Multidistrict Litigation - Module 3 of 5

Multidistrict Litigation

Multidistrict Litigation Overview

Limitations on the use of class actions to resolve mass tort cases have meant that most mass tort actions today are compiled by Multidistrict Litigation, or “MDL” procedures.[1]  These procedures were established in 1968 when Congress enacted the statute now codified as 28 U.S.C. § 1407. Actions consolidated in MDLs now comprise thirty-nine percent of open cases on the federal docket.[2]  Most of these MDL cases concern mass torts, with product liability actions dominating the active cases on the MDL docket.[3]  Another way to think of the significance of MDL mass tort actions is that more than one out of every five cases currently pending in a federal court is part of an MDL mass tort action. These product liability cases are aggregated because they have "a commonality of factual issues concerning the design, testing, manufacture, labeling and inspection of the drug or device."[4]   

MDL proceedings can be attractive to both sides in a mass tort action.  From the defendants' perspective, consolidation in a federal MDL proceeding may make nationwide litigation more manageable. From a plaintiff's perspective, consolidating litigation in an MDL proceeding may increase the pressure on defendants to enter into a global settlement of the asserted claim.  For plaintiff’s counsel, MDL aggregations make it easier to represent multiple plaintiffs and coordinate with other counsel for plaintiffs with similar claims. MDL proceedings also are useful to the courts because they place all actions arising from the same mass tort before a single judge who can then coordinate the pretrial proceedings efficiently, because she has the perspective to see the proceedings as a whole.[5] 

 The statute establishing MDL procedures states that, "When civil actions involving one or more common questions of fact are pending in different districts, such actions may be transferred to any district for coordinated or consolidated pretrial proceedings."[6]  After the pretrial proceedings are done, the individual cases are supposed to be sent back to courts for trial.  However, in most MDL cases, the consolidated proceedings are settled or resolved by a dispositive motion like a motion for summary judgment, and the cases are never sent back.[7] In fact, one MDL judge stated in an interview, “You have failed if you transfer it back.”[8]  As one commentator wrote, “most MDL cases are understood by all involved to be unamenable to trial at the outset.”

Aggregating cases into MDL proceedings

The MDL statute created the Judicial Panel for Multidistrict Litigation, which is made up of seven circuit and district court judges whom the Chief Justice of the Supreme Court appoints. No two judges on the panel are from the same circuit.[9] The Panel’s office is in Washington, DC, but it holds bi-monthly hearings around the country.  The schedule of hearings is posted on the Panel’s website.[10]

The Judicial Panel for Multidistrict Litigation determines whether civil actions pending in various federal districts should be transferred to one federal district for pretrial proceedings. If so, it selects the presiding judge.  The judge who handles these coordinated actions is called the “transferee judge,” while the courts where the actions were originally filed are called the “transferor courts.” The individual cases aggregated in the MDL proceeding are sometimes referred to as the “transferred actions,” or the “constituent actions.”    

It is possible for the Panel to create MDL proceedings on its own initiative.[11]  If the Panel considers a transfer on its own initiative, it will issue a “show cause” order to all counsel in the actions it is considering consolidating.[12]  These counsel have 14 days after the date of the order to enter an appearance, and 21 days in which to file a response to the Panel’s proposed transfer.  If counsel do not respond within 21 days, the Panel will assume that party agrees to the transfer.

It is more common, however, for an attorney for a litigant to create an MDL.  Counsel for any party — one of the plaintiffs or one of the defendants — may file a motion for transfer with the Panel.  The moving party asks the Panel to send all cases involving specified common questions of fact to a judicial district for the coordination of all pretrial proceedings. If the Panel determines that transfer will be more convenient for the parties and witnesses and finds that it will promote the just and efficient conduct of all the transferred actions, it will grant the motion.[13]

The motion to transfer that is filed with the Judicial Panel for Multidistrict Litigation must explain why aggregation will be more convenient, just and efficient, and must identify all the constituent actions the Panel is being asked to transfer.  The movant must identify each constituent case on a numbered schedule that provides each action involved, listing the full name of each party, the district court and division where each action is pending, the civil action number of each action and the name of the judge assigned to each action.[14]  This list will be the source of the Panel’s service list.

After the movant provides this service list, the clerk of the Panel will notify the counsel for all the parties in the constituent cases about the motion filing and activities in the MDL proceeding.[15]  Any party identified on the service list has 21 days to respond to the motion to transfer, and a failure to respond is considered consent to the motion.[16]   

It’s also possible that later actions will be filed that fit in the parameters of the cases that have been joined in the MDL proceeding.  Should this happen, any counsel representing a party in that MDL proceeding must notify the Panel of those other actions.  If any of the new cases raise the issues stated in the Panel’s transfer Order, the Panel will transfer those new cases into the MDL. The Panel’s rules call these actions “tag-along actions.”[17]

Considerations in Creating an MDL

The Panel considers three issues in evaluating whether to issue a transfer order and in determining what that order will say.   First, the cases must share one or more questions of common fact. These must be material, contested and factual. That the disparate cases may share some legal issues is insufficient.[18] Second, transfer must advance the just and efficient handling of the actions. The Panel will examine the number of cases involved, the number of shared questions of fact and the nature of these questions. The statutes and rules governing MDLs do not establish a minimum number of cases in the MDL, but the Panel will take the number of cases into consideration. It also must consider the potential to avoid duplicative discovery, conflicting rulings, unjust delay or needless complication.[19]   

