This is the first installment of a series of articles taking a look at the recent Multi-District Litigation lawsuits (MDLs) involving General Motors and Volkswagen. This installment sets the background and describes how MDLs came to be, how they are used by the courts, the lawyers and the parties, their clients especially to conceal documents, testimony, and information from the public.
In future installments in this series, we will take a look first at the General Motors "ignition defect" MDL, and then at the Volkswagen "pollution defeat device" MDL. Our special focus will be trained on the secrecy involved in these huge lawsuits, secrecy that is built into such lawsuits as an integral part of them. To a great extent secrecy is a major reason such lawsuits exist in the first place.
Too Big to Sue: GM and VW.
General Motors and Volkswagen may be too big to sue. The "new" General Motors has recently been outfitted with subsidies from the federal government. As for Volkswagen, in his work on Capital in the modern world Thomas Piketty pointed out almost as an afterthought that Volkswagen is "the leading automobile manufacturer in Europe and the world."[1]
In recent years, a large number of different lawsuits against GM and VW were all put into one large lawsuit for GM, and a separate large lawsuit for VW, called "multi-district litigations" or MDLs. Multi-district litigation requires explanation. MDLs were originally authorized in order to enable courts and judges to resolve certain civil disputes. Multi-district Litigation is obviously a ready-made vessel for catastrophe claims.
As time has passed in the interim, MDLs may have also been used in ways that unnecessarily ignore the presumption of public access to court files. Even at its best, multi-district litigation is like seeing through a glass darkly. "[E]ven the final results can be opaque to outsiders."[2]
The explanation given here is a brief description of a complex subject. In simple terms, an MDL is one place for all lawsuits on the same subject. An MDL is ordered where many similar lawsuits have been filed against the same defendant or group of defendants in multiple states and courts. The rationale behind ordering an MDL is that judicial economy and consistent results may be achieved by having one court consider and determine various pretrial motions and matters.
However, it is clear that the defendants' interests dominate when an MDL is ordered. It is the parties that are sued in these large cases that avoid inconsistent results, not so much the people who sue them and are understandably concerned with the outcome only in their own case. The defendants' litigation expenses in MDLs are greatly reduced from what the expenses would otherwise be to defend dozens or even hundreds of lawsuits scattered across the country. MDLs involve defendants who can be sued in "too many places."[3]
On the other hand, the people who are suing the defendants in these large MDLs suddenly have been saddled with expenses they did not necessarily anticipate that are required to prosecute any large lawsuit, or at least their lawyers have been saddled with these expenses to the extent that they cannot or do not pass them on to their clients.
The courts for their part are reluctant to adjudicate mass disputes. This reluctance has not yet stopped the disputes themselves. The mass disputes keep coming. There is no limit on catastrophes.
THEY'RE all TOO BIG TO SUE IN MULTIDISTRICT LITIGATION, BUT THEY'RE THERE TO SETTLE.
Defendants and judges in particular are looking for alternatives to trial especially in the huge cases that are on the multi-district litigation docket. They have been looking for alternatives to trying lawsuits for quite a long time, actually. MDLs originated 50 years ago in response to a wave of antitrust lawsuits against electrical equipment manufacturers. Clearly in response to litigation over natural and man-made disasters, the original concept of multi-district litigation was to combine many lawsuits into one huge lawsuit for "pretrial proceedings." The pretrial discovery in common in these huge cases basically inquires into what evidence the various parties possess. The discovery can then at least theoretically be conducted in one case, the MDL, on an economical, nationwide basis.[4]
For purposes of concealed evidence and secret settlements, it is important to know that the MDL did not exist before judges and lawyers invented it. Legislators did not hold hearings on it, academics did not write about it very much at the time, and no Rules Committee in any jurisdiction has ever attempted to write Rules to govern it. Large corporations accused of nationwide wrongs and their lawyers, many of whom keep popping up from jurisdiction to jurisdiction across the nation to defend the same defendants, were left free to write their own rules with the agreement of lawyers from smaller law firms with individual clients who were allegedly the victims in these cases.
The Federal Judicial Center has tried to fill the void with a manual written by judges for other judges and for lawyers, the Manual for Complex Litigation, Fourth, but as we shall see, they do not even follow their own model secrecy orders.
Regardless of its origins, the MDL today makes it hard to sue large defendants. The cases that end up in MDLs today stand out first for the total number of MDLs they are put into. Excluding the large numbers of specialized cases filed by prisoners and Social Security applicants, the number of MDLs has ballooned from about 16% of all federal court cases in 2002, to over 50% of the federal courts' dockets today.[5]
As of March, 2017, some 233 MDLs were pending in the federal courts. The legal standard for all these MDLs is the same. Established by federal statute, an MDL can be made from active civil cases that contain "one or more common questions of fact" and have been filed in different federal judicial districts. According to the federal statute that authorizes MDLs -- but which does not do anything else besides authorize them, such as declare the rules that MDLs should go by -- cases like these can be vacuumed up, so to speak, into one big lawsuit called an MDL "for coordinated or consolidated pretrial proceedings[.]"[6] Limiting MDLs to "pretrial proceedings" is telling in ways that the authors of the statutory language probably never intended.
