MDL Defendant Moves for Coordination with State Court Proceedings

General Motors recently moved in Pennsylvania state court to to have discovery in an ignition defect lawsuit coordinated with the discovery in the 150+ cases in a federal multi-district litigation. In re General Motors LLC Ignition Switch Litigation, MDL No. 2543 (JPML June 9, 2014).

In many mass torts, plaintiffs have tactical options about choice of forum, including state vs. federal court.  Defendants have limited ability to impact these choices, including through removal to federal court of appropriate cases, and enforcement of venue rules and the forum non conveniens doctrine. It is not unusual for a federal MDL to be operating in parallel to a number of suits progressing in state courts, raising the same essential issues.

Such a posture raises a number of challenges regarding judicial administration, economy of judicial resources, efficiency for the parties, cost, and consistency (such as on protective orders).  While there is no mechanism for mandatory coordination of state and federal cases in this context, voluntary coordination is often utilized to reduce costs, delay, and the duplication of efforts. E.g., Dunlavey v. Takeda Pharm. Am., Inc., 2012 U.S. Dist. Lexis 120897 (W.D. La. Aug. 23, 2012). Many commentators encourage such coordination and cooperation.  E.g., Manual for Complex Litigation §§20.31, 22.4 (4th ed. 2004); The Judicial Panel on Multidistrict Litigation & The Federal Judicial Center, Ten Steps to Better Case Management: A Guide for Multidistrict Litigation Transferee Judges (2009); See the Multi-jurisdiction Litigation Guide.  

The defense motion here does a nice job of explaining why such coordination is essential and wise in the context of a product liability dispute. The MDL court had entered a Joint Coordination Order to prevent duplication of discovery, avoid undue burden on the courts and parties, save costs, and conserve judicial resources.  Some 13 state courts already adopted a similar order to govern the overlapping issues. 

Such coordination does not prevent a plaintiff from seeking necessary case-specific discovery, either through consent or through a motion. But more than 4 million pages of documents have already been produced in this MDL and it makes no sense to ignore that fact and have state court plaintiffs start discovery afresh. And it is impractical and unfair to expect a defendant to produce key company witnesses for deposition hundreds of time for every individual case, as opposed to allowing state court plaintiffs, through the coordination Orders, to meaningfully participate in the master MDL deposition of the key witnesses. 

Plaintiffs oppose the motion.

 

 

Publication of my new Class Action & Mass Torts Answer Book

Just a quick note.  Your humble blogger is very pleased to announce the availability of my latest publication, the Class Action and Mass Tort Answer Book (PLI 2015).  It is available here.  (I don't spend all my time posting here.)

The book is designed to be a handy desk reference for the class action practitioner and others interested in class actions and mass torts, offering a comprehensive overview of the current law. Deeper than a mere introduction but not as bulky as a treatise, the goal was to give the reader the essentials, covering, inter alia:

-class action prerequisites
-injunctive relief, mandatory, and damages classes
-issues surrounding absent class members
-discovery of class issues

-CAFA

-class certification hearings and procedures

-appeal of a certification decision
-trial of a class action
-settlement of a class action

In addition, the book looks at MDLs and other coordinations of complex civil litigation, concluding with a decidedly un-Nostradamus-like look at the future of aggregate litigation. 

I would also thank the wonderful contributors and researchers, many colleagues at SHB, that helped make the book a reality, and they are listed in the preface and table of contents.

Alas, no book signings or appearances on Oprah yet, but will keep you posted.

 

 

En Banc Appeals Court Interprets CAFA Mass Action Requirement

The Ninth Circuit has weighed in on an interesting CAFA issue, holding that personal injury claims relating to prescription pain relief drugs belong in federal court when the plaintiffs sought coordination of the claims in state court. See Corber v. Xanodyne Pharm. Inc., et al., 771 F.3d 1218 (9th Cir. en banc, 11/18/14).

