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Class Action Cases and Multidistrict Litigation (MDL)

Multidistrict litigation (MDL) arises when multiple actions, class action or otherwise, involving the same facts are pending in different federal district courts. Under such circumstances, 28 U.S.C. § 1407 sets forth the procedure for the transfer of the actions to a single federal court for coordination or consolidation. This is known as “multi-district litigation” (MDL). The Judicial Panel on Multidistrict Litigation affects the transfer of cases under Section 1407(a).

A request to coordinate or consolidate is made by motion by any party in any of the various federal court actions. “A copy of such motion shall be filed in the district court in which the moving party’s action is pending. The panel shall give notice to the parties in all actions in which transfers for coordinated or consolidated pretrial proceedings are contemplated, and such notice shall specify the time and place of any hearing to determine whether such transfer shall be made.” 28 U.S.C. § 1407(c)(ii). The Judicial Panel may also initiate the transfer of the cases on its own motion. 28 U.S.C. §1407(c)(i).

The Judicial Panel on Multidistrict Litigation reviews the request under the guidelines of Section 1407 to determine whether the cases are appropriately coordinated or consolidated for pretrial purposes. See e.g., In re Agent Orange Product Liability Litigation, 818 F.2d 216 (2d Cir. 1987) (use of MDL procedure in connection with Agent Orange class action cases). The Judicial Panel may consider any evidence introduced by any party to any of the various federal court actions in determining whether to coordinate or consolidate the cases. 28 U.S.C. § 1407(c)(ii).

Class actions may be consolidated under the MDL procedure. The Judicial Panel applies the same guidelines in class action cases as in requests made in single plaintiff cases. MDL treatment does not alter the applicability of Rule 23 to class actions, and class certification may follow consolidation under MDL. See e.g., Hilao v. Estate of Marcos, 393 F.3d 987 (9th Cir. 2004).

Section 1407(a) provides in part:

When civil actions involving one or more common questions of fact are pending in different districts, such actions may be transferred to any district for coordinated or consolidated pretrial proceedings. Such transfers shall be made by the judicial panel on multidistrict litigation authorized by this section upon its determination that transfers for such proceedings will be for the convenience of parties and witnesses and will promote the just and efficient conduct of such actions. Each action so transferred shall be remanded by the panel at or before the conclusion of such pretrial proceedings to the district from which it was transferred unless it shall have been previously terminated: Provided, however, That the panel may separate any claim, cross-claim, counter-claim, or third-party claim and remand any of such claims before the remainder of the action is remanded.

The district court judge to whom the federal cases are assigned is known as the “transferee judge” or the “transferee court.” The federal courts from which the cases are transferred are known as the “transferor judges” or the “transferor courts.” The specifics fall within Section 1407(b), which provides in part:

Such coordinated or consolidated pretrial proceedings shall be conducted by a judge or judges to whom such actions are assigned by the judicial panel on multidistrict litigation. … With the consent of the transferee district court, such actions may be assigned by the panel to a judge or judges of such district. The judge or judges to whom such actions are assigned, the members of the judicial panel on multidistrict litigation, and other circuit and district judges designated when needed by the panel may exercise the powers of a district judge in any district for the purpose of conducting pretrial depositions in such coordinated or consolidated pretrial proceedings.

The decision of the Judicial Panel granting the motion is reviewable only by petition for extraordinary writ under 28 U.S.C. § 1651, filed in the Circuit Court with jurisdiction over the district court in which the hearing is being, or has been, held. 28 U.S.C. § 1407(e). However, “[n]o appeal or review of an order of the panel denying a motion to transfer for consolidated or coordinated proceedings.” Id. (italics added).

Once the various actions are consolidated, any subsequently filed case of the same nature is sent to the transferee judge as well. It is not uncommon, then, for an action to be filed in state court, removed to federal court, and then transferred to the transferee court. This requires, of course, that the new-filed actions be removable to federal court.

Also, once the cases are coordinated or consolidated, the transferee court generally supervises all pretrial proceedings, including discovery and dispositive motions such as motions to dismiss or for summary judgment. The court may use steering committees to assist in the management of the litigation. And while the transferee court may also oversee settlement of the actions, the cases must be remanded back to the respective transferor courts for trial. See Lexecon, Inc. v. Milberg, Weiss, Bershad, Hynes & Lerach, 523 U.S. 26, 118 S.Ct. 956 (1998) (holding that “a district court conducting such ‘pretrial proceedings’ [under MDL] may [not] invoke § 1404(a) to assign a transferred case to itself for trial”).