Litigation: Basics of MDL formation, unpredictability and the JPML

Understanding the mechanics of the JPML is key to understanding whether your case is appropriate for multi-district litigation

For those unfamiliar with the procedure for creation of multi-district litigation (MDL), the process can seem daunting and unpredictable. For example, you may be in the beginning stages of litigating a few manageable consumer products-related cases in federal court. Before you even file a responsive pleading, however, the plaintiffs raise the stakes and seek to create an MDL, consolidating your cases with several other actions in different jurisdictions against competing manufacturers. Such a scenario forces you to field questions regarding the probability of consolidation and whether you have a real opportunity to oppose the MDL.

The answers to these questions rest largely on the Judicial Panel on Multidistrict Litigation (JPML), which was created by Congress in 1968 under 28 U.S.C. § 1407 to determine the appropriateness of, and location for, an MDL. The law allows for transfer of one or more actions that have “one or more common questions of fact” and upon the JPML’s “determination that transfers for such proceedings will be for the convenience of parties and witnesses and will promote the just and efficient conduct of such actions.”

The JPML consists of seven sitting federal judges, appointed by the Chief Justice of the United States. No two JPML members may be from the same federal judicial circuit. Although the JPML sits in Washington, D.C., it generally meets every other month in different jurisdictions across the country to hear motions made under Section 1407. For instance, the JPML will have its next two sessions of 2013 on Sept. 26 in Philadelphia and Dec. 5 in Las Vegas, after having convened in July in Portland, Maine and in May in Louisville, Ky.

Section 1407 provides the only statutory justification for the creation of an MDL, and thus the JPML has wide discretion in making its determination. The JPML will consider such things as how many cases are pending throughout the federal system, how many potential “tag-along” actions may be pending, the status of the pending litigations, and how advanced they may be. A central theme of many decisions is the elimination of duplication of discovery or potentially inconsistent pretrial rulings. When multiple class actions are at issue, the “potential for conflicting or overlapping class actions presents one of the strongest reasons for” consolidation and coordination.

It is unfortunately difficult to predict how the JPML will rule. For instance, the JPML recently consolidated class action lawsuits against Anheuser-Busch alleging overstating of alcohol content in beer labeling, despite the fact that there were only six suits pending in disparate geographic locations (In re Anheuser-Busch Beer Labeling Mktg. and Sales Practices Litig.). The JPML held that the six actions shared common questions of fact and that centralization “will eliminate duplicative discovery; prevent inconsistent pretrial rulings, especially with respect to class certification; and conserve the resources of the parties, their counsel and the judiciary.” The JPML also recently consolidated 53 lawsuits involving four different diabetes drugs — each manufactured by a different defendant — allegedly linked to pancreatic cancer (In re Incretin Mimetics Prods. Liab. Litig.,). Noting the JPML is “typically hesitant to centralize litigation against multiple, competing defendants which marketed, manufactured and sold similar products,” the plaintiffs nevertheless “ma[de] highly similar allegations about each of the four drugs” sought for consolidation.

On the other hand, the JPML recently declined to consolidate 34 actions alleging patent infringement of DSL technology. In In re Brandywine Comm. Tech., the JPML held that the various actions were in different procedural postures that would complicate centralization. “Centralization of these actions is unlikely to result in the just and efficient conduct of the litigation as a whole—particularly where the newly-filed actions are already progressing towards early resolution.” And last year the JPML declined to consolidate ten suits against Fannie Mae and Freddie Mac over allegedly dodging property-related excise taxes in real estate deals (In re Real Estate Transfer Tax Litig.). According to the JPML, the factual questions presented in the various actions were “largely undisputed” and “neither numerous nor complex.”  The actions also had varied procedural postures, and thus there were “insufficient potential efficiencies to be obtained with regard to discovery and motions practice to outweigh the inconvenience to the parties and the courts....”

It is equally difficult to predict where the JPML might decide to centralize the proceedings. If there are many different jurisdictions at issue, the JPML may assign a geographically central location. However, it is up to the discretion of the JPML, and it might choose any jurisdiction it deems to be appropriate and convenient in light of the locations of the parties and witnesses. In In re Mirena IUD Prods. Liab. and Mktg. Litig., the JMPL chose the Southern District of New York amongst ten different proposed jurisdictions proposed by plaintiffs based on location of defendants’ various headquarters.

Despite the unpredictability of the MDL process, in many instances it makes strategic sense for defendants to oppose centralization, particularly where there are a limited number of actions at issue. Although there may be efficiencies in consolidating discovery, the risks—including plaintiff lawyers bringing weak tag-along actions to leverage settlement discussions and increased costs of what may be broad discovery—usually outweigh any benefits. Indeed, unless there is a multitude of cases pending, the benefits of an MDL generally can be had without consolidation by simply coordinating discovery between multiple cases. The various decisions indicate that the JPML will weigh all of the available facts and circumstances related to potential efficiencies (or lack thereof) that may be provided by consolidation and make a decision based on what is most efficient and fair. It is therefore usually worthwhile to oppose consolidation on common sense grounds that stress all of the factual differences and the lack of convenience consolidation will mean to your client and the other parties.

Contributing Author

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Eric Fish

Eric Fish is a partner in BakerHostetler’s New York office. Eric focuses his practice on complex litigation, including product liability, class action, and commercial litigation...

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