Multi-district Litigation; (Lack of) Evidence and Pending Legislation

Multi-district litigation (MDL) has its advantages even for defendants, but some see abuses, including a recent case involving an orthopedic device maker’s metal-on-metal hip implants. There is legislation in circulating on Capitol Hill that might address some of the problems associated with these mass actions, but the Trump administration and the House GOP have their hands full, raising the prospect that any corrective legislation might languish.

No evidence? No problem
Device maker Biomet faces an MDL case that took a new twist recently when a judge in Indiana dismissed the defendant’s motion to dismiss the claims of six plaintiffs in the product liability suit. A pretrial order filed in 2013 had required that plaintiffs find some means of preserving the device components in order to be eligible for the action, and several of the plaintiffs indicated that health care practitioners either refused or failed to send the devices along before the MDL commenced. One of the plaintiffs managed to recover the device and kept it in a plastic bag in a closet, but made no mention of this until she was deposed.

Judge Robert Miller of the District Court for the District of Northern Indiana decreed that the five plaintiffs who never recovered their devices could not be excluded from the MDL because those explants took place prior to the start of the MDL. Biomet’s attorneys argued spoliation as a cause for dismissal of these plaintiffs, but Miller expressed the view that these litigants could not be excluded because there was no demonstration of bad faith on their parts. As for the sixth plaintiff, her failure to handle the device appropriately seemed to have no effect on her eligibility for the MDL due to an absence of any indication that her failure to disclose her possession of the article was anything more than an oversight.

Courts are said to have considerable leeway in determining when spoliation sanctions should be applied, but defendants may be concerned that Miller’s determination could dilute the value of spoliation. There is also the lingering question of the circumstances in which a device maker is liable for devices that are made unavailable for examination because they are disposed of prior to the start of an MDL procedure.

Spoliation not mentioned, but …
The Fairness in Class Litigation Action Act of 2017, sponsored by Rep. Bob Goodlatte (R-Virginia) has made its way into the House and Senate Judiciary Committees. The bill states that among its purposes is to “diminish abuses in class action and mass tort litigation that are undermining the integrity” of the legal system.

While the bill does not seem to directly address spoliation, section 5 of the bill specifically calls out MDLs. This portion of the legislation would require that plaintiff’s counsel offer evidence in support of the claim of injury as well as “the alleged cause of that injury.” The filing of such information must take place within 45 days of the transfer of the legal action or be “directly filed in the proceedings.” Should that information not show up in the judge’s hands within the following 30 days, that plaintiff is excluded, and the bill states further that these deadlines “shall not be extended.” The text says little about what would constitute evidence in support of a claim of injury, however.

Another interesting feature of Goodlatte’s bill is that it limits attorney fees to 20 percent of the monies recovered, and any disputes about this provision would be handled by the judge who handled the pretrial proceedings. Whether this feature will tamp down some of the legal adventurism said to characterize MDLs is up for grabs, but corporate attorneys can’t help but cheer this feature (and others) of this legislation.

And despite the distractions posed by health care and tax reform, the presence of a GOP majority on both sides of Capitol Hill offers the most favorable conditions for tort reform of any kind than have been seen at any time in the past decade, particularly since a Republican holds the Oval Office for the first time in eight years.