ABA Section of Business Law

Business Law Today
September/October 2001 (Volume 11, Number 1)

Getting it together
A guide to understanding mass tort litigation

By Lloyd E. Williams Jr. and Bradley C. Nahrstadt

When life is complex, litigation can follow suit.
The world we live in is not as simple as it once was. Satellites, computers, cell phones and other modern devices have added to the layers of the life we lead at the beginning of the 21st century.

It should come as no surprise that as our society has grown more complicated, the lawsuits that are filed to address alleged wrongs in that society have also become more complicated. Class actions and multi-district litigation are no longer isolated, legal novelties. Both have made a permanent mark on the legal landscape, and, in all likelihood, it will be the rare lawyer who does not, at some point in his or her career, have some connection with mass tort litigation.

The purpose of this article is to discuss the variations among state and federal jurisdictions for the handling of mass tort litigation, to touch on the requirements of Federal Rule of Civil Procedure 23 and similar state rules dealing with class-action litigation, to discuss the functions and procedures of the Multi-District Litigation Panel, and to explain the role that various lawyers may play in connection with mass tort litigation.

When lawyers and judges use the phrase "mass tort litigation," they are usually referring to instances where a product causes injury to a large number of people resulting in lawsuits in state and federal courts nationwide. Mass tort litigation often involves multiple products and a variety of injuries, such as the litigation regarding the diet drug combination known as Fen-phen. Most often, mass tort litigation involves multiple class actions in state and federal courts.
If the litigation is pending in the federal courts, the use of multi-district litigation management techniques are usually invoked. For state court cases, each state uses its own management techniques, which are often patterned after multi-district litigation management techniques. Regardless of whether the cases are pending in state or federal court, the purpose of the litigation management techniques used by the courts is to increase efficiency, streamline discovery, facilitate prompt resolution of the disputes, and, hopefully, reduce the costs associated with the litigation.

Even a cursory review of the products that have been involved in mass tort litigation in recent years indicates just how widespread this litigation has become. A sampling: Bendectin, Agent Orange, asbestos, gypsum, breast implants, Dalkon Shield contraceptives, DES, tainted blood products, cigarettes, penile implants and pacemakers. Some of the mass tort litigation, including the litigation regarding Dalkon Shield contraceptives, was quite successful, from the point of view of efficiency and money; others, such as the litigation involving silicone breast implants, were not so successful.

Essentially, class actions are cases brought by representatives of individual plaintiffs on behalf of themselves and others who are similarly situated but too numerous to name and bring a cause of action in their own right.
Under the federal (and most state) rules, plaintiffs who wish to maintain a class action must convince the court that they meet four different criteria: numerosity, commonality, typicality and adequacy of representation. The purpose of these factors is to assure both that class action treatment is necessary and efficient and that it is fair to the absentee members of the class. All four conditions must be met in order to have a class certified.

In order to satisfy the numerosity requirement, plaintiffs must persuade the court that the joinder of all potential claimants would be impractical. In addition to describing the number of members in the potential class, plaintiffs must also define the class with enough specificity that the certifying court can determine whether a particular individual would be a member of that class. If there are subclasses within the description of the class, each subclass must also meet the numerosity requirement.

In the pacemaker litigation, the Ohio district court certified several subclasses of individuals who had received "J" Lead pacemakers when it determined, in part, that the classes would include more than 25,000 members. In fact, the court recognized that when a class size reaches "substantial proportions," the impracticability requirement is usually satisfied by numbers alone.

In order to satisfy the requirements of commonality, plaintiffs need to prove that there is a common nucleus of operative facts and legal issues. All that is really required is that the resolution of common questions affects all or most of the members of the class. In the Bendectin litigation, the Ohio district court certified a class action when it determined that the alleged injuries and questions of law as to liability would be common to all members of the class.

Typicality is determined through an inquiry into the characteristics of the proposed class representatives. In order to establish typicality, plaintiffs must demonstrate both that each class member's claim arises from the same course of events and that each class member will make similar legal arguments to prove the defendant's liability. The purpose of this requirement is to preclude certification of those cases where the legal theories of the named plaintiffs potentially conflict with those of the absentee class members.

In the penile-implant litigation, the 6th Circuit Court of Appeals decertified a class of penile-implant recipients because it found, in part, that the fact that the representative plaintiffs each used a different model and each suffered different, distinct problems failed to establish a claim typical to each representative plaintiff, let alone a class of users.

The fourth prerequisite to class certification is that the representative parties will fairly and adequately protect the interests of the class. In making a determination regarding the adequacy of representation, courts typically examine four factors:

• whether the interests of the named party are co-extensive with the interests of the other members of the class;
  
• whether his or her interests are antagonistic in any way to the interests of those represented;
  
• the proportion of those named parties as compared with the total membership of the class and,
  
• any other facts bearing on the ability of the named party to speak for the rest of the class.

