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.

 

Court Permits Plaintiffs to Evade CAFA Mass Action Reach

Readers know that one of the effects of the Class Action Fairness Act has been to encourage plaintiff counsel to get creative in ways to defeat federal jurisdiction and keep mass torts and class actions in state courts.  Last week, a federal court remanded several cases brought by individuals who claimed that they developed non-Hodgkins lymphoma as a result of exposure to PCBs, despite the “mass action” provisions of CAFA.  Nunn v. Monsanto Co., No, 4:11-CV-1657(CEJ) (E.D. Mo. 11/7/11).

Under CAFA, federal courts have jurisdiction over class actions in which the amount in controversy exceeds $5,000,000 in the aggregate; there is minimal diversity among the parties; and there are at least 100 members in the class. 28 U.S.C. §1332(d). CAFA also provides federal jurisdiction over a “mass action,” which is defined as “any civil action . . . 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).

The district court stated that for it to have jurisdiction under the mass action provisions, defendants must demonstrate that there really are 100 plaintiffs. Defendants made a clever and powerful argument, pointing out that in addition to the cases and these plaintiffs subject to the remand motion,  plaintiffs’ counsel filed two separate, largely identical, cases in the state court (St. Louis City Circuit Court), one with 95 plaintiffs and one with 96 plaintiffs. This clearly evidenced plaintiffs’ counsel purposeful efforts to “splinter” a single mass tort case for the purpose of evading federal jurisdiction. That kind of rigging was rejected in cases like Freeman v. Blue Ridge Paper Prods., Inc., 551 F.3d 405 (6th Cir. 2008), and Westerfeld v. Independent Processing, LLC, 621 F.3d 819 (8th Cir. 2010), argued defendants.

The court felt obligated to disregard such manipulations, however.  Defendants’ contention that plaintiffs had deliberately divided their cases in order to avoid the mass action threshold was somehow "irrelevant."  Reference to the other identical cases was, the court thought, akin to defendant "consolidating" the cases; by excluding cases in which the claims were consolidated on
a defendant’s motion, Congress appears to have contemplated that some cases which could have been brought as a mass action would, because of the way in which the plaintiffs chose to structure their claims, remain outside of CAFA’s grant of jurisdiction. Citing Anderson v. Bayer Corp., 610 F.3d 390, 393 (7th Cir. 2010); see also Tanoh v. Dow Chem. Co., 561 F.3d 945 (9th Cir. 2009). 
 

So, another example of the numerical loophole to removal of mass actions, evading the Congressional intent. Plaintiffs' attorneys continue to resort to dividing their clients into groups of 99 or fewer plaintiffs to try to avoid federal court.