November 03, 2011 Articles

Federal Court's Injunction Against State Court Certification Is Reversed

By Jeffrey A. Holmstrand

The withdrawal of a prescription medicine from the market predictably leads to a rash of lawsuits by parties of all stripes, including those who claim only to have sustained economic loss as a result of their purchase of the drug. Because we have a federal system, some of those suits end up in various state courts while others wind up consolidated in a multi-district litigation (MDL) proceeding, creating a potential for tension between the two fora. Recognizing this, Congress enacted the Anti-Injunction Act in 1793. Subject to certain limited exceptions, the act generally prohibits federal courts from enjoining state court proceedings. The Supreme Court’s recent decision in Smith v. Bayer Corp., 131 S. Ct. 2368, 180 L. Ed. 2d 341 (2011), addresses the scope of the act where there are competing state and federal class actions, both seeking essentially the same relief under nearly identically worded rules.

In Smith, the district court overseeing a federal MDL concluded that a West Virginia plaintiff could not seek class-wide relief under that state’s consumer protection act. When an unrelated group of plaintiffs in a West Virginia state court proceeding then sought certification of essentially the same class in the state forum, the federal district court stepped in and enjoined further state court certification proceedings. The Eighth Circuit affirmed. A unanimous Supreme Court reversed that decision. Although that result was not unexpected, the decision offers a couple of lessons for mass tort litigators. This article discusses the Smith decision and its potential consequences for future actions. Because Smith’s procedural history provides a good snapshot of the state of mass tort litigation where cases are pending in multiple systems, we’ll begin there.

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