A Multidistrict Litigation Primer

What do FEMA trailers, peanut butter, Viagra, pet food, tires, implantable defibrillators, Agent Orange and iPods have in common? A really weird dream? Maybe. Mass product liability litigation? Ding!

All of the products listed above, varied as they may be, do have at least one thing in common ' they are all subject to mass product liability litigation. Specifically, they are all currently subject to a centralized federal multidistrict litigation proceeding (“MDL”). According to information available on the Web site for the Judicial Panel on Multidistrict Litigation (“JPML”), there were 60 product liability MDLs pending as of July 14, 2008. See www.jpml.uscourts.gov/Docket_Info/Pending_Dockets/pending_dockets.html. And each MDL is made up of hundreds, if not thousands, of individual cases.

Given the number and prevalence of product liability MDLs, it is important for product liability lawyers to have a good working knowledge of MDL practice and procedure because it is likely that many such lawyers will be involved in mass litigation that is subject to MDL at some point in their careers.

The Basics of Multidistrict Litigation

Legislative History and Purpose

The MDL statute was enacted in 1968. The stated purpose of the statute was to provide centralized management for complex litigation filed in multiple federal district courts. David F. Herr, Multidistrict Litigation Manual, at 9-12 (Thompson/West 2007). The legislative history of the statute sheds light on this purpose:

The objective of the legislation is to provide centralized management under court supervision of pretrial proceedings of multidistrict litigation to assure the 'just and efficient conduct' of such actions. The ' possibility for conflict and duplication in discovery and other pretrial procedures in related cases can be avoided or minimized by such centralized management. To accomplish this objective the bill provides for the transfer of venue for the limited purpose of conducting coordinated pretrial proceedings. Id. at 9 (citing The House Judiciary Committee Report, available at H. R. Rep. No. 1130, 90th Cong., 2d Sess. 2 to 3 (1968)).

Additionally, the MDL statute was intended to target the management of litigation that is both complex and multiplicitous. The subject matters of litigation suitable for MDL is, therefore, wide-ranging, based on categories that are listed on JPML's Web site: air disasters; antitrust; common disaster; contract; employment practices; intellectual property; product liability; sales practices; and securities. See www.jpml.uscourts.gov/All_MDLs/all_mdls.html.

The purpose of the MDL statute has not evolved or changed much over the years:

The statute itself is designed to provide the benefit of centralized management and a reduction in duplicative discovery, for example, or the waste of judicial resources by having two or more judges in different districts ruling on essentially the same issues in the same litigation. By centralization, then, the discovery can be managed in an orderly way by the transferee judge. It also reduces the amount of judicial time that's required by the overall litigation ' at least that is one of the objectives. It also minimizes or reduces the potential for inconsistent adjudication on the same issue in different districts, which can result in considerable confusion in the litigation and in the law itself. Administrative Office of the United States Courts, “Chair of Judicial Panel Sees Role As Gatekeeper,” The Third Branch, Vol. 37, Number 11 (November 2005), available at www.uscourts.gov/ttb/nov05ttb/gatekeeper/index.html.

Statutory Authority

The statutory authority for MDL is found in 28 U.S.C. ' 1407, which provides, inter alia:

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. Such transfers shall be made by the judicial panel on multidistrict litigation authorized by this section upon its determination that transfers for such proceedings will be for the convenience of the parties and witnesses and will promote the just and efficient conduct of such actions. Each action so transferred shall be remanded by the panel at or before the conclusion of such pretrial proceedings to the district from which its was transferred unless it shall have been previously terminated: Provided, however, That the panel may separate any claim, cross-claim, counter-claim, or third-party claims before the remainder of the action is remanded.28 U.S.C. ' 1407(a) (emphasis in original).

First and foremost, the reach of the MDL statute is limited; it can only be used to coordinate and consolidate cases that are pending in multiple federal district courts into one federal district court; it has no effect on state court cases. David F. Herr, Multidistrict Litigation Manual, at 31-32. “The Panel has no authority over actions pending in state courts. This limitation on the Panel's authority is part of the inherently limited jurisdiction of federal courts and is therefore fundamentally inflexible.” Id. at 32. Moreover, the jurisdictional scale of the MDL proceeding is limited: MDLs are established for the coordination and consolidation of cases for pretrial proceedings only. Id. at 35-36.

“[T]here is little doubt that Congress (and the courts) intended that transfer be made for coordinated pretrial proceedings, and that actions would be remanded to the districts where they had been initially filed. Remand would occur unless the case were settled or decided by the transferee court on motion.” Id. at 35.

