Predictability vs. Flexibility: The Debate Over MDL Rules

By Perry Cooper

The prospect of new rules to govern federal consolidated litigation is drawing familiar battle lines between defense attorneys who seek predictability and plaintiffs’ attorneys who prefer flexibility.

The statute governing multidistrict litigation gives little guidance on important issues of case management, including how to pick lead counsel, hold bellwether trials, weed out bad claims, and determine attorney compensation. So every case is handled differently, subject to the discretion of the parties and the judge, and the number and type of claims involved.

This can be particularly frustrating for corporate defendants, who never know what to expect from a new MDL. That uncertainty weighs in favor of having a set of rules that would apply to all MDLs, defense attorneys say.

But it also provides the courts and parties with flexibility to tailor management of each MDL to the needs of that case, and to innovate as necessary. Forcing one set of rules to apply to all MDLs—which can range from product liability mass torts to securities class actions—may not be practical, plaintiffs’ attorneys say.

The debate is likely to intensify. The Advisory Committee on Civil Rules, the body charged with reviewing the Federal Rules of Civil Procedure, recently formed a subcommittee on multidistrict litigation. It will study MDL procedure with an eye toward the possibility of recommending new rules.

Ad Hoc Procedure

The biggest complaint, usually from defendants and their attorneys, is that they never know what to expect when cases are consolidated.

Consolidated proceedings lead some judges to suspend the application of existing rules and manage the cases on an ad hoc basis, Malini Moorthy, Vice President and Associate General Counsel for drugmaker Bayer Corp. in Whippany, N.J., told Bloomberg Law.

“Then you’re in a situation where a litigant cannot be certain that an MDL proceeding in the Southern District of New York is going to be managed in the same way procedurally as an MDL proceeding in the Southern District of Illinois,” Moorthy said.

Defense attorney John Beisner told Bloomberg Law that the federal rules are virtually suspended as to defendants’ rights in MDL proceedings.

Typically defendants aren’t allowed to move to dismiss, take discovery, or move for summary judgment on individual claims, Beisner, of Skadden, Arps, Slate, Meagher & Flom LLP in Washington, said.

“All of the things that offer protection in those cases about filing marginal or frivolous claims are suspended,” he said.

Beisner said he doesn’t mean to suggest defendants will move to dismiss every claim or take the deposition of the thousands of plaintiffs in an MDL. But the fact that defendants can’t do anything invites a lot of abuse, and contributes to “an environment that this is all about just getting these cases settled as opposed to finding the truth,” he said.

Professor Elizabeth Chamblee Burch, who studies MDLs, agrees that there is a lot of variation among cases. “I can see that being kind of frustrating from a litigant’s perspective on either side because you’re not really sure,” Burch, of the University of Georgia Law School in Athens, Ga., told Bloomberg Law.

A prominent plaintiffs’ attorney agrees.

“It can be an issue with respect to how to advise a client,” Elizabeth Cabraser, partner at Lieff Cabraser Heimann & Bernstein LLP in San Francisco, told Bloomberg Law. “We have the same issues on the plaintiffs’ side that defendants do: How do I tell my clients what to expect?”

Period of Innovation

“But I don’t think that the answer to that is to superimpose a rules grid on what is very dynamic litigation because that is really false predictability and I’m not sure that serves clients well,” Cabraser said.

She understands the impulse to want to have rules to make the process more uniform, she said. But every MDL is different.

“You have to look at the issues that are raised in the case, the type of case it is, the size of it, the geographic dispersion, how much related litigation is in the state court system—and that varies widely from case to case,” she said. “There are vast differences between an MDL arising, for example, from an airplane crash and an MDL arising from the opiates crisis, and no one should expect that those cases will be managed the same.”

Beisner admits that MDL frequent fliers such as Cabraser and himself “have just sort of made up our own rules as we’ve gone along.” There are procedures that have become customary in MDLs but aren’t really sourced in the MDL statute or federal rules, he said.

Cabraser said she’s usually a big fan of the rulemaking process. Until recently she served on the Federal Civil Rules Advisory Committee.

But MDL procedure isn’t ready for rules, she said. “With respect to multidistrict litigation in particular, we’re in a period of innovation. I think that should be encouraged.”

Flexibility

Burch echoed the desire for flexibility. “Judges who handle these cases day-to-day stress the uniqueness of each proceeding and the need for flexibility,” she said.