These first two issues focus on whether an MDL, somewhere, is a good idea.  Next, the Panel must also consider where to make the transfer.  The Panel will try to transfer the cases to a district judge who can manage the cases in a way that is cost-effective, efficient and fair to all the parties.[20]  The Panel considers the geographical location of the pending cases and the residence of parties to determine the most convenient district to handle the actions. The inquiry of the panel as to the transferee court also includes: (1) whether the proposed district has adequate transportation and hotel facilities to handle counsel from across the country who may participate in the case; (2) the business location of the defendants in relation to the proposed venue; (3) the location of witnesses and evidence in relation to the proposed venue; (4) the presence or absence of other MDLs in the district; and, (5) the competence and interest of the proposed transferee judge in handling the MDL.[21]

Effecting the Transfer to MDL

When the Panel orders the transfer of the constituent actions into an MDL, the clerk of the Panel serves the order on all counsel on the service list and sends the order to the transferee court.  As soon as the clerk of the transferee court files the order, the transfer takes effect.  At that point, the transferor courts’ jurisdiction ceases and the transferee court acquires exclusive jurisdiction.[22] From that point forward, all pretrial proceedings will take place under the supervision of the MDL court.  This includes discovery and dispositive motions such as motions to dismiss and summary judgment. The MDL court also considers evidentiary motions such as Daubert motions, which help determine what scientific and expert testimony will be allowed, an often-critical determination in mass tort actions. The MDL court is not authorized to try the transferred cases, but, instead, is supposed to remand them to the transferor courts for any trials that take place.  However, no trial in the transferor courts can take place until the Panel remands the case after the MDL judge has suggested to the Panel that it remand those cases.[23] 

The Manual for Complex Litigation issued by the Federal Judicial Center posits that early organization of the case is critically important. As soon as the MDL is established, the usual practice is for the transferee judge to quickly schedule a status conference with all the lawyers involved in the litigation. This conference will involve a variety of case management matters to be included in the first case management order.[24]

One of the most important issues for the MDL court to address is which of the many lawyers representing various plaintiffs will take the lead in managing the aggregated proceedings. It is the MDL judge’s responsibility to choose counsel for leadership positions. Typically, the MDL judge will appoint interim lead or liaison counsel to be spokespeople for the plaintiffs until the MDL judge is able to appoint permanent leadership. The judge will need to appoint the plaintiffs’ steering committee, which is responsible for the management of the plaintiffs’ side of the case during pretrial proceedings. Under the management of that committee, there are other leadership roles. For example, the liaison counsel handles administrative matters and assists in the coordination of communications between the court and other counsel. The liaison counsel usually practices in the transferor judge’s district, and, therefore, is conveniently local. Finally, the MDL judge will establish committees to do tasks such as discovery, briefing and recruiting expert witnesses.[25]

MDL judges use two primary methods to select the counsel who will fill the leadership roles.  In one method, the MDL judge invites the lawyers to apply for leadership positions, and the judge evaluates the candidates to decide which counsel to select. Alternatively, the MDL judge directs the plaintiffs’ counsel to file a proposed leadership slate. Either way, the MDL judge ultimately decides which counsel will take the various leading roles.[26]

Another early step in the case usually includes the judge ordering the parties to establish a common benefit fund for the purpose of paying reasonable attorney’s fees, costs and expenses, and to establish rules for the management of that fund.[27]

Initial Discovery in MDL Cases

In a typical non-MDL lawsuit, plaintiffs are required to make certain disclosures about their claims at the beginning of the case.  This same requirement manifests in MDLs in required “plaintiff fact sheets.”  Fact sheets are court-approved, standardized forms that seek basic information about plaintiffs’ claims, such as when and why the plaintiff used the product at issue and the injury the plaintiff claims to have suffered.[28] The court will also require all the plaintiffs to produce their medical records, identify all treating physicians and identify all potential witnesses. In some cases, the court also will require plaintiffs to produce their employment and educational histories.[29]

The fact sheets require the same level of completeness as interrogatory answers and other forms of discovery.[30]   The plaintiffs must sign a declaration at the end of the fact sheet which states the answers are true and correct to the best of their knowledge, thus making inaccurate fact sheet responses grounds for perjury charges or other punishment as false statements to the court.  The court also might require plaintiffs to submit what is called a Lone Pine affidavit, which is from a treating physician supporting a plaintiff’s claim of injury.[31]  Failure to complete fact sheets in a timely fashion, unless excused for good cause, may cause the court to dismiss a plaintiff’s claim for failure to prosecute.[32] Defendants also may be required to file fact sheets for each plaintiff, providing basic information defendants may have about the claimants or their claims. These fact sheets need not be completed until after the plaintiffs file theirs.[33]

As MDL mass tort actions proceed past these initial stages, the MDL judges and litigants often try to introduce class action procedures into the aggregated action to resolve the cases as a group, and to use class action procedures for more detailed discovery.  This may include the class action procedure of selecting some “bellwether” cases to try in the transferee court, rather than to remanded them to the transferor courts. The results of these bellwether cases may show the parties their potential risks and benefits and facilitate settlement.

In our next module, we will discuss many of the ways in which MDL procedures and class action procedures are combined in mass tort actions.