Looking at the statutory language of ' 1407 cited above, there are three additional main considerations that govern the creation and scope of MDL. Those three considerations ' common questions of fact, the convenience of the parties and witnesses and the just and efficient conduct of litigation ' are substantive considerations regarding the type of cases subject to MDL and the purpose of MDL. Each of those considerations are discussed in turn below.

Common Questions of Fact

The JPML will not consider centralized management unless the litigation involves contested, common questions of fact. The common questions must “at least play a central role” in the litigation and the JPML will consider the role and importance of the common questions to the resolution of the litigation as a whole. Multidistrict Litigation Manual, at 111-112.

For example, in the context of personal injury product liability litigation a common question of fact that is often cited by the JPML in support of centralization is causation. See, e.g., Transfer Order, In re Levaquin Product liability Litigation (J.P.M.L. June 13, 2008) (“These actions share factual questions arising out of the allegations that the antibiotic Levaquin causes tendon rupture, and the warnings provided by defendants informing Levaquin users of this risk were inadequate”); Transfer Order, In re Heparin Product Liability Litigation (J.P.M.L. June 6, 2008) (“All actions share factual questions relating to the manufacture and sale ' of allegedly adulterated Heparin causing economic or personal injuries”). All of the Transfer Orders cited herein can be viewed and/or downloaded from the JPML Web site, www.jpml.uscourts.gov/All_MDLs/Products_Liability/products_liability.html.

Convenience of the Parties And Witnesses

Just and Efficient Conduct of Litigation

The JPML will not consider centralized management unless it would: 1) be convenient for the parties and witnesses; and 2) result in just and efficient conduct of litigation. The first consideration is rather nebulous and the JPML views it broadly. Multidistrict Litigation Manual, at 112-113. “The panel has consistently taken a broad view of the question, and has sought to maximize the convenience of all the parties and witnesses, taken as a whole.” Id. at 112. As for the second consideration, the JPML has never articulated a standard to be used in determining this requirement, but it has identified several factors in various cases. Id. at 113-114. Those factors include: avoidance of conflicting ruling; prevention of duplicative discovery on common issues; resolution of conflicting class actions; promotion of judicial economy; and reduction of the burden on parties by allowing division of workload among several attorneys. Id. at 114.

Other Provisions of the MDL Statute

Another key, but comparatively self-explanatory, provision of the MDL statute provides that “[p]roceedings for the transfer of an action under this section may be initiated by (i) the judicial panel on multidistrict litigation upon its own initiative, or (ii) motion filed with the panel by a party in any action in which transfer for coordinated or consolidated pretrial proceedings under this section may be appropriate. A copy of such motion shall be filed in the district court in which the moving party's action is pending.” 28 U.S.C. ' 1407(c)(i)(ii). Note, however, that the filing of a motion for coordinated or consolidated pretrial proceedings with the JPML (also referred to as a motion for “centralization”) does not stay pending district court litigation. Multidistrict Litigation Manual, at 36-38. The transferor court may, in its discretion, however, stay proceedings pending the decision of the JPML. Id. at 37.

As a practical matter, the fact of a pending motion for transfer under section 1407, or the threat of such a motion, presents the trial judge with a fairly simple discretion. The Manual for Complex Litigation provides some insight into the judge's considerations ' although pending motions should generally be decided and additional motions may be filed, the judge will probably want to defer decisions relating to long-term case management '

[T]he court's view on these issues will probably be affected by the judge's assessment of the likelihood of transfer being ordered by the Panel. Deferral of ruling on motions may be particularly unlikely if it is likely that the MDL docket may be sent to that judge or district. Id. at 37-38. Yet another key provision of the MDL statute provides that: “[n]o proceedings for review of any order of the panel may be permitted except by extraordinary writ ' Petitions for an extraordinary writ to review an order of the panel to set a transfer hearing and other orders of the panel issued prior to the order either directing or denying transfer shall be filed only in the court of appeals having jurisdiction over the district in which a hearing is to be or has been held. Petitions for an extraordinary writ to review an order to transfer or orders subsequent to transfer shall be filed only in the court of appeals having jurisdiction over the transferee district. There shall be no appeal or review of an order of the panel denying a motion to transfer for consolidated or coordinated proceedings.” 28 U.S.C. ' 1407(e).

In short, JPML orders denying a motion to transfer are not reviewable by any court and review of other orders is obtained only by extraordinary writ. Multidistrict Litigation Manual, at 283. “Review of decisions of the Judicial Panel on Multidistrict Litigation is at best difficult to obtain. In some cases, review is not permitted by any court. Although this extremely limited review at first appears different from that in federal district courts, it is similar to the effectively limited review of any pretrial case management order ' ” Id.

Part Two of this article will discuss the judicial panel of the multidistrict litigation.

