An article forthcoming in the California Law Review has been posted on SSRN and is worth reading: Bradt & Rave, “The Information-Forcing Role of the Judge in Multidistrict Litigation.” The authors describe how MDL proceedings have come to dominate the federal civil docket – making up nearly half the caseload. MDLs have to some extent supplanted class actions, while sharing some of the principal-agent problems that plague class actions. The authors insist that the most serious problem is that the plaintiff lawyers making many of the key decisions in an MDL (usually adorned with the regal title of “the plaintiff steering committee”) do not represent all the plaintiffs. That problem rears its head in a particularly ugly fashion when it comes to settlements. Individuals get treated as an aggregate and some make out better than others for no reason grounded in rationality or fairness. It can hardly arrive as news that plaintiff lawyers might steer more dollars toward their cases than others. But while a class action judge has a well-defined role/duty to approve or disapprove class action settlements, MDL judges lack such authority. The authors are distressed by this state of play, because, in their view, MDLs are built for settlement: “The MDL statute was developed as a judge-centric model – its framers intended that judges would wrest control of cases from the litigants and guide the litigation to a conclusion that would relieve the federal courts of potentially crushing caseloads.”

What’s the solution to the principal-agent dilemma in MDLs? The authors point with favor to the judge in the World Trade Center Disaster Site Litigation who expressed the view that a proposed settlement was not enough. That judge, according to the authors, based his authority to reject the settlement on a quasi-class action theory created by Judge Weinstein the Zyprexa MDL. The WTC judge acted as an ‘information intermediary.” Once he put it out there that the settlement was, by his lights, unfair, it was not possible to cram down the settlement when most of the plaintiffs would have heard what the judge said. Bradt & Rave argue that this information intermediary role is an important one for MDL judges, because the MDL lawyers are not reliable sources of information. It is hard to argue with that last point.

But how reliable are judges? To the authors’ credit, they acknowledge points made by other scholars questioning the quasi-class action model. Many (most? all?) judges have a strong interest in settling cases. The danger of that predilection is, according to the authors, that judges might approve settlements that are unfair to some plaintiffs. That’s true as far as it goes. Nevertheless, there is another unfairness danger, and it does not seem to bother the authors much or at all: judges in some aggregated proceedings do their utmost to strong-arm settlements that are unfair to defendants. In the conclusion of the article, the authors tell us that “Settlement is good.” That’s sort of a Mom and apple pie sentiment, isn’t it? Yes, there is a Lincoln quote out here somewhere praising the concept of settling litigation. Fine. We know we’ll get a reaction as if we passed gas in church when we say this, but, hey, Not All Settlements are Good. Some are neatly wrapped packages of extortion. A sentence or two later, the authors write that “the beauty of MDL is that, by gathering all of the players into a single forum under the watchful eye of a coordinating judge with substantial flexibility, it creates a fertile environment to facilitate a comprehensive resolution.” Fertile, indeed. There is a lot of fertilizer in that field. Most of the cases in any MDL inventory are meritless – plaintiffs who suffered no injury, or suffered the injury before they used the product, or never used the product at all. And yet far too many MDL judges act as if any defendant who does not gallop over to the plaintiff steering committee with a settlement offer, a grid, and an open checkbook needs a spanking. We have seen judges rule against defense motions, or fail to rule at all, as a way of punishing defendants who seem insufficiently eager to settle. Even more commonly, when a judge wants to inspire defendants to settle, the judge will order absurd trial schedules, often with cases consolidating plaintiffs so as to maximize prejudice and the specter of huge verdicts. Information forcing? Call it what it really is: settlement forcing.

To our defense-hack eyes, the Bradt & Rave article suffers from an obliviousness to the fact that aggregated litigation mostly aggregates weak cases, and that judges in aggregated proceedings all too often value resolution over fairness. But the article is helpful in collecting cases and arguments. Indeed, if you read the footnotes carefully, you will find a number of other articles whose world view is a bit more consistent with our own. You can call us biased or cynical when it comes to MDLs, but you cannot call us isolated.