March 21, 2012 Articles

Factors For and Against MDL Coordination

By John P. Lavelle Jr. and Thomas V. Ayala

Multidistrict litigation (MDL) proceedings are often proposed to manage product-liability litigation. Any party to a case may move to create an MDL, and the Judicial Panel on Multidistrict Litigation may initiate the process on its own initiative, sometimes at the suggestion of one or more clerks of court who notice multiple filings of similar cases. Congress created the MDL Panel in 1968 with the enactment of 28 U.S.C. § 1407 and empowered it to transfer multiple civil actions to a single federal district for coordinated pretrial proceedings:

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.

28 U.S.C. § 1407(a).

The terms of section 1407 are of limited value to parties and practitioners attempting to predict whether the MDL Panel is likely to initiate an MDL in a particular instance. As of the time of the writing of this article, 64 out of 288 pending MDLs (22 percent) are product-liability actions. See United States Judicial Panel on Multidistrict Litigation, MDL Statistics Report—Distribution of Pending MDL Dockets as of November 16, 2011, www.jpml.uscourts.gov. But in contrast to litigation arising from mass accidents like air and rail crashes, which the panel has consistently transferred for MDL coordination, the panel has in many instances declined to centralize product liability actions in an MDL.

Deciding Factors Articulated by the MDL Panel
Focusing on the terms of section 1407, the statute authorizes the panel to create an MDL when the litigation at issue satisfies three criteria: the actions share common questions of fact; creation of an MDL serves the convenience of the parties and witnesses; and an MDL would, in the panel’s judgment, “promote the just and efficient conduct of the actions.”

Regarding the first criterion, common questions, the MDL Panel has stated that “transfer under Section 1407 does not require a complete identity or even a majority of common factual or legal issues as a prerequisite to transfer.” In re Accutane Prods. Liab. Litig., 343 F. Supp.2d 1382, 1383 (2004). The second criterion, convenience of the parties, is easily satisfied when the parties consent to MDL coordination, as they often do, but it is far more malleable when parties disagree over the wisdom of MDL treatment of their cases, where such an MDL should be venued, or to whom it should be assigned for judicial management. The third criterion, whether transfer will “promote the just and efficient conduct of the actions,” conveys broad discretion to the MDL Panel. In this regard, the Panel has articulated several factors relevant to its transfer decisions.

Below are the factors most commonly noted by the panel in its decisions reported during the last decade. Each of these factors is discussed in isolation, but it should be emphasized that how these factors will be weighed and balanced will depend on the specific circumstances of the litigation. The panel has not applied a rigid, arithmetic formula when considering these factors, instead employing a more flexible approach that may discount certain factors for one litigation and emphasize them for another, depending on the particular circumstances presented.

Materiality and Complexity of Common Questions of Fact
The panel considers not only whether the actions in question present common questions of fact, but also whether any common questions are material, complex, and disputed. The greater the factual commonality and complexity of disputed facts, the more likely the panel will order centralization. Compare, e.g., In re Oxycontin Prods. Liab. Litig., 395 F. Supp.2d 1358 (2005) (denying transfer) (“Movants have failed to demonstrate that any common questions of fact and law are sufficiently complex, unresolved and/or numerous to justify Section 1407 transfer in this docket . . .”), with In re Fosamax Prods. Liab. Litig., 444 F. Supp.2d 1347 (2006) (granting transfer) (“[T]hese actions present complex common factual questions concerning, among other things, 1) the development, testing, manufacturing and marketing of Fosamax, and 2) [the defendant’s] knowledge concerning the drug’s alleged adverse effects, in particular, osteonecrosis of the jaw. Centralization under Section 1407 is necessary in order to eliminate duplicative discovery; prevent inconsistent pretrial rulings; and conserve the resources of the parties, their counsel and the judiciary.”), and In re Accutane Prods. Liab. Litig., 343 F. Supp.2d 1382, 1383 (2004) (“The actions in this docket thus present complex common questions of fact concerning, inter alia, i) the development, testing, manufacturing and marketing of Accutane, and ii) defendants’ knowledge concerning the drug’s possible adverse effects.”).

