December 1, 2015

And Now a Word from the Panel: Armchair Quarterback MDL?

Originally appeared in Law360 on December 1, 2015.

—by Alan Rothman

»  For more articles from Alan on Multidistrict Litigation, read our report "MDL and Its Impact on Your Company."Welcome to the latest edition of “And Now a Word from the Panel,” a bimonthly column that “rides the circuit” with the Judicial Panel on Multidistrict Litigation as it meets at venues around the country.

With the year quickly drawing to a close, the panel heads to the panel chairperson’s home venue, New Orleans, Louisiana, for what has become its post-Thanksgiving, first-Thursday-of-December hearing session.

With football season revving into high gear and on the heels of this column’s recent discussion of a new sports (boxing) MDL, what better way to end off the year than the panel’s consideration of yet another sports MDL petition. For the armchair quarterbacks among us, the panel considers at its December hearing session a series of antitrust actions arising from the NFL’s Sunday afternoon out-of-market television package. And so as not to deflate your balloon (or football), there are even more potential sports MDLs on the horizon, including — what the last edition of this column had hoped for — a “fantasy football” proceeding for MDL sports fanatics. For now, however, we’ll leave it to our readers’ imagination, and a future column, as to the subject of that MDL petition. Hint: It has everything to do with “fantasy football.”

But before we turn to America’s new national pastime, we look again at the latest MDL “scorecard” for 2015. At the October hearing session in New York, the panel granted six out of the 15 MDL motions before it, lowering its 2015 average to .452 (granting 28 out of 62 motions)[1], slightly below the winning percentages of the NFC East league leaders. But rather than dwell upon this downward trend in creating MDLs, let’s focus on what may become the next sports MDL.

Looking Forward: An Armchair Quarterback MDL?

At its upcoming December hearing session, the panel will consider whether to create an MDL proceeding for a series of putative class actions alleging antitrust violations as a result of the exclusive distribution of television rights to the NFL’s Sunday afternoon out-of-market games. In re National Football League’s “Sunday Ticket” Antitrust Litig. (MDL. No. 2668). That television package, marketed as a “Sunday Ticket,” includes NFL games played on Sunday afternoon and not otherwise broadcast on network television within a viewer’s television market. The Sunday afternoon games are distributed exclusively through a single-satellite television service provider. At the time of the original MDL petition, there were a total of eight actions filed by residential and commercial subscribers, with six of those actions pending in the Central District of California and two in the Southern District of New York. Over time, some of the actions were dismissed and additional actions were identified as related actions, with more than a dozen (original and related) actions still pending. The overwhelming majority of those actions are in the Central District of California, with the balance in the Northern District of California and the Southern District of New York.

Plaintiffs, the NFL, individual teams and the satellite service providers all seek creation of an MDL proceeding. In support of the MDL motion, the parties point to:

  • Number of Actions: At the time of the original MDL petition, there were eight pending actions, a number which has increased (via related actions) to more than a dozen.
  • Class Actions: All of the actions were filed as putative class actions, which included some overlapping class membership. Time and again, the panel has reminded us that “centralization under Section 1407 will eliminate duplicative discovery; prevent inconsistent pretrial rulings, especially with respect to class certification.” [2]
  •  Nature of the Actions: As the parties reiterate in their respective submissions, these cases are antirust actions, which a commentator has observed “present a category of actions that the panel almost inevitably orders transferred if there are multiple actions pending in different districts.” [3]
  • Common Issues: In the briefing, reference is made to “similar factual and legal issues” in these actions.[4] As has been noted in the past, it is curious when parties argue common questions of law to support MDL centralization. The plain language of 28 U.S.C. § 1407, the MDL statute, specifies that the panel consider only whether there are “one or more common facts,” and says nothing about common legal issues.[5]

In light of these overwhelming factors in support of an MDL and what appears to be a consensus view among the parties that centralization is appropriate, one would ordinarily prepare for creation of a new MDL without hesitation. Nevertheless, given that the actions are pending in only two states, with the vast majority pending in the Central District of California, including cases with initial schedules in place, it will be interesting to see whether the panel decides that coordination can be had through informal means, rather than via creation of an MDL.

Looking Forward (Again): “Gaming” Venue for a Football MDL?

An interesting sideshow in this MDL battle is the accusation of “gamesmanship” leveled in various filings before the panel. As noted, most of the actions are pending in the Central District of California. While most of the actions name the NFL and/or the satellite television service provider, one of the plaintiffs sued each of the 32 NFL teams, as well as four television networks, including those with headquarters in New York City. Indeed, one of the television networks asserted that the filing of an action against it in the Southern District of New York was “an apparent effort to influence the panel’s venue determination.”[6] Another plaintiff described the filing as one that “smacks of gamesmanship” with a “fair surmise . . . that it did so in order to create more connections to the Southern District of New York in the hope of swaying the panel to send the cases there.”[7] Thus, in evaluating the “home field” for a potential NFL MDL, the timing and venue of underlying related actions might come into play. As this column has recently noted, the panel has suggested that it may consider motive in addressing centralization petitions, stating that “where a Section 1407 motion appears intended to further the interests of particular counsel more than those of the statute, we would certainly find less favor with it.”[8] But in response, plaintiffs in the New York action assert that the allegations of “gamesmanship” are nothing more than an argument that the claims lack basis against certain defendants, which is not a proper consideration before the panel.

Some of the other arguments offered in support of centralization in the Central District of California focus upon that district being home to: (1) the majority of the actions; (2) the first-filed action; (3) the more procedurally advanced actions; and (4) the satellite television service provider of the “Sunday Ticket.”

What will the hearing in the “Big Easy” bring? Will the panel’s MDL creation percentage fall short of .500 for the year? And is there really a “fantasy football” MDL in the wings? What other interesting issues will face the panel next? Stay tuned for our next edition of “And Now a Word from the Panel . . .,” as the panel heads to its favorite winter hearing destination, Florida, for its Jan. 28, 2016 Hearing Session — albeit in a different city than usual; any guesses?

Looking for more JPML insight from Alan Rothman? Read previous articles.

[1]This includes separately counting the grant of 4 MDL motions which were consolidated in a single MDL proceeding.

[2] In re Transpacific Passenger Air Transp. Antitrust Litig., 536 F. Supp. 2d 136, 1367 (J.P.M.L. 2008) (emphasis added), cited in MDL No. 2668, Document No. 1 at 7 (“Centralization Mem.”); see also, In re In re Pacquiao-Mayweather Boxing Match Pay-Per-View Litig. (MDL No. 2639), at 2 (J.P.M.L. Aug. 14, 2015) (“[c]entralization will eliminate duplicative discovery; prevent inconsistent pretrial rulings, including with respect to class certification”) (emphasis added).

[3] David F. Herr, Multidistrict Litigation Manual, § 5:14 (2008), cited in Centralization Mem. at 6.

[4] See Centralization Mem. at 5.

[5] “And Now a Word from the Panel,” Law360 (July 24, 2013).

[6] MDL No. 2668, Document No. 77 at 1.

[7] MDL No. 2668, Document No. 65 at 2.

[8] “And Now a Word from the Panel,” Law360 (July 28, 2015), citing In re California Wine Inorganic Arsenic Levels Prods. Liab. Litig., at 2 n.3 (J.P.M.L. June 5, 2015) (citations omitted).

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