This is hardly the first time we’ve complained about MDL procedures – such as direct filing and master complaints – adopted in derogation of the Federal Rules of Civil Procedure, and deployed to the disadvantage of defendants. Today’s decision, Sykes v. Cook Inc., ___ F.4th ___, 2023 WL 4188705 (7th Cir. June 23, 2023), isn’t even the first time that the defendant in this particular IVC MDL lost a dismissal to an MDL procedural peculiarity. See Looper v. Cook Inc., 20 F.4th 387, 391 (7th Cir. 2021) (MDL statute of limitations dismissal reversed because direct filing changed ordinarily applicable choice of law rules).
The mess that “short form” and “long form” MDL complaints, neither of which are recognized as “pleadings” by Fed. R. Civ. P. 7(a) (listing the “only” pleadings supposedly allowed in federal court), have made of MDL pleading cost the defendant two summary judgment wins in Sykes.
The two plaintiff-appellants in Sykes both alleged that the IVC filter devices placed in their vena cavae (the “VC” in “IVC”) penetrated/perforated the vein walls – but that’s all. “They had experienced no pain or other symptoms, but because their filters had perforated their veins, they pursued product liability claims against [defendant].” 2023 WL 4188705, at *1. When they filed, “[t]he direct-filing procedure the district court had adopted for the MDL did not require [either plaintiff] to file a standard complaint. Instead, each filed a short-form complaint.” Id.
Unfortunately for the defendant, that procedural quirk turned out to be important.
The only way that the MDL statute, 42 U.S.C. §1407, contemplates for cases to enter the MDL is through “tag along actions” processed by the Judicial Panel on Multidistrict Litigation. 2023 WL 4188705, at *1. MDL judges, however, often allow a procedural shortcut, direct filing, authorized neither by §1407 or the federal rules, but by defense-side waiver of objections to personal jurisdiction and venue:
[W]hen an MDL uses direct filing, the defendant may agree to waive objections based on personal jurisdiction and venue, allowing any plaintiff to file suit in the district in which the MDL is pending.
In this IVC MDL, the plaintiffs’ attorney solicitation machine dredged up a lot of asymptomatic plaintiffs, like these two, whose only “injury” was a scan showing “perforation.” Id. at *2. However, all plaintiffs were deemed to have filed the MDL “master” complaint, which pleaded a bunch of “injuries” that these asymptomatic plaintiffs never had: “permanent and continuous injuries, pain and suffering, disability and impairment,” “emotional trauma, harm and injuries that will continue into the future,” “los[s of] ability to live a normal life,” as well as past and future “lost earnings” and “medical bills.” Id. As to these two plaintiffs, all of those allegations were simply false.
That’s where the “short-form” complaint came in – “a five-page form that incorporated the master complaint’s allegations by reference and allowed a plaintiff to fill in individualized details.” Id. These plaintiffs (and a bunch of others) admitted they were asymptomatic in their short form complaints. Id. Their cases were then “categorized” in a group of “asymptomatic injury cases.” Id. “Plaintiffs were required to “certify the respective outcomes.” Id. These two did that. Id. at *3. A few months later one of them filed a “declaration” claiming onset of pain, the other stayed asymptomatic until the defendant moved for summary judgment. Id.
The defendant’s summary judgment motion “argu[ed] that under the applicable state law, an asymptomatic . . . perforation is not a legally cognizable injury, so no cause of action had accrued.” 2023 WL 4188705, at *3. The substantive law of both states at issue (Kentucky and Texas – more on that, here) required present/actual injury as a product liability element, so summary judgment was entered. Id.
But on appeal, both summary judgments were vacated because there was no subject matter jurisdiction. These were diversity cases, and the only allegations that the $75,000 jurisdictional amount was met were in the master complaint – the one that alleged all the injuries that these two plaintiffs did not have. Id. at *4. Subject matter jurisdiction, of course, is not waivable, and the standard is “legal certainty”:
The plaintiff’s allegations about the amount in controversy control unless the court concludes, “to a legal certainty,” that “the face of the pleadings” demonstrates “that the plaintiff cannot recover” the jurisdictional minimum or that “the proofs” show that “the plaintiff never was entitled to recover that amount.”