However, even if the actions share common factual questions, if they involve significant individualized questions of fact, the panel may not be inclined to transfer on the basis that the individualized questions “overshadow,” “predominate over” or “outweigh” the common ones. See, e.g., In re Abbott Labs. Similac Prods. Liab. Litig., 763 F. Supp.2d 1376–77 (2011) (“We are of the opinion that the individual facts contained in these actions will predominate over any alleged common fact questions. For instance, discovery and motion practice may be expected to concern (1) the particular product each plaintiff purchased, (2) any injuries that consumption of the product caused, (3) whether the product contained beetles or beetle larvae, and/or (4) what advertising or other representations were made to each particular plaintiff (and, relatedly, whether the plaintiff relied upon those representations.”)); In re American-Manufactured Drywall Prods. Liab. Litig., 716 F. Supp.2d 1367 (2010) (“[T]he different manufacturer defendants produced the drywall using different, proprietary techniques and different sources. . . . The proponents of centralization have not convinced us that any efficiencies from centralization would outweigh the multiple individualized issues, including ones of liability and causation, that these actions appear to present.”); In re Table Saw Prods. Liab. Litig., 641 F. Supp.2d 1384 (2009) (“The 42 constituent actions all arise from accidents in which the subject plaintiffs were injured by table saws, and all plaintiffs advance a theory that those saws are defective because, inter alia, they lack ‘flesh detection’ technology (also known as ‘SawStop’ technology”). These common issues, however, are overshadowed by the non-common ones. Each action arises from an individual accident that occurred under necessarily unique circumstances.”); In re Victoria’s Secret Undergarments/Intimate Apparel Prods. Liab. Litig., MDL 2061, 2009 WL 1740577 (June 15, 2009) (“While each action alleges that Victoria’s Secret undergarments are defective, it appears that this common allegation may be overshadowed by factual issues unique to each action. Victoria’s Secret sells a vast array of brands, styles, and colors of undergarments, and they are manufactured by various factories with components from various suppliers.”); but see In re Darvocet, Darvon & Propoxyphene Prods. Liab. Litig., MDL 2226, 2011 WL 3648473 (Aug. 16, 2011) (“In opposing centralization, the defendants argue that the actions involve multiple individualized fact issues of causation and product identification which will require discovery unique to each case. We appreciate this argument, but our experience causes us respectfully to disagree as to its significance. . . . Transferee judges can accommodate common and individual discovery tracks, gaining the benefits of centralization without delaying or compromising consideration of claims on their individual merits. . . . Our experience from the PPA litigation is that a single judge can resolve collective issues expeditiously and, then, suggest Section 1407 remand of actions to transferor courts for more individual discovery and trial, if necessary.”).

Shortly after the enactment of section 1407, the MDL Panel made clear that it would not transfer part of a case, such as only issues involving common facts, while remanding the individualized issues to the districts in which the cases were filed. See In re San Juan, Puerto Rico Air Crash Disaster, 316 F. Supp. 981, 982 (1970) (“[W]e think it more conducive to effective judicial management to allow [the MDL judge] to determine which issues are appropriate for coordinated or consolidated pretrial proceedings and which should be reserved for further proceedings following remand.”). Nor has the panel granted requests to limit the time for completion of MDL proceedings. In re Depuy Orthopaedics, Inc., ASR Hip Implant Prods. Liab. Litig., 753 F. Supp.2d 1378 (2010) (“We reject Fleming’s request to limit the length of pretrial proceedings. We have long held that the Panel has neither the power nor the inclination to dictate in any way the manner in which transferee judges supervise actions pending before them. . . . Such a request is more properly addressed to the transferee judge.”). The MDL Panel has also declined to separate the claims of different classes of plaintiffs for purposes of MDL coordination. In re Bextra & Celebrex Mktg., Sales Practices & Prods. Liab. Litig., 391 F. Supp.2d 1377, 1379 (2005) (declining to separate “sales/marketing” plaintiffs from “products liability” plaintiffs). The panel has also declined to separate the claims of plaintiffs who have pending motions to remand to state court. In re Conagra Peanut Butter Prods. Liab. Litig., MDL 1845, 2008 WL 2332241 (June 5, 2008) (“Plaintiffs can present their motion to remand the action to state court to the transferee judge.”).

