Basics of Multidistrict Litigation
Jordan Elias— November 28, 2018
Many of the largest and most significant class actions wind up in a multidistrict litigation. What’s an “MDL” and how is it different from a regular court proceeding?
The MDL Statute
A federal statute, 28 U.S.C. § 1407, governs MDL practice. Congress passed this law in 1968 after civil antitrust suits were filed across the country against makers of electrical equipment who had been indicted for price fixing.
When different federal judges preside over cases that arise from the same set of facts, there is potential for general mischief, unfairness to the litigants, and embarrassment to the judiciary from inconsistent rulings. Therefore, with an MDL, a single judge supervises related cases to make sure the pretrial work is coordinated.
The Judicial Panel on Multidistrict Litigation, a small group of federal judges, decides whether to create an MDL for a given controversy and where to assign it.
The statute empowers the Panel to create an MDL when cases in multiple districts involve common factual questions and a centralized proceeding will be convenient for parties and promote justice and efficiency.
There have been nearly 3,000 MDLs. The name of an MDL begins with “In re”— short for “In regard to” whatever the controversy may be.
The Key Questions: Whether and Where
Practice in front of the Panel comes down to two questions: should an MDL be created, and if so, where and in front of what judge?
First, the Panel considers the number of cases on file and where they are pending. The more cases and districts there are, the more likely an MDL will be created.
In recent years, the Panel has pushed back against a trend toward greater use of the MDL procedure. When the Panel decides not to create an MDL, it often encourages the parties to try to coordinate informally or through ordinary case transfers.
Second, the Panel considers the litigation’s “center of gravity”—for example, where the alleged violations or the event giving rise to the controversy took place. That location often serves as a proxy for the place that will be most convenient for all concerned to litigate the case.
As MDL judge, the Panel often enlists the federal judge who was assigned the first-filed case or the cases at the litigation’s center of gravity.
The MDL Court
The MDL court has wide discretion to supervise the litigation in its pretrial phase.
The first step is usually to determine which lawyers will lead the case prosecution for the plaintiffs. Those lawyers then usually file a single “consolidated” complaint. The case then proceeds through the normal pretrial stages of motion practice and discovery.
One of the wrinkles of MDL practice is that the MDL court only has power over transferred cases before they get to trial. At the end of the pretrial stage, transferred cases must be sent back to their original jurisdictions for trial. But the MDL judge can supervise the trial of cases that were originally filed in the MDL forum or if the parties have agreed to a trial in the MDL court.
MDL judges often turn for guidance to the Federal Judicial Center’s Pocket Guide.
Our Commitment to Excellence
Girard Sharp LLP represents consumers, investors, and institutions in class actions and other complex litigation nationwide, including in multidistrict litigation. Our class action lawyers have obtained multimillion-dollar recoveries for victims of unfair and deceptive practices in antitrust, financial fraud, and consumer protection matters against some of the country’s largest corporations (such as Raymond James, John Hancock, Sears, Yahoo, and JP Morgan Chase). Girard Sharp LLP has earned top-tier rankings from U.S. News & World Report for Securities and Class Action Litigation and was selected as a 2018 Elite Trial Lawyers finalist by the National Law Journal.
Jordan Elias is a partner with Girard Sharp LLP in San Francisco, California.