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Welcome to the latest installment of And Now a Word from the Panel, a column which "rides the circuit" with the Judicial Panel on Multidistrict Litigation as it meets on a bimonthly basis at venues around the country.

As the panel heads to the nation's capital, Washington, D.C., for its March 28 hearing session – which coincides with the home opener for the Washington Nationals – the panel considers a paltry four new MDL petitions, bringing to 10 the total number of motions to create new MDL proceedings heard by the panel in 2019, with four hearing sessions remaining. But the relatively small number of new motions belies the otherwise burgeoning MDL docket and the many actions subsumed within the vast MDL landscape.1

With the advent of spring, we enter not only a new baseball season, but also tax season. Appropriately, this month's column will explore an MDL motion addressing a series of antitrust lawsuits against a provider of tax preparation services arising from certain employment practices.

But before sharpening our pencils to look back at the panel's ruling, let us explore the broader results from the January hearing session held in Miami, Florida. Following the January session, the panel ruled on six motions seeking to create new MDL proceedings. The panel granted three motions and denied three motions, for an even .500 batting average.

The three new MDL proceedings cut across different practice areas, including data breach, antitrust and pharmaceutical product liability, staples of MDL litigation. The three motions which were denied involved an air crash, debt collection practices and alleged "no-poach" clauses in a tax preparation service provider's franchise agreements (more on that later).

The overall number of pending MDL proceedings has declined to 205,2 as compared to 209 just two months ago. The panel continues to close out older MDL dockets, terminating a total of seven existing MDLs this year through mid-March.3 Product liability MDLs are now one shy from occupying exactly a third of the current number MDL proceedings.4

But this number belies the oversized impact of MDLs in the overall federal judiciary. The 205 MDL proceedings now encompass a whopping 147,880 actions,5 making it clear that MDLs are a mainstay of the U.S. legal system.6 A total of 34 of the 205 MDL proceedings have more than 500 individual pending actions, almost all of which are from among the product liability MDLs.7

Looking Back: Tax Season

The MDL process touches almost every aspect of American life. The motions considered by the panel at the January hearing session were no exception.

One of the motions addressed was a motion to create an MDL proceeding for three actions (with three additional potential "tag-alongs") filed against a provider of tax preparation services.8 The actions, asserting antitrust claims, arose from a "no-poach" clause present in the company's standard franchise agreements.

The complaints alleged that the company and others "engaged in a conspiracy with respect to the recruiting of employees and potential employees, including agreeing not to solicit or recruit, without prior approval, each other's personnel," and that the company "impeded or restricted the movement of employees between [the company] and its franchisees," ultimately preventing competition for employees and decreased employment opportunities.9

The company opposed creation of an MDL. In denying the MDL motion, the panel focused on several factors:

  • The key issues "appear to be largely undisputed";
  • It was "unlikely" that the key issues would "require significant discovery";
  • The party most likely to face duplicative discovery (the tax services provider) opposed creation of the MDL;
  • There were a "limited number of involved districts," as both the actions in the motion and "tag-alongs" were embodied within the minimum number of two judicial districts;
  • The actions in one of the districts had already been consolidated; and
  • The defendants intended to move to compel arbitration, or in the alternative for Section 1404 transfer, which could result in the actions no longer meeting the requisite threshold number of two districts for MDL consideration.10

What is the takeaway from this recent panel decision? Beyond articulating a menu of typical reasons why the panel will deny a new MDL motion, it also emphasizes the import of discovery to the MDL process and, in particular, the need for both "disputed" factual issues and "significant discovery."

Interestingly, the panel also acknowledged defendants' opposition to the MDL motion. Although practitioners should be mindful of the MDL process under Section 1407 any time two or more actions are pending in at least two federal judicial districts (the statutory threshold for MDL consideration), that is merely a floor for possible consideration.

Ultimately, the panel must decide whether centralized proceedings will serve Section 1407's mandate to "promote the just and efficient conduct of such actions." In this instance, the panel decided the better course was to allow other litigation mechanisms – whether compelling arbitration or Section 1404 transfer – to run their course, options which could well moot the need for an MDL.

What will spring bring to the panel? Will the panel keep up its "batting average" as we move forward this season? Will the number of actions within newly created MDL proceedings continue to blossom? Stay tuned for the May edition of "And Now A Word From The Panel," as the panel returns to the "Big Easy" – New Orleans, Louisiana – for its May 30 hearing session!

  1. See Simpson, David, MDLs Surge to Majority of Entire Federal Civil Caseload, Law360 (March 14, 2019).

  2. See United States Judicial Panel on Multidistrict Litigation, MDL Statistics Report - Docket Summary Listing (Pending) (March 15, 2019).

  3. See United States Judicial Panel on Multidistrict Litigation, MDL Statistics Report - Docket Summary Listing (Terminated) (March 15, 2019).

  4. See United States Judicial Panel on Multidistrict Litigation, MDL Statistics Report - Docket Summary Listing (By Type) (March 15, 2019).

  5. See United States Judicial Panel on Multidistrict Litigation, MDL Statistics Report - Distribution of Pending MDL Dockets by Actions Pending (March 15, 2019).

  6. See n.1, supra.

  7. See United States Judicial Panel on Multidistrict Litigation, MDL Statistics Report - Distribution of Pending MDL Dockets by Actions Pending (March 15, 2019).

  8. In re H&R Block Employee Antitrust Litig. (MDL No. 2880).

  9. Id. at 1.

  10. Id. at 1-2.

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