Stages of Pretrial Proceedings in the Actions
In contrast to tort litigation arising from a single calamitous event, product-liability actions routinely arise from products sold over an extended time period and from injuries sustained at different times, sometimes with a significant latency period. Considering this reality as well as statutes of limitations, docket conditions in particular jurisdictions, and other factors impacting the pace at which pretrial matters proceed, product-liability cases proposed for transfer may be in different procedural postures when the MDL Panel is considering transfer. Such circumstances generally counsel against transfer. For example, if significant discovery has already occurred in some cases, parties can informally coordinate discovery in later cases, lessening the need for an MDL. Also, the panel may be inclined against transfer if it would delay more advanced cases from proceeding to trial. See In re Reglan/Metoclopramide Prods. Liab. Litig., 622 F. Supp.2d 1380 (2009) (denying transfer) (“[S]everal of the actions appear to be substantially advanced (five were commenced in either 2006 or 2007). Metoclopramide litigation has a lengthy history, and the record indicates that a significant amount of the common discovery has already taken place.”); but see In re Yamaha Motor Corp. Rhino ATV Prods. Liab. Litig., MDL 2016, 2009 WL 382262 (Feb. 13, 2009) (transferring actions to MDL, but exempting from transfer two actions that were almost trial ready). By contrast, where all the cases are in the initial phases of discovery and motion practice, transfer is more likely.

Number of Actions in Proposed MDL
A greater number of cases generally weighs in favor of consolidation, and this factor can outweigh all others. For example, in 1991, after the panel had on five separate occasions rejected attempts to coordinate asbestos litigation in an MDL, the panel transferred more than 25,000 asbestos personal-injury actions then pending in federal courts to an MDL proceeding. In re Asbestos Prods. Liab. Litig., 771 F. Supp. 415 (1991). The panel has, however, declined to coordinate more than 100 pending cases in view of other factors weighing against transfer. See, e.g., In re Ambulatory Pain Pump-Chondrolysis Prods. Liab. Litig., 709 F. Supp.2d 1375 (2010) (“Although the number of related actions has certainly grown, the issues that weighed against centralization in that earlier docket remain. An indeterminate number of different pain pumps made by different manufacturers are still at issue, as are different anesthetics made by different pharmaceutical companies. Most, if not all, defendants are named in only a minority of actions; and several defendants are named in but a handful of actions. Many actions involve no anesthetic manufacturers at all.”).

The panel has been less receptive to MDL motions in product-liability litigation involving a small number of cases. See, e.g., In re Dorel Juvenile Group, Inc., Stroller Prods. Liab. Litig., 598 F. Supp.2d 1365 (2009) (transfer of two actions denied); In re Depo-Provera Prods. Liab. Litig., 499 F. Supp.2d 1348 (2007) (transfer of three actions denied); In re DaimlerChrysler Corp. Seat Belt Buckle Prods. Liab. Litig., 217 F. Supp.2d 1376, 1377 (2002) (“Given the minimal number of actions involved in this docket, movant has failed to persuade us that any common questions of fact are sufficiently complex to warrant Section 1407 centralization.”). The MDL Panel has rejected conclusory arguments that the prospect of future filings of related cases warrant MDL coordination. See In re Zimmer, Inc., Centralign Hip Prosthesis Prods. Liab. Litig. (No. II), 366 F. Supp.2d 1384, 1385 (2005) (“Proponents of transfer have alluded to the prospect of additional actions that are or may soon be pending in additional districts as a reason for ordering centralization. We note, however, that such actions are not now before the Panel, and their pendency does not create a persuasive reason for transfer of the five Connecticut actions that are.”). But facts suggesting a high probability of mass filings, such as a recall of a widely used product, are likely to be carefully considered by the panel. See, e.g., In re Darvocet, Darvon & Propoxyphene Prods. Liab. Litig., MDL 2226, 2011 WL 3648473 (Aug. 16, 2011) (“These products were removed from the U.S. market in December 2010, because the safety risks for cardiac complications and death outweighed their benefits for pain relief at recommended doses. . . . Though only about thirty-five cases have been filed thus far, the Panel considered the distinct potential that many more cases may be forthcoming.”).