The issue was whether removal is proper under the “mass action” provision of the Class Action Fairness Act of 2005 (“CAFA”), 28 U.S.C. § 1332(d)(11)(B)(i), when plaintiffs in several actions moved for coordination in the state trial court pursuant to California Code of Civil Procedure section 404.  It was significant that plaintiffs moved for coordination  “for all purposes” and justified their request in part by asserting a need to avoid inconsistent judgments.  As our readers know, CAFA extends federal removal jurisdiction for certain class actions and for mass actions in which “monetary relief claims of 100 or more persons are proposed to be tried jointly on the ground that the plaintiffs’ claims involve common questions of law or fact.” 28 U.S.C. § 1332(d)(11)(B)(i).

Here, the petitions asked the California Judicial Council to establish a coordinated proceeding for all California propoxyphene actions under section 404 of the California Code of Civil Procedure. The standards for coordination list that coordination of civil actions sharing a common question of fact or law is appropriate if one judge hearing all of the actions for all purposes in a selected site or sites will promote the ends of justice taking into account whether the common question of fact or law is predominating and significant to the litigation; the convenience of parties, witnesses, and counsel; the relative development of the actions and the work product of counsel; the efficient utilization of judicial facilities and manpower; the calendar of the courts; the disadvantages of duplicative and inconsistent rulings, orders, or judgments; and, the likelihood of settlement of the actions without further litigation should coordination be denied.

Plaintiffs asked for coordination of their lawsuits for reasons consistent with these factors, including concerns that there could be potential “duplicate and inconsistent rulings, orders, or judgments,” and that without coordination, “two or more separate courts ... may render different rulings on liability and other issues.” Plaintiffs argued in their petitions and the supporting memoranda that the cases should be coordinated before one judge “hearing all of the actions for all purposes,” to address “the same or substantially similar” causes of action, issues of law, and issues of material fact.

The central CAFA issue in dispute was whether plaintiffs’ petitions for coordination constituted proposals for the cases “to be tried jointly” under CAFA.  The mass action provision allows for federal jurisdiction when the monetary relief claims of 100 or more persons are “proposed to be tried jointly” on the ground that the plaintiffs' claims involve common questions of law or fact, 28 U.S.C. § 1332(d)(11)(B)(i). The district court held that it lacked jurisdiction under CAFA because plaintiffs’ petitions for coordination were not explicit proposals to try the cases jointly, and it thus remanded the cases back to state court.

Congress enacted CAFA in 2005 to “curb perceived abuses of the class action device which, in the view of Congress, had often been used to litigate multi-state or even national class actions in state courts.” Tanoh v. Dow Chem. Co., 561 F.3d 945, 952 (9th Cir.2009). CAFA further extends federal jurisdiction over “mass action” cases when several requirements are met, although only the “proposed to be tried jointly” requirement was at issue here. See 28 U.S.C. § 1332(d)(2), (6), (11)(A).

The case eventually made it to the Ninth Circuit en banc, which noted that while plaintiffs are the masters of their complaints, they are also the masters of their petitions for coordination. Stated another way, when the court assesses whether there has been a proposal for joint trial, the court must hold plaintiffs responsible for what they have said and done. Plaintiffs voluntarily asked for coordination under section 404, and they submitted memoranda in support of their petitions for coordination. The court thus carefully assessed the language of the petitions for coordination to see whether, in language or substance, they had proposed a joint trial.

The en banc court concluded that plaintiffs’ petitions for coordination were in essence proposals for joint trial. First, the petitions said that plaintiffs sought coordination “for all purposes.” “All purposes” must include the purposes of trial. So reading the petitions literally, plaintiffs, who in total number far more than 100, were seeking a joint trial. Second, the specific reasons given for coordination also supported the conclusion that a joint trial was requested. For example, plaintiffs listed potential issues in support of their petitions that would be addressed only through some form of joint trial, such as the danger of inconsistent judgments and conflicting determinations of liability.  A "proposal for a joint trial can be implicit." See also Atwell v. Bos. Scientific Corp., 740 F.3d 1160, 1163 (8th Cir.2013) (holding that proposals for joint trial may be made implicitly).

This issue of when and whether plaintiffs propose that cases be tried jointly for CAFA purposes has now been addressed by several courts. See Atwell v. Bos. Scientific Corp., 740 F.3d 1160 (8th Cir. 2013);  In re Abbott Labs. Inc, 698 F.3d 568 (7th Cir. 2012).  But see Parson v. Johnson & Johnson, 749 F.3d 879 (10th Cir. 2014).