It bears repeating that no rules have been written specifically to govern MDLs. MDL procedures are proposed by the parties, especially by the larger parties that naturally drive the MDL. The proposals of these larger parties are adopted with some regularity by mutual agreement with the other parties in the MDL. It has been said that the "creation" of an MDL under the federal statute is the only part of an MDL that is not based on consent of the parties.[7]
End of the first installment, the Predicate to MDLs. NEXT: GENERAL MOTORS AND VOLKSWAGEN MULTI-DISTRICT LITIGATION: WHY, AND WHAT THEY HAVE IN COMMON.
Please Read the Disclaimer. ©2019 Dennis J. Wall. All Rights Reserved.
[1] Thomas Piketty, Capital in the Twenty-First Century, trans. Arthur Goldhammer (Cambridge, MA and London: Belknap Press of Harvard University Press, 2014), 143.
[2] E.g., Abbe R. Gluck, "Unorthodox Civil Procedure: Modern Multidistrict Litigation's Place in the Textbook Understandings of Procedure," 165 U. Pa. L. Rev. 1669, 1692-93 (2017). See Alexandra D. Lahav, "A Primer on Bellwether Trials," at 7 n.20 (Essay, Aug. 4, 2017), Rev. Litig. 37 (forthcoming 2017), available at SSRN: https: //ssrn.com/abstract=3013402 (combining mediations and tactics such as in bellwether trials in MDLs, the problem is that such procedures are not public and lack many benefits of trials).
[3] Abbe R. Gluck, "Unorthodox Civil Procedure," 165 U. Pa. L. Rev. at 1682 (emphasis in original). See in addition the language of Section 1407 itself, the MDL referral statute found at 28 U.S.C.A. § 1407; Abbe R. Gluck, "Unorthodox Civil Procedure," 165 U. Pa. L. Rev. at 1698.
[4] MDLs began with a raft of antitrust lawsuits against electrical equipment manufacturers: Stephen B. Burbank, "The MDL Court and Case Management in Historical Perspective" at 1, 2 (April 28, 2017 Paper submitted to GWU Conference titled "Multi-district Litigation Roundtable" for an April 28, 2017 Panel Discussion on "Case Management Strategies by Transferee Judges"), available at https://www.law.gwu.edu/sites/www.law.gwu.edu/files/downloads/MDL.GWU.pdf; Abbe R. Gluck, "Unorthodox Civil Procedure" 1671-72.
The original concept was common discovery on an economical, nationwide basis: Jay Tidmarsh, "The MDL as De Facto Opt-In Class Action" at 1, 6 (Undated paper submitted to George Washington University Law School. Conference titled "Multi-district Litigation Roundtable" for an April 27, 2017 Panel Discussion on "MDL Panel Decision Making"), available at https://www.law.gwu.edu/sites/www.law.gwu.edu/files/downloads/Tidmarsh-MDL-Paper.pdf.
[5] MDLs are one such alternative: Jotwell; "The Settler-in-Chief," by Jay Tidmarsh reviewing Adam Zimmerman, "Presidential Settlements," 163 U. Pa. L. Rev. ___ (forthcoming 2015), available at SSRN, https://courtslaw.jotwell.com/the-settler-in-chief/.
From 16% in 2002 to over 50% now: See, e.g., Elizabeth Chamblee Burch, "Monopolies in Multidistrict Litigation," 70 Vand. L. Rev. 67, 72 (2017); John Rabiej, "Two Proposals to Improve How Courts Manage 'Mega-MDLs,'" at 4 (Undated Essay submitted to GWU Conference titled "Multi-district Litigation Roundtable" for an April 28, 2017 Panel Discussion on "Alternatives to MDL Practice"), available at https://www.law.gwu.edu/sites/www.law.gwu.edu/files/downloads/rabiej.mdlpaper.pdf. Mr. Rabiej defined "mega-MDLs" in his essay as those with 900 cases or more.
[6] 233 pending MDLs in March, 2017: Abbe Gluck, "Unorthodox Civil Procedure," 165 U. Pa. L. Rev. at 1679.
The statute: 28 USCA § 1407.
[7] No Rules specifically written for MDLs: Abbe R. Gluck, "Unorthodox Civil Procedure," 165 U. Pa. L. Rev. at 1675, 1688; see John Rabiej, "Two Proposals to Improve How Courts Manage 'Mega-MDLs,'" at 1.
Has been said "creation" of MDL only aspect of MDLs that is not based on consent: Abbe R. Gluck, "Unorthodox Civil Procedure," 165 U. Pa. L. Rev. at 1700. Cf. Jay Tidmarsh, "The MDL as De Facto Opt-In Class Action" at 5 (comparing role of consent in opt-in class actions with MDLs).
Overall: See Elizabeth Chamblee Burch and Margaret S. Williams, "Repeat Players in Multidistrict Litigation: The Social Network," 102 Cornell L. Rev. 1445, 1455-59 (2017).
End of the first installment, the Predicate to MDLs. NEXT: GENERAL MOTORS AND VOLKSWAGEN MULTI-DISTRICT LITIGATION: WHY, AND WHAT THEY HAVE IN COMMON.
Please Read the Disclaimer. ©2019 Dennis J. Wall. All Rights Reserved.
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