The panel has rejected an argument that MDL consolidation would be inappropriate because it would encourage the filing of non-meritorious suits. See, e.g., In re Seroquel Prods. Liab. Litig., 447 F. Supp.2d 1376, 1378 ( 2006). According to the MDL Panel, addressing concerns about spurious claims is the province of MDL judges, who have developed case-management mechanisms to dispose of such claims, such as a requirement for a notice of diagnosis from treating physicians, phased product identification discovery and dismissal of defendants as to whom plaintiffs have failed to satisfy the product-identification requirement, and trial-worthy certification requirements with sanctions to prevent the plaintiffs’ counsel from dismissing cases after much time and money has been spent to work up the defense. See, e.g., In re Silica Prods. Liab. Litig., 398 F. Supp.2d 563, 575 & n.18 (S.D. Tex. 2005) (requiring each plaintiff to complete a plaintiff-specific fact sheet); Lore v. Lone Pine Corp., No. L-03306-85, 1986 N.J. Super. LEXIS 1626 (Nov. 18, 1986) (requiring plaintiffs in mass-tort litigation to offer “[r]eports of treating physicians and medical or other experts, supporting each individual plaintiff’s claim of injury and causation”). The MDL Panel has also rejected an argument that the “creation of an MDL might derail [a defendant’s] ongoing efforts to settle claims involving the Durom Cup quickly and without the expenditure of substantial time and resources.” In re Zimmer Durom Hip Cup Prods. Liab. Litig., MDL 2158, 2010 WL 2380876 (June 9, 2010).

Number of Products and Number of Defendants in the Actions
If multiple defendants are not named in all or most of the actions, this factor generally weighs against consolidation. Similarly, if the defendants make different products, or if there are material variations in their manufacturing processes or products, these factors weigh against consolidation. See, e.g., In re Ambulatory Pain Pump-Chondrolysis Prods. Liab. Litig., 709 F. Supp.2d 1375 (2010) (“An indeterminate number of different pain pumps made by different manufacturers are still at issue, as are different anesthetics made by different pharmaceutical companies. Most, if not all, defendants are named in only a minority of actions; and several defendants are named in but a handful of actions. Many actions involve no anesthetic manufacturers at all.”); In re American-Manufactured Drywall Prods. Liab. Litig., 716 F. Supp.2d 1367 (2010) (“[T]he different manufacturer defendants produced the drywall using different, proprietary techniques and different sources.”); In re Reglan/Metoclopramide Prods. Liab. Litig., 622 F. Supp.2d 1380 (2009) (“[T]here is no single common defendant, and some entities . . . are named in only one or two actions.”).

Claims involving a single product and a single defendant are more likely to be coordinated. See, e.g., In re Prempro Prods. Liab. Litig., 254 F. Supp.2d1366, 1367 (2003) (“All actions before the Panel are brought against the . . . defendants by persons allegedly injured by Prempro, a hormone combination of estrogen and progestin used in the treatment of menopausal symptoms. The actions in this docket thus present complex common questions of fact concerning, inter alia, i) the development, testing, manufacturing and marketing of Prempro, and ii) defendants’ knowledge concerning the drug’s possible adverse effects.”); see also In re St. Jude Med., Inc., Silzone Heart Valves Prods. Liab. Litig., 2001 WL 36292052 (2001) (“All actions are brought as class actions against the same, sole defendant and arise from the same factual milieu, namely the manufacture and marketing of allegedly defective heart valve and replacement products incorporating St Jude’s proprietary Silzone coating.”). If a plaintiff joins claims against a manufacturer of one product with claims against a manufacturer of another product in a case that is proposed for transfer to an MDL, a party may move the panel to separate the claims not subject to an MDL and remand them to the district in which they were filed. This has been done with success. See, e.g., In re Seroquel Prods. Liab. Litig., 447 F. Supp.2d 1376, 1378 (2006) (granting request to separate and remand claims aimed at products other than the product at issue in an MDL).

