It would be hard to find a lawyer who has worked on more big-ticket class or mass action disputes than Stephen Cirami. He’s had a hand in the $1.4B Stryker Modular Hip Settlement; $6B WorldCom Securities Litigation Settlement; $1.1B Royal Ahold Securities and ERISA Settlement; United States v. Pokerstars (Full Tilt Poker); and $2.4B Bank of America Corporate Securities Litigation. Just to name a few.
And actually, he’s had more than a hand. The one-time big firm litigator has been the go-to expert called on to administer the settlements in those and a vast array of other class suits over the past 12 years as a leader at Lake Success, N.Y.-based Garden City Group. The company has nearly 600 employees in six U.S. offices and is a division of the multinational Crawford & Company business processes leader.
In an era of mind-boggling settlements – both in dollar amount and class size – Cirami has emerged as one of the field’s top minds, capable of assembling a team specializing in financial products and markets, real estate, medical and consumer products, or any subject-matter expertise alongside professionals who know the ins and outs of organizing and managing classes of sometimes millions of claimants.
Lawdragon: Steve, tell us what drove you to move from class action litigation to claims administration – and what do you like most about your work at Garden City Group?
Stephen Cirami: What I like the most about GCG, frankly, is the people. This is a people business and we have a terrific team across all our offices. And that’s where it starts. As for why I moved into this field, it offered a real opportunity to work across several disciplines that interested me – law, of course, but also business solutions, management, securities and finance, and technology. It also offered a unique path to provide solutions to the complex litigation challenges I saw occurring on a daily basis.
LD: Can you explain to us what claims administrators do?
SC: In its simplest form, we find class members, notify them of their rights, validate claims, and pay valid class members. But what we really do is much, much more than that. Each administration is unique and may involve hundreds of different things, from buying media and placing ads, to developing custom websites, to mass mailing or emailing, establishing call centers, often supporting many languages, to using the most up-to-date technology. In many ways, we’re a technology and data company. And we handle those tasks in a way that satisfies our clients’ legal, practical and business needs.
We have professionals in all disciplines – from tech, to call sectors, to media to claims processing. We have many attorneys on our staff, licensed securities brokers, banking experts, and even medical experts. Professionals from all disciplines come together at GCG to help the parties and claimants. We’re a client service company. And it’s everyone’s attitude about what we do that makes this a special place.
LD: Do you need professionals from so many disciplines to administer intricate settlements?
SC: I don’t know that you have to have them; I doubt that many others in our space do. But that’s who we are. GCG has sought out specialists in the various industries with the skills needed to ensure we offer the best expertise in the business. We administer billions of dollars in settlements every year and process billions in payments. And it’s not as simple as writing out a check – we need to have people who understand the various intricacies of banking such as in what kind of accounts to hold the money, anti-fraud protections, currency exchanges, and the like.
LD: What led you to make the move from law practice to Garden City, and how did you go about it?
SC: Most of my life I wanted to go to law school and aspired to be an attorney, specifically a litigator. And I was interested in class actions right from the get-go. I always found class actions and mass claims very interesting. In fact, I remember doing some research on the Bill of Peace for one of my law school professors at Duke. I was interested from there and took advanced classes on civil procedure and wrote on that topic while in law school.
When I graduated, I joined Rogers & Wells (now Clifford Chance) in New York, and asked to work on as many class actions as possible. The type of suit didn’t matter to me, whether it was a human rights, consumer or securities class action, but early on I developed a specialty in the antitrust space.
But what really intrigued me was the class mechanism. I found these cases so much more interesting than the one-on-one lawsuit where company A sues company B over a contract. Class actions touch on constitutional issues like due process rights and allow you to use a procedural mechanism to bring together millions of people. I enjoy the legal aspect of that, as well as the practical one.
LD: Do you remember some of the early cases you worked on as a lawyer, and how they shaped your interest in class actions?
SC: The case I most remember was the IPO antitrust litigation; the lawsuit essentially alleged laddering requirements by the initial public offering underwriters to their customers so that they would be allocated IPO shares of a tech company in exchange for their agreement to buy additional shares at a fixed price. The case was pending in the Southern District of New York, and there was a parallel securities case going on with the same factual allegations and many of the same defendants. I worked on the antitrust case as an attorney, which we got dismissed. And then I ran the claims administration for $586 million settlement of the securities action at GCG.
