Early Settlement through Fines

The early settlement feature of the OAL is clearly the exception in the districts studied. The norm is for the parties to settle at the courthouse steps, after they have completed discovery. Senior Chief Judge Hubert I. Teitelbaum in the Western District of Pennsylva-

1S4. See Jones, An Empirical Examination of the Resolution of Shareholder De­rivative and Class Action Lawsuits, 60 B.U.L. Rev. 542, 544-47 (1980). See also Note, The Rule 23MS) Class Action: An Empirical Study, 62 Geo. L.J. 1123 (1974); Note, Abuse in Plaintiff Class Action Settlements: The Need for a Guardian During Pre-trial Settlement Negotiations, 84 Mich. L. Rev. 308, 308-09 n.6 (1985); In re School Asbestos Litig., 789 F.2d 996, 1009 (3d Cir. 1986) (“[T]he realities of litigation should not be overlooked in theoretical musings. Most tort cases settle, and the preliminary maneuverings in litigation today are designed as much, if not more, for settlement purposes than for trial. Settlements of class actions often result in savings for all concerned.”).

Chapter VI

nia and District Judge Joseph H. Young in the District of Mary­land impose sanctions for late settlement of cases, including asbes­tos litigation.165 Reports from both jurisdictions indicate that these practices are effective in fostering marginally earlier settlements in asbestos litigation than is the norm for those two courts.

In the District of Maryland, Judge Young’s order imposes a fine of $1,000 per day for any asbestos case settlements announced later than approximately ten days before the scheduled trial date.166 If any of the asbestos cases in the cluster scheduled for trial settle at any time, the fine is imposed on the party found responsible for the delayed settlement.167 Judge Young has not imposed any fines and all of his cases have settled within the guidelines. Attorneys com­plain about the order and question its legality, morality, constitu­tionality, and fundamental fairness, but, sometimes in the same sentence, they confess that it works. A similar report was received fromWestern Pennsylvania regarding Judge Teitelbaum’s imposi­tion of jury costs on the parties for delayed settlements. A reason for its success is that lawyers want to avoid the embarrassment of having sanctions imposed on them.

Imposing fines for late settlement, of course, is not comparable to an OAL program that drastically alters the time of settlement and avoids much pretrial discovery. These orders may have marginal impact on the parties’ transaction costs. Looking at judicial econo­mies, the orders require little judicial effort to implement, are largely self-enforcing, and allow a court to plan its trial schedule more efficiently.