Whether Plaintiffs Are Represented by Common Counsel
If some or all of the plaintiffs share common counsel, the MDL Panel is more likely to assume that informal coordination of actions will occur than to create an MDL. In re American-Manufactured Drywall Prods. Liab. Litig., 716 F. Supp.2d 1367 (2010) (denying transfer) (“[P]laintiffs in many of the actions share counsel, which should further facilitate cooperation among the parties and coordination of the actions.”). Existing coordination activity between or among parties also weighs against MDL transfer. In re Zimmer, Inc., Centralign Hip Prosthesis Prods. Liab. Litig., 237 F. Supp.2d 1376, 1377 (2002) (denying transfer) (“We note that i) pretrial proceedings have been ongoing in the Connecticut district for over two years, and ii) plaintiff in the Minnesota action is represented by counsel who also represents the Connecticut action plaintiffs.”). Likewise, a defendant’s offer to coordinate discovery, such as by agreeing to make deposition testimony available for use in more than one case, also weighs against MDL consolidation. See In re Chilean Nitrate Prods. Liab. Litig., 787 F. Supp.2d 1347 (2011) (denying transfer) (“[P]laintiffs in both actions are represented by one law firm, and another law firm represents SQMNA in both actions. In these circumstances, informal cooperation among the involved attorneys is both practicable and preferable. . . . SQMNA represents that it has already offered to coordinate discovery, and that it is agreeable to the use of depositions of its witnesses in both actions.”).

Potential for Overlapping Class Actions
The MDL Panel has expressed a preference for centralizing overlapping class actions to ensure consistency of rulings. See, e.g., In re Apple iPod Nano Prods. Liab. Litig., 429 F. Supp.2d 1366, 1367–68 (2006) (coordinating six putative class actions sharing factual questions regarding an alleged defect in iPod Nano); In re Bluetooth Headset Prods. Liab. Litig., 475 F. Supp.2d 1403 (2007) (creating MDL to coordinate multiple putative class actions asserting that use of the Bluetooth headsets causes hearing loss); In re Am. Honda Motor Co., Inc., Oil Filter Prods. Liab. Litig., 416 F. Supp.2d 1368, 1369 (2006) (creating MDL to coordinate five separate putative statewide class actions). The Supreme Court’s recent opinion in Smith v. Bayer Corp. alluded to the pendency of overlapping class actions as a factor favoring MDL transfer. 131 S. Ct. 2368 (2011) (responding to policy argument concerning the re-litigation of class-certification issues by noting that federal courts may consolidate multiple overlapping suits against a single defendant in one court pursuant to section 1407). In some instances, however, the MDL Panel appeared to require a literal overlap in the class definitions of the actions proposed for transfer. See, e.g., In re Nissan N. Am., Inc., Infiniti FX Dashboard Prods. Liab. Litig., MDL 2164, 2010 WL 2244200 (June 3, 2010) (“Although both [actions] are putative class actions, the Hope plaintiffs seek certification of a Missouri-wide class, while the Aaron plaintiff seeks certification of a Texas-wide class. Thus, there are no overlapping classes.”); In re BMW Reverse Transmission Prods. Liab. Litig., MDL 1922, 2008 WL 1392291 (Apr. 9, 2008) (“Inasmuch as this litigation involves only two purported class actions with distinctly separate classes, the proponents of centralization have failed to persuade us that any common questions of fact are sufficiently complex and/or numerous to justify Section 1407 transfer in this docket at this time.”); In re Lycoming Crankshaft Prods. Liab. Litig., 473 F. Supp.2d 1380 (2007) (“This docket contains only three actions (two of which have been consolidated before the same judge) pending in two districts, and no overlap exists between the putative classes in the Pennsylvania actions and the California action.”).