 

JPML Releases MDL Stats

 The U.S. Judicial Panel on Multidistrict Litigation recently released the data on requests for coordination and dispositions in 2012, and some interesting trends can be detected.

Specifically, the Panel has shown an increasingly strict view of MDL requests.  In the early years of the last decade, the Panel routinely granted most requests, and even as recently as 2007-09 the Panel was granting 4 out every 5 requests.  Since then, however, the panel has denied more than 40% of the MDL requests.

One theory for the change is the increase over time in the number of petitions made, but that trend has actually started to level off in recent years.  And the Panel has always maintained it has sufficient able federal judges to mange the MDL's.

Another theory has to do with the feedback received by the Panel from judges and practitioners in a 2010 survey of MDL practice.  Much of that feedback discussed the Panel's ostensible preference for centralization.  The Panel now may have a deeper appreciation for the costs and economics of creating an MDL.

A third theory is that CAFA and federal court scrutiny of class actions has pushed more cases into the MDL stream, and sooner, although it is hard to confirm any rampant prematurity phenomenon.

Another is a possible change in the mix of cases proposed for MDL status.  Recent cases may have smaller numbers of parties, more varied filing dates, differing defendants, and different subject matters -- fewer antitrust matters and more consumer fraud claims, for example.  

 

 

Panel Rejects MDL Status for Brass Plumbing Claims

We have posted before about the MDL process and the importance of the initial decision by the Panel on ordering coordination. Last week the Judicial Panel on Multidistrict Litigation declined to consolidate the suits by plaintiffs alleging injuries over brass plumbing fittings.See In re Uponor Inc., F1960 Plumbing Fittings Products Liability Litigation, MDL No. 2393 (JPML 9/27/12).

We like to flag for readers, for any insights they may offer, the less common decisions rejecting MDL status, see also here and here.

The plaintiffs alleged in this litigation that high-zinc-content brass components on the plumbing fittings failed, due to corrosion that caused the loss of zinc. This resulted, they said, in various forms of property damage, including the loss of integrity of the components, leaks, loss of water pressure, and other problems.This litigation currently consists of nineteen actions pending in
seven districts, but the Panel was notified of four additional, potentially related actions.

All involved homeowners supported plaintiff’s motion. The Uponor/Wirsbo defendants also supported the motion but  other responding defendants, which are various plumbing and supply defendants,  builders, or installers, opposed the motion and, alternatively, suggested a different transferee forum.

The Panel rejected the motion, noting that "several practical considerations" make the request to centralize unworkable. Most fundamentally, this request rested on a factual assumption – that F1960 fittings are involved in every action – that required the Panel to make a determination not apparent on the face of most complaints. Very few complaints actually mentioned the F1960
standard. Instead, plaintiffs typically framed their complaints as broadly involving high zinc yellow brass fittings and other attendant components. The exceedingly general language that the homeowners employed in most actions to describe the defective components at issue
made it impossible in most cases to transfer “F1960 claims” and then separate and remand, other product claims.

But even assuming that the court could separate and remand the non-F1960 claims, the proposed transfer would still double the forums in which numerous local defendants would have to litigate, or [in an important practical observation]  at a minimum, monitor. Centralization might thus force many local defendants – builders, plumbers, suppliers – to prosecute their indemnity claims against the manufacturer in the MDL, while still having to defend claims that they supplied, built homes with, or installed defective plumbing components elsewhere.

Fragmentation of this litigation, said the Panel, also would increase the risk that the involved
courts will rule inconsistently on identical issues of state law, such as issues of compliance with Nevada’s unique state pre-litigation statute regarding construction defects. The potential inefficiencies and inconvenience associated with centralizing this litigation, separating out F1960 claims etc.,  outweigh any possible benefits of, or added efficiencies to, resolving common claims regarding the F1960 fittings.

"Centralization is not a cure-all for every group of complicated cases."  The actions here were in
distinct procedural postures, and most of the advanced actions seem to be progressing well in the District of Nevada.

