Common Benefit Fees in Multidistrict Litigation

Author:Eldon E. Fallon
Position:Judge, United States District Court for the Eastern District of Louisiana
Common Benefit Fees in Multidistrict Litigation
Eldon E. Fallon
In 1968, Congress enacted The Multidistrict Litigation Act.1
This Act bestowed upon a panel of seven federal judges (the Panel),
appointed by the Chief Justice of the United States, broad powers to
transfer groups of cases filed in multiple federal district courts to a
single federal district court for the purpose of coordinating and
conducting pretrial proceedings.2 This transfer is made without
consideration of personal jurisdiction over the parties or the venue
requirements of 28 U.S.C. § 1404.3 In making such a transfer from
the court in which the case was filed (the transferor court) to the
court designated to receive the cases (the transferee court), the Panel
considers whether there are sufficient common questions of fact
among these civil actions to justify centralizing them in a single
district to further the convenience of the parties and witnesses and to
promote the just and efficient conduct of the actions.4 The Panel
may carry out this function either upon its own initiative or in
response to a motion filed with the Panel by a party in any action in
which transfer might be appropriate.5
Copyright 2014, by ELDON E. FALLON.
Judge, United States District Court for the Eastern District of Louisiana.
B.A. 1960 Tulane University; J.D. 1962 Tulane Law School; LL.M. 1963 Yale
Law School. The author thanks Lexy Butler for her editorial suggestions and
Ashley Barriere for helping with the format of the footnotes.
1. 28 U.S.C. § 1407 (2006).
2. See Gregory Hansel, Extreme Litigation: An Interview with Judge Wm.
Terrell Hodges, Chairman of the Judicial Panel on Multidistrict Litigation, 19
ME. B. J. 16, 18 (2004). See generally John G. Heyburn II, A View from the Panel:
Part of the Solution, 82 TUL. L. REV. 2225 (2008); John F. Nangle, From the
Horse’s Mouth: The Workings of the Judicial Panel on Multidistrict Litigation, 66
DEF. COUNS. J. 341 (1999).
3. See In re FMC Corp. Patent Litig., 422 F. Supp. 1163, 1165 (J.P.M.L.
1976) (“Transfers under Section 1407 are simply not encumbered by
considerations of in personam jurisdiction and venue.”).
4. See 28 U.S.C. § 1407(a) which provides, inter alia:
When civil actions involving one or more common questions of fact are
pending in different districts, such actions may be transferred to any
district for coordinated or consolidated pretrial proceedings. Such
transfers shall be made by the judicia l panel on multidistrict litigation
authorized by this section upon its determination that transfers for such
proceedings will be for the convenience of parties and witnesses and will
promote the just and efficient conduct of such action.
5. Id. § 1407(c).
When the Panel finds that centralization of related actions is
appropriate, a multidistrict litigation (MDL) case is formally created
by the issuance of a transfer order.6 The Panel’s transfer order
designates the transferee court, assigns a title and number to the
MDL, and identifies the related actions currently pending in federal
districts outside of the selected transferee forum that will be
transferred pursuant to 28 U.S.C. § 1407. These cases, together with
any related actions originally filed in the transferee forum, constitute
the MDL. If the Panel subsequently learns of additional related
cases, it will issue conditional transfer orders identifying tag-along
actions that will be sent to join the MDL.7 The finality of the
transfer order is delayed for seven days to permit the opportunity to
object to the transfer.8 Transferor courts retain jurisdiction over
cases subject to conditional transfer orders until such orders become
final. Occasionally, the Panel will vacate a conditional transfer order
before it becomes final, typically based either on a well-founded
objection or in light of the dismissal or remand of an action by the
transferor court.
In the early decades of multidistrict litigation, business was
slow. The 1970s and 1980s saw some modest increase, but since the
1990s, the workload of the Panel has substantially increased.9 This
increase is generally attributed to the change in the nature of civil
litigation, which has placed greater emphasis on class actions, mass
torts, and complex litigation. Presently, with the passage of the Class
Action Fairness Act (CAFA) and the general disfavor of nationwide
class actions expressed by several U.S. circuit courts, multidistrict
litigation is playing an increasingly significant quantitative role in
6. Id.
7. A tag-alon g action is “a civil action pending i n a district court which
involves common questions of fact with either (1 ) actions on a pending motion to
transfer to create an MDL or (2) actions previously transferred to an existing
MDL, and which the Panel would consider transferring under Section 1407.”
Rules of Procedure of the Judicial Panel on Mult idistrict Litigation, Rule 1.1(h),
277 F.R.D. 480 (2011) [hereinafter Panel Rules].
8. See id. Rule 7.1(b).
9. See Heyburn, supra note 2, at 2231; ANNUAL REPORT OF THE JUDICIAL
PANEL ON MULTIDISTRICT LITIGATION 1 (1980), available at http://
(reporting that pursuant to 28 U.S.C. § 1407, between July 1, 1979, to June 30, 1980,
the Panel acted upon 1,386 civil actions); ANNUAL STATISTICS OF THE UNITED
Revised.pdf (during the 12-month period ending September 30, 2011, the Panel
acted upon 43,769 civil actions).

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