Mulitdistrict litigations – both federal MDLs and their state-court equivalents – sound like noble endeavors. The concept is simple: consolidate similar lawsuits under one judge to streamline proceedings. This, in theory, avoids contradictory rulings and saves court resources. But when you pan out past the injured plaintiffs and mountains of medical records, you’ll spot one constant: the plaintiffs’ attorneys, quietly — or not so quietly — raking it in like blackjack dealers at a high-stakes casino. That’s because behind the judicial curtain, there’s a familiar tale unfolding: an elite cadre of plaintiffs’ lawyers ascend to “leadership positions,” and suddenly they’re holding the keys to a billion-dollar vault.
Plaintiffs’ “leadership” have turned what was once a tool for judicial efficiency into a revenue-generating juggernaut. To be fair, depositions, discovery, Rule 702 hearings, etc. take real work. But the math doesn’t lie. Take a $2 billion settlement. If the leadership team takes home 6% to 10% in common benefit fees (on top of their own individual client fees), that’s $120–$200 million going to a handful of firms. That’s not a contingency — that’s a conquest. The actual plaintiffs, the people plaintiffs’ leadership spent years arguing were devastatingly injured, get a few thousand dollars each, and that’s before they learn that half their award is going to a Medicare lien and a third to their lawyer. Meanwhile, their lawyers walk away with enough to buy a vineyard, a yacht, or possibly a minor European fútbol club.
So, we werent surprised when we happened upon Johnson v. Mazie, — F.4th –, 2025 WL 1909974 (3rd Cir. Jul. 11, 2025)—a group of plaintiffs suing their mass tort attorneys post-MDL settlement for breach of contract, legal malpractice, conversion, and unjust enrichment. Id. at *1. The underlying product liability MDL, concerning a blood pressure medication, was venued in the District of New Jersey. It settled for over $300 million. Id. at *1. Plaintiffs filed suit in New Jersey state court alleging that plaintiffs’ co-lead counsel in the MDL collected fees (both contingency and common benefit) in violation of New Jersey state court rules made applicable to federal litigation by the district’s court local rules. Id. Plaintiffs are citizens of various states other than New Jersey and alleged that the amount in controversy for each plaintiff is less than $75,000. Id.
Defendant (plaintiffs’ MDL counsel) removed the case to federal court on both diversity and federal question grounds and plaintiffs moved to remand. The district court denied plaintiffs’ motion holding sua sponte that it had “ancillary enforcement jurisdiction over the matter because Plaintiffs challenged attorney’s fees awarded from the MDL settlement.” Id. at *2. Ancillary enforcement jurisdiction gives “federal courts the power to enforce their judgments and ensure that they are not dependent on state courts to enforce their decrees.” Id. However, it cannot serve as the basis for removal of a state court action to federal court.
To remove a case, defendant must “demonstrate that original subject-matter jurisdiction lies in the federal courts.” 28 U.S.C. §1441(a) (emphasis added). In the case of a previously settled matter,
[a]lthough the federal court retain[s] jurisdiction over the settlement, that d[oes] not “authorize[ ] removal” because the “invocation of ancillary [enforcement] jurisdiction” d[oes] not “dispense with the need for compliance with statutory requirements.”
Id. at *3. Therefore, the Third Circuit held that the denial of plaintiffs’ motion to remand on this basis was an error.
The district court did not rule on either the federal question or diversity jurisdiction arguments, but the appellate court looked at both. On federal question, defendant argued that while plaintiffs brought state law claims, those claims challenge a federal district court’s MDL fee awards. The Third Circuit ruled that was not enough to raise a “disputed and substantial” federal issue. Id. On diversity jurisdiction, there was no dispute that the parties were diverse, only whether the value of the claim exceeded $75,000 as required by federal statute. Plaintiffs alleged that each claim was less in value, and such an allegation typically controls the question. But there are exceptions, such as where state law permits recovery of damages in excess of the amount demanded. In that case, if a defendant shows by a preponderance of the evidence that the amount in controversy exceeds $75,000, a district court can find removal based on diversity jurisdiction proper. Id. at *4. Because the district court made no findings regarding the amount in controversy, the Third Circuit vacated the judgement and remanded the case to the district court on that issue.
Yes, this case is basically about removal, but a knock-down, drag-out between MDL plaintiffs and their lawyers is pure popcorn entertainment to us. Especially because we know in the MDL economy, the real winner is the person who filed the motion to be appointed co-lead counsel. If you’re looking for profit — the MDL casino is open, and plaintiffs’ leadership is the house.