Class actions are not the only form of aggregate litigation. Multi-district litigation (“MDL”), the process by which large numbers of smaller lawsuits are consolidated before a single judge for pretrial purposes, without requiring any kind of certification process, has been around since 1968. And, as courts have demanded more rigor for Rule 23 certification, MDLs have become more popular, particularly for mass torts.
With that increasing popularity comes increasing scrutiny. To take just one example, a new paper on the proper role of the judge in MDL cases by professors Andrew Bradt and D. Theodore Rave has received press coverage only days after its posting on SSRN.
The paper deserves the recognition. It’s a good summary of the problems with MDLs, and contains an interesting solution to at least one of the issues scholars and lawyers have confronted.
As the authors write:
Despite its transfer-and-remand structure, judges, lawyers, and scholars all recognize that the goal of MDL is not merely centralized discovery followed by thousands of trials scattered around the country. The goal is mass settlement. By centralizing nationwide proceedings in mass tort cases—essentially gathering all of the relevant players into same forum before the same judge—MDL creates a perfect environment for the parties to negotiate a global resolution of the defendant’s liability to potentially thousands of claimants in one fell swoop.6 And, as MDL has begun to take center stage in both the federal courts and procedure scholarship,7 perhaps the most controversial issue is clarifying the proper role of the judge in achieving these mass settlements—in particular whether the MDL judge should review settlements, and reject them if they are unfair, as a judge in a class action would be obliged to do under Federal Rule of Civil Procedure 23(e).
MDLs, of course, are not class actions. There are no absentee members, and consolidation is supposed to only be for pretrial proceedings. (In reality, there are often just a few “bellwether” trials held in front of the MDL court.)
Faced with the question of how to keep aggregate settlements fair without the protections of Rule 23(e), Professors Bradt & Rave suggest a novel solution:
the judge in an MDL ought to conceive of her role as acting in an “information forcing” capacity; that is, the judge should use the MDL process to force the disclosure of information to allows the parties in MDL cases to make informed decision about whether to accept proposed settlements. And often, the single most useful piece of information that the MDL judge can communicate to claimants will be a simple and frank assessment of the fairness of deal, even if that assessment will have no binding force.
Their argument is straightforward. Aggregate litigation of any type faces a governance problem, because there are always a large number of claimants represented by a small number of lawyers. As a result, no individual claimant will exert much control over the litigation. Moreover, the lawyers will be tempted to cut corners, and may not reconcile the conflicts between their interests and their clients’.
Class actions resolve this dilemma through certification under Rule 23. But MDL cases don’t have that kind of structural protection. Instead, litigants remain dependent on their lawyers and the steering committee to watch out for their interest.
Some judges have addressed this concern by appointing themselves fiduciaries of the small claimants, and treating the MDL as a “quasi-class action.” This role is controversial, and possibly in violation of the Rules Enabling Act.
But, the authors note, judges don’t need formal authority to register their opinion of MDL settlements. And, based on the reactions of one set of litigants to a judge’s declaration that a settlement was “unfair” (instead of seeking mandamus, they re-negotiated to address the judge’s concerns), they believe MDL judges may simply need to be more aggressive in sharing their thoughts about the progress of the litigation.
It’s an intriguing idea, though not without its flaws. As Bradt & Rave note, some judges may not have the bandwidth to monitor the MDLs in front of them this closely; and some may be biased toward any settlement so long as it clears their docket or provides some relief to many claimants.
The fact is, however, that aggregation by MDL is not going away. And lawyers concerned with mass torts will be grappling with these issues for some time to come. Professors Bradt & Rave have provided a concise, thought-provoking summary that is sure to have influence in this area.