What do FEMA trailers, peanut butter, Viagra, pet food, tires, implantable defibrillators, Agent Orange and iPods have in common? A really weird dream? Maybe. Mass product liability litigation? Ding!

All of the products listed above, varied as they may be, do have at least one thing in common ' they are all subject to mass product liability litigation. Specifically, they are all currently subject to a centralized federal multidistrict litigation proceeding (“MDL”). According to information available on the Web site for the Judicial Panel on Multidistrict Litigation (“JPML”), there were 60 product liability MDLs pending as of July 14, 2008. See www.jpml.uscourts.gov/Docket_Info/Pending_Dockets/pending_dockets.html. And each MDL is made up of hundreds, if not thousands, of individual cases.

Given the number and prevalence of product liability MDLs, it is important for product liability lawyers to have a good working knowledge of MDL practice and procedure because it is likely that many such lawyers will be involved in mass litigation that is subject to MDL at some point in their careers.

The Basics of Multidistrict Litigation

Legislative History and Purpose

The MDL statute was enacted in 1968. The stated purpose of the statute was to provide centralized management for complex litigation filed in multiple federal district courts. David F. Herr, Multidistrict Litigation Manual, at 9-12 (Thompson/West 2007). The legislative history of the statute sheds light on this purpose:

The objective of the legislation is to provide centralized management under court supervision of pretrial proceedings of multidistrict litigation to assure the 'just and efficient conduct' of such actions. The ' possibility for conflict and duplication in discovery and other pretrial procedures in related cases can be avoided or minimized by such centralized management. To accomplish this objective the bill provides for the transfer of venue for the limited purpose of conducting coordinated pretrial proceedings. Id. at 9 (citing The House Judiciary Committee Report, available at H. R. Rep. No. 1130, 90th Cong., 2d Sess. 2 to 3 (1968)).

Additionally, the MDL statute was intended to target the management of litigation that is both complex and multiplicitous. The subject matters of litigation suitable for MDL is, therefore, wide-ranging, based on categories that are listed on JPML's Web site: air disasters; antitrust; common disaster; contract; employment practices; intellectual property; product liability; sales practices; and securities. See www.jpml.uscourts.gov/All_MDLs/all_mdls.html.

The purpose of the MDL statute has not evolved or changed much over the years:

The statute itself is designed to provide the benefit of centralized management and a reduction in duplicative discovery, for example, or the waste of judicial resources by having two or more judges in different districts ruling on essentially the same issues in the same litigation. By centralization, then, the discovery can be managed in an orderly way by the transferee judge. It also reduces the amount of judicial time that's required by the overall litigation ' at least that is one of the objectives. It also minimizes or reduces the potential for inconsistent adjudication on the same issue in different districts, which can result in considerable confusion in the litigation and in the law itself. Administrative Office of the United States Courts, “Chair of Judicial Panel Sees Role As Gatekeeper,” The Third Branch, Vol. 37, Number 11 (November 2005), available at www.uscourts.gov/ttb/nov05ttb/gatekeeper/index.html.

Statutory Authority

The statutory authority for MDL is found in 28 U.S.C. ' 1407, which provides, inter alia:

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. Such transfers shall be made by the judicial panel on multidistrict litigation authorized by this section upon its determination that transfers for such proceedings will be for the convenience of the parties and witnesses and will promote the just and efficient conduct of such actions. Each action so transferred shall be remanded by the panel at or before the conclusion of such pretrial proceedings to the district from which its was transferred unless it shall have been previously terminated: Provided, however, That the panel may separate any claim, cross-claim, counter-claim, or third-party claims before the remainder of the action is remanded.28 U.S.C. ' 1407(a) (emphasis in original).

First and foremost, the reach of the MDL statute is limited; it can only be used to coordinate and consolidate cases that are pending in multiple federal district courts into one federal district court; it has no effect on state court cases. David F. Herr, Multidistrict Litigation Manual, at 31-32. “The Panel has no authority over actions pending in state courts. This limitation on the Panel's authority is part of the inherently limited jurisdiction of federal courts and is therefore fundamentally inflexible.” Id. at 32. Moreover, the jurisdictional scale of the MDL proceeding is limited: MDLs are established for the coordination and consolidation of cases for pretrial proceedings only. Id. at 35-36.

“[T]here is little doubt that Congress (and the courts) intended that transfer be made for coordinated pretrial proceedings, and that actions would be remanded to the districts where they had been initially filed. Remand would occur unless the case were settled or decided by the transferee court on motion.” Id. at 35.

