Canada: Managing Complex Litigation In The U.S. MDL: Lessons To Be Learned

Last Updated: January 3 2012
Article by Andrew Carvajal

Presented at the 2010 OBA Class Action Colloquium.

Introduction

For some years, the law regarding the certification of class actions in Ontario, as well as the rest of Canada, was rather unclear. This situation created significant risk early in the litigation process. As a result, most of the legal battles that determined the future of a potential class action were fought at the certification level. If the class action was ultimately certified, most class actions would settle soon after, without further delay and expense. Today, the law in Ontario and the rest of Canada with regards to certification has matured to the point where there is more predictability, and therefore less risk, around the types of cases which will be successfully certified. As a result, defendants are beginning to approach the certification process more strategically than before, and considering consent to certification, subject to appropriate class definition and common issues.

Given this jurisprudential shift, much of the focus of the parties to a class action has also shifted from the certification motion to the management of the action as a whole through discovery, settlement processes or the completion of the common issues trial. This shift in focus presents new challenges for the judge with the responsibility for case managing the class action. Class actions generally are complex litigation, often involving thousands of absent class members, significant financial exposure, millions of documents, dozens of experts on both sides, and a multitude of fact witnesses. In addition, the issues at stake in the litigation are important to the parties and the absent class members, and often to society as a whole and to the development of the law. Accordingly, the mandate of the case management judge to deliver a just and expeditious resolution of the action through settlement, or through an efficient and timely trial process, is a very complex and demanding task. Effective case management is the new challenge for class action judges, and what is at stake is the future viability of the class action process in Canada. If methods cannot be crafted to make the process expeditious and efficient, the procedural complexities and financial burden will deter future recourse to class actions as the preferred vehicle for the resolution of mass tort issues.

We may then want to look at the pretrial, settlement or trial processes employed in complex litigation elsewhere, and see whether there are lessons which can be imported into our practice here. For the purpose of this paper, we will turn our gaze south of the border to Multidistrict Litigation (MDL) in the United States of America. More specifically, the litigation and pretrial proceedings of three recent mass tort cases were reviewed. These cases are:

1. Vioxx Product Liability Litigation (MDL No.1657). Headed by Judge Eldon Fallon in the Eastern District of Louisiana.

2. Guidant Corp. Implantable Defibrillators Products Liability Litigation (MDL No. 1708). Headed by Judge Donovan Frank in the District of Minnesota.

3. Medtronic Inc. Implantable Defibrillators Products Liability Litigation (MDL No. 1762). Headed by Judge James Rosenbaum in the District of Minnesota.

Why Focus on the MDL?

MDL processes serve a very specific purpose within the scope of complex and mass tort litigation in the U.S.A. They have traditionally been limited to establishing a centralized forum where related cases are consolidated so that coordinated pretrial discovery can proceed in an efficient and effective manner.1 The system is confined to federal cases, even though some states may have some equivalent processes, and MDLs deal with the consolidation of both individual lawsuits and class actions.

It is not suggested that the MDL system is a good alternative to our system of bringing class actions in Canada. In fact, one of the reasons why the federal court system is turning to the remedial powers of MDL more frequently than before, is because of recent statutory and judicial discouragement of the use of class actions in the U.S.2 The reason why MDL has been chosen for the purpose of this discussion is because of its resemblance to class action litigation, in terms that they both deal with a large number of related claims, and because it happens to be a system where effective case management in the pretrial process has yielded admirable results.

The statistics of MDL proceedings point to the efficiency of this process. By September 30, 2009, there had been 323,258 actions involved in the MDL process during its 40 years of existence. 88,000 actions were pending at the time and 223,126 had been terminated by an MDL court. Only 12,132 cases were not terminated in the process, showing that MDL judges had terminated 95% of the actions before them.3

The speed with which settlements are reached by the parties in MDLs is also impressive. In Vioxx, in only 31 months the parties were able to reach a $4.5 billion global settlement which provided benefits to 32,886 individuals.4 In Guidant, the parties were able to reach a $240 million Master Settlement Agreement for 8,550 claimants in just over 24 months.5 In Medtronic, the Master Settlement Agreement of $93.75 million was reached less than 18 months after the commencement of the MDL.6 Compared with the pace at which similar actions have been moving in Canada, these numbers alone warrant an examination of what makes an MDL so effective in this respect. While there are other factors which are also influential in achieving these outcomes, our thesis is that the MDL judges, armed with wide discretion and experience in case management techniques in the context of complex mass tort litigation, have been instrumental in effecting the just and timely outcomes seen in the Vioxx, Guidant and Medtronic MDLs.

