Readers of this blog are familiar with the MDL Panel. And readers probably know that some, but not all, states have “mini MDL” procedures for coordinating cases in state court systems. This post criticizes, and proposes an amendment to, one aspect of California’s “mini MDL” statute.
California’s process for creating statewide coordinated proceedings is among the most highly developed in the country. Unlike the process in many states, California’s “mini MDL” structure was created by statute. The Code of Civil Procedure permits parties to file a petition with the chair of the Judicial Council of California asking that cases pending in different courts and sharing a common question of law or fact be coordinated. See Cal. Code Civ. Proc. §§ 404-404.9. Code of Civil Procedure § 404.1 lists seven factors to be considered in making the coordination decision.
The California statute incorrectly requires the coordination motion judge to consider one irrelevant, and potentially harmful, factor in deciding whether to coordinate cases — “whether the common question of fact or law is predominating and significant to the litigation.” See Cal. Code Civ. Proc. § 404.1. In the federal system, the MDL Panel is empowered to coordinate “civil actions involving one or more common questions of fact.” See 28 U.S.C. § 1407. The statutory language thus permits coordination if the cases contain as few as one common question of fact. Although the MDL Panel has wavered on the issue, the Panel has never held that common questions must predominate to allow coordination. See, e.g., In re Diet Drugs (Phentermine, Fenfluramine, Dexfenfluramine) Prods. Liab. Litig., 990 F. Supp. 834, 835-36 (J.P.M.L. 1998) (rejecting the argument that common questions failed to predominate, but not holding that common questions must predominate). In practice, the MDL Panel seems to balance the existence of common questions with other considerations. As more convenience and fairness is achieved through transfer, less commonality is required. See, e.g., In re Westinghouse Electric Corp. Uranium Contracts Litig., 405 F. Supp. 316, 319 (J.P.M.L. 1975).
The standard for certifying a lawsuit as a class action is, of course, quite different. Under Federal Rule of Civil Procedure 23(b)(3), a court will certify a class action only if “the court finds that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members.” Fed. R. Civ. P. 23(b)(3).
The distinction between cases that contain a single common question of fact, on the one hand, and predominating common questions, on the other hand, makes a difference. The MDL Panel frequently transfers cases for coordinated proceedings because the cases contain one or more common questions of fact, but, because common questions do not predominate, the cases cannot be certified as class actions. See, e.g., In re Bridgestone/Firestone, Inc. Tires Prods. Liab. Litig., 288 F.3d 1012 (7th Cir. 2002) (reversing order certifying class in MDL proceeding). This result is entirely proper: There are many types of cases, such as product liability cases seeking to recover for personal injuries, in which federal courts almost never certify classes. See, e.g., In re American Med. Sys., Inc., 75 F.3d 1069 (6th Cir. 1996). Even though those cases cannot be certified as class actions, however, transferring the cases to a single court for coordinated discovery proceedings might nonetheless promote efficiency. Documents would be produced only once; corporate witnesses would be deposed only once; interrogatories would be asked and answered only once; and so on. Even though the cases are not suitable for class certification, the parties and the judicial system might well benefit from coordinated pretrial proceedings.
The standards governing most state “mini MDL” processes (whether imposed by statutes, court rules, or ad hoc procedures) mirror the federal system: Courts do not assess whether common questions predominate when deciding whether to coordinate cases. See generally Mark Herrmann, Geoffrey J. Ritts & Katherine Larson, Statewide Coordinated Proceedings: State Court Analogues to the Federal MDL Process (2d rev. ed. 2004) (surveying the law in all 50 states).
The California mini MDL statute, however, is different. California Code of Civil Procedure § 404.1 requires the coordination motion judge to consider “whether the common question of fact or law is predominating. . . .” (Emphasis added.) The California mini MDL statute thus interposes at the coordination stage a legal issue that is irrelevant to whether the cases should be coordinated and relevant only to the later, independent question whether putative class actions should be certified.
California’s statutory flaw creates two related problems. First, defendants who favor coordination but oppose class certification may be reluctant to invoke the California coordination statute. Defendants may fear that the arguments they are required to make to seek coordination may later be used against them at a class certification hearing. If this concern discourages defendants from invoking the coordination process, then cases in which coordination would promote judicial efficiency will not be coordinated, wasting both the parties’ and judicial resources.
On the other hand, if defendants do seek coordination in these cases, then plaintiffs may (as they have in past litigation) use the defense arguments pressed at the coordination stage at a later class certification hearing. If a judge were to grant class certification based on a defendant’s supposed admission at the coordination stage that common questions “predominate,” then a class might be certified in an inappropriate case. The resulting proceeding could harm either defendants who find themselves defending against improperly aggregated claims or absent class members who find themselves bound to a judgment tried by an inappropriate class representative.
There is no reason for California to interject the question whether common questions “predominate” into the process for seeking coordinated proceedings. The legislature should amend California Code of Civil Procedure § 404.1 to delete that one factor, thus assuring that parties will not be discouraged from seeking coordination in appropriate cases and that the California state judicial system will achieve maximum efficiency when handling related cases.