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This time of year, many of us are focused on the NFL playoffs.  For someone who watches the Super Bowl for the commercials or the halftime show, which team wins may not matter much.  For those devoted to a particular team, however, there is one possible result that will be truly satisfying.  The reality is that, the fans of 96.875% of the teams end the season with dissatisfaction and those of 92.857% of the playoff teams end the season with an excruciating loss.  Of course, there are those who can find something positive from a non-championship season.  Maybe the fan’s favorite team showed a big improvement over the prior season or the team finally found a franchise quarterback, either of which could lead to optimism for the next season, even though it will probably result in another non-championship.

In the world of product liability MDLs, way more than 99% of the cases filed end in dismissal.  In any given MDL, very few, or perhaps none, of the cases that the plaintiff lawyers file will result in judgment for the plaintiff.  Of course, the path to and nature of the dismissal will determine how the parties and their counsel feel about it.  A dismissal in connection with a settlement or a dismissal without prejudice will not be as dissatisfying for the plaintiff as a dismissal with prejudice after summary judgment or a defense verdict at trial.  For the defendants in an MDL, the reality is that satisfaction is affected by a range of economic considerations.  Managing an MDL where the vast majority of cases essentially sit around for years waiting for settlement requires a focus on the big picture as well as the case count.

Subject matter jurisdiction in a product liability MDL will almost always be based on diversity and the defendant will usually prefer that any given case within the MDL’s definition proceed in the MDL instead of in state court.  There is a clear gap in the proceeding statements.  A plaintiff with the same state of residence as the defendant(s) cannot stay in federal court based on diversity jurisdiction, and there is no special federal jurisdiction for MDL courts.  In In re Cook Med., Inc., IVC Filters Mkt’g, Sales Pracs. & Prods. Liab. Litig., MDL No. 2570, 2024 U.S. Dist. LEXIS 235780 (S.D. Ind. Nov. 14, 2024) (“Cook”), the defendants succeeded in getting the cases of eleven plaintiffs from Indiana, where the defendants are also based, dismissed without prejudice for lack of subject matter jurisdiction.  That is only part of the story.  The plaintiff lawyers admitted they did not have diversity jurisdiction for these cases when they were directly filed in the MDL and no other basis for keeping the cases in the MDL.  And they refused to dismiss the cases when requested.  So, the defendants sought Rule 11 sanctions in connection with the dismissals.  This was largely symbolic because they sought only the costs of bringing the motions to dismiss in nine cases and later reduced the request to $100 per case.  They apparently did not pursue other avenues for sanctions or costs, probably because Rule 11 allows sanctions to be awarded against an attorney or law firm, not just against a party.

The Cook court denied sanctions.  While the plaintiff lawyers had no argument about jurisdiction, their excuse for refusing to voluntarily dismiss when requested was that Indiana’s savings clause would not provide a year to re-file if the dismissals were voluntary.  The court thus saw the refusals to dismiss as not being sanctionable because they were “in the best interest of Plaintiffs, their clients.”  2024 U.S. Dist. LEXIS 235780, *4.  Here is the problem with that decision.  The cases were directly filed in the MDL in 2018 to 2020, several years after the MDL was established.  [We have tracked various rulings from and related to this MDL over the years, like here, here, here, and here.]  Subject matter jurisdiction is measured at the time the case is filed in or removed to federal court.  Plaintiff lawyers should know the law well enough to ensure that they do not file time-barred cases and/or cases in courts without jurisdiction.  There would have been no need to use the Indiana savings clause if the cases had been timely filed in Indiana state court originally or if the mistake of filing in the MDL had been discovered before the statute of limitations expired.  These cases were pending in the wrong court for four to six years before the savings clause became the excuse for forcing motions to dismiss to be filed.  When the court had to rule on those motions and the attendant obvious sanctions issue, the delay should not have been exculpatory.  After all, the Cook court did find that the plaintiff lawyers “should have realized that Plaintiffs’ cases did not fall within the diversity jurisdiction of this court,” a determination that would have applied at all points from before filing until the ultimate dismissal.  Id. 

Sanctionable conduct by a lawyer should not get a retroactive blessing if it persists long enough to hurt the lawyer’s clients.  Nor is the consideration that sanctions “can affect the reputation and creativity of counsel” usually going to be sufficient for an MDL to refrain from sending the message that filing frivolous cases and refusing to dismiss them is sanctionable.  Id. (quoting from Hartmarx Corp. v. Abboud, 326 F.3d 862, 867 (7th Cir. 2003)).  Indeed, because the savings clause would not resurrect a case that was untimely when filed, if any of these cases were filed in the wrong court after the statute of limitations had expired, then the much later refusal to dismiss served no interest of the lawyer’s client.

By contrast, just about any unsupportable claim or position advanced by a plaintiff lawyer could be said to be done in the “best interest” of the lawyer’s client, who presumably wants to win a big award or secure a big settlement.  That may be why Rule 11 has no provision that excuses unsupported representations to the Court—such as a jurisdictional allegation in a complaint—based on the interest of the party on whose behalf the representation is made.  It does specify, however, that any “sanction imposed under this rule must be limited to what suffices to deter repetition of the conduct or comparable conduct by others similarly situated.”  Fed. R. Civ. P. 11(c)(4).  In the context of an MDL, trying to deter the direct filing of cases without subject matter jurisdiction makes sense.