A Brief History of MDL

During the 1960s, more than 1800 civil actions involving conspiracy allegations among electrical equipment managers were brought across 33 federal district courts.7 These arose in the wake of successful criminal antitrust prosecutions advanced by the U.S. government.8 To coordinate discovery and the litigation of this massive enterprise, Chief Justice Earl Warren created the Coordinating Committee for Multiple Litigation of the U.S. District Courts. The Committee was very successful in ensuring that judges and attorneys involved in the litigation cooperated to coordinate pre-trial proceedings, including: 1) scheduling of coordinated pretrial discovery proceedings; 2) utilization of national depositions with lead counsel chosen for plaintiffs and defendants; and 3) establishment of a central document depository containing over 1,000,000 documents.9

In the aftermath of this experience, the Committee recommended a more formalized procedure for handling multiple actions involving similar issues.10 Following this recommendation, the U.S. Congress amended the Judicial Code in 1968 and enacted the statutory provision which gave rise to MDL: 28 U.S.C. § 1407. The process was designed to involve the transfer of actions which were pending in different districts and which involved "one or more common questions of fact" to any district for "coordinated or consolidated pretrial proceedings".11 The purposes of these transfers were to provide convenience to parties and witnesses and promote the just and efficient conduct of such actions.12

The authority to order such transfer rests with the Judicial Panel on Multidistrict Litigation (JPML), located in Washington D.C. The Panel consist of seven federal district and circuit court judges appointed by the Chief Justice of the U.S. Supreme Court, each from different circuits.13

The Transfer Process

For a case to be eligible for transfer, it must be pending in federal court and four of the seven members of the JPML must agree with the transfer.14 The Panel can transfer a case to any other district in the country (transferee district), and this must not necessarily be the district in which the claim was initially brought (transferor district).15 The Panel's transfer order will assign a title and number to the MDL and will identify the related actions currently pending in districts outside the selected transferee forum that are being transferred pursuant to 28 U.S.C. § 1407.16 These cases, together with any related actions originally filed in the transferee district and those subsequently filed, constitute the MDL.17

The main criteria provided by U.S.C. § 1407 in determining whether the transfer of a case to MDL is appropriate are: 1) the existence of common questions of fact; 2) the convenience of the parties and witnesses; and 3) the just and efficient conduct of the proceedings. Some commentators have added that the Panel also considers a variety of other factors, including the progress of the action, the size of the litigation, the number of pending actions and the districts in which these actions were originated, the possibility of conflicting rulings, minimizing duplicative discovery, familiarity of a transferee judge with the issues of the action, agreement by all parties that the transfer is appropriate, docket conditions, and the availability of judicial resources.18

Similar to a transfer for case management under Rule 77 of the Ontario Rules of Civil Procedure, the agreement of the parties to the action is neither necessary for a transfer to MDL nor sufficient for a transfer to take place. A transfer may be made by motion of the parties or by the JPML on its own initiative.19 However, transfer by the Panel itself is commonly limited to "tag-along" cases, which share factual questions with a case that has already been transferred to a different district.20

Both individual actions and class actions can be transferred as part of an MDL. Once the cases are consolidated, a transferee court can further decide to certify all or some of the cases as a class action, if the conditions for certification are met.21

A transfer decision by the Panel is only reviewable by extraordinary writ in the court of appeal for the circuit in which the transferee court is located.22 There is no option to appeal a decision denying transfer to MDL.23 The Panel may separate any claim, cross-claim, counterclaim, or third-party claim and remand any of such claims to the originating court before the remainder of the action is remanded; however, this is rather uncommon.24

Selecting a Transferee Court

A judge in charge of an MDL has a great impact on the litigation and the outcome of the case assigned to him or her. In deciding the transferee district, the JPML will normally consider the same factors associated with the decision to transfer the case generally, as well as a few others related to the parties' place of business, the dockets and resources available in the district, and the willingness and experience of a particular judge to handle an MDL.25 This last factor is probably the most significant one.