Availability of a Suitable Forum and an Available MDL Judge
The availability of a forum and a judge with manageable docket conditions and a willingness to preside in an MDL are fundamental prerequisites to transfer. The MDL Panel is likely to consider these factors carefully in connection with its transfer decision, so each party should address these factors, regardless of whether it supports or opposes an MDL. See, e.g., In re Bridgestone/Firestone, Inc., 2000 WL 33416573 (Oct. 24, 2000) (“Given the range of locations of parties and witnesses in this docket and the geographic dispersal of constituent actions, it is clear that no single district emerges as a nexus. Thus, we have searched for a transferee judge with the ability and temperament to steer this complex litigation on a steady and expeditious course.”); see also In re Guidant Corp. Implantable Defibrillators Prods. Liab. Litig., 398 F. Supp.2d 1371, 1372 (2005) (“In concluding that the District of Minnesota is an appropriate forum for this docket, we observe that this district, where at least ten actions are already pending before one judge, is a geographically central, metropolitan district equipped with the resources that this complex products liability litigation is likely to require. The District of Minnesota also has a nexus to this docket given the location there of key Guidant facilities involved in the development and manufacturing of the relevant devices.”); In re IKO Roofing Shingle Prods. Liab. Litig., MDL 2104, 2009 WL 4572865 (Dec. 3, 2009) (“Certain IKO facilities are located in this district [Illinois], so relevant documents and witnesses are likely found there. Centralization in this district also permits the Panel to effect the Section 1407 assignment to a transferee district that is not currently assigned to other multidistrict litigation dockets and to a transferee judge who has a caseload favorable to accepting the assignment.”).

In selecting the MDL venue, the panel considers the geographic focal point, if any, of the parties and events giving rise to the litigation; the possibility of coordination with related state-court proceedings; and the location of the first-filed action. In selecting the federal judge, the panel considers whether a judge is already presiding in one or more of the cases to be centralized, the prospective judges’ experience in complex cases, the prospective judges’ willingness and motivation to handle an MDL docket, docket conditions, and the preference of the parties.

What to Make of the Factors?
The panel’s decisions over the last decade demonstrate that its inquiries are highly fact-specific. Mass torts that involve thousands of claimants or circumstances suggesting a forthcoming avalanche of claims are easier calls for MDL centralization than immature torts not associated with a major recall, peer-reviewed publication, regulatory action, or other traditional mass-tort spark. Similarly, litigation involving multiple proposed class actions in different jurisdictions is likely to be centralized. Consider an observation in a recent opinion addressing such serial litigation outside the context of an MDL:

This action is one of several “identical” actions against Philip Morris being prosecuted in different states by different plaintiffs but the same core counsel. So far, these actions have achieved mixed results. The New York action was dismissed, partially on the pleadings and partially on summary judgment. In the Massachusetts action, a class has been certified for a merits trial on a limited set of claims. The Florida action is in its infancy. Both sides lean heavily upon favorable findings in these other actions as proof that they should prevail on the instant motions.

Xavier v. Philip Morris USA Inc., 787 F. Supp.2d 1075, 1079 (N.D. Cal. 2011).

The MDL mechanism should serve to minimize this type of duplicative effort and the potential for inconsistent rulings in federal courts, which is a key goal of section 1407. Aside from burgeoning mass torts and overlapping class actions, however, predicting how the panel will rule in a particular instance is more difficult. As with other multifactorial analyses, the practitioner’s challenge is to assign value to each factor, highlight its importance or unimportance in a particular case, and craft a persuasive argument that consideration of all of the pertinent factors counsels in favor of or against MDL treatment.

Keywords: litigation, mass torts, multidistrict litigation, Judicial Panel on Multidistrict Litigation


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