 2013 and early 2014, the filing fee for in the Southern District of West Virginia was approximately 400.00. Assuming 7,000 cases had been served and not filed, CLH would need to spend more $2 million in order to file its backlog of cases.

“The result was that although CLH managed to file some cases in the MDLs in

2014 prior to the February 14, 2014 deadline, it missed the deadline for hundreds, and potentially thousands of cases,” the suit states. “CLH, LM and each named defendant were well aware of this problem.”

The suit says the defendants then filed TVM lawsuits, each containing dozens of plaintiffs, in state courts in order to only pay a single filing fee and force the manufacture defendants to remove the cases to federal court. 

“But something far more sinister was going on,” the suit states. “CLH wasn’t just filing cases in state courts in circumvention of the MDL and saving filing fees. CLH was including hundreds of claims in the state court filings for which it had already served short form complaints in the MDL.

“There was no legitimate reason for CLH to do so. But that is what CLH did, as is clear from the removal petitions filed by the various manufacturer defendants in those cases.”

Johnson believes the “obvious explanation” for the bulk filings in state courts is that CLH was attempting to hide the “blown” statute of limitations issue and afford the firm more time to negotiate settlements.

Johnson anticipates that the defendant lawyers will attempt to seal her complaint, as they did in Alvarado v. Clark Love & Hutson, to prevent it from becoming public information and allowing individuals who were represented by them to learn about the nature of their actions in concealing the blown statutes.

She is represented by the Beggs Landers Law Firm in Irving.

The complaint was filed July 23 in the U.S. District Court for Southern Texas, Houston Division – case No. 4:19-CV-02693.

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Houston Division of the Southern District of Texas