Defendants’ Gripes With MDLs, and What to Do About Them

By Perry Cooper

Legal scholars have spilled a lot of ink considering whether plaintiffs, plaintiffs’ lawyers, and the courts are well served by multidistrict litigation, but nobody is looking at whether MDLs are working for defendants.

That was the premise for a day-long conference in Washington Oct. 19, organized by Brian Fitzpatrick of Vanderbilt University Law School in Nashville, Tenn. Fitzpatrick, a professor who specializes in complex litigation, has conservative bona fides—most notably his clerkship for Justice Antonin Scalia.

From the conservative, libertarian perspective, the MDL process is efficient, Fitzgerald said. But what is lost at the expense of efficiency?

Judge Easterbrook criticized the “central planning” involved in mass actions for increasing error costs. If a judge makes a bad call, that decision can affect thousands of cases, not just one. Easterbrook also lamented the information loss: Nothing is learned from the individual cases because they are never individually adjudicated.

Fitzpatrick wants to know: “Are we imposing more costs on ourselves than the efficiencies we get from multidistrict litigation?”

Defense attorneys shared some of their gripes with the process, particularly as it applies to mass torts, and even allowed a few plaintiffs’ attorneys to chime in.

Gripe #1: Numbers Bias

The sheer number of cases consolidated in an MDL—which in a drug injury suit can number in the thousands—can make the claims seem legitimate, defendants say.

“So many cases make judges think there’s a there there,” Dan Troy, general counsel for drug maker GlaxoSmithKline plc, said.

Defense attorney Andrew J. Trask called it the “law of large numbers.” Judges will come to see these alleged injuries as a big problem when the numbers start adding up, Trask, who specializes in class actions at McGuireWoods LLP in Los Angeles, said.

A federal judge at the conference said the numbers can be overwhelming.

“Human inertia causes judges to think that a stack of 5,000 cases is insurmountable,” Judge Eduardo C. Robreno of the U.S. District Court for the Eastern District of Pennsylvania said. He manages the largest MDL in U.S. history, which once involved over 100,000 federal asbestos claims.

Judges need a mechanism to screen out claims that don’t belong, such as claims filed by plaintiffs who didn’t even take the drug at issue, he said. One idea for reducing such meritless claims is requiring each plaintiff to pay the $400 filing fee, he said.

Plaintiffs’ attorney Chris Seeger said he’s willing to agree that cases that truly have no merit are a real problem in MDLs. Seeger, a partner at Seeger Weiss LLP in New York, currently serves in leadership roles in the NFL concussion MDL, the Volkswagen clean diesel MDL, and the testosterone products MDL, among others.

“I used to think it might be better to have the bad cases in so that the plaintiffs’ attorneys can control them, but I realize it’s bad for the other side,” he said. He also noted the danger of having those bad cases come up in a randomized process for picking bellwether trials.

Meritless claims sit on the books, affect share price, and shape company decisionmaking, Trask said.

Gripe #2: No Early Proof of Merits

One way to cut back on meritless claims is to require plaintiffs to provide basic proof of their claim early on, attorneys said.

Under the current system, it can take years before the plaintiffs are required to provide the “slightest modicum of proof that they were actually injured,” Troy said.

Tim Pratt, general counsel for medical device maker Boston Scientific Corp., would like courts to require plaintiffs to submit short depositions within six months of filing their cases.

Plaintiffs and their lawyers must invest something in the process—not just get a free ride, he said. Plaintiffs have to do so much less in an MDL than they would if they were bringing the case individually.

Bayer Corp. general counsel Malini Moorthy said 30 to 40 percent of claimants in drug cases are zeroed out at the end of a settlement because they never had a valid claim. Judges should be able to eliminate those claims from the beginning, she said.

Most agreed that plaintiffs should be required to show that they were prescribed the drug in question and give some evidence that it injured them.

Even plaintiffs’ attorney Seeger agreed. He said his firm will require MDL plaintiffs to provide this evidence from the start of all MDLs they are involved in going forward.

Gripe #3: Not Enough Guidance

MDLs follow a quasi-class action process, but without the protections provided by Federal Rule of Civil Procedure 23, which governs class actions, Moorthy said.

“There’s the sense that the federal rules are suspended for defendants in MDLs,” she said. “The consistency provided by the federal rules is lost in multidistrict litigation.”

Pratt suggested having the federal rules committee draft changes to the FRCP to give judges more guidance on MDLs.

Duke Law professor Francis McGovern said writing these rules should be the province of the Judicial Panel on Multidistrict Litigation, which decides whether and where to consolidate cases.

“They are the people who really understand the problems,” he said.

Rule changes floated by the attorneys included allowing interlocutory appeals of significant rulings, parallel to Rule 23(f); bifurcating the judges’ roles so that one judge handles discovery and another handles settlement; and ensuring defendants don’t bear a disproportionate discovery burden.

But Robreno argued that codifying MDL practice would freeze it in time. “MDLs are a common source of litigation innovation and a rule could curtail judges’ creative solutions,” he said.

Seeger agreed that more rules “would take the fun out of mass torts.” He likes working in this area specifically because there aren’t too many rules, the landscape is always changing, and the litigation is exciting, he said.

Gripe #4: Bellwethers Are Worthless

Bellwether trials were another target of defense attorney angst. Many pointed out such trials aren’t explicitly allowed under the MDL statute.

Moreover, they don’t prove anything, Pratt said. “They are just used as a hammer for settlement.”

He questioned whether bellwethers even help value cases. Defendants never actually pay verdict amounts to all claimants, and the cases tried may not be representative of all the claims, he said.

“How do you know what’s representative when you don’t know much about 90 percent of the claims?” defense attorney Brian Jackson of Butler Snow LLP in Nashville, Tenn., said.

Seeger agreed bellwether verdicts may not have much value because they tend to be all over the place. “But what’s the alternative?” he asked.

Fellow plaintiffs’ attorney Jonathan D. Selbin said bellwethers do say something about the claims.

“We plaintiffs’ lawyers tend to believe our own bullshit” so trial is helpful to realize claims aren’t as strong as they think, Selbin, partner at Lieff Cabraser Heimann & Bernstein LLP in New York, said.

Bellwethers help plaintiffs’ attorney see their claims from the perspective of others, “warts and all,” Seeger said.

The Fairness in Class Action Litigation and Furthering Asbestos Claim Transparency Act of 2017 ( H.R. 985), or FICALA, includes provisions to address many of these perceived problems, but there is much disagreement over whether the bill will provide viable solutions.

The Oct. 19 event in Washington was sponsored by Lawyers for Civil Justice, the Federalist Society, and Kirkland & Ellis LLP.

To contact the reporter on this story: Perry Cooper in Washington at pcooper@bna.com

To contact the editor responsible for this story: Steven Patrick at spatrick@bna.com

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