Multi district litigation: Meaning, Criticisms & Real-World Uses

What Is Multi district litigation?

Multi district litigation (MDL) is a special federal legal procedure designed to consolidate and transfer multiple civil actions involving one or more common questions of fact that are pending in different federal districts to a single district court for coordinated or consolidated pretrial proceedings. This process is a crucial element within legal risk management for corporations and other entities facing widespread litigation. The primary goal of Multi district litigation is to promote judicial efficiency, prevent inconsistent pretrial rulings, and conserve the resources of the parties, their counsel, and the judiciary²³, ²⁴, ²⁵.

History and Origin

The concept of Multi district litigation emerged from the challenges faced by the U.S. judicial system in handling complex, widespread cases in the mid-20th century. A significant impetus came from the numerous antitrust cases filed against electrical equipment manufacturers in the early 1960s, which involved nearly 2,000 separate civil actions across 36 federal judicial districts. Recognizing the need for a more formal and comprehensive solution, Congress enacted 28 U.S.C. § 1407 in 1968, establishing the Judicial Panel on Multidistrict Litigation (JPML).¹⁹, ²⁰, ²¹, ²² This panel, composed of seven federal judges appointed by the Chief Justice of the United States, has the authority to determine whether cases should be consolidated into an MDL and select the transferee court and judge.¹⁶, ¹⁷, ¹⁸ The creation of the JPML marked a pivotal shift towards centralizing power over nationwide litigation in the hands of individual judges for efficient case management.¹⁵ More information about the panel can be found on the Judicial Panel on Multidistrict Litigation website.

Key Takeaways

Multi district litigation (MDL) consolidates similar civil cases from different federal courts into one court for pretrial proceedings.
The Judicial Panel on Multidistrict Litigation (JPML) oversees the creation and transfer of MDLs.
The primary objectives of MDL are to enhance judicial efficiency, avoid duplicative discovery, and prevent inconsistent rulings.
MDLs represent a substantial portion of the federal civil caseload, especially in mass torts like product liability cases.
While efficient, MDLs face criticisms regarding due process concerns and the concentration of judicial power.

Interpreting the Multi district litigation

Multi district litigation is a procedural mechanism, not a substantive legal theory or a financial metric with a direct formula. Its "interpretation" lies in understanding its impact on the litigation landscape, particularly for entities facing widespread claims. When an MDL is established, it signifies that a common factual issue is central to numerous lawsuits filed by various plaintiffs against one or more defendants.

For companies, the formation of an MDL often indicates a significant corporate governance and financial event, as it centralizes a potentially massive legal exposure. The transferee judge assigned to an MDL oversees all pretrial matters, including discovery, motions, and potential settlement conferences.¹⁴ This centralization allows for a unified approach to evidence gathering and legal arguments, which can lead to global settlements that resolve many claims simultaneously. However, if cases are not resolved during the pretrial phase, they are typically remanded to their original federal courts for trial.¹², ¹³

Hypothetical Example

Imagine a pharmaceutical company, "MediCorp Inc.," launches a new widely prescribed medication. After several months, hundreds of patients across multiple states file individual lawsuits, alleging severe, similar side effects from the drug. Each lawsuit raises common questions of fact regarding the drug's design, testing, marketing, and MediCorp's knowledge of the adverse effects.

To manage this influx of similar cases more efficiently, the Judicial Panel on Multidistrict Litigation would likely consolidate these individual lawsuits into a single Multi district litigation. Let's say the JPML transfers all these cases to the U.S. District Court for the Southern District of New York. A single judge in that court would then oversee all pretrial proceedings for every lawsuit. This would involve a coordinated discovery process where documents are exchanged and depositions are taken once for all cases, rather than hundreds of times individually. The judge might also handle motions related to expert testimony or summary judgment for the entire group of cases. If a large-scale settlement is negotiated, it would cover many, if not all, plaintiffs within the MDL. If not, unresolved cases would be sent back to their original districts for individual trials.

Practical Applications

Multi district litigation is primarily applied in the federal court system to manage complex civil actions that share common factual questions but are filed in various districts. Its prevalence has grown significantly, now constituting a substantial portion of the federal civil caseload. As of fiscal year 2023, MDLs comprised 65% of the federal civil caseload, a notable increase from 38% a decade prior.¹¹

Common types of cases suitable for MDL include:

Mass Torts: This is the most frequent application, involving numerous tort claims arising from a single product or event, such as defective drugs or medical devices, environmental disasters, or widespread product liability claims.¹⁰ For example, the opioid litigation, involving thousands of lawsuits against pharmaceutical companies and distributors, has been largely managed through MDLs, leading to significant nationwide settlements.⁹
Antitrust Cases: Price-fixing or other anti-competitive practices affecting consumers or businesses across different states often result in MDLs.
Securities Fraud: Cases involving widespread investor fraud impacting many individuals.
Data Security Breaches: Large-scale data breaches affecting customers nationwide are frequently consolidated into MDLs.

By centralizing pretrial processes, MDLs streamline the handling of complex civil procedure across jurisdictions, aiming to reduce redundant efforts and potentially expedite resolutions.

Limitations and Criticisms

Despite its benefits in managing complex cases, Multi district litigation faces several criticisms. One significant concern revolves around the extensive power granted to a single transferee judge who presides over all pretrial matters, potentially impacting thousands of cases with little appellate scrutiny.⁸ This concentration of power, while promoting efficiency, can lead to concerns about due process, especially for individual plaintiffs whose cases may be overshadowed by the collective proceedings.⁷

Surveys have highlighted dissatisfaction among plaintiffs involved in MDLs. For example, a survey of female plaintiffs in certain product liability MDLs found that a significant majority were dissatisfied with their lawyers, felt uninformed about their cases, and did not feel their lawyers acted in their best interest.⁶ These issues often stem from the vast number of cases aggregated, where individual attention can be diluted, and attorneys might handle a high volume of cases, prioritizing global settlements over individual client needs.⁴, ⁵ Another critique is that while MDLs are designed for pretrial proceedings, many cases ultimately resolve through global settlement without ever returning to their original courts for trial, altering the traditional litigation path and potentially influencing legal costs and outcomes.², ³

Multi district litigation vs. Class Action

While both Multi district litigation (MDL) and class action lawsuits aggregate numerous individual claims, they operate under distinct legal frameworks and serve different purposes. The fundamental difference lies in their aggregation mechanism and the binding nature of the proceedings.

Multi district litigation (MDL): MDL involves the consolidation of individual lawsuits filed by different plaintiffs in various federal courts that share common factual questions. These cases are transferred to a single court for coordinated pretrial proceedings (e.g., discovery, motions). Crucially, each case within an MDL retains its individual identity. If a case is not resolved through settlement in the MDL court, it is typically remanded back to its original court for trial.¹ Plaintiffs generally retain their individual attorneys and control over their specific claims, even if those claims are managed collectively for pretrial efficiency.
Class Action: A class action lawsuit, conversely, is a representative lawsuit where one or more individuals (the "named plaintiffs") file a lawsuit on behalf of a larger group of similarly situated individuals (the "class"). Once a class is certified by the court, the outcome of the lawsuit—whether it's a judgment or settlement—binds all members of the class, except for those who explicitly opt out. The class itself is treated as a single entity, and individual class members typically do not have separate control over the litigation or their own attorneys, although they may receive notice and an opportunity to object to settlements. Class actions are often used for "negative value" claims, where individual damages are too small to justify separate lawsuits.

In essence, MDL streamlines the pretrial phase for multiple individual cases, preserving their individual nature, while a class action creates a single lawsuit that represents and binds a larger group.