By Hannah R. Anderson and Andrew G. Jackson
We won’t say his name, but one of your authors has a car that makes a horrible noise. The kind of noise that strikes fear into the heart of any non-savvy owner and suggests that it’s not a question of whether the car will blow up, but when. We can only hope that the author in question takes his car in before it becomes a car fire that shuts down traffic on 35W. Multidistrict litigation (MDL), as it happens, is a lot like a noisy car in need of a close look under the hood.
The MDL system was designed to coordinate and consolidate pretrial proceedings for just and efficient case management.1 Under 28 U.S.C. §1407, the Judicial Panel on Multidistrict Litigation (JPML) is authorized to transfer federal civil actions pending in more than one district and involving common questions of fact to any district for coordinated and consolidated pretrial proceedings. The JPML must determine that transfer “will be for the convenience of the parties and witnesses and will promote the just and efficient conduct of such actions.”2
The MDL mechanism is highly utilized by litigants in the 21st century, but flaws in the system have been exposed. This article explores (1) a brief history of MDLs and their purpose; (2) the MDL system’s ailments; and (3) suggested paths to reform.
The MDL system as intended
MDLs arose from the successful prosecution of antitrust laws against electrical equipment manufacturers in the 1960s.3 Nearly 2,000 private treble-damage actions involving 25,000 claims were filed in 35 federal judicial districts.4 To manage them, U.S. Supreme Court Chief Justice Earl Warren appointed nine federal judges to a Coordinating Committee for Multiple Litigation.5 The committee disposed of the cases, primarily through voluntary cooperation in consolidated pretrial
proceedings and through settlements.6 Seeing wisdom in the coordination of complex litigation, Congress in 1968 enacted 28 U.S.C. §1407, thereby creating the JPML.
Aggregation of similar claims in an MDL still retains value. Aggregation can maximize fair and efficient case management, minimize duplication, reduce cost and delay, enhance the prospect of settlement, promote consistent outcomes, and increase procedural fairness.7 The need for the MDL system is supported by statistics demonstrating its increasingly heavy use. Between 1968 and 2019, the JPML considered motions for transfer in over 2,900 groups of cases, or “dockets,” centralizing approximately 722,146 actions or claims.8 Of the dockets considered by the JPML, 1,168 motions to transfer did not result in centralization.9
In 2019, MDL proceedings made up more than 50 percent of the federal court docket for the first time ever, comprising 202 MDLs pending in 46 different federal districts, in 32 different states, and before 160 different transferee judges.10 Seventy of the 202 MDLs (over one-third) were product liability cases, an increase from 16 percent in 2005.11 Of those 70 MDLs, 50 percent involved pharmaceutical products and/or medical devices.12 Obviously, the need for the MDL system exists, so what is the problem?
The ailments of the MDL system
Though the MDL system faces several issues and worrisome inconsistencies, we focus here on four of the primary problems plaguing the system.13
First, the rules governing pleadings, discovery, motion practice, and appellate review are often applied inconsistently.14
Second, an abundance of meritless claims exist in MDL actions; some estimates indicate more than 40 percent of claimants in an MDL are unable to show any evidence of exposure to the alleged harm.15 These meritless claims convey false information, making it difficult to evaluate settlement and select meaningful bellwether cases for trial.
Third, the MDL process needs to address third-party litigation funding, which has grown substantially in recent years. Third-party litigation funding presents serious issues regarding conflicts of interests, ethical issues, potential violations of state laws that prohibit a disinterested party from meddling in a lawsuit for personal gain,16 whether class action counsel will adequately represent the class, and whether the funder is vested with undue influence or control over the underlying litigation.17
Finally, appellate review is asymmetrical: While plaintiffs can immediately appeal a motion to dismiss or a motion for summary judgment because a dispositive ruling is considered a final order, defendants have no instant remedy for a denial of a dispositive motion.18 Instead, defendants must wait until a final verdict is reached in one of the cases in the MDL proceedings.
