A jurisprudential milestone of sorts was recognized last month when the ever rising tide of federal MDL filings surpassed 50% − that’s right, over half – of all cases currently open in the federal judicial system now are contained in multi-district litigation.  As reported, “the 248 MDL dockets accounted for 52 percent of all pending federal civil cases at the end of the last fiscal year.”  Here’s a more detailed review:

A year ago, civil cases concentrated in MDLs made up 47% of the entire federal civil caseload.  The change to majority MDL continues a trend of growing concentration of the federal civil caseload in MDLs which dates back to the early 1990s. . . .  [T]he largest MDLs comprise an even bigger share of the civil caseload than in past years.  At the end of fiscal year 2018, cases in large MDLs with 1,000 or more cases represented 46% of cases in the federal civil court system, compared to 40% at the end of fiscal year 2017, according to calculations based on data from the Judicial Panel on Multidistrict Litigation (JPML) and United States Courts.  The 140,052 cases pending in 24 large MDLs represented 89% of all the cases across 248 MDL dockets at the end of fiscal year 2018.

Rules4MDLs, “MDL Cases Surge to Majority of Entire Federal Civil Caseload” (3/14/2019).  There are no rules for MDLs.

As we’ve discussed many times before, the ordinary Federal Rules of Civil Procedure apply sporadically, if at all in MDLs.  Likewise, some MDL judges apply Daubert rigorously, and others do not.  Some MDLs are disposed of on the basis of federal preemption, while other MDL judges seem never to have granted a preemption motion in their careers.  Appellate opportunities are few and far between, and almost always arise when plaintiffs lose, since defense losses don’t generate immediately appealable orders.  The current MDL system makes the federal judicial system resemble the baroque Holy Roman Empire – an agglomeration of hundreds of feudal principalities, feigning allegiance to one set of laws, but in reality operating more or less independently – with some of those margraves and palatine counts wielding rather despotic power.

Like some wasps do to caterpillars, agglomerations of “plaintiff steering committees,” assisted by shadowy funded media solicitors, have parasitized the federal judicial system, converting it into a system not for justice, but for converting mass solicitations into mass settlements without the merits of 99+% of the filed “inventory” ever being examined.

But what these stories aren’t telling you is that the situation is only going to get worse.

Why?

Because, for all the faults of federal MDL practice, mass tort practice in many states is even worse. That means that most defendants sued in most state courts will try to remove cases to federal court.

In the ensuing procedural gamesmanship, plaintiffs are in the process of losing one of the main ways they gamed the system to keep diverse cases in state court – the so-called “forum defendant rule” whereby even a diverse action could be kept in state court by the presence of defendant domiciled in the plaintiff’s chosen forum. The forum defendant rule applies only to parties “properly joined and served,” and technologically-savvy defendants have discovered that, by monitoring electronic dockets, they can remove diverse cases faster than plaintiffs can serve forum defendants. We call this “pre-service,” “snap,” or “wrinkle” removal, and we’ve chronicled (and advocated) its rise since 2007.

As we thought it would, pre-service removal degenerated into nationwide guerilla warfare for a while, since (as with MDLs) appellate review of removal controversies (remands are not appealable at all) tends to be sporadic and delayed, since removal can only be appealed as of right when the plaintiff ultimately loses on the merits.

But in the last year, that inherently delayed process began reaching a conclusion.

Two courts of appeals, the Second and the Third, confronted pre-service removal head on, and both decisively rejected the “absurd result” argument the plaintiffs had cobbled together to deny effect to the plain language of the removal statute.  Gibbons v. Bristol-Myers Squibb Co., ___ F.3d ___, 2019 WL 1339013 (2d Cir. March 26, 2019), and Encompass Insurance Co. v. Stone Mansion Restaurant Inc., 902 F.3d 147 (3d Cir. 2018).. We wrote “breaking news” posts for both cases.

Since we had the express statutory language on our side, as well as Congress not modifying the relevant language the last time it tinkered with the statute – after pre-service removal had become a “thing” – we always thought the defense side had the better of this argument.  With two emphatic affirmances, we think the rest of the appellate dominoes eventually tumble, and pre-service removal will become the norm across the country.

But widespread pre-service removal means more cases in federal court.  Since so many of the cases being removed in this fashion involve mass torts, we believe that an even larger percentage of pre-service removal cases will wind up in MDLs than federal cases generally.

A second trend is the recent more rigorous enforcement of constitutional due process limits on personal jurisdiction.  As personal jurisdiction restricts forum shopping, the same result should ensue.  A lot of plaintiffs who once would have been litigation tourists will end up having to file in defendants’ “home” states if they want to benefit (usually by hiding in the weeds and waiting for settlement) from any kind of aggregation.  Thus, enforcing the constitutional limits to personal  jurisdiction (and use of pre-service removal) will likewise move those cases, as well, to federal court.

So, yes, the situation with MDLs is bad, and cries out for reforms to prevent warehousing, allow appeals, and shed light on litigation financiers pulling strings from the shadows.  But we think things are going to get worse before they get better.