SOMETHING LESS AND SOMETHING MORE: MDL'S ROOTS AS A CLASS ACTION ALTERNATIVE.

• Author: Bradt, Andrew D.
• Position: Multi-district litigation - Special Issue on Class Actions

INTRODUCTION 1711 I. CLASS ACTIONS AND MDLs IN MASS TORTS 1714 II. THE PARALLEL DEVELOPMENT OF MDL AND NEW RULE 23 1720 A. Two Committees on Two Tracks: Events Leading up to November 1963 1720 B. The Civil Rules Advisory Committee Meets, October 31-November 2, 1963 1725 C. The Reporters Meet With the CCML, November 17-18, 1963 1727 III. THE CCML's REJECTION OF A PREDOMINANCE REQUIREMENT 1731 IV. OBSERVATIONS WITH THE BENEFIT OF FIFTY YEARS' HINDSIGHT 1737 CONCLUSION 1742 INTRODUCTION

Rule 23(b)(3) has always had a bit of a self-confidence problem, at least when it comes to mass torts. Although it offers what its drafters called an "adventuresome" opportunity to unite and bind a class whose members' claims share common questions of fact or law, (1) it has always contained hedges that cabin its applicability. These hedges include the requirements of predominance and superiority and the unlimited right of a class member to opt out. (2) Ultimately, Rule 23(b)(3) creates the possibility of a binding judgment on all members of a mass tort class, but the limitations embedded in the rule make such a judgment--and its potential benefits--difficult to realize.

Meanwhile, the MDL statute, (3) which does not by its terms seek to produce binding judgments on behalf of a representative class but only transfers cases to a single court for "pretrial proceedings," has flourished in mass tort cases--often achieving the kind of mass settlements that one could have imagined might be obtainable under Rule 23(b)(3). (4) Though MDL has detractors, in an era defined by large caseloads and vanishing trials, it is the poster child for successful aggregate litigation.

In this contribution to this Symposium marking fifty years since the 1966 Amendments to Rule 23 were adopted, I examine closely the roots of some of the structural reasons why MDL has succeeded as a mass tort aggregator. In short, MDL works in large measure because of its split personality. An MDL functions simultaneously as a tight consolidation of cases into a unitary package before a single judge and a temporary coordination of individual cases destined for remand to the districts in which they were filed. MDL's ability to oscillate between these two personalities facilitates the strong aggregation of cases without formally violating traditional norms of litigant autonomy. Because MDL neither formally changes the character of any individual case within it nor produces a judgment that binds an absent party, it does not require the due process--based limitations of the class action rule. An MDL is easily formed and impossible to exit, but the availability of an eventual trial for each individual case ensures that the purportedly temporary coordination for pretrial proceedings does not produce the same sort of alarm that the class action does--an irony in light of the centralization of power that MDL achieves. (5)

As I have detailed in another article in this law review, this mainspring of MDL's success has been part of the statute from the beginning and was a product of a political compromise by the statute's drafters in order to secure support for its enactment. (6) The small group of federal judges, and one academic, Dean Phil C. Neal of the University of Chicago, who conceived of and shepherded the MDL statute to passage some fifty years ago did so because they believed that--in the words of MDL's primary judicial proponent, District Judge William Becker of Kansas City--a "litigation explosion" was coming to the federal courts and permanent reform to federal procedure was necessary to handle it. (7) In particular, they believed that there needed to be a provision that would centralize litigation of national scope before a single federal judge--and that the judges hearing these cases should be ones committed to the then somewhat novel principles of active case management. The drafters, who understood that pretrial proceedings were increasingly becoming the main event in large-scale litigation, believed that "limited transfer for pretrial" would achieve their aims. (8)

Here, drawing on the records of the committees and drafters who created the amended Rule 23 and the MDL statute, I focus on two episodes in the MDL creation story.