Because absent class members will be bound by all class decrees, basic notions of fairness and justice require that such members receive adequate representation. In the Agent Orange litigation, in order to meet the fourth requirement for certification, the court selected from among the hundreds of plaintiffs representative persons who had a substantial stake in the litigation, who lacked conflicts or reasons to be motivated by factors inconsistent with the motives of the absentee class members and who would fairly and adequately protect the interests of the class.

Even if the plaintiff is successful in meeting the four requirements outlined above, before the court will certify a class, the plaintiff must usually also show that one of the three following conditions can be met:
o the prosecution of separate actions will either risk inconsistent judgments establishing incompatible standards of conduct, or, as a practical matter, would dispose of the interests of all nonparties;

• final injunctive or declaratory relief against the defendant is warranted; or
• that common questions of law or fact predominate over questions affecting only individuals, and a class action is superior to all other methods of adjudication.
  For example, the district court in New York certified a class of all veterans who were injured by exposure to Agent Orange only after determining that the affirmative defenses and questions of causation were common to the class, that they predominated over any questions affecting individual members and that, given the enormity of the class and the judicial economies that would result from a class trial, a class action would be far superior to all other methods for a fair and efficient adjudication of the controversy.

In the late 1960s, Congress recognized that mass tort litigation was on the rise. In an effort to impose some order on the resulting chaos, Congress created the Judicial Panel on Multi-District Litigation, known as the MDL Panel, through the enactment of 28 U.S.C. Section 1407. Section 1407(a) permits the temporary transfer of civil actions that are pending in different federal districts and involve one or more common questions of fact to a single district court for coordinated or consolidated pre-trial proceedings to promote the just and efficient conduct of such litigation.

The value of Section 1407 is that it brings before a civil judge all of the cases, parties and counsel involved in the litigation. This affords a unique opportunity for negotiating a global settlement or for expediting oftentimes lengthy discovery.
Congress originally designed Section 1407 predominantly for use in the litigation of mass torts, such as aircraft disasters, anti-trust violations, securities laws violations and product liability actions, as well as patent, trademark and copyright litigation. However, in recent years, the MDL Panel also has consolidated cases involving employment practices, contracts and other types of litigation.
In fact, 28 U.S.C. Section 1407(a) sets forth three prerequisites to transfer pending civil actions for pre-trial consolidation:

• the civil actions must involve "common questions of fact";
  
• the transfer must be "for the convenience of the parties and witnesses"; and
  
• the transfer must "promote the just and efficient conduct of such actions." In determining whether the transfer will promote the just and efficient conduct of the actions, the MDL Panel considers a variety of factors, including the elimination of duplicative discovery, the prevention of inconsistent pre-trial rulings, and the conservation of the party's resources.

Proceedings for transfer of actions by the MDL Panel (which is composed of seven federal circuit and district court judges) may be instituted by a party to any action in which transfer may be appropriate or by the panel itself on its own initiative. The panel evaluates each group of cases proposed for multi-district litigation on its own facts in light of statutory criteria, mindful that the object of transfer is to eliminate duplication and discovery, avoid conflicting rulings and schedules, reduce litigation costs, and save time and effort on the part of the parties, the lawyers, the witnesses and the courts.

No single factor is used by the MDL Panel to determine which district is selected as the one where actions shall be transferred. The factors the MDL Panel may consider include: where the largest number of cases are pending; where discovery has occurred; the sight of the occurrence; the district in which costs and inconvenience will be minimized; the relative conditions of the potential transferee courts' dockets; the location of relevant documents; the residences of the witnesses; and the experience and skill of available judges.

Once the panel makes a determination regarding which district should receive the transferred actions, the panel will assign the consolidated actions to a transferee judge. Often the panel will choose a judge who is already familiar with one or more of the actions. Occasionally, it will assign the action to a member of the panel, to a judge who has previous experience managing consolidated cases, or to a judge designated to sit specifically in the transferring district on intracircuit or intercircuit assignment.

The authors were recently involved as counsel for a milling company in multiple class and individual actions involving the alleged improper sale and distribution of genetically engineered corn. Many of the cases were pending in the U.S. District Court for the Northern District of Illinois and in the federal courts in Texas. The MDL Panel assigned all of the federal cases to Judge James Moran in the Northern District of Illinois based in large part on his previous experience with mass tort litigation and the fact that one of the first filed class actions was already pending in front of him.

