United States: And Now A Word From The Panel: MDLs And The High Court

Law360, New York (March 28, 2017, 4:28 PM EDT) -- Welcome to the latest installment of "And Now a Word from the Panel," a bimonthly 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.

On the heels of last week's confirmation hearings for U.S. Supreme Court nominee Judge Neil Gorsuch, this month's column explores the intersection between the Supreme Court and MDLs — specifically, the impact that various high court decisions have had on multidistrict litigation practice, and the statutory role that the Supreme Court plays with respect to the panel and MDLs.

But before exploring this timely topic, and as we look forward to another baseball season as well as the "Final Four," the panel heads to "Cactus League" territory and host city for this weekend's "Final Four" — Phoenix, Arizona — for its March 30 hearing session, a departure from its usual early spring destination of California.

At its January hearing session in "Grapefruit League" territory (Miami), the panel created only one new MDL proceeding and denied four MDL petitions — batting a mere .200 for its winter session. In addition, the overall number of pending MDL proceedings has dwindled down to 233, with the panel continuing to clear out MDL dockets, terminating a total of 12 existing MDLs this year through mid-March.1

When SCOTUS Meets MDL

Although unlikely discernable from Judge Gorsuch's confirmation hearings, SCOTUS has a significant role in the MDL world. This ranges from (1) SCOTUS decisions impacting on trial and appeals in MDL proceedings; (2) the appointment of panel members; and (3) the selection of an MDL judge.

In addition, although Judge Gorsuch has never presided over an MDL proceeding nor served as a panel member, he has considered an appeal from an MDL judge's decision which wound its way to Gorsuch in the Tenth Circuit via an intriguing procedural detour.

SCOTUS MDL Decisions

Although hardly the type of SCOTUS decisions which capture the attention of general media headlines or even confirmation hearings, the Supreme Court has issued a number of decisions of critical import for MDL practitioners. In particular, this column highlights two unanimous SCOTUS decisions (as to the results) which impact on trials and appeals in MDL proceedings.

In Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach2, a unanimous SCOTUS held that the MDL statute expressly mandates that an MDL judge "shall be remanded by the panel at or after the conclusion of such pretrial proceedings to the district from which it was transferred."3

Thus, an MDL court may not transfer to itself for trial a case previously transferred to the MDL proceeding from another federal district court. Rather, a case transferred to an MDL proceeding must generally be transferred back for trial to the district from which it originated.

In Gelboim v. Bank of America Corp.4, a unanimous SCOTUS held that a final judgment entered in a particular case within an MDL proceeding, dismissing fewer than all cases within the MDL, is appealable as of right. Parties need not wait for dismissal, or a final judgment, as to all cases within the MDL proceeding before seeking an appeal as of right, as to an individual case within the MDL.

The MDL statute (28 U.S.C. § 1407) vests the Chief Justice of the Supreme Court with the sole authority to appoint panel members. Under the statute, the only restriction placed upon the Chief Justice in selecting the seven panel members from among district and circuit court judges is that no two panel members may "be from the same circuit."5

The last appointment made by Chief Justice Roberts was back in October of 2014.

Selecting an MDL Transferee Judge

As readers of this column are aware, one of the most interesting and unpredictable facets of panel practice is the selection of MDL venue and the MDL judge. This is an integral part of the panel's role and a critical aspect of any decision establishing a new MDL proceeding. Ordinarily, the panel must select a federal district court judge in the desired venue.

But the panel has another option. If the panel prefers to select a district court judge or even a circuit court judge who does not sit in the selected district, the panel can request that the Chief Justice of the United States (or the chief judge of the Circuit) temporarily assign that district court judge or circuit court judge to serve in the panel's preferred judicial district.6

The Nominee Meets an MDL Proceeding

Although it would have made for a much more interesting "Word from the Panel" had Judge Gorsuch previously served as a panel member or as an MDL transferee judge, we will have to settle for a decision penned by the nominee in a Tenth Circuit appeal arising from an MDL proceeding. Novell Inc. v. Microsoft Corp.7

The most fascinating nugget from that decision, affirming the grant of a judgment as a matter of law under Fed.R.Civ.P. 50, is that the MDL proceeding at issue was venued on the East Coast (in Maryland), far away from the Tenth Circuit.

How did the appeal make its way to Judge Gorsuch? No, he was not sitting by designation on the Fourth Circuit. Rather, applying the Lexecon precedent discussed above, the MDL judge in Maryland (and a former panel member) remanded the case back to the District of Utah, the district in which the action was initially filed. In an interesting twist, not only did the case return to Utah, but it came "along with Maryland District [MDL] Judge ... on an intercircuit assignment," pursuant to 28 U.S.C. § 292.8

Thus, even if an MDL judge cannot generally try a case under Lexecon while wearing the hat of an"MDL judge," sitting by assignment and wearing the hat of an "original transferor court judge" is a different matter.

Will the panel improve its "batting average" in Phoenix? What issues will the panel consider at its next hearing session? Will SCOTUS grant certiorari in any cases involving MDL proceedings? Stay tuned for our next edition of "And Now a Word from the Panel" as the panel leaves this year's "Final Four" host city and makes a rare trip to San Antonio, Texas — coincidentally, the 2018 "Final Four" host city and home of the (Southwest) division-leading San Antonio Spurs — for its May 25 hearing session.

Footnotes

1 http://www.jpml.uscourts.gov/sites/jpml/files/Recently_Terminated%20MDLs-1-1-2017_to_3-15-2017.pdf

2 523 U.S. 26 (1998); Justice Scalia joined in the result, but did not join one section of the opinion.

3 2 8 U.S.C. § 1407(a).

4 135 S.Ct. 897 (2015).

5 28 U.S.C. § 1407(d).

6 28 U.S.C. § 1407(b); "And Now a Word from the Panel: ABCs of JPML Practice," Law360 (Sept. 30, 2014).

7 731 F.3d 1064 (10th Cir. 2013).

8 Id. at 1069.

Originally published in Law360

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