Thus, moving parties failed to convince the Panel that Section 1407 transfer of F1960 claims will benefit the parties and witnesses, or that centralization will produce sufficient clarity or efficiency in this already complicated litigation to outweigh the added inconvenience, confusion and cost that would be imposed on numerous parties.
 

 

Challenge to Federal-State Court Coordination Overture Prompts Response

One of the challenges of our system of federalism, and dual jurisdiction between state and federal courts, is the coordination of related cases pending in the two systems.  Perhaps nowhere does this happen more regularly than in the realm of mass torts.  Federal cases may be coordinated in an MDL, and several states, such as New Jersey, have a procedure to centralize mass tort filings in their state court system. See Hermann, et al. Statewide Coordinated Proceedings (2d ed. West 2004). But coordination between the state and federal level has been more difficult, more informal, more experimental. That is, state and federal judges, faced with the lack of a comprehensive statutory scheme, have undertaken innovative efforts to coordinate parallel or related litigation so as to try to reduce the costs, delays, and duplication of effort that can stem from such dispersed litigation. State judges, for example, can bring additional resources that might enable an MDL transferee court to implement a nationwide discovery plan or a coordinated national calendar

Recently, plaintiffs in state court cases in the Actos litigation sent the Actos federal MDL court a letter complaining that the judge improperly "intervened" by discussing the litigation "ex parte" with the state court judge.  The plaintiffs asserted that the federal court persuaded the state court judge to rule in a certain fashion on scheduling issues, including the time for discovery and trial dates. Plaintiffs complained that such "intervention" would prevent them from properly litigating their cases; violated the important policy of comity (citing the Anti-Injunction Act); and raised "objectivity" concerns.  Plaintiffs requested the federal court refrain from such communications in the future with any state court judges handling Actos cases, citing the Canons of Judicial Ethics.  Finally, the letter asked that plaintiffs further be heard on this issue at an upcoming MDL hearing.

At first blush, this seemed like an over-reaction by plaintiffs, and perhaps an attempt to intimidate the court into not doing what seems like a perfectly acceptable thing, informally coordinating litigation which raises similar issues, involves many of the same counsel, and likely will implicate many of the same discovery requests, fact and expert witnesses. We leave it to the loyal readers of MassTortDefense to decide for themselves about the tone of this letter.

So how did the federal court react? Judge Doherty is overseeing the federal multidistrict litigation, In re: Actos (Pioglitazone) Products Liability Litigation (MDL-2299). Her reaction came in the form of a "Memorandum Response." The court read the original letter as possibly alleging improper and unethical conduct by both the federal and state court judges, and doing so by making "completely specious" arguments. On the merits, the court began by noting that the Manual for Complex Litigation recommends cooperation and coordination among federal and state court judges in these mass tort contexts.  So does the state court-focused manual, Managing Mass Tort Cases: A Resource for State Court Judges, published by the Conference of Chief Justices. The important notion of comity was respected because the communication from the MDL court was merely an invitation asking whether state courts might see any benefit in talking about the litigation posture. An invitation to chat is not an "intervention." And any communications were in that same spirit.

The court's memorandum turned to the MDL schedule, its internal logic and consistency, and the ample opportunity all parties had to comment on and object to any of its provisions. The court then points out, logically, that an improper ex parte conversation involves a communication between the court and one , but not all parties -- not a conversation between two independent judges.

The court than labeled a "cautionary tale" those cases that warn attorneys against unsubstantiated allegations that bring the judiciary into disrepute. Finally, the court noted that the letter inaccurately cites the Code of Judicial Conduct. The canons clearly do not prohibit a judge from consulting with other judges to aid the judge in carrying out his or her responsibilities.

The court gave the authors the benefit of the doubt, deciding ultimately to view the letter as over-zealous, ill-advised, poorly thought out, regrettable hyperbole, and empty rhetoric, as opposed to something more troubling.   An interesting read for all our readers, especially those with MDL practices.

 

JPML Declines MDL Status for Surgical Robots

We have posted before about the MDL process and the importance of the initial decision by the Panel on ordering coordination. Last week the Judicial Panel on Multidistrict Litigation declined to consolidate the suits by plaintiffs alleging injuries from da Vinci surgical robots. See In re Da Vinci Robotic Surgical System Products Liability Litigation, MDL No. 2381 (J.P.M.L., , 8/3/12).