As MDL proceedings have increased as a share of the federal caseload, so too have calls for MDL reform. In August 2017, the Advisory Committee on Civil Rules created an MDL subcommittee to explore revisions to the FRCP. The MDL subcommittee issued a request to the Federal Judicial Center and others regarding proposals for amending the FRCP to address management of MDL proceedings. More recently, in October 2019, 45 general counsel from large companies signed a letter to the advisory committee supporting review of MDL procedures. The GCs describe MDL proceedings as having reached “a point of crisis.”19
Popular paths to reform
Proposals for reform are numerous; here, we focus on a few of the most popular. In August 2017, Lawyers for Civil Justice (LCJ) formalized a request to the advisory committee asking members to consider various amendments to the FRCP.20 The proposed reforms included adding “master complaints” and “master answers” to acceptable pleadings identified in FRCP 7, amending FRCP 26 to account for early-screening techniques and third-party litigation financing, and creating a vehicle for interlocutory review of pretrial motions via FRCP 54.
In its request to the committee, LCJ suggested that amending FRCP 7 would address concerns surrounding MDL pleadings.21 Master complaints combine and refine common allegations within a single document that invites a corresponding master answer. FRCP 7 does not formally recognize or regulate master complaints or answers despite their widespread use in MDL proceedings. In the absence of formal FRCP acknowledgement, some courts have declined to treat master complaints/answers as pleadings. This is particularly troublesome when it comes to deciding pretrial motions under, for example, FRCPs 8, 9, and 12. These rules apply specifically to pleadings, and MDL litigants are denied some of the traditional protections of the FRCP when courts decline to recognize master complaints/answers as pleadings. Consequently, FRCP 7 should be amended to formally recognize master complaints and answers as pleadings.
Early screening techniques represent another area of potential MDL reform, since defense counsel regularly employ these tools to establish the existence or dearth of evidence underlying a plaintiff’s claims. Such tools include plaintiff fact sheets22 (PFS), defendant fact sheets (DFS), and Lone Pine orders,23 and their use is widespread in discovery. In 2019, at the direction of the advisory committee, the Federal Judicial Center conducted a study on the use of PFS and other case management tools in MDL proceedings.24 Between 2008 and 2018, PFS were ordered in 57 percent of all MDL proceedings and in 87 percent of proceedings with more than 1,000 total actions.25 LCJ identified this area as “[o]ne of the FRCP’s most visible and important failures in the MDL context.” To formally recognize the utility and ubiquity of these tools, FRCP 26 should be amended to require early disclosure of evidentiary support for factual and injury-related allegations in consolidated proceedings.26 Doing so would provide uniformity among PFS, DFS, and Lone Pine orders already utilized in MDL proceedings.
Third-party litigation similarly implicates FRCP 26 as an opportunity for MDL reform. The business of lead generation is booming and has drawn the attention (and ire) of several organizations, including the American Medical Association and the Federal Trade Commission.27 Lead generators profit by producing as many mass tort plaintiffs as possible. But verifying the merits of these claims is a murky business, one that is challenged by competing interests in financial gain. Amending FRCP 26 to require disclosure of third-party litigation financers would provide transparency to courts and parties so that both discovery and potential settlement value may be appropriately adjusted. Transparency would also help counter the insinuation that a high number of plaintiffs implies defendant guilt. Plaintiffs would benefit from such an amendment as well; indeed, such an amendment to FRCP 26 could help plaintiffs with legitimate claims avoid an “unjust dismissal of their own claims hidden amongst the non-meritorious and fraudulent ones.”28
Interlocutory review is another area of proposed reform receiving increased attention. An amendment to FRCP 54 would address the issue of inconsistent access to interlocutory review by permitting parties to seek appellate review of material rulings.29 In 2019, the advisory committee considered whether to draft such an amendment.30 Judge Robert Dow, the head of the MDL subcommittee, observed that “a court rule or legislation are the only available means” for accomplishing opportunities for interlocutory appellate review of MDL court rulings.31 Material rulings might include (among others) Daubert motions, preemption motions, decisions to proceed with a bellwether trial, and any ruling that the FRCP do not apply to the consolidated proceedings.32 Expanding immediate access to appellate review would lead to more just and consistent results, provide guidance to future parties and courts, and facilitate timely case resolution without needlessly wasting resources.
In conclusion, fix your car, stop slowing down to ogle those who don’t make good automotive choices, and get ready for some revolutionary MDL reform. It is coming.
HANNAH R. ANDERSON specializes in product liability and mass tort litigation at Faegre Drinker. She has experience at all stages of trial and is committed to providing consistent, practical, and creative service, designed for clients.
ANDREW G. JACKSON, Faegre Drinker associate, is a product liability and mass tort litigator specializing in drug and device defense. Experienced in trial, expert, company case, discovery, and settlement teams, Andrew delivers uncomplicated, trial-ready solutions.
