Federal multidistrict litigation: background, basics, global settlements, and bellwether trials.

• Author: Johnson, Jeffrey R.

THE FIRST major multidistrict litigation in the United States federal courts occurred following the filing of over 1,800 civil actions involving allegations that electrical equipment manufacturers conspired to fix prices in the 1960s. Chief Justice Earl Warren created the Coordinating Committee for Multiple Litigation of U.S. District Courts to facilitate discovery in these cases. At the conclusion of its work, the Committee recommended a more formalized approach to the administration of multidistrict litigation. This recommendation led to the 1968 enactment of 28 U.S.C. [section] 1407, which provides a statutory basis for current Multidistrict Litigation ("MDL"). Under Section 1407, Congress gave the newly created Judicial Panel on Multidistrict Litigation ("JPML") broad powers to transfer groups of cases from federal courts throughout the country to a single district court for the purpose of conducting coordinated and consolidated pretrial proceedings without consideration for personal jurisdiction and without having to meet the venue requirements of 28 U.S.C.[section] 1404. (1)

This article provides an introductory summary to the history, structure and basic mechanisms of the MDL process. This article will also address ways in which practitioners may use the MDL process to more conveniently dispose of related claims occurring in multiple jurisdictions.

1. MDL Basics

   1. About the JPML

      Section 1047(a) provides that 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. (2) Transfers are made by the JPML (3) 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 actions." (4)

      The JPML consists of seven circuit and district judges designated from time to time by the Chief Justice of the United States, no two of whom shall be from the same circuit. (5) The concurrence of four members shall be necessary to any action by the panel. Judge John G. Heyburn II is the current Chair of the JPML. Any attorney admitted in any federal district court may practice before the JPML. When the case is transferred, any attorney may continue to represent his client in the transferee district, and there is express provision that local counsel is not required. (6)

   2. Initiating a transfer of an action into an MDL

      Under Section 1407(c), proceedings for the transfer of an action under this section may be initiated in two ways: (i) by the JPML upon its own initiative, or (ii) by motion filed with the JPML by a party in any action in which transfer for coordinated or consolidated pretrial proceedings under this section may be appropriate. A copy of such motion shall be filed in the district court in which the moving party's action is pending. (7)

      The JPML provides notice to the parties in all actions in which transfers for coordinated or consolidated pretrial proceedings are contemplated, and such notice specifies the time and place of any hearing to determine whether such transfer shall be made. Orders of the JPML setting a hearing and other orders of the JPML issued prior to the order either directing or denying transfer are filed in the Office of the Clerk of the district court in which a transfer hearing is to be or has been held. The JPML's order of transfer is required to be based upon a record of a hearing at which material evidence may be offered by any party to an action pending in any district that would be affected by the proceedings under this section, and shall be supported by findings of fact and conclusions of law based upon such record. Orders of transfer and such other orders as the JPML may make thereafter shall be filed in the Office of the Clerk of the district court of the transferee district and shall be effective when filed. The Clerk of the transferee district court shall transmit a certified copy of the JPML's order of transfer to the Clerk of the district court from which the action is being transferred. An order denying transfer shall be filed in each district wherein there is a case pending in which the motion for transfer has been made.

   3. Factors considered by the JPML in determining whether to establish an MDL

      The JPML has broad discretion to establish or deny an MDL. Some of the factors (8) which have been discussed as potentially relevant, depending upon the circumstances, include:

      * How many common questions of fact (9) are there?

      * What is the nature of the common questions?

      * How many cases are presently and prospectively involved?

      * What is the geographical location of the districts in which the cases are pending?

      * Is it anticipated that further cases will be filed, and in what districts?

      * Who are the principal witnesses in the cases and where do they reside?

      * What detriment, financial or otherwise, will be imposed upon any of the parties by ordering transfer?

      * Will transfer result in a substantial saving of duplicative work?

      * Will transfer usefully avoid conflicting rulings in the pretrial proceedings of the cases involved?

      * Can many of the advantages of transfer be worked out by cooperation among counsel without transfer?

      * Are pretrial proceedings already far along in any one or more of the cases?

      * Will transfer hasten or delay progress in the cases?

      * What is the availability of a judge or judges in the proposed transferee court or courts?

      * Will the advantages of transfer overcome the normal desirability of having the same judge who conducts the trial also conduct pretrial proceedings?

      * Will transfer impede or promote the prospect of settlement?

      * Will transfer serve any ulterior motive of any party or parties, such as forum-shopping?

      * If class actions are involved, will transfer make for complexity or for simplification?

      * Will transfer unjustly delay or deny any party's right to provisional remedies such as injunctive relief?

      * What is the status and possible effect of any appeals pending in any of the cases?

      * Will transfer operate to eliminate or avoid an undesirable multiplicity of appeals on similar issues?

      Over the years, the JPML has become increasingly willing to establish MDLs. According to the American Lawyer, (10) in the first 15 years of the JPML's existence, the JPML denied motions to establish 19 out of 32 mass tort MDLs. From 1986 to 2006, the JPML denied only 15 out of 130 MDL motions.

      As of September 30, 2010, the JPML had transferred 301,221 lawsuits to MDL judges, and more than 102,000 of those lawsuits were still a part of ongoing MDL proceedings. (11) The several hundred MDLs currently pending are varied and include varying types of litigation: air disaster, antitrust, contract, common disaster, employment practices, intellectual property, products...