Chapter § 4.12 Is MDL Reform Needed?

• Jurisdiction: United States
• Publication year: 2020

§ 4.12 Is MDL Reform Needed?

Many observers believe that MDL reform is much needed. As of early 2019, nearly half of the pending civil cases in district courts are MDLs (i.e., of 315,523 pending cases, 151,530 are MDLs).²⁴³ The focus on the MDL process and whether it’s working as intended has thus escalated. And stakeholders are calling for major reform. According to the U.S. Chamber Institute for Legal Reform, “MDL proceedings are morphing from a procedural device that is intended to create efficiencies . . . into lawsuit magnets.”²⁴⁴ Plaintiffs’ counsel use “aggressive advertising and highly sophisticated client recruitment strategies” to attract and file claims in MDLs with “dubious merit.”²⁴⁵ Because MDLs have, by design, “tended to prioritize global issues over individual ones, plaintiffs’ counsel have successfully warehoused meritless claims and shielded them from judicial scrutiny in a way they never could if all the cases were being tried individually.”²⁴⁶ In fact, it is estimated that “between 30–40 percent” of cases “filed in any MDL turn out (often at the settlement stage) to be unsupportable.”²⁴⁷ Plaintiffs have ostensibly used the strategy of bringing and hiding non-meritorious cases in MDLs to deceptively inflate the size of MDLs and ultimately extract windfall settlements from corporate defendants.²⁴⁸

It’s problematic that there are no formal mechanisms to stamp out frivolous claims in MDLs. Plus transferee courts aren’t always using effective case management techniques to eliminate these claims. Below we discuss ad hoc procedures that courts employ to address the issues outlined above and some proposed legislative and judicial fixes. We also discuss the use of litigation funders in MDLs and how one transferee judge has responded to requests to disclose the financiers.

[1] Plaintiff Fact Sheets and Lone Pine Orders

Many transferee courts are using plaintiff fact sheets and Lone Pine orders as case management tools to streamline litigation and eliminate unfounded claims. First, fact sheets require plaintiffs at the outset of litigation to satisfy a minimum evidentiary threshold before proceeding to discovery. In In re Silica Products Liability Litigation, the transferee court required “all Plaintiffs in recently-transferred actions” to “submit sworn Fact Sheets within 60 days from the date of transfer by the Panel.”²⁴⁹ “The Plaintiff’s Fact Sheet required each Plaintiff to submit specific information about when, where and how each Plaintiff alleged he or she was exposed to silica dust,” and “also required detailed medical information concerning each Plaintiff’s silica-related injury.”²⁵⁰

The concept of a Lone Pine order originated from the decision of a New Jersey state court issuing a case management order in Lore v. Lone Pine Corp.²⁵¹ Lone Pine orders are designed to assist in the management of complex issues and reduce the burden on defendants and the court in mass tort litigation, essentially requiring plaintiffs to produce a measure of evidence to support their claims at the outset.²⁵² Although no federal rule or statute requires or even explicitly authorizes the entry of these orders, Lone Pine orders are used “routinely” in MDLs, particularly in mass tort cases.²⁵³ The factors courts typically consider when deciding whether to enter a Lone Pine order include (1) the posture of the action, (2) the peculiar case management needs presented, (3) external agency decisions impacting the merits of the case, (4) the availability and use of other procedures explicitly sanctioned by federal rule or statute, and (5) the type of injury alleged by plaintiffs and its cause.²⁵⁴

In addition to requiring plaintiff fact sheets and entering Lone Pine orders, the U.S. Chamber Institute for Legal Reform suggests that MDL courts also should consider “phased or sequenced discovery, as well as random selection of cases for dispositive pretrial briefing, including Daubert motions and motions for summary judgment,” to “ensure that the individual claims at issue in an MDL proceeding are carefully considered before the parties rush to settlement or spend large sums of money trying cases.”²⁵⁵ Also, although certainly not the primary reason to employ it, the bellwether process, which we discuss at length in section 4.10, serves as another device to eliminate frivolous cases. Plaintiffs will often voluntarily dismiss frivolous cases if they are chosen for a bellwether trial.²⁵⁶

[2] Advisory Committee on Civil Rules

In November 2017, the Advisory Committee on Civil Rules²⁵⁷ formed a subcommittee to discuss the promotion of efficient and effective MDL actions. Several legal industry groups submitted ideas to the committee, three of which garnered considerable attention. First, the Lawyers for Civil Justice proposed revising Rule 26(a)(1) to require that each plaintiff disclose with particularity, within 60 days after filing the case or the MDL transfer, exposure to the alleged cause and specific injury. The rule would also require plaintiffs to submit documentation substantiating both exposure and injury. This rule would, in effect, codify the plaintiff fact sheet that many courts require.²⁵⁸ Other commenters suggested that the transferee judges use Rule 11 sanctions liberally to deter plaintiffs from filing frivolous lawsuits²⁵⁹ and that they enter Lone Pine orders requiring plaintiffs to submit an affidavit from an independent physician to support their theories of injury or damages.²⁶⁰ As of this writing, the Advisory Committee has not acted on any of the proposed suggestions.

[3] The Class Action Fairness Act of 2017

In February 2017, Representative Bob Goodlatte introduced a bill in the House called the Fairness in Class Action Litigation and Furthering Asbestos Claim Transparency Act of 2017 (the “Bill”). The House passed the Bill a month later, and, shortly thereafter, it was received in the Senate, read twice, and referred to the Committee on the Judiciary. But the Bill has stalled since then.²⁶¹ At any rate, the Bill would have some key implications for MDLs. First, it would codify the Lone Pine regime, requiring that any plaintiff in an MDL “make a submission sufficient to demonstrate that there is evidentiary support (including but not limited to medical records) for the factual contentions in plaintiff’s complaint regarding...