Judges presiding over multidistrict litigations, known as MDLs, must walk a tightrope between individual and collective needs. As the Sixth Circuit reminded us in a recent decision, In re National Prescription Opiate Litigation, this can be an especially challenging balancing act for a district judge. On the one hand, MDL courts operate within the Federal Rules of Civil Procedure, designed largely to adjudicate individual cases. On the other hand, an MDL exists so that many cases across the country can be brought before a single district judge, who can make pretrial rulings to create efficiencies across all the cases. It remains the case, however, as the Sixth Circuit held, that where the MDL court’s interest in efficiency clashes with its adherence to the Federal Rules of Civil Procedure, efficiency must give way.
In this opiate MDL case, the Sixth Circuit granted mandamus relief to two pharmacy defendants, striking amended pleadings and mooting nationwide discovery the district court allowed to encourage a global settlement of more than 2,700 lawsuits about the national opioid crisis. The Sixth Circuit wrote that the MDL judge, a “notably conscientious and capable” jurist, had erred by allowing the plaintiffs to add new claims more than 18 months after the deadline to amend without a showing of “good cause” why the plaintiffs failed to amend within the deadline.
“Respectfully, the district court’s mistake was to think it had authority to disregard the Rules’ requirements in the Pharmacies’ cases in favor of enhancing the efficiency of the MDL as a whole,” the Sixth Circuit wrote. “[A] district court’s decision whether to grant a motion to amend in an individual case depends on the record in that case and not others. Nor can a party’s rights in one case be impinged to create efficiencies in the MDL generally.”
The Sixth Circuit’s guidance for MDL courts applies as well in the class context for several reasons. For one, MDLs often include both individual and class cases, a combination that can transform the MDL into a “bet-the-company” matter for defendants. In such cases, unless the plaintiff has filed a consolidated complaint merging the identities of each action, defendants and the courts should approach each action within an MDL as a separate action subject to ordinary civil procedural rules. Although an MDL court may use techniques to create efficiencies and avoid duplication, it “must find efficiencies within the Civil Rules, rather than in violation of them.” So too in a class action, where the individual rights of class members cannot be overlooked to force a broader class settlement.
In this case, two Ohio counties brought claims arising out of the nation’s opioid crisis against the petitioners, two pharmaceutical chains, as well as other defendants. The counties asserted the claims against the pharmacies as “distributors” of pharmaceuticals to their retail pharmacies and expressly declined to bring claims against the pharmacies as “dispensers” of opioid drugs. More than 18 months after the court’s deadline for amending pleadings and 10 months after the parties concluded discovery, involving more than 600 depositions and the production of tens of millions of documents, the counties moved to amend their complaints to add the dispensing claims — the claims they had previously disavowed.
The MDL court not only granted the motion but also stated that it would not receive any additional motions to dismiss on the distribution claims from the pharmacies. When the parties timely filed motions to dismiss, the court failed to rule on them. It instead directed the pharmacies to engage in far-reaching discovery of the new claims, including producing data on every prescription they filled nationwide within a period of 13 years. The court ordered the vast, nationwide discovery to “be available for future trials of MDL cases,” even though the actual pending cases before the court involved two Ohio counties — and none of the nationwide discovery would be admissible in the Ohio cases. The pharmacies sought a writ of mandamus to block each of these rulings.
Finding the circumstances to be of such an exceptional character to warrant mandamus relief, the Sixth Circuit granted the petition. It explained, “The rule of law applies in multidistrict litigation under 28 U.S.C. § 1407 just as it does in any individual case.” Although an MDL court has the discretion to promote efficiency and avoid duplication in the matter, the court explained, each case within an MDL retains its individual nature (absent certain exceptions not applicable), and the MDL may not “distort or disregard the rules of law applicable to each of those cases.”
The MDL court could not ignore Federal Rule of Civil Procedure 16(b), which sets out a “good cause” standard for amending pleadings. This “meant the district court could grant leave to amend only if the Counties demonstrated that ‘despite their diligence they could not meet the original deadline.’” Neither the counties nor the district court even attempted to show the counties’ due diligence in seeking the amendment. In fact, the counties had considered, but declined to raise, the dispensary claims, arguably waiving the claims. The MDL court disregarded this point because in its view, “in the context of an MDL” the objection “lose[s] much of [its] import.” The MDL court reasoned that the “trial would be most efficient if it included not only existing ‘distribution claims’ but also claims against those pharmacies as dispensers.”
In doing so, the Sixth Circuit said the MDL court erred. “[T]he district court’s mistake was to think it had authority to disregard the Rules’ requirements in the Pharmacies’ cases in favor of enhancing the efficiency of the MDL as a whole,” the Sixth Circuit said. “MDLs are not some kind of judicial border country, where the rules are few and the law rarely makes an appearance.” In an MDL action, the Federal Rules of Civil Procedure, including the requirements for granting a motion to amend, “are the same as those for ordinary litigation on an ordinary docket.”
The MDL court’s efficiency rationale could not substitute for the due diligence requirement of Rule 16(b). Thus, the district court abused its discretion allowing the late amendment, and the circuit court remanded the action with instructions to strike the amendments.
The Sixth Circuit found that this relief mooted the remaining portions of the petition, but “[g]iven that more than 2,700 cases remain pending in the MDL,” it made these observations: First, a “district court may not refuse to adjudicate motions properly filed under that Rule.” Second, the “question whether discovery is ‘proportional to the needs of the case’ under Rule 26(b)(1) must — per the terms of the Rule — be based on the court’s determination of the needs of the particular case in which the discovery is ordered.” None of this means that the MDL cannot create efficiencies. In fact, pretrial rulings in one case will likely apply to many other cases in an MDL since the cases all come before the MDL court precisely because the needs of many cases are substantially similar.