Introduction to the MDL Settlement Process
by Cathy Yanni
This four-part series will present a discussion on settling multidistrict litigations (“MDLs”). I will begin with Introduction to the MDL Settlement Process, followed by Best Practices for Settling, Ethical Obligations of Counsel and Allocation Methodology.
The Judicial Panel on Multidistrict Litigation
The U.S. Judicial Panel on Multidistrict Litigation was created in 1968 and is composed of seven judges appointed by the Chief Justice of the U.S. Supreme Court. The panel decides whether similar cases in multiple federal district courts should be centralized in a single MDL docket and which court should oversee the MDL. The MDL process was established to avoid duplication of discovery, prevent inconsistent pretrial rulings and conserve resources of the parties, counsel and the judiciary. About one-third of all cases in federal court are in the MDL system, and 27 percent of active federal judges have an MDL assignment. The MDL panel conducts hearings to determine whether cases should receive MDL status, and then assigns them to a judge. The panel adheres to a tight briefing schedule, which is completed within 30 days of the filing of a motion to centralize, and meets every two months to hear arguments on MDL status and assignment. It hears arguments on 15 to 20 cases at each session, and each counsel has two to five minutes to argue to the panel. The panel recommends that parties arguing for the same result designate one spokesperson, although anywhere from two to eight lawyers typically argue. After the arguments are heard, the panel issues an order about two weeks afterwards with MDL status and assignment.
MDL cases reflect a cross section of litigation, including antitrust, employment, intellectual property, securities and product liability cases. Most MDLs settle, and there is a variety of settlement models. In a bellwether trial system, generally the judge will request that the plaintiffs and defendants each select several representative cases for trial. Cases are fully prepared and tried to a jury. These cases are typically representative of issues of liability and damages that will be common to all cases. It is assumed that the verdicts will be instructive on the value of the cases within the MDL and will provide the parties with enough information to determine whether groups of cases should be settled. The drawback to this system is that the parties need to complete discovery, which can be extraordinarily expensive, and the verdicts may not be instructive.
Examples of cases that used bellwether trials are fen-phen, Yaz and Yasmin and currently the transvaginal mesh MDLs.
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