Photo of Bexis

Most of this blogpost is about inside MDL baseball.  If that’s not your thing, please come back on Monday.  Also, this post is solely from the non-Dechert side of the Blog.

When last we checked on the progress of the Zantac MDL, the plaintiffs’ claims for innovator liability and against pharmacies and other retailers had been dismissed again, after plaintiffs were given a chance to replead – with the exception of certain plaintiff-specific “negligence” claims that they had pleaded but we doubted they could, or even wanted, to actually litigate.  We ended with:

But prolix is prolix:  We also understand that plaintiffs were undeterred and already have filed more than 50 notices of appeal.

Hence, our latest chronicle, In re Zantac (Ranitidine) Products Liability Litigation, ___ F. Supp.3d ___, 2021 WL 5050347 (S.D. Fla. Nov. 1, 2021) (“Zantac IX”), in which the MDL judge conscientiously resolved a thicket of procedural issues created by all these appeals.  First, we go straight to the end, because that’s where the plaintiffs’ bottom line is:

The Court addresses one final matter.  A primary basis for the Plaintiffs’ objection to Rule 54(b) judgment is that the entry of the judgment would require them to pay excessive appellate filing fees. If the Plaintiffs are correct, that is a ramification that flows from the way the Plaintiffs have prosecuted their appeals.

Zantac IX, 2021 WL 5050347, at *18 (emphasis added).

In other words, plaintiffs have only themselves to blame for their supposedly “excessive” appellate filing fees.  “First, the Plaintiffs have taken the position that, master pleadings notwithstanding, each individual case in this MDL has retained its full identity and corresponding appellate rights.”  Id.  We’ll examine why that is so.  “Second, the Plaintiffs have elected to take appeals and seek Rule 58 final judgments in only a very few, select cases,” id., in an attempt to freeze out many of the defendants.  “[T]he Plaintiffs’ decision to seek individual appeals in this manner is the reason the Defendants are entitled to Rule 54(b) judgment.”  Id.  We’ll discuss that, too.  But had the plaintiffs sought an interlocutory appeal under 28 U.S.C. §1292(b) − through which all defendants could participate in all issues of interest to them – “there would be no need to take many appeals from many individual cases.”  Id.

The first issue, involving the “identity” of individual plaintiffs’ claims while they are subject to the MDL, involves a United States Supreme Court case Gelboim v. Bank of America Corp., 574 U.S. 405 (2015), which we discussed hereGelboim created what Zantac IX denominated an MDL “merger doctrine.”  2021 WL 5050347, at *7.  The key is the footnote we discussed in our prior post,

Parties may elect to file a master complaint and a corresponding consolidated answer, which supersede prior individual pleadings.  In such a case, the transferee court may treat the master pleadings as merging the discrete actions for the duration of the MDL pretrial proceedings.  No merger occurs, however, when the master complaint is not meant to be a pleading with legal effect but only an administrative summary of the claims brought by all the plaintiffs.

574 U.S. at 413 n.3 (citations and quotation marks omitted).  Thus, while “[c]ases consolidated for MDL pretrial proceedings ordinarily retain their separate identities,” and thus are separately appealable, the parties can change that by how they “treat the master pleadings.”

Zantac IX discussed at some length how the all the parties had throughout treated the Zantac master complaints as the operative pleadings.

  • Plaintiffs filed and served the master pleadings.
  • Filing of the master pleadings provided the dates for calculating all pleading and motion deadlines.
  • The master pleadings attracted twenty motions to dismiss over three rounds of motion practice.
  • The parties’ arguments and the court’s rulings on the motions to dismiss addressed only the allegations in the master complaints.
  • PTO 31, entered with consent of all parties, stated that the master complaints would “supersede and replace all claims pleaded in any complaint previously filed in or transferred to [the] MDL.”