As discussed by Galligan and Arsenault:

The MDL transferee judge's crucial role in settlement heightens the interest of both sides in his or her selection. In complex litigation, courts are authorized and expected to take an active role in shepherding the case to resolution."26

Judge Heyburn discusses that an ideal candidate to manage MDL litigation is one "with some existing knowledge of one of the cases to be centralized and who may already have some experience with complex cases, if the new docket appears to require it".27

Ultimately, the Panel's goal is to pair an experienced, knowledgeable, motivated, and available judge in a convenient location with a particular group of cases. The Panel therefore attempts to apply those factors in a given docket in the manner that will most benefit the litigants and the judiciary. The Panel's sole purpose is to benefit the system as a whole rather than a particular party or a particular point of view within the litigation.28

Case Management in MDL

As Professor McGovern of Duke University Law School once said:

The most prominent judges in the first half of the twentieth century were the opinion writers; the most recognized judges now are case managers. In the context of mass torts, the role of the judge can be analogized more to a "player."29

The U.S. Manual of Complex Litigation, Fourth, with which all counsel participating in MDLs are expected to be familiar,30 discusses the importance of judicial involvement as part of the general principles of complex litigation. With regard to what effective case management entails, the Manual says the following:

It is active. The judge anticipates problems before they arise rather than waiting passively for counsel to present them. Because the attorneys may become immersed in the details of the case, innovation and creativity in formulating a litigation plan frequently will depend on the judge.

It is substantive. The judge becomes familiar at an early stage with the substantive issues in order to make informed rulings on issue definition and narrowing, and on related matters, such as scheduling, bifurcation and consolidation, and discovery control.

It is timely. The judge decides disputes promptly, particularly those that may substantially affect the course or scope of further proceedings. Delayed rulings may be costly and burdensome for litigants and will often delay other litigation events. The parties may prefer that a ruling be timely rather than perfect.

It is continuing. The judge periodically monitors the progress of the litigation to see that schedules are being followed and to consider necessary modifications of the litigation plan. Interim reports may be ordered between scheduled conferences.

It is firm, but fair. Time limits and other controls and requirements are not imposed arbitrarily or without considering the views of counsel, and they are revised when warranted. Once established, however, schedules are met, and, when necessary, appropriate sanctions are imposed for derelictions and dilatory tactics.

It is careful. An early display of careful preparation sets the proper tone and enhances the court's credibility and effectiveness with counsel.31

The JPML transfers cases to the transferee court for "coordinated or consolidated pretrial proceedings".32 This is indeed a broad power and it necessarily encompasses issuing pretrial orders, resolving pretrial motions (including discovery motions, motions to amend, motions to dismiss, motions for summary judgment, and motions for class certification), attempting to facilitate settlement or establishing parameters for how the trial will be conducted.33

In practice, there is only one true limit on a transferee court's discretion over cases transferred to it by the JPML, namely that a transferee court cannot unilaterally transfer cases to itself for trial. While this issue was not settled for many years, the U.S. Supreme Court defined this limitation in Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach,34 noting that the MDL statute not only authorizes the JPML to transfer for coordinated or consolidated pretrial proceedings, but obliges the Panel to remand any pending case to its originating court, if not resolved.35 The exception to this, as will be discussed later, is the ability of MDL judges to try a selection of test or "bellwether" cases, as part of the pretrial process of the larger action.36

At the conclusion of pretrial proceedings, cases that have not been terminated in the transferee court as a result of summary judgment, judgment of dismissal, or judgment upon stipulation, must be remanded by the Panel to the transferor courts for trial.37 The transferee court prepares a pretrial order that chronicles the proceedings, summarizes the rulings that will affect further proceedings, outlines the issues remaining for discovery and trial, and indicates the nature and expected duration of further pretrial proceedings.38 The complete pretrial record is also sent to the transferor court.39

The Steering Committees

A particularly interesting aspect of MDL is the appointment of steering committees for the parties and the selection of counsel who will be involved in these committees. Upon transfer, one of the first orders of business is the appointment of lead and liaison counsel, followed by the configuration of a Plaintiffs' Steering Committee (PSC), and in cases involving multiple defendants, a Defense Steering Committee (DSC).

