And Now A Word From The Panel: Too Small For An MDL?
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.
This week, the panel heads to Los Angeles for its Sept. 26 hearing session, where it is now scheduled to address 10 new MDL petitions. That will bring this year's total to 37 MDL petitions heard by the panel, with a final hearing session remaining.
At the May hearing session in Portland, Oregon, the panel considered 11 new MDL petitions. The panel granted seven of those motions and denied four of those motions. The MDL proceedings include litigations in the areas of antitrust, patent, product liability, and marketing and sales, as well as a data breach. With seven new MDLs, the panel's batting average has broken .500 for the year, reaching .519 (14 motions granted, and 13 motions denied).
The overall number of pending MDL proceedings has declined to 195,1 as compared to 199 just two months ago. The panel continues to close out older MDL dockets, terminating a total of 32 existing MDLs this year through mid-September.2 Product liability MDLs comprise roughly a third of the total number of MDL proceedings.3
The 195 MDL proceedings encompass 135,131 actions.4 There are now 29 MDL proceedings which have more than 500 individual pending actions, almost all of which are from among the product liability MDLs.5
Large MDLs – as addressed in our last column – are a constant in MDL practice. But what about the flip side? When are there too few pending actions to create an MDL proceeding? Under the MDL statute, a minimum of only two federal actions in a total of at least two federal judicial districts is required to create an MDL. But that is simply a threshold. How does the panel react to the pendency of a relatively limited number of cases in considering an MDL petition?
Looking Back: Too Small to Be an MDL?
For some guidance as to the answer to this question, we need look no further than decisions from the July hearing session. In each of its decisions from that session denying an MDL petition, the panel alluded to the relative dearth of actions, ranging in those petitions from two to 10 actions.
Significantly, the panel reminded practitioners that "the proponent of centralization bears a heavier burden to demonstrate that centralization is appropriate when only a few actions are at issue."6 While that hurdle is not insurmountable, other factors will need to strongly weigh in favor of MDL centralization before the panel will create a new MDL.
The bar is raised when relatively few actions are pending, because the presence of few actions combines with other factors militating against MDL centralization, including:
- A limited number of plaintiffs counsel;
- An ability to informally coordinate; and
- The possibility of Section 1404 transfer.
In addition, in denying MDL treatment for six actions in two judicial districts alleging RICO violations arising from an alleged scheme to evade court judgments, the panel suggested that the "first-to-file" rule might be employed to stay later-filed actions.7
The panel also recognized that the absolute number of actions is not always relevant where the actions are pending in relatively few judicial districts, particularly where cases are in a single district and/or assigned to the same judge. In those instances, "as a practical matter ... there are [fewer] pretrial proceedings to coordinate."8
Another important lesson conveyed by the panel is that the panel is "reluctant to grant [MDL] centralization based on the mere possibility of future actions."9 The creation of an MDL, even with relatively few cases, can itself trigger mass filings. But the mere representations by counsel as to the number of actions which may be filed will generally not be a factor in deciding whether to create an MDL. Applying this lesson, the panel denied an MDL petition which embodied only the minimum two actions in two judicial districts.10
What will this hearing session bring to the panel? Will the panel continue to grant more MDL petitions than it denies? What reasons will the panel articulate for denying petitions? Will the panel keep its batting average over the .500 mark for the year? Will the number of overall MDLs once again hit the 200 mark?
Stay tuned for our next edition of And Now A Word From The Panel, as the panel heads to Austin, Texas, for its Dec. 5 hearing session – bypassing a November hearing date, in light of Thanksgiving falling on the last Thursday of the month.
MDL Statistics Report - Docket Summary Listing, Active Litigation (Sept. 16, 2019).
MDL Statistics Report - Docket Summary Listing, Closed Litigations (Sept. 16, 2019).
MDL Statistics Report - Docket Type Summary, Active Litigation (Sept. 16, 2019).