We like to flag for readers, for any insights they may offer, the less common decisions rejecting MDL status, see also here and here. Also here. See here.

At the time of the decision there were five cases pending in five different federal courts. Defendant Intuitive Surgical, Inc. also supported the motion. The parties even agreed on centralization in the Northern District of California.

But the Panel was not persuaded that Section 1407 centralization would serve the convenience of the parties and witnesses or further the just and efficient conduct of this litigation. Each action, said the Panel, alleged personal injuries arising out of alleged defects in the da Vinci Robotic Surgical System. These are "relatively straightforward personal injury or wrongful death actions,"   and the litigation may focus to a large extent on individual questions of fact concerning the circumstances of each patient’s alleged injuries.

Given the "minimal number of actions currently pending," the proponents of centralization failed to convince the Panel that any factual questions shared by these actions are sufficiently complex or
numerous to justify Section 1407 transfer. The court noted that the proponents maintained that this litigation may eventually encompass “hundreds” of cases or “over a thousand” cases. But the Panel declined to accept such predictions, and considered voluntary coordination among the parties and the involved courts of these relatively actions to be a preferable alternative to centralization at this time.

MDL Panel Declines to Coordinate Spread Litigation

The Judicial Panel on Multidistrict Litigation declined recently to consolidate three suits by plaintiffs who alleged Ferrero U.S.A. Inc. misrepresented Nutella hazelnut spread as a healthy and nutritious food. In re Nutella Marketing and Sales Practices Litigation, MDL No. 2248 (J.P.M.L.,  8/16/11).

We are always interested when the Panel declines to coordinate cases, but also have to admit that this is a favorite product in the MassTortDefense household.  The spread, in its earliest form, was created in the 1940s by Mr. Pietro Ferrero, a pastry maker and founder of the Ferrero company. At the time, there was very little chocolate because cocoa was in short supply due to World War II rationing. So Mr. Ferrero used hazelnuts, which were plentiful in the Piedmont region of Italy, to extend the chocolate supply. The region is mostly mountains and hills, on the north-western border of Italy with France and Switzerland.

A plaintiff in the District of New Jersey action sought consolidation, arguing that the cases made similar allegations challenging Ferrero's marketing and advertising practices. Interestingly, movants and respondents both recommended centralization because the actions contained "similar allegations" concerning Ferrero’s advertising, marketing and sale of Nutella spread and its alleged misrepresentations of Nutella as a healthy and nutritious food. All parties disagreed only as to the appropriate choice for transferee district.

However, the Panel noted that it has an institutional responsibility that goes beyond simply accommodating the particular wishes of the parties. See In re: Equinox Fitness Wage and Hour Empl’t Practices Litig., 764 F. Supp. 2d 1347, 1348 (J.P.M.L. 2011) (denying unopposed motion for centralization of two actions).

Here, the Panel was not persuaded that Section 1407 centralization was necessary for the convenience of the parties and witnesses or for the just and efficient conduct of this litigation. The actions may have shared some factual questions regarding the common defendant’s marketing
practices, but these questions did not appear complicated to the Panel. Indeed, the parties did not persuade the Panel that any common factual questions were sufficiently complex or numerous to justify Section 1407 transfer.  Instead, said the Panel, cooperation among the parties and deference among the courts should minimize the possibility of duplicative discovery and inconsistent pretrial rulings. See, e.g., In re: General Mills, Inc., Yoplus Yogurt Prods. Mktg. and Sales Practices Litig., 716 F. Supp. 2d 1371 (J.P.M.L. 2010).

 

JPML Orders Gulf Oil Spill MDL to Eastern District of Louisiana

The Judicial Panel on Multidistrict Litigation yesterday selected New Orleans as the site of the oil spill litigation MDL. The Panel ordered coordination, and transferred 77 lawsuits to the Eastern District of Louisiana before U.S. Judge Carl J. Barbier (and referred to more than 200 potential tag along actions). In Re: Oil Spill by the Oil Rig "Deepwater Horizon" in The Gulf of Mexico, MDL No. 2179 (Aug. 10, 2010). 

