Multidistrict Litigation

By Brian J. Donovan

The United States Judicial Panel on Multidistrict Litigation (“JPML”) traces its origins to the early 1960s when more than 1800 related civil actions involving price-fixing allegations in the electrical equipment industry flooded the federal courts. To coordinate discovery among the electrical equipment antitrust cases in the over thirty involved courts, Chief Justice Earl Warren created the Coordinating Committee for Multiple Litigation of the United States District Courts. At the end of its work, the Committee recommended a more formalized procedure for handling groups of similar cases. In response, in 1968, Congress enacted the Multidistrict Litigation Statute (28 U.S.C. § 1407), the statute to which the JPML owes its existence.

The JPML consists of seven sitting federal judges designated from time to time by the Chief Justice of the United States. No two JPML members may be from the same federal judicial circuit. The concurrence of four members shall be necessary to any action by the JPML.

The seven JPML members are appointed without any limitation on their terms (“designated from time to time”). However, in June 2000, then-Chief Justice William H. Rehnquist imposed some regularity and predictability on the appointment process by establishing staggered seven-year terms for each member. Chief Justice John G. Roberts, Jr. has continued his predecessor’s practice.

The multidistrict litigation (“MDL”) statute provides, in pertinent part, “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 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 it was transferred unless it shall have been previously terminated.”

In plain English, the JPML was created to:

(a) determine whether civil actions pending in different federal districts involve one or more common questions of fact such that the actions should be transferred to one federal district for coordinated or consolidated pretrial proceedings;

(b) ensure such transfer of cases to one federal district will be for the convenience of parties and witnesses and will promote the just and efficient conduct of such actions; and

(c) select the federal district and judge(s) best situated to handle the transferred cases.

Common questions of fact do not have to predominate over other questions, and arguments against transfer because of the existence of non-common issues are unlikely to prevail. The JPML, driven by its charge for achieving judicial efficiency, liberally grants consolidation even in the face of objections by the parties to the litigation.

Theoretically, the purpose of this transfer or “centralization” process is threefold:

(a) to avoid duplication of discovery;

(b) to prevent inconsistent pretrial rulings; and

(c) to conserve the resources of the parties, their counsel and the judiciary.

The MDL statute further provides:

Proceedings for the transfer of an action under this section may be initiated by:

(a) the JPML upon its own initiative, or

(b) a motion filed with the JPML 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.

When lobbying for transfer to a particular district, parties may not argue about applicable district and circuit law in potential courts (which may be more favorable to the plaintiffs or the defendants in a given set of facts); they are limited to administrative and convenience arguments.

New cases transferred from other districts to existing MDLs are called “tag-along” actions. When the JPML receives a “tag-along” notice, it issues a Conditional Transfer Order (“CTO”) transferring the action to the designated MDL transferee court.

Any party opposing the transfer shall file a notice of opposition with the clerk of the JPML within 7 days. In such event, the clerk of the JPML shall not transmit the transfer order to the clerk of the transferee district court, but shall notify the parties of the briefing schedule. Failure to respond to a CTO shall be treated as that party’s acquiescence to it. Within 14 days of the filing of its notice of opposition, the party opposing transfer shall file a motion to vacate the CTO and brief in support thereof. The clerk of the JPML shall set the motion for the next appropriate hearing session. Failure to file and serve a motion and brief shall be treated as withdrawal of the opposition and the clerk of the JPML shall forthwith transmit the order to the clerk of the transferee district court.

In the vast majority of cases, an affected party does not file a notice of opposition within the 7-day time period established by the JPML, and the JPML automatically transfers the case to the transferee court.

Notwithstanding the clarity of purpose set forth in the MDL statute, facilitating global settlement is the main purpose of consolidation into an MDL. Indeed, settlement is the fate of almost all cases that are part of an MDL. Relatively few MDL cases are remanded to the district courts in which they were originally filed. Parties to MDL cases and the transferee judges who preside over them face tremendous pressure to settle. Because a primary objective of consolidation into MDL is to avoid multiple federal judges having to deal with the same issues, some transferee judges perceive the inability to achieve a global settlement as a failure.

As Judge Fallon described, it is “not unusual” for a transferee court to “encourage a global resolution of the matter before recommending to the Panel that the case be remanded.”

In short, theoretically the JPML may only transfer cases into an MDL for pretrial matters; the transferee court’s jurisdiction extends only that far. But as a practical matter, for almost all cases transferred into an MDL, there is no trial, let alone post-trial matters, left to conduct back in the transferor district. Settlement is the endgame in almost all instances. To get there, the transferee judge appoints a small group of attorneys to strategize, conduct discovery, and try test cases on behalf of the group of plaintiffs. This appointed group is frequently called a steering committee; it steers the strategy for discovery and guides the course for all other pretrial matters. The steering committee effectively replaces the plaintiffs’ chosen representatives and is expected to represent the interests of all plaintiffs in the MDL, no matter how varied they may be. Every claimant enters an MDL having made the decision to hire a particular lawyer and file suit against a particular defendant in a particular jurisdiction. But once her case is transferred to an MDL, the transferee judge decides who will really represent her interests in the MDL. Suddenly, all of the decisions the claimant made about exercising her rights through litigation – which lawyer to hire, when and where to file a lawsuit, and against whom – have been replaced by decisions made by the transferee judge and the attorneys appointed by the transferee judge.