Looking at the statutory language of ' 1407 cited above, there are three additional main considerations that govern the creation and scope of MDL. Those three considerations ' common questions of fact, the convenience of the parties and witnesses and the just and efficient conduct of litigation ' are substantive considerations regarding the type of cases subject to MDL and the purpose of MDL. Each of those considerations are discussed in turn below.

Common Questions of Fact

The JPML will not consider centralized management unless the litigation involves contested, common questions of fact. The common questions must “at least play a central role” in the litigation and the JPML will consider the role and importance of the common questions to the resolution of the litigation as a whole. Multidistrict Litigation Manual, at 111-112.

For example, in the context of personal injury product liability litigation a common question of fact that is often cited by the JPML in support of centralization is causation. See, e.g., Transfer Order, In re Levaquin Product liability Litigation (J.P.M.L. June 13, 2008) (“These actions share factual questions arising out of the allegations that the antibiotic Levaquin causes tendon rupture, and the warnings provided by defendants informing Levaquin users of this risk were inadequate”); Transfer Order, In re Heparin Product Liability Litigation (J.P.M.L. June 6, 2008) (“All actions share factual questions relating to the manufacture and sale ' of allegedly adulterated Heparin causing economic or personal injuries”). All of the Transfer Orders cited herein can be viewed and/or downloaded from the JPML Web site, www.jpml.uscourts.gov/All_MDLs/Products_Liability/products_liability.html.

Convenience of the Parties And Witnesses

Just and Efficient Conduct of Litigation

The JPML will not consider centralized management unless it would: 1) be convenient for the parties and witnesses; and 2) result in just and efficient conduct of litigation. The first consideration is rather nebulous and the JPML views it broadly. Multidistrict Litigation Manual, at 112-113. “The panel has consistently taken a broad view of the question, and has sought to maximize the convenience of all the parties and witnesses, taken as a whole.” Id. at 112. As for the second consideration, the JPML has never articulated a standard to be used in determining this requirement, but it has identified several factors in various cases. Id. at 113-114. Those factors include: avoidance of conflicting ruling; prevention of duplicative discovery on common issues; resolution of conflicting class actions; promotion of judicial economy; and reduction of the burden on parties by allowing division of workload among several attorneys. Id. at 114.

Other Provisions of the MDL Statute

Another key, but comparatively self-explanatory, provision of the MDL statute provides that “[p]roceedings for the transfer of an action under this section may be initiated by (i) the judicial panel on multidistrict litigation upon its own initiative, or (ii) motion filed with the panel by a party in any action in which transfer for coordinated or consolidated pretrial proceedings under this section may be appropriate. A copy of such motion shall be filed in the district court in which the moving party's action is pending.” 28 U.S.C. ' 1407(c)(i)(ii). Note, however, that the filing of a motion for coordinated or consolidated pretrial proceedings with the JPML (also referred to as a motion for “centralization”) does not stay pending district court litigation. Multidistrict Litigation Manual, at 36-38. The transferor court may, in its discretion, however, stay proceedings pending the decision of the JPML. Id. at 37.

As a practical matter, the fact of a pending motion for transfer under section 1407, or the threat of such a motion, presents the trial judge with a fairly simple discretion. The Manual for Complex Litigation provides some insight into the judge's considerations ' although pending motions should generally be decided and additional motions may be filed, the judge will probably want to defer decisions relating to long-term case management '

[T]he court's view on these issues will probably be affected by the judge's assessment of the likelihood of transfer being ordered by the Panel. Deferral of ruling on motions may be particularly unlikely if it is likely that the MDL docket may be sent to that judge or district. Id. at 37-38. Yet another key provision of the MDL statute provides that: “[n]o proceedings for review of any order of the panel may be permitted except by extraordinary writ ' Petitions for an extraordinary writ to review an order of the panel to set a transfer hearing and other orders of the panel issued prior to the order either directing or denying transfer shall be filed only in the court of appeals having jurisdiction over the district in which a hearing is to be or has been held. Petitions for an extraordinary writ to review an order to transfer or orders subsequent to transfer shall be filed only in the court of appeals having jurisdiction over the transferee district. There shall be no appeal or review of an order of the panel denying a motion to transfer for consolidated or coordinated proceedings.” 28 U.S.C. ' 1407(e).

In short, JPML orders denying a motion to transfer are not reviewable by any court and review of other orders is obtained only by extraordinary writ. Multidistrict Litigation Manual, at 283. “Review of decisions of the Judicial Panel on Multidistrict Litigation is at best difficult to obtain. In some cases, review is not permitted by any court. Although this extremely limited review at first appears different from that in federal district courts, it is similar to the effectively limited review of any pretrial case management order ' ” Id.

Part Two of this article will discuss the judicial panel of the multidistrict litigation.