MDL, Class Actions, and Competing Interests of State Litigation
Posted in on January 30, 2014
Any attorney considering representing a plaintiff or plaintiffs in a products liability claim against a pharmaceutical manufacturer should be aware of the potential complications of coordination with other similar actions, and particularly the possibility of multidistrict litigation. Unlike other types of litigation which are sometimes lumped under the generic heading of mass torts, such as plane crashes, toxic chemical releases and hotel fires, litigation concerning prescription drugs can involve tens, if not hundreds, of thousands of potential claimants. Because of the vast numbers of users of prescription drugs the number of injured victims is likely to be large as well, and the litigation nationwide in scope, with cases being filed in both state and federal courts. The magnitude of pharmaceutical product liability litigation causes courts to seek to coordinate these cases to the greatest practical extent, while still protecting the rights of the parties.
Under 28 USC 1407(a), when civil actions involving one or more common questions of fact are pending in different districts, the actions may be transferred to any district for coordinated or consolidated pretrial proceedings. Such transfers are made by the Judicial Panel on Multidistrict Litigation upon a determination that ‘the convenience of parties and the witnesses will promote the just and efficient conduct of such actions.’ The purpose of MDL is to effect judicial economy and to eliminate the potential for conflicting contemporaneous pretrial rulings by coordinate district courts. (Weigel, The Judicial Panel on Multidistrict Litigation (1978) 78 F.R.D. 575)
Apart from the federal procedure, many states have adopted procedures for the assignment of complex multiparty litigation to a single judge or judicial panel. (Schwarzer, W. Judicial Federalism in Action: Coordination of Litigation in State and Federal Courts, 78 Va. L. Rev. 1689 (1992). For example, in California, Code of Civil Procedure § 404 provides that when civil actions sharing a common question of fact or law are pending in different courts and it is shown the actions are “complex”, the Chair of the Judicial Council may assign a judge to determine if the cases should be coordinated. If coordination will “promote the ends of justice,” the coordination judge is vested with “whatever great breadth of discretion may be necessary and appropriate to ease the transition through the judicial system of the logjam of cases which gives rise to coordination.” ( McGhan Med. Corp. v. Sup.Ct. (Hogan) (1992) 11 Cal.App.4th 804, 812, 14 Cal.Rptr.2d 264, 269-270)
Absent a bankruptcy, federal courts generally have no jurisdiction over state court claims, and there is no formal procedural means by which all state and federal cases arising from claims relating to ingestion of the same prescription drug can be coordinated under the same judicial umbrella. Recognizing this, the Manual for Complex Litigation recommends that when transfer of all cases to a single court for centralized management is not possible, the effected courts should attempt to coordinate proceedings through informal means to the extent practicable, in order to minimize conflicts, inconsistent rulings and duplication of effort. (Manual for Complex Litigation 3d, Federal Judicial Center 1995, p.14) According to the Manual:
“Coordination becomes much more difficult when cases are dispersed across a number of states, even where the federal cases are centered in a single MDL transferee court. Clearly, the federal MDL judge cannot impose coordinated management on widely dispersed state courts ; it is difficult even to obtain and communicate information about such widespread litigation. The greatest need, therefore, is for an information network that could form the basis for voluntarily coordinated action by state court judges to the extent feasible under and consistent with their rules and procedures. The federal judge can serve as a catalyst for the development of an information network from which eventually some degree of state-federal coordination may emerge.”
(Manual for Complex Litigation, supra at p.260)
Without an informal coordination achieved through cooperation between the court assigned the MDL and the judges in the various states who have been given the task of coordinating their respective state proceedings, there can be a substantial divergence in how the cases move through the systems in terms of procedure and timing. There may be a differences from one court to the next in terms of every facet of discovery and trial, from protective orders to dispositive motions, from deposition schedules to trial dates, from document production to admissibility of evidence.
