As our guest post predicted in last Monday, even Hurricane Harvey could not delay the Fifth Circuit long in deciding the Pinnacle Hip MDL mandamus petition. Its decision, denying mandamus but mostly agreeing with the defendant’s substantive position, is available here. In re Depuy Orthopaedics, Inc., ___ F.3d ___, 2017 WL 3768923 (5th Cir. Aug. 31, 2017). The appellate court had two issues before it: (1) whether defendants had waived jurisdictional objections under Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26 (1998), as to all 9,300 MDL cases, as the MDL judge had held, and (2) whether, if there was no waiver, mandamus would lie “to prohibit the district court from proceeding to trial” in certain bellwether cases. Depuy, 2017 WL 3768923, at *2.
The defendant won the waiver issue. Although mandamus was ultimately denied as to the second (bellwether trial) issue, the panel majority (different majorities decided the two issues) issued a strong shot across the MDL judge’s bow by declaring that action to be in error.
To understand our evaluation, we begin with mandamus.
Mandamus is – and is intended to be – difficult to obtain, because it upsets and short-circuits the usual process of appellate review. 2017 WL 3768923, at *3. To obtain mandamus, a petitioner such as the MDL defendant here, must establish three things:
- The “right to relief” – that the judicial order at issue was erroneous – must be “clear and indisputable.” There must be a “clear” abuse of discretion that “produce[s] patently erroneous results.”
- Mandamus must be “appropriate under the circumstances,” being “particularly appropriate” for issues extending “beyond the immediate case.”
- The mandamus petitioner must “have no other adequate means to obtain relief.” If ordinary appellate review will suffice, mandamus is denied.
Depuy, 2017 WL 3768923, at *4-5.
As to waiver, the majority held that no valid basis existed for the MDL court’s decision that Lexecon/personal jurisdiction objections had been waived as to all 9,300 MDL cases. Such waivers must be “clear and unambiguous,” id. at *4, and nothing the defendant did approached that standard.
The MDL court’s notion, echoed by plaintiffs, that petitioners are trying to limit their waivers retroactively, is not borne out by the facts. We hold that petitioners limited their venue waivers to the first two bellwether trials and that the MDL court erred by declaring that they had globally and permanently waived their objections to venue and personal jurisdiction. That was grave error:
Id. (footnotes omitted). Since there was no “clear and unequivocal” waiver, “the MDL court clearly abused any discretion it might have had and, in doing so, reached a ‘patently erroneous’ result.” Id. at *5. Since this error at least potentially infected all 9,300 cases in the MDL, that prerequisite to mandamus was also met. Id
Although two of the three judges on the Fifth Circuit panel found “grave error” in the grounds on which the pending (and, indeed, the past) consolidated bellwether trial was predicated, and also that mandamus would be “appropriate,” mandamus was nonetheless denied. What happened?
One of those two panelists (Judge Jerry Smith, who wrote the opinion) switched on the third element – whether an appeal, after the 10-plaintiff consolidated trial was concluded, was an “adequate” remedy. While the MDL statute, itself, is intended to “promote the just and efficient conduct of such [MDL] actions,” 28 U.S.C. §1407(a), that is not the mandamus standard. As far as a right to mandamus is concerned, a doomed consolidated trial, no matter how wasteful of the parties’ time and resources, is still a trial, and at the end of the whole thing (“each of the previous three bellwether trials lasted several weeks,” 2017 WL 3768923, at *5), an appeal in the normal course can be had. Mandamus, according to this majority, isn’t available to avoid waste of time and expense:
[F]or appeal to be an inadequate remedy, there must be some obstacle to relief beyond litigation costs that renders obtaining relief not just expensive but effectively unobtainable. Nor is . . . the risk of substantial settlement pressure  grounds for granting a mandamus petition;
Depuy, 2017 WL 3768923, at *6 (footnotes omitted). Thus, the defendant “met [only] two of the three” elements required for mandamus.
On this final point, Judge Edith Jones dissented, finding that, apart from time and expense, the MDL court had “plainly act[ed] in excess of its jurisdiction, [so] mandamus may issue to prevent the usurpation of power.” Id. at *9. The grounds for her conclusion are interesting, and have implications for future MDL practice. She believes that “direct filed” MDL cases by plaintiffs from outside the state in which the MDL is located (including all ten of the plaintiffs in the proposed bellwether trial) lack personal jurisdiction, and therefore “but for” the “global waiver” that the panel had just found erroneous, there was “no claim to personal jurisdiction over the cases.” Id. Because there was no jurisdiction (and therefore, also improper venue) over the cases proposed to be tried, more than just wasted time and expense was involved, and mandamus was appropriate. Id.
We’ve alluded to this potential jurisdictional problem with direct filed cases before, and we suspect there will soon be a lot more law on this issue. We also believe that, in light of this jurisdictional uncertainty, and the direction in which Supreme Court’s recent jurisdictional precedents point, MDL defendants should strongly consider preserving objections to the use of direct filing.
So what now? We doubt we have ever seen such a strong shot across the bow fired by an appellate court. A majority of the panel – and law of the case usually applies to appellate decisions – says that the basis for the objected-to consolidated bellwether trial (and also the one just finished) was not just error but “clear” and “grave” error. This “majority requests the district court to vacate its ruling on waiver and to withdraw its order for a trial.” 2017 WL 3768923, at *1. Judge Jones’ dissent describes the likely result if the MDL judge disregards this signal and plows forward anyway:
If the district court lacked jurisdiction over these direct-filing plaintiffs’ cases, as our panel majority concludes, they will receive a take-nothing judgment nearly a decade after their suits were filed and will have to start all over − if they have the stomach for it. For the remaining thousands, the goal of the bellwether process will have been perverted by unreliable judgments, delayed by the appeals, and undermined when those judgments are reversed. Allowing the court’s conduct of trials outside its jurisdiction to spawn such unpredictability and unfairness will harm petitioners or plaintiffs and most likely both. Such an outcome belies the goals of efficiency, economy, fairness, and predictability for which the MDL system supposedly exists.
Depuy, 2017 WL 3768923, at *10 (concurring and dissenting opinion) (citing §1407).
One possibility is for the defendant to seek en banc appellate review, since both parts of the decision – the finding of clear error, and the denial of mandamus drew dissents from different members of the panel. That has happened before in the MDL context, although a long time ago. See In re Exterior Siding & Aluminum Coil Antitrust Litigation, 705 F.2d 980 (8th Cir. 1983) (en banc) (vacating mandamus concerning class certification). However, the strictures of the difficult-to-meet mandamus standard must be considered. Plaintiffs might also seek such review, although since relief was denied, it is questionable whether they would be “aggrieved” enough to have standing.
Another possibility would be to seek relief from the Panel on MDL Litigation, since there are strong grounds (enunciated by Judge Jones) for asserting that the Pinnacle Hip MDL is no longer being conducted in accordance with the goals and purposes of the MDL statute. Finally, it is possible, that with an appellate finding of error staring him in the face, the MDL judge, on remand, may decide that a course correction is in order.
Whatever happens, we’ll be watching with interest.