A typical securities fraud case involves one company and purchasers of stock of that company. The IPO case involved 309 companies! We mailed more than 10 million notices, and each one had to be customized for the particular stocks each shareholder purchased. It was very complicated, very large and raised a number of issues of first impression. I also had to testify in court about the processes we used in that case before Judge Shira Scheindlin. The IPO case really showed our expertise navigating larger and more complex cases, which is where our talent really shines.
LD: Was it scary to make the move from law practice to claims administration?
SC: It was a tough decision, a big jump. I always thought I’d be a litigator my entire career. But the more senior I got in private practice, the more I developed relationships with the companies I worked with, while I was supporting and advising them on how to stay out of litigation. At a certain point, I realized I enjoyed that more than fighting over what happened afterwards. My interest was piqued, and as a senior associate I thought I might end up in-house at a company where the general counsel did more than just legal work.
While I had never worked on a settlement administration as a lawyer, several of the partners that I respected had nothing but good things to say about their experiences with GCG, and, well, the rest is history. But to answer your question directly, it was scary, and it was not a decision I made lightly. But it’s now 12-plus years later, and I have never looked back.
LD: What was your first impression when you talked to GCG?
SC: They were much smaller then, probably with about 150 people in New York, and maybe 250 nationwide. I was interviewed and hired by Shandy Garr, who’s still at the company and now runs our Diversity & Inclusion program. She’s an amazing person who brought me in, and over the course of the following years taught me everything she knew about our processes and business model so that I could jump right in. To this day she remains one of my dearest friends.
LD: What was the hardest part about transitioning from law practice to claims management?
SC: That’s easy – finances and budgets – they don’t teach that in law school! The other challenge was really in learning how to manage different people, with different backgrounds, experiences, goals, and educations, and getting the best out of them. In an organization like this, I have the opportunity to motivate and inspire people. As you see people grow and spread their wings and learn, you’re building a team together and that’s very rewarding. And because our team here brings together so many diverse backgrounds, I get to learn from them every day.
LD: What are the challenges you face as a leader at GCG and in administering some of the complex matters your team is known for handling?
SC: Everything starts with our core people, who we build a team around depending on the size and complexity of a case. Building the right team for each case is part of the excitement. Every case has a project management team, with an individual who runs the team. Between our operations centers in New York and Seattle, we have roughly 30 team leaders, each of whom has broad experience handling different aspects of various types of cases.
We’ve been fortunate to work on many of the largest and most high-profile cases around the world. So we might pull together a team of foreign-language speaking customer service representatives, or we might put together a team experienced in medical records review for a mass tort case. For example, I hired a doctor (who also happens to be a licensed attorney), to assist in various portions of medical claims review for the Stryker Modular Hip Settlement, and he continues to be a valuable asset on other cases as well. It’s the particular expertise that’s necessary to understand the specific claim profile of each class member and ensure proper claims management for each individual.
For a financial instruments or complex securities case, for example, we have a base of finance experts, CPAs, folks with their series 3, 4, 7, 24, and 63 licenses, folks who’ve worked on trading desks and in back offices, who understand how those different instruments work, whether it’s an equity, credit default swap, foreign exchange market or LIBOR case. Our people have not just worked on these areas of expertise in prior claims administrations, they’ve actually done this work in their prior lives.
We also have experts on the notice and claimant outreach side, including people with an advertising and media background who can perform sophisticated reach and frequency analysis, as well as individuals whose daily focus is to identify class members through third parties and effectuate complicated notice programs, like the IPO case I mentioned previously.
LD: Are there any cases that are particularly memorable?
SC: There are several, but one in particular, I can talk about. The Sunday before Thanksgiving one year, we got an email telling us about a new large case (including hundreds of thousands of class members) we were being asked to handle. And the notices needed to be mailed Thanksgiving weekend.
Of course we said we could do it, we just needed everything on Monday morning and we’d mail the notices out Saturday. We make things happen and move mountains for our clients.
