A federal judiciary panel last year rejected a record number of requests to coordinate multidistrict litigation, adding a new level of scrutiny for attorneys who petition to get large numbers of cases across the country combined under the pretrial procedure.
In 2015, the U.S. Judicial Panel on Multidistrict Litigation issued 36 denial orders—about 44 percent of the 82 requests made that year. It issued 33 approvals. That’s the first time in the past decade that the panel has denied more requests than approved them.
The uptick in denials, which continued into this year, represents a sea change for the panel, which historically has approved most requests for MDLs. The turnaround comes as lawyers on both sides have raised criticisms of MDLs, which have consumed a record number of the nation’s federal lawsuits.
“In earlier times, it was more of a foregone conclusion that things would be consolidated,” said Lori Cohen, chairwoman of the pharmaceutical and medical-device litigation practice group at Greenberg Traurig. “We’re getting a sense that these judges are taking a harder look and a stricter scrutiny in terms of—whichever side is trying to obtain consolidation—whether they’ve met their burden.”
Panel clerk Jeffrey Lüthi did not respond to a request for comment.
Congress established the panel in 1968. Made up of seven federal judges appointed by the chief justice of the United States, the panel coordinates cases with common claims into a single proceeding in order to promote efficiencies in discovery matters. The panel’s rulings aren’t precedential, but they affect the outcome of some of the nation’s largest dockets by determining which judges end up overseeing the litigation.
The types of cases have changed over the years. Once dominated by securities, antitrust and mass disaster lawsuits, the panel now handles a large share of mass torts and class actions. In 2015, the panel approved seven MDLs dealing with data-breach class actions.
The panel has a long history of approving most MDL requests. In 2006, for example, the panel approved 73 percent of all requests. But that number has been dwindling over the years. In 2015, the panel approved only 40 percent of all requests. The trend has continued so far this year, with 11 cases granted and 16 denied.
While most MDLs comprise fewer than 100 cases, some have ballooned into tens of thousands of lawsuits, said John Rabiej, director of Duke Law School’s Center for Judicial Studies. A 2014 report by the center found that a record 36 percent of 334,141 federal lawsuits were pending in MDLs. Duke hosted a conference that same year in which former MDL Panel chairman John Heyburn said the panel “had a concerted effort to cut down the number, reduce the number of orders, and was scrutinizing every one very carefully,” Rabiej said.
He said the panel, now headed by chairwoman Sarah Vance, is responding to an increasing number of concerns from lawyers about the MDL process.
Some plaintiffs lawyers fear that “they’re going to lose control over their cases and also may lose some or all of the fees associated with the cases,” said Deborah Hensler, a professor at Stanford Law School.
Yet defendants aren’t pushing MDLs either: They made up only 35 percent of the requests in 2015. Hensler said defense attorneys often have to weigh the inconvenience of handling dozens of cases across the country against the impact that an MDL order could have on the plaintiffs bar.
“We definitely see that when an MDL forms, what happens on the defense side is there’s a big giant flashing red light siren screaming ‘target’ on the corporate defendant’s back,” Cohen said. “There are cases filed that are not properly screened, not properly assessed, before being brought into court.”
Those arguments rarely show up before the panel. But the panel gets an earful of other objections. In 2015, 81 percent of the cases in which the panel denied MDLs involved plaintiffs or defendants who opposed coordination, compared to 39 percent in those that were approved.
In its denial orders, the panel wasn’t always persuaded by the objections and didn’t cite general concerns about MDLs. But it cited other reasons, such as factual or procedural differences, or having too few cases to constitute an MDL. In fact, in 2015, more than a third of the panel’s orders cited the low number of cases as a reason for denial. Most involved just two or three cases.
“How many is it necessary to persuade the panel to centralize? There’s no hard and fast answer,” said Christopher Lebsock of Hausfeld. But at some point, he said, “it starts to be a case management issues for the defendant, the courts, even for the plaintiffs lawyers, about how you manage hundreds of hundreds of cases.”
Lawyers who regularly attend hearings said the panel is increasingly asking why they couldn’t informally coordinate discovery on their own, particularly since most of the documents are accessible electronically.
As a result, many lawyers have shifted the focus in their briefs and oral arguments from where the documents are located—historically a key factor raised in support of a specific judge or venue—to the complexity of the cases. Ronald Marron, founder of the Law Offices of Ronald A. Marron in San Diego, said he looks at whether the cases could involve potential experts, scientific testimony or arcane statutes.
“We’re just very thorough,” he said. “We’ve always been thorough, but now we pull out all the stops.”