October 4, 2018 / 6:29 PM / 2 months ago

Defense group argues new MDL stats prove need to change rules for mass torts

(Reuters) - The defense group Lawyers for Civil Justice has just released new statistics about the concentration of products liability cases in multidistrict litigation. According to the study, which is based on 2017 data from the U.S. Courts and the Judicial Panel on Multidistrict Litigation, cases consolidated in MDLs comprised 46.7 percent of the civil docket before U.S. district judges in 2017 – 124,202 cases in 256 MDLs.

About 90 percent of those cases involve product liability claims, which means, according to the study, that consolidated product liability cases – such as those alleging defects in drugs or medical devices – account for about 42 percent of the civil caseload before federal district judges.

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The 18 largest MDLs contain about 107,000 individual cases, or, according to the defense analysis. Yet these vast numbers of cases are in the control of just a handful of judges: 15 judges, the study contends, are in charge of more than 40 percent of the entire civil docket before U.S. district judges.

I’m going to point out some caveats about the numbers, but first I want to give you the context for the defense study. Last November, after calls from Lawyers for Civil Justice, among others, the court system’s Advisory Committee on Civil Rules established a subcommittee to evaluate whether to entertain proposals to change the rules for multidistrict litigation. The subcommittee still hasn’t made that initial determination and, according to LCJ general counsel Alex Dahl, probably won’t even decide whether to begin to revise the rules before the end of the year.

The defense group is continuing to press its case for reform. In a Sept. 14 meeting with the MDL subcommittee, Lawyers for Civil Justice argued that the flood of cases in big MDLs has effectively swamped the basic rules of civil procedure. “Defendants often cannot exercise their discovery rights until the litigation is well underway, at which point defendants (and courts) must expend significant resources to identify and combat these claims,” LCJ said in a letter presented at the meeting.

The defense group is pushing, in the long run, for six reforms. Boiled down, they include a rule change to require MDL plaintiffs to disclose evidence of their injury and its cause at an early stage of the litigation; a rule allowing defendants mid-case appellate review of trial court rulings that cut across the litigation, like preemption and the validity of scientific evidence; a new provision that would bar judges from ordering bellwether trials without defendants’ consent; a new rule requiring disclosure of plaintiffs’ outside sources of funding; an amendment to close a loophole in joinder rules and an amendment to tighten pleading standards to ward off meritless claims and permit defendants to move to dismiss consolidated master complaints.

So, to bring the Lawyers for Civil Justice arguments back to the newly released study, the group contends the new statistics support its arguments that sheer volume has a disproportionate impact on the resolution of MDL cases. When judges have to devise their own means to corral litigation, the LCJ argues, both defendants and legitimate plaintiffs are hurt by the uncertainty.

In individual product liability cases, for instance, defendants can contest a plaintiff’s evidence of injury and causation at an early stage. But in many product liability MDLs, said LCJ general counsel Dahl, judges set case management rules that preclude that early screening. The consequence, according to the group, becomes clear from a statistic that defense lawyers harvested from the Vioxx product liability litigation and have included in the new study: 31.6 percent of the plaintiffs who filed lawsuits in the Vioxx MDL never followed up with claims when Merck reached a global settlement. Dahl and John Beisner of Skadden Arps Slate Meagher & Flom, who also spoke to me about the new study, said the Vioxx claims statistic shows that MDLs are brimming with meritless suits and that the ad hoc MDL process encourages quantity, not quality.

“The absence of rules makes the proceedings unpredictable, which is a problem for both sides,” Beisner said.

“If everyone understands there are rules,” Dahl added, “then meritless claims don’t get filed.”

I asked Dahl and Beisner whether academics and plaintiffs’ lawyers agreed with their proposed rule changes, or even with their threshold argument that MDL rules need reform. They cited John Rabiej of the Bolch Judicial Institute at Duke Law School, who has hosted conferences on changing MDL rules and devised the methodology for assessing the MDL caseload as a percentage of the federal civil docket. As for plaintiffs’ lawyers, Beisner said, “What I’m hearing at conferences is a fair amount of agreement from plaintiffs’ lawyers … Their frustration is that many of them are scrupulous about screening but they face delays because of suspect claims. But they are hesitant to say, ‘We join you.’”

For a reality check on the LCJ statistics and arguments, I reached out to two law professors, mass torts expert Elizabeth Burch of the University of Georgia and Alexandra Lahav, a specialist in civil procedures and complex litigation from the University of Connecticut.

Both took issue with the LCJ’s calculation of MDL cases as a percentage of the federal civil docket. The defense group excluded Social Security cases and lawsuits by federal inmates from its calculation, reasoning that those cases are not typically overseen by U.S. district judges. Burch said in an email that the exclusion distorts the numbers. Her calculation – and she’s got an book on MDLs, “Mass Tort Deals: Backroom Bargaining in Multidistrict Litigation” coming out in 2019 – is that MDLs comprised 16 percent of the pending federal civil docket in 2002 and 37 percent in 2017. That’s still a big chunk of cases, but not quite the bombshell 47 percent the LCJ posited.

Burch also said the group’s Vioxx statistic is “particularly misleading.” The Vioxx settlement required plaintiffs’ lawyers to agree to settle their entire dockets if any clients wanted to make a claim. It stands to reason, she said, that some clients would “fall outside of the evidentiary standards that Merck and lead plaintiffs’ counsel jointly agreed to.”

Lahav told me she disagrees with the basic LCJ premise that the existing Federal Rules of Civil Procedure need to be changed to reflect the expansion of MDLs. “I’m not certain there really is a rules problem,” she said. “There’s a social problem. There are products out there that may injure people, the cost of bringing a suit is high, there needs to be a way to aggregate suits and this is how we’re doing it.” Defendants might prefer not to be sued at all, Lahav said, but “everything they’re asking for is already in the rules.”

There’s still a very, very long way to go before the Advisory Committee proposes any rule changes. We don’t even know, as I mentioned above, whether the MDL subcommittee will decide the rules need changing at all. But defendants are already making their case. If you’re on the other side, you’d better start preparing counterarguments.

The views expressed in this article are not those of Reuters News.

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