After the transfer, the transferee judge exercises not only the judicial powers of the transferee district, but also, under 28 U.S.C. Section 1407 (b), "the powers of a district judge in any district for the purpose of conducting pre-trial depositions in such coordinated or consolidated proceedings." This supervisory power over depositions in other districts may be exercised in person or by telephone. The transferee judge may vacate or modify any order of a transferor court, including protective orders. Until altered, however, orders of a transferor court remain in effect.

When the transferee court is ready to proceed, it will generally issue a scheduling order that will regulate subsequent proceedings. There is no established format for this scheduling order, but it usually contains procedures for the conduct of the litigation that are calculated to eliminate uncertainty, streamline the resolution of disputes, and promote a prompt, fair and efficient conclusion to the litigation.
Most courts include the following items in the initial scheduling order:

• the selection of a plaintiffs' committee to represent all plaintiffs on liability issues, together with an explanation of their duties and the basis for their compensation,
• a schedule for the completion of all pre-trial discovery and pre-trial motions
  
• a schedule for regular status conferences and for the filings of motions with respect to preliminary issues, such as jurisdiction and choice of law, and,
• the creation of a mechanism for dealing promptly and efficiently with pre-trial discovery disputes.

The designation of lawyers to act as designated counsel in an MDL case is one of the major tasks of the transferee court. Lawyers designated by the court to act in the litigation on behalf of other counsel and parties, in addition to their own clients, generally fall into one of the following categories:

Liaison counsel is charged with essentially administrative matters, such as communications between the court and other counsel (including receiving and distributing notices, orders, motions and briefs on behalf of the group), convening meetings of counsel, advising parties on developments in the case, and otherwise assisting in the coordination of activities and positions

. Such counsel may act for the group in managing document depositories and in resolving scheduling conflicts. Liaison counsel will usually have offices in the same locality as the court.
The lead counsel is charged with major responsibility for formulating (after consultation with other counsel) and presenting positions on substantive and procedural issues during the litigation.

Typically they act for the group - either personally or by coordinating the efforts of others - in presenting written and oral arguments and suggestions to the court, working with opposing counsel in developing and implementing a litigation plan, initiating and organizing discovery requests and responses, conducting the principal examination of deponents, employing experts, arranging for support services, and seeing that schedules are met.

Trial counsel serves as the principal lawyer for the group at trial in presenting arguments, making objections, conducting examination of witnesses, and generally organizing and coordinating the work of the other lawyers on the trial team.
Committees of counsel, often called steering committees, coordinating committees, management committees, executive committees, discovery committees or trial teams, may be formed to serve a wide range of functions. Committees may be assigned tasks by the court or lead counsel, such as preparing briefs or conducting portions of a discovery program. The plaintiffs' steering committee is usually composed of three or four lawyers who have experience with complex and multi-district litigation. The transferee court usually selects experienced and able counsel for the plaintiffs' committee in order to ensure quality representation of the plaintiffs, as well as support for the other plaintiffs' lawyers who are not selected as members of the committee.
If there are class actions involved as part of the MDL litigation, the transferee court will follow the procedures outlined above to determine whether or not the class should be certified. For example, hundreds of Bendectin cases were transferred to the U. S. District Court for the Southern District of Ohio and more than 600 Agent Orange cases were transferred to the U.S. District Court for the Eastern District of New York prior to a determination to certify a class of plaintiffs.

In addition, the transferee court may create subclasses of plaintiffs if conflicts arise between plaintiffs belonging to one large class. In the case of the Bendectin litigation, the judge created two subclasses of plaintiffs in order to prevent a possible conflict of interest - those who had already filed suit and those who had yet to do so. Where necessary, the transferee court can appoint lawyers to represent the various subclasses that have been created by the court.

Since transfer following 28 U.S.C. Section 1407 extends only to transfers for pre-trial purposes, it stands to reason that the transferee court is heavily involved in supervising discovery, ruling on procedural and substantive motions and ruling on universal evidentiary issues. In addition to supervising the completion of pre-trial discovery, the transferee court is also responsible for approving or rejecting global settlements and supervising the administration of those settlements. Any cases that cannot be settled must be returned to the transferor court for trial.

Mass tort litigation, particularly when class actions are involved, can be very lucrative for the lawyers involved. Oftentimes, hundreds of millions or even billions of dollars are at stake in mass tort litigation. As long as that type of financial incentive exists, such litigation will continue to thrive. Counsel for plaintiffs and defendants would do well to acquaint themselves with the guidelines for mass tort litigation.

Then, when the cases present themselves, counsel will be ready to litigate.

Williams and Nahrstadt are partners at Williams Montgomery & John Ltd., in Chicago. Williams' e-mail is lew@willmont.com. Nahrstadt's is bcn@willmont.com.