San Juan, Puerto Rico – High-profile mass tort law firm Watts Guerra, led by attorney Mikal Watts, is closing its Puerto Rico office and laying off dozens of employees, according to internal emails obtained by Bloomberg Law. Watts, known for spearheading high-stakes litigation against corporations, recently stated that he was “restructuring” the firm but had no intention of leaving. However, emails shared with Bloomberg Law reveal that Watts sent an email to all employees on January 7, announcing his resignation from the firm due to health reasons. He informed Bloomberg Law that he plans to continue practicing law independently and overseeing his ongoing cases.
The Puerto Rico office, which houses around 110 employees responsible for managing numerous cases for Watts Guerra’s vast clientele, received a notice on January 19 stating that the firm would initiate “mass layoffs.” At least 50 employees, representing over 33% of the workforce, will be affected. An anonymous employee who shared the emails indicated that other offices also have administrative staff. The employee chose to remain unnamed, fearing potential repercussions.
Watts clarified that he and Guerra are separating, and as of today, his new law firm has commenced operations. He intends to retain the majority of his mass tort cases with the approval of his clients, while Guerra will handle individual personal injury cases. Watts has made efforts to refer his former employees to other law firms in Puerto Rico to help them secure new job opportunities. He will also retain some employees in the area, although the exact number is uncertain as of now.
Watts Guerra is a prominent player in ongoing mass tort cases such as the Camp Lejeune Marine base water contamination, Hawaiian Electric’s alleged negligence leading to fatal wildfires in Maui, and Johnson & Johnson talcum products linked to cancer. Watts is often seen as the prominent spokesperson for these cases, regularly appearing in court and interacting with the media. Among his notable achievements, he represents approximately 16,000 J&J talc claimants and participates in a supporting group of attorneys in an $8.9 billion proposed settlement.
In an email sent on January 8, the day after Watts announced his resignation, capital partner Frank Guerra and partner Alicia O’Neill assured employees that Frank cares deeply for their well-being and is committed to advocating for clients and the team. They emphasized that employees are safe with him leading the charge. However, less than two weeks after this email, a layoff notice was issued, revealing that the firm’s Puerto Rico operations would be permanently discontinued by the end of 2024. Watts, in the signed notice, stated that the layoff process would commence on March 20, 2024, with potential phased layoffs.
The termination notice also addressed severance, stating that it will vary for each employee. By the final day of 2024, every employee will receive a termination notice. Watts Guerra plans to offer voluntary separation payments to employees who execute and do not revoke a separation agreement and general release.
In 2015, Mikal Watts and six others faced charges of fabricating thousands of clients to obtain payouts from BP in relation to the Deepwater Horizon oil spill settlement. Watts and four co-defendants were later acquitted. Last year, at the semi-annual Mass Torts Made Perfect conference, Watts sounded the alarm about the prevalence of false claims in large mass torts. He disclosed that his firm had conducted audits, uncovering “hundreds and hundreds” of bogus leads. This raised concerns about the path of funding from litigation financers to law firms and eventually to lead generators who sometimes register clients using false information.
Mikal Watts’ decision to resign from Watts Guerra and the subsequent closure of the Puerto Rico office mark a significant shift for the high-profile mass tort law firm. As Watts ventures into independent practice, the legal landscape of mass tort litigation may undergo further changes.