First, I detail the MDL statute's drafters' collaboration with the Reporters of the Civil Rules Advisory Committee in 1963, in which the drafters of the MDL statute made clear their intention that MDL would be the primary aggregation device for mass torts, and one which invested plenary power in the hands of the district judges to whom MDLs were assigned. The creators of the MDL statute expressed to the Advisory Committee's Reporters their strong opposition to any opportunity to opt out of a consolidated mass tort proceeding, because such a right could threaten the efficiencies of aggregate treatment. (9)

Second, I detail the MDL judges' opposition to efforts by two firms, Cravath, Swaine & Moore and Dechert, Price & Rhoades, to amend the proposed MDL statute to require predominance of common questions of law or fact, modeled on Rule 23's predominance requirement. (10) Judge Becker, who spearheaded the effort to pass the MDL statute, vociferously opposed the amendment because he believed that inserting such a requirement would cripple the statute's ability to respond to the predicted "litigation explosion." (11) Becker understood that a predominance requirement would severely limit the availability of MDL, particularly in tort cases involving the application of multiple states' laws. With the benefit of fifty years' worth of hindsight, we can see that Judge Becker's prediction was on the nose.

Both of these episodes highlight the single-mindedness of the small group that drafted the MDL statute: They believed a strong aggregation device was necessary to protect the federal courts as an institution, and their thinking was dominated by fulfilling that need, rather than by a motivation to create a device that was in any real sense more protective of individual litigants' interests.

In Part I of this Article, I will briefly outline the structural differences between MDL and class actions, as well as how those differences create advantages for MDL in aggregating mass tort cases. In Parts II and III, I will tell the stories I described above. Placing the development of MDL against the backdrop of the development of the class action reveals how the seeds of MDL's current dominance were planted long ago. Finally, in Part IV, I turn briefly to the present. In a litigation landscape in which MDL is the dominant mechanism for aggregation, it is necessary to turn a critical eye toward what its creators wrought fifty years ago. Although judges and lawyers on both sides of litigation have accustomed themselves to the benefits of the MDL process, the notion that the cases do not lose their individual character by being transferred into the collective, and therefore the protections of the class action are inapposite, demands reconsideration. The central question going forward in the era of MDL ascendancy will be how to tailor protection for individual litigants within the MDL consolidation.

1. CLASS ACTIONS AND MDLS IN MASS TORTS

   Although one could envision the class action as the essential procedural device for resolving massive litigation, readers of this Symposium need no extensive review of how the various limitations on Rule 23(b)(3) have handicapped the availability of the mass tort class action, even for settlement. (12) After a brief heyday in the federal and state courts in the 1990s, decisions by lower federal courts and the Supreme Court diminished the prospects for class certification, including for settlement-only classes, and Congress threw cold water on state courts' attempts to certify nationwide classes by expanding federal jurisdiction under the Class Action Fairness Act. (13) Courts have applied Rule 23's restrictions, particularly the predominance requirement, in myriad ways to prevent class certification. Examples include additional factual gatekeeping at the class-certification stage, scrutiny of whether the representative can adequately represent the class (including those who may have "future claims" who are not yet members of the class), and assessment of whether efficiency is reduced because the individual factual or legal questions of the claimants overwhelm the common questions. (14) With respect to this last issue, it has proven to be a particularly daunting obstacle for certification of the class when the class members' claims arise under multiple states' laws. (15)

   The Multidistrict Litigation Act aims somewhat lower than the class action, but it does not burden itself with such limitations. On the surface, the statute is comparatively bloodless: it provides only for limited transfer of cases to "any district for coordinated or consolidated pretrial proceedings," after which each case "shall be remanded by the panel... to the district from which it was transferred ...." (16) MDL, in that sense, is more modest than Rule 23(b)(3). It does not create litigation that would otherwise not exist, for instance by aggregating negative-value claims. Nor does it require any reconceptualization of rights as belonging to groups instead of individuals. (17) Instead, it consolidates only already-filed cases (and to-be-filed tagalong cases), and, unless a class is certified, judgments made by the MDL court do not formally bind any absentees, because presumably there are none. Indeed, because there are no absentees in an MDL, no provision is made for adequate representation. (18) And, of course, the MDL statute does not contain the predominance and superiority requirements, or any opportunity for litigants to opt out. (19) Because no absentees are bound and those who have filed cases are entitled to a trial in the districts they initially chose, MDL appears to be a rather modest procedural mechanism.

   But make no mistake: the aims...