We have not been terribly shy in voicing our concerns over certain practices we see in drug and device MDLs. Some of these concerns are directed to plaintiff lawyers, some to the judges overseeing the MDLs, and some to both. For instance, we think many MDL judges are far too lenient in allowing plaintiffs chance after chance to plead a non-preempted claim, comply with basic discovery requirements, or find experts who can offer reliable opinions on threshold issues like general causation.
We recognize that other issues can be thorny, especially in MDLs that last several years and/or have new cases added after merits decisions on recurring issues occur. Home Depot USA, Inc. v. Lafarge North America, Inc., — F.4th –, 2023 WL 1458892 (3d Cir. Feb. 2, 2023), addressed two thorny issues, often interrelated, the law of the case and issue preclusion. Part of the idea of “coordinated or consolidated pretrial proceedings” in MDLs is that they “will promote the just and efficient conduct of such actions.” 28 U.S.C. § 1407. The value of avoiding conflicting decisions from multiple courts overseeing the same sort of cases is often touted in this context. In a given MDL, it may be the plaintiffs, the defendants, or some of each that want law of the case and/or issue preclusions to prevent do-overs. Absent class treatment, though, some number of do-overs—at least from some party’s perspective—are inevitable. This is certainly the case when it comes to the general inapplicability of nonmutual offensive collateral estoppel in product liability cases, so that jury verdicts and resulting judgments in bellwether trials rarely determine what will happen in another case. See here and here. Home Depot is not a product liability case and we do not purport to know anywhere near the full history of the Domestic Drywall Antitrust Litigation MDL from whence it came. But it does provide a relatively rare appellate explication of how complicated and protracted MDLs are supposed to function.
The facts of Home Depot, as relevant to the decision and with more than a little dumbing down, are that the price fixing MDL was established in 2013 based on cases brought by various direct purchasers against various manufacturers, but Home Depot (HD) was not a plaintiff. HD was a putative class member of a case brought against Lafarge (LNA) and other manufacturers; over time, they all settled and HD opted out of the LNA settlement class but not the others. In mid-2018, HD brought its own suit as an indirect purchaser against LNA, which was transferred to the MDL despite HD’s objection. After a while, the MDL court considered a Rule 702 motion of HD’s expert economist and its ruling excluded the expert largely for “ignor[ing] relevant facts and prior decisions in the same case.” An interlocutory appeal followed over LNA’s objection.
Home Depot was interesting to us, not only because it addressed law of the case and issue preclusion in the context of an MDL, but because the court proceeded to provide some operating principles after it decided the issues before it. The first principle was that “those doctrines generally apply to each case in [an] MDL in the same way as they apply to cases outside of it.” 2023 WL 1458892, *1. It may be difficult to identify many decisions from other MDLs that explicitly say the opposite—that MDLs are different when it comes to these doctrines—but many judges are clearly of that view. For instance, we are aware of remand orders from MDLs that urge transferee judges overseeing trials in individual cases to follow rulings made in other individual cases on the balance of relevance and prejudice for specific categories of evidence. The MDL judge in Home Depot applied special rules for an MDL, albeit without explicitly saying so. This was most obvious in the context of the application of the law of the case. As we noted, the judge referred to “prior decisions in the same case” when he was really talking about prior decisions in different cases in the MDL. Inadvertently loose nomenclature this may be, but the law of the case doctrine “only applies within the same case.” Id. at *4 (citation omitted). “Cases centralized in an MDL retain their separate identities unless they choose to proceed on a consolidated master complaint.” Id. (citation and internal punctuation omitted). Here, it was the same MDL, but different cases. Indeed, the “decisions” at issue happened before the Home Depot case made it to the MDL. Two of the three “decisions” here were also not actual decisions anyway, so clearly no law of the case could limit HD’s expert.
The appellate court in Home Depot emphasized that MDLs do not have different rules for law of the case. The Supreme Court decision in Gelboim v. Bank of Am. Corp., 574 U.S. 405, 413 (2015), made clear that that separate MDL cases have to be treated separately for law of the case purposes. The MDL process does not “change the rights of the parties.” Id. (citing In re TMI Litig., 193 F.3d 613, 724 (3d Cir. 1999)). Knowing that the aforementioned TMI stood for Three Mile Island and curious about the context, we looked up the cited part of TMI. The issue there was extending a summary judgment ruling from a group of trial plaintiffs to 2000 non-trial plaintiffs. In reversing, the appellate court in TMI stated “consolidation [into an MDL] is not intended to affect the substantive rights of the parties to the consolidated cases.” TMI, 193 F.3d at 724. Coming from our background of serial drug and device product liability litigation, we find these statements somewhat aspirational. They are, however, good to keep in mind should you need to brief a situation where the particular procedures in an MDL have affected the substantive rights of your client.
Issue preclusion is, by definition, something that affects a substantive right. It also should be a higher bar than law of the case, except that it can arise from a decision in another case. The fairly familiar criteria for issues preclusion are that “the identical issue was decided in a prior adjudication, there was a final judgment on the merits, the party against whom the bar is asserted was a party or in privity with a party to the prior adjudication, and the party against whom the bar is asserted had a full and fair opportunity to litigate the issue in question.” 2023 WL 1458892, *5 (citations and internal punctuation omitted). Being a putative member of a pending class does not count as being a party or in privity with a party. Id. A few other criteria were not met either. The analysis was pretty obvious what is discussed above.
The Home Depot appellate court chastised the MDL court for trying to create an exception to the requirements for issue preclusion where HD allegedly benefited from class action settlements with manufacturers other than LNA. Settlements are not judgments on the merits and the settlement classes from which HD did not opt out “preserve[d] class members’ rights to pursue claims against others.” Id. at *6.
The district court has broad authority to structure and manage the MDL proceeding to promote efficiency and avoid unfairness. But it does not have the authority to create special rules to bind plaintiffs by the finding of previous proceedings in which they were not parties, even by a proceeding as thorough as the multidistrict common issues trial.
Id. (citations and internal punctuation omitted).
Home Depot was not done. After rejecting the argument that the expert could be excluded on other grounds—the record was not sufficiently developed for that—the court turned to a discussion of mechanisms available to MDL courts to balance “judicial economy” against “fairness to litigants.” Id. at *7-10. You can read the discussion yourself and probably draw out some support for the positions urged for one side or the other in a particular MDL. As it noted, “No particular approach will be suitable in every case.” Id. at *10. We agree. To the principles articulated in this part of Home Depot, we would add our own: It is not the job of an MDL court to slant its rulings to facilitate a mass settlement. In other words, let the chips (or drywall) fall where they may.