And Now A Word From The Panel: Justifying An MDL

By Alan Rothman
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Law360 (September 23, 2020, 3:50 PM EDT) --
Alan Rothman
Alan Rothman
Welcome to the latest installment of And Now a Word from the Panel, a column which "rides the circuit" with the Judicial Panel on Multidistrict Litigation as it meets on a bimonthly basis. On Sept. 24, in the wake of the COVID-19 pandemic, the panel will once again follow its new practice of holding its hearing sessions remotely.

As with the May and July hearing sessions, the September hearing will be held remotely as a video teleconference from the panel's Washington, D.C., office via the Zoom meeting app, rather than meeting in person in its previously scheduled September locale of Birmingham, Alabama.[1]

But for those thinking that the panel might yet be open to making video panel sessions a fixture of panel practice, it has once again cautioned that the "Panel plans to return to its practice of in-person hearings when it becomes practicable to do so."[2]

This month's column takes a bit of a detour, and explores the panel's views on trade secret MDLs, including its consideration of a new MDL petition arising from allegations of exploitation of a competitor's trade secrets, among other alleged misconduct. In particular, the panel addressed whether the presence of numerous individual defendants, in addition to a corporate defendant, warrants denial of an MDL petition.

But before reaching these issues, let us review the results of the panel's July video hearing session. At this session, the panel considered 12 new MDL petitions. The panel granted six of those new MDL motions and denied six of the motions, with the six new MDLs relating to product liability, antitrust, employment, data privacy, trade secrets and ticket refunds.

The new MDLs are spread out a bit more across the country, with the selected venues for the new MDLs including Arkansas, California, Illinois, Missouri, New York and North Carolina — a more balanced approach to MDLs venues than the recent trend toward "east of the Mississippi" venues discussed in our last column.[3]

PANEL TRIVIA CORNER


July Trivia Question

Which judicial district has the most pending MDL proceedings?

Answer to July Trivia Question

The Northern District of California.

September Trivia Question

When was the last time that the panel held two hearing sessions within the Eleventh Circuit during the same calendar year?


Like to venture a guess as to this month's trivia question? Have tidbits of panel trivia that you would like to be featured in an upcoming column? Please do not hesitate to drop me a note at arothman@sidley.com.

With the baseball season winding down, the panel continues to bat .500 for the year, establishing 14 new MDL proceedings out of a total of 28 petitions considered by the panel in 2020. The pace of new MDL petitions continues to pick up steam, with the panel now slated to hear arguments on eight MDL petitions at its September hearing (with one other petition recently withdrawn).

Given the volume of the petitions, the panel has again divided its hearing into morning and afternoon sessions.

The overall number of pending MDL proceedings is now at 180, a slight decline from 183 two months ago.[4] The panel continues to close out older MDL dockets, terminating a total of 25 existing MDLs this year through mid-September.[5]

Product liability MDLs continue to comprise approximately one-third of the total number of MDL proceedings.[6] The 180 MDL proceedings now encompass a whopping 312,519 actions.[7] There are now 23 MDL proceedings which have more than 500 individual pending actions, almost all of which are from among the product liability MDLs.[8]

Looking Back: Keeping a Secret

At the July hearing session, the panel heard oral argument via Zoom in In re: Ahern Rentals Inc. Trade Secret Litigation, with respect to a petition to create an MDL for actions arising from allegations of a nationwide scheme by the defendants, including former employees of the plaintiff and their new employer.[9] The plaintiff alleges that its competitor engaged in a scheme to lure away the plaintiff's employees and customers, and that the former employees took the plaintiff's trade secrets as well as other proprietary information while still employed by the plaintiff.

In addition to naming the competing entity as a defendant, the plaintiff named numerous individual defendants who allegedly engaged in misconduct. In opposing MDL centralization, the plaintiff argued that the actions focused on the conduct of individual defendants, which was "highly localized."[10]

In rejecting that argument and establishing a new MDL, the panel focused on the "nationwide conspiracy" allegedly conducted by the corporate defendant, even though individual actions may allege misconduct "unique to each individual defendant." Of particular interest to the panel was a complaint which named only the corporate defendant and alleged Racketeer Influenced and Corrupt Organizations Act and antitrust violations.

That complaint included many of the "allegations made against the individual defendants in more than half of the actions also before the Panel." The panel found it likely that there would be overlapping discovery, a key factor in the panel's decision-making process. Indeed, the plaintiff had already served overlapping discovery across the actions.[11]

What is the takeaway for MDL practitioners? Do not focus on the dichotomy between corporate and individual defendants. Rather, consider whether the actions are similar — and specifically, whether they will lead to common discovery, warranting centralization in an MDL proceeding to "serve the convenience of the parties and witnesses and promote the just and efficient conduct of th[e] litigation."[12]

What will the September video hearing bring? Will the panel still face an onslaught of new MDL petitions? Will they involve actions against both individuals and corporate defendants? Will the panel select varied venues across the country for MDL proceedings?

Even if panel hearings continue remotely in December instead of its planned locale of San Antonio, Texas, stay tuned for our next edition of And Now Word from the Panel. May all be well and safe!



Alan E. Rothman is counsel at Sidley Austin LLP. He counsels clients on issues relating to practice and procedure before the Judicial Panel on Multidistrict Litigation, and has appeared before the panel on oral argument.

The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.

[1] https://www.jpml.uscourts.gov/sites/jpml/files/Supplemental_Notice_of_Hearing_Session-9-24-20.pdf.

[2] Id.

[3] "And Now a Word from the Panel: MDL Distancing," Law360 (July 27, 2020).

[4] https://www.jpml.uscourts.gov/sites/jpml/files/Pending_MDL_Dockets_By_District-September-15-2020.pdf.

[5] https://www.jpml.uscourts.gov/sites/jpml/files/Recently_Terminated_MDLs-January%201-September-15-2020.pdf.

[6] https://www.jpml.uscourts.gov/sites/jpml/files/Pending_MDL_Dockets_By_MDL_Type-September-15-2020.pdf.

[7] https://www.jpml.uscourts.gov/sites/jpml/files/Pending_MDL_Dockets_By_Actions_Pending-September-15-2020.pdf.

[8] Id.

[9] In re Ahern Rentals Inc. Trade Secret Litig. , MDL No. 2945 (J.P.M.L Aug. 7, 2020).

[10] Id. at 1.

[11] Id. at 2.

[12] Id. at 1.​​​​​

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