Mass Tort Multidistrict Litigation (MDL) Proceedings
When multiple civil actions involving one or more common questions of fact are pending in several different federal district courts, those actions can sometimes be transferred to one district court for coordinated and consolidated management and pretrial proceedings under a single judge. Congress created the Multidistrict Litigation (MDL) Panel in 1968 to handle these types of cases. The purpose behind implementing MDLs was to streamline and manage large numbers of relatively complex, but factually similar, claims in a consistent manner. This would ideally reduce backlog in federal courts and reduce duplicative discovery, allowing the courts to administer mass claims in a more coherent fashion. read more...
Unfortunately, the plaintiffs’ trial bar has found ways to game the mass tort litigation system and have devised ways to lump claims together so as to avoid federal jurisdiction. As a result, thousands of cases involving national controversies that should belong in federal court are being handled by a few “magnet” state courts—even though those courts have no relationship to the parties and have no business being involved. This often has the unfortunate effect of dragging innocent small businesses, unlucky enough to be located in a trial lawyer-friendly jurisdiction, into burdensome and expensive litigation.
Furthermore, even if a case is able to be heard in a federal mass tort MDL proceeding, some plaintiffs’ counsel file thousands of advertising-generated claims without properly investigating those claims’ legitimacy. This goes on unimpeded because MDL courts often limit the ability of defendants to scrutinize individual claims within an MDL. As a result, MDL proceedings are often clogged with bogus claims, prejudicing both plaintiffs with legitimate claims and defendants. Additionally, MDL courts sometimes force “bellwether” trials, despite their mandate to only conduct pre-trial proceedings, and use the results of those trials to pressure settlements.
Even though the cases in mass tort MDL proceedings account for roughly 35% of all civil lawsuits pending in the federal court system nationwide, appeals from key rulings in those proceedings are rarely allowed.
The Fairness in Class Action Litigation Act of 2017 (FICALA) will make a number of significant changes to the class action litigation system and also help address many of the significant abuses that turn MDLs into a mechanism of extracting strong-armed settlements from defendants, who are many times effectively deprived of their day in court.
The significant changes to the current state of the mass tort MDL system that FICALA makes include:
- Help fix the magnet state court problem by requiring courts to determine jurisdiction on an individual case basis in a MDL. This will help prevent lawyers from lumping together unrelated personal injury claims in multiple-plaintiff lawsuits solely to avoid federal jurisdiction.
- Ensuring that MDL courts only conduct trials when all parties agree to such, putting an end to the use of “bellwether” trials, which are often forced upon plaintiffs and defendants to pressure them to settle.
- Requiring that claimants (the allegedly injured parties) get 80% of any settlement payments, notwithstanding any fee demands by their lawyers. All too often under the current system, trial lawyers walk away with more than their clients.
- Requiring federal appellate courts to hear appeals from orders issued in MDL proceedings where immediate review may materially advance the ultimate termination of the case.
FICALA would put MDLs back on the right track towards being a means of making the management of federal civil cases more efficient, rather than a tool used by trial attorneys to extract massive, pressured settlements from defendants.