If the plaintiff’s attorney is filing a case in state court against an out of state drug manufacturer, he or she may have no choice but to become subject to an MDL, through involuntary removal to federal court based upon diversity jurisdiction. However, if there is a legitimate cause of action against local defendants such as physicians or pharmacists who wrongfully prescribed or provided the drug, the plaintiff may have the option of filing in state court and preventing removal.
What are the advantages and the disadvantages of state vs. federal courts? There is no fast and easy answer. Aside from the fact a federal MDL case is likely to be assigned to a court in some distant state, there are many other factors to consider with respect to scheduling, scope and sequence of discovery, pretrial proceedings and trial. There is no question that there are fundamental distinctions between state and federal court procedures that should be taken into account. Nevertheless, the practical dissimilarities may be negligible depending upon the extent to which the state and federal actions are informally coordinated. Attorneys involved in pharmaceutical product liability litigation should therefore be aware of the various inherent competing interests of the parties involved, and basic differences of opinion as to how the litigation will move forward, which typically give rise to innumerable procedural disputes in coordinated litigation.
According to the Manual section on coordination of related state and federal cases:
“Increasingly, complex litigation involves cases brought in both federal and state courts…In such situations, judges have at times been able to achieve substantial coordination of various aspects of pretrial: coordinating scheduling of discovery, motions and other pretrial events; appointing lead or liaison counsel; developing a coordinated management plan for the entire litigation; providing for joint discovery, such as by cross-noticing of depositions and making discovery taken in one case available in other cases (reciprocity, cost sharing and future cooperation may be required as conditions to obtaining discovery of use in other litigation); coordinating rulings on discovery disputes, such the assertion of privilege and using parallel orders to promote uniformity to the extent possible.”
(Manual for Complex Litigation, supra at p.259)
The foregoing section highlights some of the major areas where disputes arise between the various parties. Bringing together the various competing interests of parties and factions within groups of parties in a number of courts, presents a monumental management challenge for the judge assigned to coordinate the litigation. An additional source of competing interests arises among the various courts themselves, in situations where there is concurrent state and federal litigation in several jurisdictions.
Statutes of limitation for personal injury and wrongful death range from 1 to 6 years, depending upon the state, and certain states with shorter statutes may find a greater concentration of early filings. Some state courts have extremely crowded dockets and cases are not in short supply. They may be under a fast track policy or legislative mandate to resolve claims within a certain time period from the date of filing.
The judge assigned the coordinated litigation in one state may prefer to move his or her cases through the system more quickly than most, and not to move in lock step with the MDL. A particular judge may have a philosophy of resolving cases by setting early trial dates or pushing the parties to a schedule of mediations. Others may take a slower wait and see approach, preferring a more indefinite schedule. Some judges may choose to defer to the MDL judge to set the pace for their own cases as to the sequence and timing of discovery and trial scheduling, and will not make a move until the MDL judge does.
There will also be differences of opinion among the plaintiffs’ bar as to how the litigation should proceed and the best venue for their cases. Where they have an option to file in state court, some attorneys or groups of attorneys representing plaintiffs may be opposed to filing in federal court and participating in the MDL. In states with faster tracks where they are confident they will obtain a head start on discovery, attorneys may avoid federal court and the MDL, feeling they will be delayed or bogged down by the other states that are not up to speed.
They may also object to paying an MDL assessment, such as a percentage of each individual client’s gross recovery, for the common benefit work performed by the MDL lawyers. Some attorneys would prefer to do the work themselves and develop their own work product, unencumbered by the MDL, if they feel they will have fewer restrictions in their own state court. Others may wish to sit back and attempt to utilize the work of the MDL lawyers, hoping to obtain the benefit without sharing in the cost and risk.
In an effort to be fair to the MDL lawyers who expend substantial time and effort for common benefit work, some state court judges may order assessments in non-MDL cases to be paid to the MDL. The amount of the assessment may also take into account the efforts of attorneys in their own court whose earlier work may have assisted the MDL. Regardless of the assessment issue, there are attorneys who steadfastly avoid proceeding with their cases in the MDL, believing they have more control over the litigation, and more leverage for faster resolution of their cases.
