Remanding Multidistrict Litigation

Remanding Multidistrict Litigation Elizabeth Chamblee Burch * INTRODUCTION Scholars and commentators have long lamented vanishing trials, empty courtrooms, and the rise of alternative dispute resolution. 1 Aggregation—whether through class actions or, as is more likely today, multidistrict litigation—contributes steadily to disappearing trials and fuels the new paradigm of making and enforcing a settlement grid. 2 Section 1407, the multidistrict litigation statute, allows the Judicial Panel on Multidistrict Litigation (“the Panel”) to transfer federal cases with a common factual question to the same judge (“the transferee judge”) for coordinated pretrial proceedings. 3 In theory, after the parties complete discovery on common issues and the transferee judge rules on pretrial motions that affect the cases uniformly, the judge should then remand those cases to their transferor courts for case Copyright 2014, by ELIZABETH CHAMBLEE BURCH. * Associate Professor, University of Georgia School of Law. Many thanks to the participants at the Louisiana Law Review ’s Symposium—“The Rest of the Story: Resolving the Cases Remanded by the MDL”—for their comments in discussing these issues. 1. See, e.g. , Marc Galanter, The Vanishing Trial: What the Numbers Tell Us, What They May Mean , 10 DISP. RESOL. MAG. 3 (2004) (“Moreover, the drop in trials has been recent and steep. In the early part of our period, there was an increase in federal civil trials, peaking in 1985, when there were 12,529. From then to now, the number of trials has dropped by more than 60 percent and the portion of cases disposed of by trial has fallen from 4.7 percent to 1.8 percent.”); Marc Galanter, The Vanishing Trial: An Examination of Trials and Related Matters in Federal and State Courts , 1 J. EMPIRICAL LEGAL STUD. 459 (2004) (tracing the decline of trials in the United States); Gillian K. Hadfield, Where Have All the Trials Gone? Settlements, Nontrial Adjudications, and Statistical Artifacts in the Changing Disposition of Federal Civil Cases , 1 J. EMPIRICAL LEGAL STUD. 705 (2004); Hope Viner Samborn, The Vanishing Trial , 88 A.B.A. J. 24 (2002) (questioning whether the increase of settlements, mediation, and arbitration will harm the justice system); Martin H. Redish, Summary Judgment and the Vanishing Trial: Implications of the Litigation Matrix , 57 STAN. L. REV. 1329 (2005) (examining the influence of summary judgment on the trend of vanishing trials); Thomas J. Stipanowich, ADR and the “Vanishing Trial”: The Growth and Impact of “Alternative Dispute Resolution , ” 1 J. EMPIRICAL LEGAL STUD. 843 (2004) (analyzing the relationship between ADR and declining trials). 2. See, e.g. , RICHARD A. NAGAREDA, MASS TORTS IN A WORLD OF SETTLEMENT 57 (2007). 3. See 28 U.S.C. § 1407 (2012). 400 LOUISIANA LAW REVIEW [Vol. 75 specific discovery and trial. 4 Practice, however, has proven to be quite different. Multidistrict litigation has frequently been described as a “black hole” 5 because transfer is typically a one-way ticket. 6 Indeed, interviews with attorneys who have been heavily involved in these cases suggest that “the panel has abdicated its proper role by providing no recourse to remedy or to exit an MDL black hole.” 7 The numbers lend truth to this proposition. As of 2010, the Panel remanded only 3.425% of cases to their original districts. 8 That number dwindled to 3.1% in 2012, 9 and to a scant 2.9% in 4. Id. § 1407(a) (“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 . . . .”). 5. See, e.g. , In re U.S. Lines, Inc., No. 97-CIV-6727, 1998 WL 382023, at *7 (S.D.N.Y. July 9, 1998) (explaining appellants’ description of the asbestos multidistrict litigation as “a black hole” and “the third level of Dante’s inferno”); Eldon E. Fallon et al., Bellwether Trials in Multidistrict Litigation , 82 TUL. L. REV. 2323, 2330 (2008) (“Indeed, the strongest criticism of the traditional MDL process is that the centralized forum can resemble a ‘black hole,’ into which cases are transferred never to be heard from again.”); John G. Heyburn II & Francis E. McGovern, Evaluating and Improving the MDL Process , 38 LITIGATION 27, 31 (2012) (“The single most prominent complaint about multidistrict litigation arises from counsel’s negative experiences in so-called black hole cases—those that seem not to move at an acceptable pace.”); Eduardo C. Robreno, The Federal Asbestos Product Liability Multidistrict Litigation (MDL-875): Black Hole or New Paradigm? , 23 WIDENER L. J. 97, 126 (2013) (“Ultimately, neither the court nor the parties were ready, willing, or able to move [asbestos] cases to trial and settlement. This stage of litigation led some litigants to refer to MDL-875 as a ‘black hole,’ where cases disappeared forever from the active dockets of the court.”). 6. See, e.g. , In re Korean Air Lines Disaster of Sept. 1, 1983, 829 F.2d 1171, 1176 n.9 (D.C. Cir. 1987) (“In practice, it has been reported, most cases transferred under § 1407 are not remanded.”). 