THE CASE AGAINST MDL RULEMAKING.

• Author: Norwalk, Jenifer J.
• Position: Multidistrict litigation

INTRODUCTION 276 I. OVERVIEW OF MDL 279 A. A Brief History 281 B. Use of the MDL Statute Today 282 C. Rules Committee Progress 284 II. ADVANTAGES AND DISADVANTAGES OF 288 MDL RULEMAKING A. Efficiency 290 B. Fairness 292 C. Other Considerations 294 III. MDL RULE PROPOSALS 295 A. Early Vetting 295 B. Interlocutory Appellate Review 299 C. Settlement Review 302 D. Third-Party Litigation Funding 305 IV. ALTERNATIVES TO RULEMAKING 307 A. Action by Congress 307 B. Working Groups 308 C. Amending Current Rules 309 D. Education 310 CONCLUSION 311 INTRODUCTION

John Navarrete sued Hill's Pet Nutrition, a dog food manufacturer, after it voluntarily recalled some of its products for containing too much vitamin D. (1) The Judicial Panel on Multidistrict Litigation centralized (2) Navarrete's case with five other cases pursuant to the multidistrict litigation statute, 28 U.S.C. [section] 1407. (3) All six plaintiffs claimed that their pets died or became seriously ill because they consumed the recalled products. (4) The centralized proceeding is currently pending in the District of Kansas, where all pretrial matters will be resolved. (5)

A few states to the West, Bradley Colgate, along with forty-four individuals from twenty-two different states, sued JUUL Labs, a leader in the electronic cigarette industry. (6) The plaintiffs alleged that JUUL used research from the tobacco industry to create a product that is more addictive than traditional cigarettes and targeted at youth. (7) The Panel centralized Colgate's case with nine other multiparty cases, all involving claims that JUUL marketed its products to attract minors, misrepresented or omitted that its products are more potent and addictive than traditional cigarettes, and promoted nicotine addiction. (8) There may be more than forty additional related actions. (9) The centralized proceeding is currently pending in the Northern District of California. (10)

Moving to the East Coast, more than 14,000 plaintiffs sued manufacturers of products containing asbestos in eighty-seven federal districts, alleging personal injury or wrongful death caused by asbestos exposure. (11) The litigation involved thousands of deaths, millions of injuries, and billions of dollars. (12) The Panel centralized 26,639 actions, all involving questions of the danger attributable to airborne asbestos in industrial materials and products. (13) The centralized proceeding is currently pending in the Eastern District of Pennsylvania--and has been since 1991. (14)

These three cases vary greatly, and not just in their subject matter. One involves a handful of plaintiffs, while another involves tens of thousands. One involves lawsuits originating in 2019, while another includes lawsuits that are thirty years old. These examples illustrate the enormous diversity of cases centralized in MDLs across the country. Because of this diversity, there is no uniform set of federal rules governing MDL proceedings. Instead, MDL judges craft procedure specifically suited for the particular case before them, (15) guided by the knowledge shared by the Panel on its website, the Manual for Complex Litigation, and the experience of seasoned MDL attorneys. (16) But this could soon change.

In November 2017, the Advisory Committee on Civil Rules first addressed the possibility of creating new rules specifically for MDL. (17) The corporate defense bar, most notably Lawyers for Civil Justice, had been urging the Committee for years to adopt MDL-specific rules, arguing that ad hoc procedures lack transparency, uniformity, and predictability, and are unfair to defendants. (18) At its next meeting, the Committee appointed a Subcommittee to study the need for MDL-specific rules. (19) Since then, the Subcommittee has gathered more information and reached out to active players in MDL proceedings. At its meeting in October 2019, it identified four topics as the center of its current work: early vetting to weed out meritless claims, opportunities for interlocutory appellate review, settlement review, and third-party litigation funding disclosure. (20) In April 2020, the Subcommittee narrowed its focus to the first three. (21) And in October 2020, the Subcommittee made significant progress: it decided not to pursue rulemaking for expanded interlocutory appellate review, but it is still studying potential rules for screening claims and judicial supervision of settlement. (22)