2021 WL 5050347, at *9.

But while all objective MDL activity supported application of the MDL “merger doctrine,” plaintiffs’ master complaints pleaded their “subjective intent to preserve their individual appellate rights.”  Id. at *10.  For example:

This SAMPIC [second amended personal injury complaint] does not necessarily include all claims asserted in all of the transferred actions to this Court, and it is not intended to consolidate for any purpose the separate claims of the individual Plaintiffs in this MDL.  Each Plaintiff in this MDL will adopt this SAMPIC and specific causes of action alleged herein against specific Defendants through a separate Short Form Complaint – Version 3 (“SFC”), attached hereto as Exhibit A.  Any individual facts, jurisdictional allegations, additional legal claims, and/or requests for relief of an individual Plaintiff may be set forth as necessary in the SFC filed by the respective Plaintiff.  This SAMPIC does not constitute a waiver or dismissal of any actions or claims asserted in those individual actions, and no Plaintiff relinquishes the right to amend his or her individual claims to include additional claims as discovery proceeds and facts and other circumstances may warrant pursuant to PTO No. 31 or the appropriate Federal Rules of Civil Procedure.

Id. (quoting language found in all master complaints).

What the plaintiffs purported to want, the MDL judge gave them.

The Court resolves this situation by concluding that, in the presence of doubt and the general presumption against a finding of waiver of individual rights, the Court should not find that any right to appeal was waived by a Plaintiff and, instead, the “default rule” [from Gelboim] applies.

2021 WL 5050347, at *11.

We note that it is not at all clear that the MDL court needed to credit plaintiffs’ boilerplate language about preserving individual rights.  Merger doesn’t eliminate any plaintiff’s individual appellate rights, it just affects appellate timing, and objective evidence of merger should matter more than any party’s subjective wish.

In any event, under Zantac IX, every plaintiff can now choose to appeal, or not, their individual actions and thus to incur the necessary fees.  “Waiver occurs when a Plaintiff foregoes the opportunity to amend and proceeds directly to appeal.”  Id. at *11.  In the “generic-only” cases – where a given plaintiff sued only generic manufacturers of the drug – all claims had been dismissed with prejudice as preempted, so the court allowed for final judgments under Fed. R. Civ. P. 58.  Id.  Each plaintiff had the option to seek such a judgment.  Id.

Plaintiffs had also attempted to manipulate the appellate process to preserve their option to wage post-remand guerrilla warfare against MDL preemption rulings.  Zantac IX refused to countenance such shenanigans and instead certified appeals under Fed. R. Civ. P. 54(b) in cases where preemption applied but did not wipe out all claims against all parties.

A concern for courts overseeing MDLs is the possibility that, upon remand, the court’s various rulings will be appealed in piecemeal fashion to appellate courts across the federal judicial system. This precise concern is the reason that courts have entered Rule 54(b) judgments in MDLs.

2021 WL 5050347, at *13 (citation omitted).  Thus, all “active defendants in the MDL affected by the same ruling on appeal could join the appeal,” id., and prevent any “possibility that eventually the parties could receive different, inconsistent rulings on federal pre-emption in every circuit court in the United States.”  Id. at *14.

The result of the Rule 54(b) orders is that every defendant with similar preemption arguments – for example, plaintiffs asserted failure-to-report claims indiscriminately against all classes of defendants – will participate in the current round of appeals.

Addressing “when,” the Court concludes that its rulings on federal pre-emption as to the Generics, Brands, and Retailers are of such great importance that the entry of partial judgment should not be delayed, even though other claims remain pending in this MDL.  All of the parties affected by the Court’s federal pre-emption rulings − not just a subset of the Generics − should have the opportunity to argue the propriety of that ruling in a single, binding appellate forum, consistent with the purpose of centralized MDL proceedings.

2021 WL 5050347, at *15.  Administratively, Zantac IX chose to “docket a single Rule 54(b) final judgment on the MDL docket,” as opposed to “more than one thousand separate Rule 54(b) judgments in the individual cases..”  Id.

This seems to us to be the fairest outcome to all concerned under the circumstances.  Plaintiffs who sued non-generic defendants need not jettison conceivably valid claims in order to obtain final orders enabling them to appeal the various preemption rulings.  All defendants can participate in the current round of appeals without fear that, following remand from the MDL, plaintiffs will mount collateral attacks on the MDL preemption rulings in who knows how many different courts.  And, as discussed at the outset, plaintiffs have only their own over-the-top pleading habits to blame for having to pay filing fees in each case.