As it turns out, we didn’t receive the contact information or documents until the Wednesday night before Thanksgiving – and the notices had to go out Friday! But in the end our team pulled together to get a couple hundred thousand notices and claim forms out in less than 48 hours – and over Thanksgiving. We’ve had plenty of other fire drills, just usually not around the holidays.
LD: Can you give us an illustration of some advice you give clients when you have the opportunity to get involved at the pre-settlement phase?
SC: Bringing GCG into the process as early as possible in a settlement is certainly beneficial for our clients. A good example that jumps to mind is the structure of claim form instructions. A lot of lawyers like lots and lots of instructions. But what we’ve seen is that no one reads them. The longer they are, the more likely they will confuse people. In fact, there is an inverse correlation to the amount of detail in the instructions, and the number of complete claims; the more you put in, the more incomplete claims you receive. Invariably, our advice is to simplify.
Once a settlement is inked, there’s very little flexibility on what the claim form looks like or other aspects of the program where we may be able to provide assistance.
LD: What’s the future of GCG? How do you expect claims administration will change in the next five years?
SC: Our industry is really tech driven. That’s why we are so committed to building and maintaining the best possible technology team. It’s an ongoing commitment that requires us to constantly ask if we are at the forefront of our industry’s services and security. Our terrific staff of IT professionals plays an integral role on our cases, most importantly securing the sensitive data we handle, but also improving our processes and refining our outward-facing communications through the case websites they build and host.
Technology has changed our landscape through all three of the primary pieces of our process: notice, claims and distribution.
The mail and notice process today is becoming more email driven. And rather than publishing in traditional publications, we’re using and exploring social media strategies. Indeed, I understand that the federal rules advisory committee is considering adding language to Rule 23 on these issues.
For the claims piece, it’s now commonplace to allow claims filing online. We’ll see more of that, plus more opportunity for people to do that on their mobile devices.
Likewise, with distribution, we historically mailed out checks. We’re now looking at other less expensive ways of getting money in people’s hands. In the U.S., it’s pretty basic to move to wire or electronic funds transfer. In Europe, they allow other kinds of electronic payments. I expect you’ll see more pop money or mobile phone payments down the road as well.
LD: And what about international class actions, that seems like a hot area.
SC: We definitely have been looking at that for some time. To me, it’s an emerging market. Ever since the U.S. Supreme Court ruled in Morrison and cut out claims from foreign investors who purchased stock in foreign companies (the so-called F-cubed), we’ve seen class actions growing in other markets worldwide.
What we’re very enthused about is our experience here. We are poised to handle global settlements as they come up; we have experience distributing funds in 50 currencies, and executing publication programs in as many as 140 countries and in 41 languages. We also see a big advantage in the fact that we’re part of a large, international company, Crawford & Company, which has an expansive global network and resources in more than 70 countries. In fact, I have been in discussions with my colleagues in the U.K., the Netherlands, and Australia, among other places about global opportunities.
One of the biggest areas right now is class actions under Dutch law, which we are definitely seeing more and more of. For example, we’re handling the Converium Holding AG Settlement, requiring us to work with U.S. class counsel and directly with the foundation established under Dutch law overseeing the distribution of $143 million. That involved complicated calculations of recognized claim amounts, by converting all pricing information from multiple foreign currencies into U.S. dollars.
Another example of our international work is the Royal Ahold case, in which GCG received and processed nearly 250,000 claims from over 100 countries after mailing claim packets in 16 languages to claimants in 24 countries. In that matter, I traveled to Amsterdam to meet with the Dutch banking association and shareholder advocacy group to assist their customers in filing claims.
LD: What do you do in your spare time? I’ve read you’re on the board of an organization called Behind the Book in New York?
SC: It’s a great local New York City grassroots charity. As board members, we don’t just meet, we also go to the classroom. We bring in well-known authors of children’s books to underserved classrooms throughout the city. The principal goal is to engage students from kindergarten throughout high school and get them interested in reading.
We help them meet and interact with someone who’s written a book to get them engaged and to become active readers. I got involved because I wanted to give back to the community. I have three boys and try to read with them as much as possible. My twins just turned 14, and my other son is 9 ½.
My favorite book growing up was “The Hobbit,” and I’ve read the whole “Harry Potter” and “Hunger Games series” (with my kids!).