Adapting the Class-Action Rigorous-Analysis Certification Model to JPML Centralization Decisions

Under 28 U.S.C. § 1407, actions can be centralized into an MDL if it “promotes the just and efficient conduct of such actions.” But the expected efficiencies of mass-tort MDLs do not always materialize and should not unquestionably be presumed. Some mass-tort MDLs have taken ten or more years to resolve, discovery costs in others have exceeded $100 million per side, and the number of added claims that are seriously questioned in still other mass-tort MDLs has passed a tipping point. In response, defendants in several major mass-tort MDLs have turned to bankruptcy as a last resort to limit liability, but also because they view bankruptcy as a more efficient process than MDL litigation.

In making its decisions, “[t]he Panel does not consider the legal or factual strengths of a given case, nor does it consider the likely outcome of pending jurisdictional motions.” (A View from the Panel: Part of the Solution, John G. Heyburn, 82 Tulane L. Rev. 2225, 2237 (2008).) Instead, the Panel focuses on and routinely justifies their centralization orders on grounds that handling discovery and other pretrial activities in a single MDL is more efficient than having to otherwise conduct duplicative work in separate trials of individual actions. By narrowing its examination, the Panel’s presumption of greater efficiency has led to requests for more and more unwieldy MDLs whose nature and scope are ill defined and unmanageable.

The Manual for Complex Litigation, p. 347 (4th edition 2004) (MCL) recognizes that: “Procedures to aggregate claims sometimes encourage the filing of questionable claims, accelerate the rate at which claims are presented, or even create a mass tort out of what otherwise might simply have been a flurry of similar cases that would have quickly faded away.” The MCL identifies several “prudential and procedural factors” at pages 349-359, which it recommends should be considered when determining whether centralization will “promote the just and efficient conduct of such actions.” And if the information about the prudential factors is unclear, the Manual suggests that aggregation be deferred until enough trials, settlements, or other proceedings in individual cases have occurred. A track record of experiences in individual actions would also make management more efficient if the actions were later centralized in a mass-tort MDL.