Although some of these topics are more appropriate for rulemaking than others, this Comment argues that the Subcommittee should decline to move forward with any rule proposal. This Comment first provides an overview of MDL in Part I. It explains the basic structure of [section] 1407 and the mechanics of transfer. Next, Part I offers a brief history of [section] 1407, starting with the considerations that prompted its passage in the first place. This history tells an important story about the reason for MDL's flexible design. The drafters of [section] 1407 wanted to give federal judges flexibility to handle increasingly complex litigation. They crafted [section] 1407 to be free from rigid, formulaic procedural requirements--despite backlash from the corporate defense bar that closely mirrors the language used to advocate for MDL-specific rules today. (23) Part I then describes recent MDL practice: its rise in popularity following more restrictive judicial attitudes toward Rule 23 of the Federal Rules of Civil Procedure, and the makeup of MDLs currently pending in federal district courts. Part I concludes by addressing the progress the Rules Committee has made since deciding to consider proposals for MDL-specific rules in 2017, current through its October 2020 meeting.

Part II of this Comment examines the advantages and disadvantages of MDL rulemaking. It frames the discussion in terms of the two aims of the Federal Rules of Civil Procedure: efficiency and fairness. (24) Part II also discusses other considerations that must be weighed in deciding whether to adopt MDL-specific

rules, including precautions already in place to limit bias from ad hoc procedure and the significant variation between small and large MDLs.

Part III of this Comment focuses on the four proposals the Subcommittee has decided to study: early vetting, opportunities for interlocutory appellate review, settlement review, and third-party litigation funding disclosure. Rather than providing an exhaustive description of these proposals, Part III uses them as a vehicle for examining the appropriateness of the MDL-rulemaking enterprise as a whole. It argues that balancing the costs and benefits of these four proposals reveals that MDL-specific rules will not promote efficiency and fairness and should not be adopted.

Finally, Part IV concludes with a discussion of alternatives to federal rulemaking, including action by Congress, an MDL working group, amending the current rules, and education. Although these alternatives each have their costs, many are better suited for the MDL context than promulgating an entirely new set of rules. More importantly, most current literature fails to consider possibilities for MDL reform beyond federal rulemaking, and this Comment hopes to encourage scholars and others invested in MDL procedure to expand the conversation outside the four corners of the Federal Rules of Civil Procedure.

1. OVERVIEW OF MDL

   The multidistrict litigation statute provides that "civil actions involving one or more common questions of fact... pending in different districts... may be transferred to any district for coordinated or consolidated pretrial proceedings." (25) The Judicial Panel on Multidistrict Litigation, comprised of seven federal judges appointed by the Chief Justice of the United States, decides whether transfer "will promote the just and efficient conduct of such actions," and orders transfer if it so concludes. (26) The Panel may only transfer cases for pretrial purposes: it may not transfer cases for consolidated trial. (27) Pretrial matters range from deciding class certification motions and motions to dismiss to resolving discovery disputes and managing expert disclosures. (28) After pretrial proceedings are finished, the action "shall be remanded by the panel... to the district from which it was transferred." (29) Even with this limitation, the effects of pretrial transfer are significant. Only about three percent of cases return to the transferor court--the rest are settled or resolved by dispositive motion in the MDL court. (30) Because trials are rare, pretrial proceedings are the "main event"--and these pretrial proceedings are squarely within the purview of the MDL judge. (3)'

   The Panel may transfer an MDL proceeding to any district, even if venue and personal jurisdiction requirements would ordinarily foreclose that forum to the parties. (32) Transfer may be initiated by the Panel upon its own initiative, or upon motion "filed with the panel by a party in any action in which transfer... may be appropriate." (33) If a party opposes transfer, it may petition for an extraordinary writ in the court of appeals with jurisdiction over the transferee district court. (34) In contrast, an order denying transfer is not reviewable. (35)

   Like all civil actions in federal court, MDLs are governed by the Federal Rules of Civil Procedure. (36) Although the Panel may prescribe rules for its operations (and has done so twenty-five times (37)), these rules must be consistent with the Civil Rules. (38) Because MDL requires a higher degree of practical problem solving than "traditional" two-party civil litigation, MDL judges are emboldened to develop special MDL procedures that vary from case to case. (39)

   This Section begins with a brief history of [section] 1407, focusing in particular on the considerations that prompted its creators to delegate authority to the Panel instead of promulgating a firm set of rules. It then discusses recent trends in MDL practice and the overlap...