Additionally, in any mass tort case involving prescription drugs there will probably be several class actions filed seeking medical monitoring. Class action attorneys may also represent individual claimants in personal injury or wrongful death claims, while others may be involved only with class actions. The Manual for Complex Litigation advises that in litigation involving both class and individual claims, class and individual counsel will need to coordinate. (Manual for Complex Litigation, supra at p.31)
However, at times there will be disagreement between class and individual counsel over the direction the litigation should take. Their interests are not always identical or completely aligned. For example, if the class counsel are pushing for an aggressive discovery schedule to obtain early certification, the defense may likewise seek early individualized discovery from the plaintiffs, including the depositions of each plaintiff and their physicians. This may be more palatable to an attorney who has only a single class action. However, it may present an extreme burden to attorneys with numerous individual claimants who are seeking to mediate claims after generic liability discovery is substantially completed, without having to engage in extensive individual damages and liability discovery.
In pharmaceutical mass tort litigation there will usually be millions of documents ultimately produced in discovery. The manufacturer will undoubtedly want to avoid multiple productions in several states, and will therefore push for production at a single national depository in a single state, whereas the plaintiffs’ attorneys in individual states will want their own production in their own states.
With respect to the actual production of documents and the location, timing and methods of production, the attorneys for plaintiffs will want to get on a fast track and obtain early and comprehensive production. Those who are in state courts moving ahead of the MDL will want to move even quicker, hoping to obtain as much as possible before an MDL-led informal coordination with their courts slows the pace. They will probably be reluctant to wait for an MDL management structure to form and for a schedule of discovery to be in place before beginning their discovery.
Conversely, the defendant manufacturers will want to delay production in state court cases as long as possible, and to hold back the state coordinated proceedings and individual actions that may be out in front of the MDL. The defendants will attempt to avoid any significant production in the hope that there will be some informal coordination between the state proceeding and the MDL, and thus production at one location according to a specified schedule.
Another distinction that may exist between state and federal courts, and a major source of disputes between the parties, concerns protective orders and confidentiality agreements relating to discovery, and particularly document production. Defendant manufacturers will insist upon rigid control of the documents produced, and will seek to obtain orders severely restricting the distribution and copying of allegedly confidential materials. They will also attempt to withhold damaging documents by claiming privilege, or at a minimum, to forestall their inevitable production.
Courts in different jurisdictions have disparate attitudes and policies with respect to such protective orders. This can create inconsistencies in the production of the identical documents in different jurisdictions. Where some judges routinely grant confidentiality orders, others rarely do so. Reasonable minds may differ and a judge may order unprotected production of documents that another judge believes should be protected as confidential, or not produced at all.
Aside from the personal opinions of the particular judge, different jurisdictions may have their own unique policies with regard to confidentiality and the scope of evidence which should be produced or protected. For example, in the forms section of the Manual for Complex Litigation there is a form confidentiality order (section 41.36 Form A), which places the burden on the plaintiff to apply to the court for a ruling that a document or category of documents stamped as confidential is not entitled to such status and protection. The party seeking to prevent disclosure must then demonstrate that there is ‘good cause for the document to have such protection.'( Manual for Complex Litigation, supra, at p.454).
However, in Los Angeles County, California (which, by population, is larger than 42 states), there is a local Superior Court rule against confidentiality agreements and protective orders. They are only permitted under limited circumstances and with a document by document showing. Rule 7.19 provides:
It is the policy of this court that confidentiality agreements and protective orders are disfavored and should only be approved by the court when there is a genuine trade secret or privilege to be protected. Such agreements will not be recognized or approved by this court absent a particularized showing (document by document) that:
- Secrecy is in the public interest; and
- The proponent has a cognizable interest in the material, i.e. the material contains trade secrets, privileged information, or is otherwise protected by law from disclosure; and
- That disclosure would cause serious harm.
Because of state court rules such as this, attorneys may prefer avoiding the MDL, unless they can be fairly certain they will be able to obtain the documents elsewhere, and obtain an agreement that they will be able to use those documents according to the least restrictive terms under which they are ordered to be produced in another jurisdiction.