7. Heyburn & McGovern, supra note 5, at 31. 8. Since Congress created the Panel in 1968, the Panel has centralized 349,914 civil actions for pretrial proceedings and, as of September 30, 2010, transferee courts have terminated 266,264 actions, reassigned 398 actions to transferor courts within the transferee district, and remanded 11,986 actions for trial. ADMIN. OFFICE OF THE U.S. COURTS, 2010 ANNUAL REPORT OF THE DIRECTOR: JUDICIAL BUSINESS OF THE UNITED STATES COURTS (2011), available at http://www.uscourts.gov/uscourts/Statistics/JudicialBusiness/2010 /JudicialBusinespdfversion.pdf, archived at http://perma.cc/98N2-PH7R. 9. “Since its creation in 1968, the Panel has centralized 415,995 civil actions for pretrial proceedings. By the end of 2012, a total of 13,065 actions had been remanded for trial, 398 had been reassigned within the transferee districts, 341,836 had been terminated in the transferee courts, and 60,696 were pending throughout 54 transferee district courts.” ADMIN. OFFICE OF THE U.S. COURTS, 2012 ANNUAL REPORT OF THE DIRECTOR: JUDICIAL BUSINESS OF THE UNITED STATES COURTS (2012), available at http://www.uscourts.gov/Statistics 2014] REMANDING MULTIDISTRICT LITIGATION 401 2013. 10 To put this number in perspective, in 2012, the multidistrict litigation docket comprised roughly 15% of all federal civil cases. 11 Retaining cases in hopes of forcing a global settlement can cause a constellation of complications. These concerns range from procedural justice issues over selecting a forum and correcting error, to substantive concerns about fidelity to state laws, to undermining democratic participation ideals fulfilled through jury trials in affected communities. Yet, if transferee judges remanded cases after overseeing discovery into common issues, they could alleviate those concerns while avoiding inconsistent rulings on common questions and streamlining discovery. But transferee judges exacerbate these concerns when they disregard two inherent limitations on their power. First, Congress intended to limit multidistrict litigation’s jurisdictional reach to pretrial proceedings. 12 The statute’s legislative history states that “trial in the originating district is generally preferable from the standpoint of the parties and witnesses.” 13 Accordingly, the statute is designed to “maximize the litigant’s traditional privileges of selecting where, when and how to enforce his substantive rights or assert his defenses while minimizing possible undue complexity from multi-party jury trials.” 14 This hints at the second limitation. When nationwide plaintiffs’ claims are founded on state substantive laws, common questions decrease as the differences between states’ laws increase. This, in turn, creates a conundrum for transferee courts: applying the originating state’s choice-of-law provision as Klaxon 15 requires /JudicialBusiness/2012/judicial-panel-multidistrict-litigation.aspx, archived at http: //perma.cc/D65B-ZX5N. 10. “Since its creation in 1968, the Panel has centralized 462,501 civil actions for pretrial proceedings. By the end of 2013, a total of 13,432 actions had been remanded for trial, 398 actions had been reassigned within the transferee districts, 359,432 actions had been terminated in the transferee courts, and 89,123 actions were pending in 271 multidistrict litigation dockets throughout 56 transferee district courts.” ADMIN. OFFICE OF THE U.S. COURTS, 2013 ANNUAL REPORT OF THE DIRECTOR: JUDICIAL BUSINESS OF THE UNITED STATES COURTS (2013), available at http://www.uscourts.gov/Statistics/Judicial Business/2013/judicial-panel-multidistrict-litigation.aspx, archived at http://per ma.cc/MPX2-ETC8. 11. Heyburn & McGovern, supra note 5, at 26. 12. See 28 U.S.C. § 1407 (2012). 13. S. REP. NO. 90-454, at 5 (1967). 14. In re Plumbing Fixture Cases, 298 F. Supp. 484, 499 (J.P.M.L. 1968). 15. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941) (“The conflict of laws rules to be applied by the federal court in Delaware must 402 LOUISIANA LAW REVIEW [Vol. 75 is inefficient and challenging, but overlooking those differences to facilitate aggregate resolution ignores federalism concerns and may raise Erie questions. 16 Returning cases to their original districts as Congress intended, however, easily solves this conundrum. Because remand occurs so infrequently, few courts or scholars have addressed the topic. This Article thus aims to ignite that discussion by explaining the potential advantages of remand, arguing that remand’s scarcity is caused by repeat players’ uniform interest in settlement and suggesting key junctures for both transferee judges and the Panel to disaggregate cases. Part I begins by exploring the procedural, substantive, and communal benefits of remanding multidistrict litigation. Despite the potential upside and...