This weekend, the Drug and Device Law Rock Climber hosted a sleepover to say goodbye to her friends as she headed back to college. Somehow, between our last survey of heads on pillows and the convergence on the breakfast table, the number of non-resident young adults increased, prompting the logical question (as we cracked a few more eggs), “How did you guys get here?”

In In re Mortgage Electronic Registration Systems (MERS) Litigation, 2016 WL 3931820 (D. Ariz. July 21, 2016), the United States District Court for the District of Arizona asked a similar question.  This is obviously not a drug or device case, but it is relevant to all of us who defend clients in MDLs. In MERS, cases related to the formation and operation of the subject mortgage registration systems were consolidated in an MDL.  After the court dismissed a number of associated cases, the plaintiffs filed a Consolidated Amended Complaint (“CAC”). One of the named plaintiffs in the CAC had not been named in the previous complaint and “had never filed a lawsuit that the Judicial Panel on Multidistrict Litigation transferred to [the court].” MERS, 2016 WL 3931820 at *1.

A complicated procedural sequence ensued. The district court dismissed the CAC for failure to state a claim upon which relief could be granted.  In its discussion of its dismissal of Count I of the CAC, the court stated, “[The new] alleged Plaintiff . . . is not a named Plaintiff in any member case of this MDL.  Accordingly, Plaintiffs’ claim cannot rest on allegations relating to [this plaintiff].”  Id. at *1.  The Ninth Circuit affirmed the dismissal of the CAC except that it reversed and remanded as to Count I.  And so, the parties ended up back before the MDL court, where the defendants moved for summary judgment on the new plaintiff’s claims.  The defendants argued, “[This plaintiff] never filed a lawsuit that the [JPML] transferred to this Court.  Rather, [he] was joined when Plaintiffs filed their Consolidated Master Complaint – which is impermissible – and thus, this Court’s jurisdiction has not been invoked.” Id. at *2 (citations omitted).  In the alternative, the defendants asked that the new plaintiff’s claims be dismissed for lack of jurisdiction.

The court requested supplemental briefing on the following questions: 1) Does a transferee MDL court have the authority to join ‘new’ plaintiffs in an MDL when such plaintiffs never filed their own case (nor paid the filing fee) and never had their cases transferred to this Court by the panel on multidistrict litigation; and 2) what was the basis for federal subject matter jurisdiction over the new plaintiff’s case. Id. In their supplemental brief, the plaintiffs argued that the new plaintiff’s case was properly joined in the MDL because, like other plaintiffs, the defendants were allegedly involved in recording false documents related to the new plaintiff’s property.  Plaintiffs also argued that the court had diversity jurisdiction over the new plaintiff’s claims.  The defendants countered, “The jurisdictional issue relating to [the new plaintiff] does not involve whether there was diversity jurisdiction or federal question jurisdiction relating to [his] claims.  Rather, the issue is whether the Court’s jurisdiction is sufficiently invoked because [the new plaintiff] never filed a lawsuit in this federal court or in any other federal court that was then transferred to the MDL Court by the [JPML].” Id. at *3.Continue Reading MDL Court Says “You Don’t Belong Here” to Plaintiff “Added by Amendment”