Sykes, 2023 WL 4188705, at *4 (quoting St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 289 (1938)). Jurisdictional amount, like other jurisdictional elements, is measured solely “as of the date on which a case is filed in or removed to federal court.” Id. (citations omitted). However, to determine jurisdictional amount as of the filing date, the “full record” is considered, including “evidence produced in discovery.” Id. at *5.
Sykes ruled – after-the-fact, of course – that the asymptomatic plaintiffs should never have been allowed in the MDL (or into federal court at all) in the first place. These plaintiffs’ “short-form complaints and case-categorization forms contradict the master complaint’s jurisdictional allegations.” Id. at *6. While the master complaint covers all plaintiffs generally, it doesn’t affect these two plaintiffs:
The master complaint no doubt alleges injuries that place more than $75,000 in controversy, . . . [b]ut [these plaintiffs] have not suffered the injuries alleged in the master complaint. Neither plaintiff claims she had experienced pain or any other symptoms when she filed her complaint, and each initially categorized her case as an asymptomatic perforation.
Id. That’s a neat trick in itself, available only to MDL plaintiffs – they can falsely adopt a master complaint’s injury allegations (“a plaintiff does not act in good faith when she bases jurisdictional allegations on injuries she has not suffered,” id.) and still avoid Rule 11 by virtue of the contradictory facts pleaded in their short-form complaints.
On the basis of the “full record” asymptomatic plaintiffs could not possibly meet the $75,000 jurisdictional amount for diversity jurisdiction:
[T]he record shows that based on the injuries [these two plaintiffs] could allege in good faith when they filed their complaints, it was legally impossible for either plaintiff to recover more than $75,000. We therefore lack jurisdiction.
Id. They couldn’t amend the master complaint, but they could have (but did not) amend their short-form complaints. Id. at *7 (citing 28 U.S.C. §1653).
Nor could any extra-pleadings materials produced in MDL discovery support the jurisdictional amount. Their medical records supported their initial allegations of being asymptomatic. Id. at *8. A declaration by a plaintiff’s expert was just the usual garbage they spout in low-value cases – lots of purported “elevated risk,” but no actual injuries. Id. at *9 (“He does not opine that [either plaintiff] must have experienced pain from their perforations or that they necessarily suffer from some specific impairment.”). Some medical literature, and an “FDA communication” were more of the same: describing possible risks (“a predictor of failed filter retrieval”) but nothing more. Id. at *10. A post-filing declaration by one of the plaintiffs, that she was now symptomatic, came after the filing of the complaint and was irrelevant. Id. at *11.
Looking at the factual record, and applying the relevant states’ law (neither of which allows recovery for unmanifested future risks), Sykes concluded that a verdict exceeding the $75,000 jurisdictional amount would be “excessive” in both states as a matter of law. Id. at *12-13.
As a result, the with-prejudice dismissal that the defendant had obtained in the MDL was vacated, and both plaintiffs were instead dismissed without prejudice. Id. at *13. Unfortunately for the defendant, “[c]onvenience . . . does not control our jurisdictional analysis.” Id. at *7.
So, what is an MDL defendant to do? First of all, master pleadings and direct filing (by cutting procedural corners) encourage the solicitation of low-value asymptomatic cases, and then encourage plaintiffs to act in bad faith and rely on jurisdictional allegations that do not apply to them. There are a lot of competing concerns over master pleadings and direct filings at the outset of an MDL when these things are implemented, including cost, efficiency, and pressure from MDL judges, but master pleadings and direct filing have big downsides, some of which do not materialize until further down the MDL road. So maybe more MDL defendants should refuse to agree to them.
Second, move to throw out asymptomatic plaintiffs on subject matter jurisdictional grounds – particularly in states that do not allow medical monitoring claims, but recognize also that in a lot of cases, even a medical monitoring recovery is likely to be so small, for any given plaintiff, that the jurisdictional amount cannot possibly be met. That’s the silver lining in Sykes. All of the remaining asymptomatic plaintiffs in that MDL are subject to dismissal, since there is no waiver and because the usual P-side attempts to change the facts in response to a dispositive motion won’t work here, because of the “time of filing” cut off.