United States: Plaintiffs' Lead Counsel Off The Hook In Yaz MDL

Multidistrict litigation is not special. By making this pithy observation, we do not mean to denigrate what has become the mother of all procedural mechanisms. What we mean is that multidistrict litigation is, at its core, nothing more than a bunch of venue transfers, bringing multiple cases involving common issues before a single district judge for coordinated pretrial proceedings. The MDL statute does not grant an MDL judge any extraordinary or special powers. In fact, the statute purports to augment a district judge's prerogative in only one way: An MDL judge "may exercise the powers of a district judge in any district for the purpose of conducting pretrial depositions." 28 U.S.C. § 1407(a).

Not very Earth-shattering stuff, but the point is that whatever exceptional gravitas you might attribute to an MDL comes not from an act of Congress. It comes from the fact that one judge has all the parties and their attorneys in front of him or her with the power to preside over all their cases at the same time. That includes deciding which cases will proceed, and which will wait, and how proceedings will be conducted for those chosen to go ahead, maybe a few at a time, or maybe in entire "waves."

It also includes naming the plaintiffs' Lead and Liaison Counsel, a function that is uniquely important for the plaintiffs' side because there are usually many more plaintiffs' lawyers involved and they are generally being paid based on the results. That requires a leadership structure with defined responsibilities and a common-benefit compensation structure to go along.

But where do Lead and Liaison Counsel's responsibilities begin and where do they end? According to the Yaz MDL judge, who as far as we can tell is the first judge anywhere to address this particular issue, they begin and end with the court's order creating those roles and defining those responsibilities. That was the ruling in Casey v. Denton, No. 3:17-cv-00521, 2018 WL 4205153 (S.D. Ill. Sept. 4, 2018), where the district judge presiding over the Yaz hormonal contraceptive MDL held that the plaintiffs' Lead and Liaison Counsel owed no general fiduciary duty to plaintiffs in the MDL, other than their own clients. After the bulk of the cases in the MDL resolved, the MDL judge entered an order placing the unresolved cases on separate litigation tracks, with all the deadlines that you would expect: Fact sheets, case-specific expert reports etc. Id. at **2-3.

Here is where is got ugly. Many of the non-settling plaintiffs blew the deadlines, resulting in motions to dismiss. The plaintiffs blew the deadlines to oppose those motions, too. Presented with violations of court orders and utter indifference from the plaintiffs (and their individual attorneys) toward their own cases, the MDL judge justifiably dismissed their cases. Id. No one appealed or sought reconsideration. Id.

So, what is a plaintiff to do, after rejecting settlement and opting to litigate, only then to blow off the resulting litigation deadlines? Of course, you sue your lawyer. But not your own lawyer. You sue the Lead and Liaison Counsel who created this whole mess, right? That is exactly what these plaintiffs did, claiming that the Lead and Liaison Counsel "breached purported fiduciary duties by failing to address (or failing to delegate) the directives laid out" in the court's orders. Id. at *2. The plaintiffs analogized to duties owed by attorneys representing classes of plaintiffs, i.e., that Lead the Liaison Counsel's duties arose from and were created by the court's order creating those positions and "bestowing" certain duties. Id. at *3.

That proposition was a nonstarter for this judge. First, the court found no fiduciary duty:

Id. at *4 (emphasis added). In this case, the document creating the relationship was Case Management Order No. 2, which created the roles of Lead and Liaison Counsel and "very clearly set[ ] out what responsibilities the Lead and Liaison Counsel . . . owed to plaintiffs." Moreover, "it is clear from the text that Order No. 2 only imposed tasks geared towards facilitating general work product that could be used for the common good of all plaintiffs," such as coordination of document depositories, preparing agendas, and conducting common discovery. Id. As the MDL judge concluded, "It was never the intention or spirit of Order No. 2 to supersede the authority or importance of each plaintiff's individually-retained counsel when it came to specific matters unique to each case." Id. at 5.

That is not to say that Lead and Liaison counsel own no duty to MDL plaintiffs. The court analogized to a trustee, who owes a duty to pursue the "good of all." Id. at *6. As Judge Cardozo reminded us all in law school, "A trustee is held to something stricter than the morals of the market place. Not honesty alone, but the punctilio of an honor the most sensitive, is then the standard of behavior . . . ." Meinhard v. Salmon, 164 N.E. 545 (N.Y. 1928) (emphasis added). Whatever the "punctilio of an honor" encompasses, it does not extend to representing an individual plaintiff when her or her own lawyer fails to do so.

Second, the court decided it would be a bad idea to create the fiduciary duty that the plaintiffs wanted. After all, who would want to be Lead and/or Liaison Counsel if those roles came saddled with the duty to respond to every deadline and otherwise represent individuals with whom they have no engagement? We have no qualm with the idea that the plaintiffs' leadership in an MDL should earn their pay, and we know from our view from the other side of the aisle that they work very hard. But even we have to admit that the plaintiffs in this case were asking too much.

The lesson here is that Lead and Liaison Counsel's duties are defined by court order, and not so much by common law principles governing fiduciaries. So be careful in drafting and presenting those proposed orders for the judge's signature. They may be used against you. A little gratuitous advice to plaintiffs' attorneys, who are very unlikely to read our blog.

This article is presented for informational purposes only and is not intended to constitute legal advice.