A PSC will typically include some combination of lead counsel and/or executive committee and liaison counsel.40 A DSC will commonly consist of representatives of the defendants with the most serious exposure to liability, or in the case of different categories of defendants, one or more representatives from each group.41 If there are conflictive interests amongst the different defendants, the court may appoint more than one DSC.42

As expected, becoming a member of a steering committee is a competitive endeavour, since it will provide counsel with substantial say over the direction in which the action will develop, and a substantial stake in the financial outcome. As discussed by Galligan and Arsenault:

Many courts note that the main criteria for an appointment are (1) the willingness and ability to commit to a time-consuming process; (2) the ability to work cooperatively with others; (3) professional experience in this type of litigation; and (4) access to sufficient resources to advance the litigation in a timely manner.43

Since their first pretrial orders, transferee judges in an MDL provide guidance with regards to the appointment of counsel for steering committees,44 making this process one in which there is significant judicial involvement, with rather effective results. The speed with which these appointments take place, for example, is noteworthy. In the Vioxx MDL, plaintiffs' liaison counsel was appointed only 12 days (February 28, 2005) after the transfer order was issued (February 16, 2005). Defendant liaison counsel was appointed 20 days (March 8, 2005) after the transfer order was granted. Both the plaintiffs' and defendants' steering committee were appointed 51 days after the transfer order (April 8, 2005). In Medtronic, the appointment of lead counsel for both the plaintiffs and defendants and the appointment of the PSC came 48 days (January 24, 2006) after the transfer order was issued (December 7, 2005). In contrast, the appointment of counsel to lead the Vioxx class litigation in Canada involved a carriage battle that lasted over two years, and over one year in both Guidant and Medtronic. The delay in appointment of plaintiff class counsel delayed certification and the forward progress of the action, and posed problems to potential class members in choosing which counsel to join.

The efficiency of the system does come at a price for counsel. Not only is there less deference accorded to counsel and the parties themselves in their decision-making during the pretrial phase, but the level of commitment demanded of members of the steering committee is staggering. Nicholas Drakulich, an experienced U.S. plaintiff attorney in MDL, who was involved in the PSCs of both Guidant and Medtronic, relates that once you become part of the steering committee "it becomes your life".45 In addition, "[f]or the lawyer accustomed to the one-on-one mode of litigation and being directly and solely responsible for representing his or her client, the role of a committee member may be a difficult adjustment".46 Being a committee member also imposes a great burden of communication and responsibility, not merely to a lawyer's clients, but also to other lawyers and their clients.47 Committee members are forced to work with other people as a result of judicial appointment, rather than by their individual choice, and this requires certain skills.

There are significant advantages to be gained from all this interaction, however, as discussed by counsel who have participated in MDLs. There tends to be a division of labour amongst lawyers and law firms based on what they do best. Some firms are better at research and brief writing, others at discovery or e-discovery, some have particular experience with trial preparation and conduct, and others may have better experience working with expert witnesses.48

To read this article in full together with its footnotes please click here.

http://lernersclassactiondefence.ca/

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Andrew Carvajal
 
In association with
Related Video
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert
Email Address
Company Name
Password
Confirm Password
Mondaq Topics -- Select your Interests
Accounting and Audit
Anti-trust/Competition Law
Consumer Protection
Corporate/Commercial Law
Criminal Law
Employment and HR
Energy and Natural Resources
Environment
Family and Matrimonial
Finance and Banking
Food, Drugs, Healthcare, Life Sciences
Government, Public Sector
Immigration
Insolvency/Bankruptcy, Re-structuring
Insurance
Intellectual Property
International Law
Litigation, Mediation & Arbitration
Media, Telecoms, IT, Entertainment
Privacy
Real Estate and Construction
Strategy
Tax
Transport
Wealth Management
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.