In its order, the Panel found that the cases indisputably share factual issues concerning the cause (or causes) of the Deepwater Horizon explosion/fire and the role, if any, that each defendant played in it. Centralization under Section 1407 would eliminate duplicative discovery, prevent inconsistent pretrial rulings, including rulings on class certification and other issues, and conserve the resources of the parties, their counsel, and the judiciary. Interestingly, the Panel noted that centralization may also facilitate closer coordination with Kenneth Feinberg’s administration of the BP compensation fund.

Over some objections, the Panel also concluded that it made sense to include the personal injury/wrongful death actions in the MDL. While these actions will require some amount of individualized discovery, in other respects they overlap with those that pursue only economic damage claims, found the Panel. The Order notes that the transferee judge has broad discretion to employ any number of pretrial techniques – such as establishing separate discovery and/or motion tracks – to address any differences among the cases and efficiently manage the various aspects of this litigation. See, e.g., In re Lehman Brothers Holdings, Inc., Securities & Employee Retirement Income Security Act (ERISA) Litigation, 598 F.Supp.2d 1362, 1364 (J.P.M.L. 2009). 

In terms of where the cases should be coordinated, the Panel noted that the parties advanced sound reasons for a large number of possible transferee districts and judges. They settled upon the Eastern District of Louisiana as the most appropriate district for this litigation. Without discounting the spill’s effects on other states, the Panel concluded that "if there is a geographic and psychological center of gravity in this docket, then the Eastern District of Louisiana is closest to it."

In selecting Judge Barbier, the Panel expressly declined the suggestion made at oral argument that, given the litigation’s scope and complexity, it should assign the docket to multiple transferee judges. "Experience teaches," said the Panel, that most, if not all, multidistrict proceedings do not require the oversight of more than one judge, provided that he or she has the time and resources to handle the assignment. Moreover, Judge Barbier has at his disposal all the many assets of the Eastern District of Louisiana which is accustomed to handling large MDLs. Judge Barbier may also, found the Panel, choose to employ special masters and other case administration tools to facilitate certain aspects of the litigation. See Manual for Complex Litigation, Fourth §§ 11.52, 11.53 (2004).


 

JPML Hears Oral Argument In Gulf Oil Spill MDL

The U.S. Judicial Panel on Multidistrict Litigation heard oral argument last week on the issue of consolidating the hundreds of cases arising from the Gulf oil spill. In re: Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico,  MDL No. 2179.

The MDL panel met this time in Boise, Idaho, and suspended the usual rule limiting oral
argument to 20 minutes.  Multiple attorneys representing the various parties in the pending cases addressed the panel.  Most defendants urged the cases be coordinated in the Southern District of Texas, while most plaintiffs, including some of the restaurant owners and fishermen affected by the spill, argued for the Eastern District of Louisiana, asserting that much of the injury/damages is centered there. A  few other plaintiffs pushed for the cases to be coordinated in Mississippi, Alabama, or Florida courts.

BP argued that the Texas forum was appropriate because this defendant's headquarters, documents, and key fact witnesses are all located there. The government wants the cases consolidated in New Orleans. But one issue is that 8 federal judges, including several in Louisiana, have recused themselves from the spill cases.  This led to discussion whether potential judicial conflicts should compel the panel to bring in a judge from outside the Gulf states. In New Orleans, the Eastern District of Louisiana has consolidated its 50+ oil spill cases before Judge Carl J. Barbier, who has issued interim case management orders and appointed interim liaison counsel for plaintiffs and defendants.  Some have argued this has effectively created an administrative framework that could be utilized were the Panel to send the MDL to New Orleans.

At last look, federal cases were spread around the country, including in New York and California and Illinois.  However, the busiest oil spill dockets are in the Eastern District of Louisiana, Southern District of Texas, Southern District of Alabama, and the three Florida district courts, each with more than 10 cases. 

As noted here, the litigation involves a wide variety of claims, from personal injury, to property or environmental damages, lost profits, and securities-based economic injury.  The panel asked whether the cases, even if consolidated, should be put in separate groupings.  Some plaintiffs' attorneys  argued it was particularly important to set up a separate track for personal-injury claims.