Originally published in Law360 on March 25, 2015
Welcome to the latest edition of “And Now a Word From the Panel,” a column which “rides the circuit” with the Judicial Panel on Multidistrict Litigation as it meets on a bi-monthly basis at venues around the country.
As the spring thaw finally arrives for most for the country, the panel once again — for the seventh year in a row — heads to its destination of choice for its March hearing session: San Diego, California, “America’s Finest City.”
After its January winter session in Miami, Florida, the panel appeared to give the “cold shoulder” to creating MDL proceedings. In Miami, the panel considered 11 MDL motions, yet denied a majority of those motions. But before looking in greater detail at these somewhat unusual results, let us take a look ahead at what spring (finally) brings the panel at its March hearing.
Looking Ahead: A Baby MDL?
At its upcoming session, the panel will consider whether to create an MDL proceeding for cases arising from the alleged contamination of baby wipes with the bacteria Burkholderia cepacia and the ensuing nationwide voluntary recall of various baby wipe products. In re Nutek Baby Wipes Litig. (MDL No. 2605).
What makes this MDL petition particularly intriguing is the dramatic shift in the contours of the litigation since the initial MDL motion was filed in December 2014. At the time of the original motion, there were seven pending class actions, most of which were filed on behalf of a putative nationwide class. The cases were filed in various federal district courts. Ordinarily, these cases might be prime candidates for MDL centralization, seeking to avoid the risk of inconsistent rulings on class certification. But shortly after the MDL motion was filed, plaintiffs in all but one of the cases filed notices of voluntary dismissal. As a result, the only remaining class action is pending in the Eastern District of New York, where an amended consolidated consumer class action complaint was filed on behalf of 31 plaintiffs from a total of 15 states. In addition, there are two personal injury actions, arising from the use of the baby wipes, filed by a single law firm in federal court in Oklahoma.
Thus, what began as a seemingly clear case for MDL centralization may no longer be so. What began as more than half a dozen actions in various federal courts was reduced to three cases pending in a total of two federal district courts.
In their opposition, plaintiffs pointed to several other factors militating against creation of an MDL:
- The parties are formally and informally cooperating.
- There are few plaintiffs’ counsel.
- Section 1404, forum non conveniens, presents a viable alternative to Section 1407 MDL transfer.
In short, the rapidly shrinking number of actions into a potential mere baby-sized MDL proceeding presents the manufacturer with a significant challenge in convincing the panel to create an MDL proceeding at this juncture.
Looking Back: Just Say No!
In our January column which looked back at 2014, we observed that the panel continued to grant a substantial majority (more than 60 percent) of the MDL motions that it considered. What makes the panel’s January hearing particularly notable, then, is that it denied a majority of MDL motions heard at that session. In total, the panel denied seven of the 11 MDL motions before it.
Although it is far too early to term these denials as a “trend,” it behooves panel practitioners to take note of the bases for denial as they shape their arguments in future MDL petitions. Taking a closer look at the reasons for the denials emanating from the January session reveals that there continue to be certain common themes as to when the panel will deny requests to create an MDL, and perhaps a few that are not as common:
A Minimal Number of Actions. The panel reminded us that, “[w]here only a minimal number of actions are involved, the proponent of centralization bears a heavier burden to demonstrate that centralization is appropriate.”
Common Counsel. The panel opined once again that “[w]here so few counsel are involved, discovery should be coordinated by the parties efficiently without centralization.”
Differing Procedural Postures. Where some actions are more advanced than others, MDL centralization would not accomplish its goals.
But significantly, the panel also identified a number of reasons that may be less commonly known as bases to deny creation of an MDL:
Individualized Fact Determinations. Where motions might be “directed to the individual claims of nearly 500 plaintiffs,” or would “involve significant case-specific facts,” an MDL proceeding may not be the most efficient means of addressing those claims.
Cases Involve the Laws of Many Different States. Where the cases involve “over 30 state laws” or where pretrial practice “will differ from action to action due to the different state and federal laws asserted in each action,” the cases may not be well-suited for MDL centralization.
In addition, the panel reminded us that common factual issues must be “sufficiently complex or numerous.” Cases where there are common factual issues will not in and of themselves warrant MDL treatment. Interestingly, the panel also remarked that where no class actions are involved, “the scope for inconsistent pretrial rulings and practice” becomes limited “to issues pertaining to discovery and scheduling.”
What will spring bring for the panel? Will it continue to close the door on new MDL proceedings? Will it decide to throw the baby out with the bathwater and decline to create a baby wipe MDL? What new issues will make their way to the panel at the next hearing? Stay tuned for our May edition of “And Now a Word from the Panel,” as the panel heads north for its pre-summer (May 28) hearing in Minneapolis, Minnesota — home to 10 current MDL proceedings.
Panel Trivia Corner
January Trivia Question:
For the years 2013-14, which federal district was assigned the most new MDL proceedings?
Answer to January Trivia Question:
The Southern District of New York.
March Trivia Question:
Since January 2013, courts within which federal judicial Circuits have not hosted a JPML hearing session?