Notes
1 Herr, David F., Multidistrict Lit Man §1:1 Overview of the Panel’s Role (May 2019).
2 28 U.S.C. §1407.
3The Judicial Panel and the Conduct of Multidistrict Litigation, 87 Harvard l. Rev. 1001, fn. 1 (1974).
4 Id.
5 Id.
6 Id.
7 Herr, David F., Multidistrict Lit Man §22.312 Overview of the Panel’s Role (May 2019).
8 United States Judicial Panel on Multidistrict Litigation – Statistical Analysis of Multidistrict Litigation Under 28 U.S.C. §1407 Fiscal Year 2019 – Cumulative from September 1968 through 9/30/2019, available at https://www.jpml.uscourts.gov/sites/jpml/files/JPML_Statistical_Analysis_of_Multidistrict_Litigation-FY-2019_0.pdf ); In re: Sitagliptin Phosphate (‘608 & ‘921) Patent Litig., MDL No. 2902, 402 F.Supp. 3d 1366 (JPML 8/8/2019) (the 2902nd case assigned an MDL number).
9 Id. There are several reasons a docket may not be transferred, including the JPML denying the motion, the motion was withdrawn, or the motion was deemed moot.
10 Vickery, Alan & Zoha Barkeshli, The Trend Toward MDLs in Products Cases, Faegre Drinker on Products (8/6/2019), available at https://www.faegredrinkeronproducts.com/2019/08/the-trend-toward-mdls-in-products-cases/#page=1 (last visited 2/7/2020).
11 Id.
12 Id.
13 Letter from 45 General Counsel to Ms. Rebecca A. Womeldorf, Secretary, the Committee on Rules of Practice and Procedure (10/3/2019), available at http://www.lfcj.com/uploads/1/1/2/0/112061707/letter_from_45_companies_urging_frcp_amendments_for_mdl_cases_10-3-19.pdf (last visited 2/7/2020); see also Advisory Committee Rules of Civil Procedure, MDL Subcommittee Report, 11/1/2018 at 142.
14 Id.
15 Id.
16 For those who enjoy legalese, this doctrine is referred to as “champerty and maintenance.”
17 Supra note 13; see also Letter from Advanced Medical Technology Association et al. to Ms. Rebecca A. Womeldorf, Secretary, Committee on Rules of Practice and Procedure (3/27/2019).
18 Supra note 13.
19 Id.
20 Lawyers for Civil Justice, Request for Rulemaking to the Advisory Committee on Civil Rules (2017), https://www.uscourts.gov/sites/default/files/17-cv-rrrrr-suggestion_lcj_0.pdf
21 Id.
22 PFS are “standardized questionnaires that serve the same function as interrogatories and requests for production.” They are often utilized in large MDLs to separate the meritorious claims from the ones lacking supporting evidence. Margaret S. Williams, Emery G. Lee, & Jason A. Cantone, Plaintiff Fact Sheets in Multidistrict Litigation, Fed. Judicial Ctr. (2019), https://www.fjc.gov/sites/default/files/materials/49/PFS%20in%20MDL.pdf
23 Id. Lone Pine orders require plaintiffs to produce expert affidavits identifying case-specific evidence on causation and are typically issued later in proceedings than PFS.
24 Id.
25 Id.
26 Supra note 20.
27 See Am. Med. Ass’n, Attorney Ads on Drug Side Effects H-105.985 (last modified 2019) https://policysearch.ama-assn.org/policyfinder/detail/Attorney%20Ads%20on%20Drug%20Side%20Effects%20H105.985?uri=%2FAMADoc%2FHOD-105.985.xml ; U.S. Fed. Trade Comm’n, FTC Flags Potentially Unlawful TV Ads for Prescription Drug Lawsuits (9/24/2019), https://www.ftc.gov/news-events/press-releases/2019/09/ftc-flags-potentially-unlawful-tv-ads-prescription-drug-lawsuits
28 Supra note 20.
29 Id.
30 See Agenda Book, Advisory Committee on Civil Rules (Apr. 2-3, 2019 meeting), at 212-14 (MDL Subcommittee Report).
31 See Agenda Book, Advisory Committee on Civil Rules (10/29/2019 meeting) at 106 (MDL Subcommittee Report).
32 Supra note 20.