For the same reason they will pursue a strategy of delay in document production, defendant manufacturers will also want to postpone discovery relating to their key employees. The defendants do not want to subject deponents to multiple depositions in multiple jurisdictions, and therefore they will attempt to obtain some sort of informal coordination whereby the key employee depositions will be taken only once, through the MDL, and available to anyone as a result of cross-noticing. It goes without saying that manufacturer defendants would prefer a single deposition, and therefore to the extent possible they will delay by seeking stays of discovery until attempts at coordination with the MDL and other states can be achieved.
In an MDL situation the defense will likely seek early depositions of individual plaintiffs and their doctors. On issues such as those related to the learned intermediary doctrine, delayed discovery and comparative fault, it can be to the defendant’s advantage to have these depositions prior to the plaintiffs’ completion of their liability discovery, and prior to depositions of key employees and detailmen. If the defendants are employing a scorched earth policy to force the plaintiffs into submission, scheduling dozens of plaintiff and doctor depositions as soon as possible is an effective method.
On the other hand, the plaintiffs will want to complete or significantly finish ‘person most knowledgeable’ depositions under FRCP 30(b)(6) or similar state court rules, and document discovery on generic liability issues, prior to any individualized discovery. It may be critical to know prior to the deposition of a prescribing physician, the extent of the manufacturer’s undisclosed knowledge about a drug’s harmful effects. If these depositions are taken prematurely and before all relevant documents are produced and reviewed, the testimony and opinions of the physician may be inaccurate and the physician may need to be deposed again.
Whether or not either side will get their wish will depend upon the judge. Some judges will order simultaneous discovery on damages and liability, while others will prefer to focus on generic liability issues before permitting depositions relating to specific liability and damages issues on individual cases.
There is a perception that proceeding in state court will increase the chance of an earlier trial date, instead of waiting for the MDL to begin transferring individual cases back for trial in the district courts where they were originally filed. From the perspective of attorneys representing plaintiffs, an earlier trial date provides more settlement leverage for individual cases. The feeling that they will be lumped together with thousands of cases from around the country moving on a slow track may discourage counsel from filing in federal court, particularly those attorneys with large numbers of cases of their own.
Those attorneys with the experience and resources to conduct necessary document and deposition discovery and expert witness work-up to ready their cases for trial, will attempt to obtain trial dates for their best cases as quickly as possible. With or without a coordinated proceeding in an individual state, this may be the fastest way to obtain a trial date, and improve the chances of early resolution.
The defendants, on the other hand, will attempt to avoid early trial dates, especially in those cases with the better liability facts and larger damages. If they are to be faced with a coordination judge hand-picking cases for early trial dates, the defense will prefer that the weaker cases are set first, such as cases with minimal damages or significant causation issues.
For the plaintiff’s attorney there may be advantages to having prescription drug product liability cases in an MDL. Participation may allow an opportunity to work with a large number of attorneys nationally, with a wide range of experience and potentially more extensive work product. It may also provide a national network of resources and access to highly qualified, carefully selected experts prepared by teams of attorneys. The work-up by lawyers experienced in class action and mass tort cases usually generates high quality work product that cannot be easily duplicated.
This must be compared with the disadvantages of being in multidistrict litigation, in that federal courts may be more rigid with respect to dispositive motions and admissibility of evidence, particularly scientific evidence and expert testimony. State courts may be more liberal in terms of the scope of discovery, less restrictive with protective orders and more likely to set earlier trial dates.
In the final analysis, the extent to which state and federal coordination is achieved will ultimately determine whether there is any significant distinction between pursuing pharmaceutical product liability cases in a state coordinated proceeding or in multidistrict litigation. Because this will be dependent upon the personalities and preferences of the judges involved, a factor over which the attorney has no control, the plaintiffs’ attorney should carefully consider all available information, and consult with other attorneys handling similar cases before choosing one court over another.