But she acknowledged that the downside to flexibility is that “ad hoc practices may be seen as less predictable and less legitimate than those that emerge from formal rule making procedures.”

She advocates for encapsulating certain procedural aspects into a formal rule. “First among those would be a requirement that the lead lawyers adequately represent the plaintiffs,” she said.

Burch can see why “repeat players” in MDL practice might push back against rules. They “have far more ability to shape and reform the practices and norms that govern the proceedings when fewer formal rules exist,” she said.

But Cabraser disagreed, saying: “It should be the old dogs, like me, who have difficultly learning new tricks, who ought to be saying it’s time for rules now because I don’t want to learn anymore and I don’t want to innovate.”

“It ought to be empowering to younger attorneys because it’s not like you show up to a MDL and somebody else knows the secret sauce and you don’t,” Cabraser said.

Beisner agreed that some flexibility is needed, and “some judges come up with marvelous ways to approach these very difficult proceedings.” But others are less successful, and would benefit from tethering the procedure more to the rules and statute, he said.

Moorthy pointed to the proposal that pro-business group Lawyers for Civil Justice sent the rules committee. “A perfect set of amendments would achieve consistency, efficiency, and fairness without sacrificing the discretion that a judge may feel he or she needs to manage the proceedings in front of them,” she said.

Varying Nature of MDLs

The wide-ranging nature of MDL practice is another argument against imposing too many rules, Burch said.

“When people think MDL, they think mass torts, but ‘MDL’ covers all kinds of things like antitrust and securities and employment and data breach,” she said.

“If you are going to write rules for MDLs but you have in mind drug and pharma MDLs, those rules aren’t going to fit other types of cases and it’s an exercise in futility,” Cabraser said.

But Moorthy insisted she wouldn’t advocate for rules that “are particular to a particular type of claim or to a particular industry.”

Beisner pointed out that MDL cases fundamentally break down into mass tort cases and MDLs of multiple class actions.

“The MDLs that are largely class actions pose fewer of these problems because they are so guided by what’s in Rule 23 whether they are in MDL proceedings or not,” he said.

Alternative Avenues

Guidance on MDL procedure doesn’t have to come from the rules committee.

“The rules committee is an appropriate avenue,” Moorthy said. But the Judicial Panel on Multidistrict Litigation, which decides which cases should be consolidated and where, could try to find a workable solution, or Congress could step in, she said.

There are some aspects of MDL practice that are outside the jurisdiction of the rules committee, Beisner said.

“For example, the issue of the extent to which trials can be conducted in an MDL proceeding—that’s a statutory issue,” he said. It’s up to Congress to dictate any changes to the MDL statute.

Cabraser bristled at the idea that Congress is equipped to provide guidance. The rulemaking process is more open, deliberate, and considered, she said.

A better approach to improve MDL procedure is to make it easier for litigants and judges to learn from successful MDLs, she said. Everyone would benefit from an online compendium of all of the case management orders from contemporary MDLs, she said.

Many MDL judges already keep websites with links to their orders and transcripts of proceedings, or direct the parties to do so. “Those have all fans and no detractors,” she said. The websites are useful resources that enable innovation to proceed with guidance, she said. Case management orders can be refined and adapted for use in a particular case.

Beisner said there’s already a good system for judges to share what works in their cases. But “I think the problem is that a lot of that isn’t available to the judges until after they have started into the MDL, appreciate what the issues are, and then begin talking to other judges about it. At that point, in some respects, the die has been cast.”

Investigation Needed

The multidistrict litigation subcommittee is investigating, but that doesn’t necessarily mean the Advisory Committee on Civil Rules will write rules to govern MDL procedure. For now, the subcommittee will gather information and input from stakeholders to determine if rules would be practical and beneficial.

If the committee decides to propose rules on MDLs, it would be years before they went into effect. The committee started exploring amendments to Federal Rule of Civil Procedure 23, which governs class action practice, in 2014. Its proposed changes won’t take effect until at least December 2018.

Beisner and Cabraser can agree on one thing—it makes sense to study MDL procedures.

“I’m hoping that one thing that might come out of this study is to see what works and what doesn’t in a more systematic way,” Beisner said. “Whether all of the recipes for a great MDL are something you can translate into a rule remains to be seen.”

“Mine is a more conservative approach,” Cabraser said. “Let’s apply the rules we have and then if we find that there’s a gap—if we find that there’s a particular type of case or a particular scenario in which the rules as used don’t produce effective case management—then we know what we have to do.”

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

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

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