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Because of their coordinated nature, MDLs afford a unique opportunity for courts to facilitate large-scale settlements resolving all, or at least many, plaintiffs’ claims in a complex litigation. Fed. Jud. Ctr., Manual for Complex Litigation § 13 (4th ed. 2004) [hereinafter MCL]. The vast majority of cases transferred to MDLs are not remanded to the transferor courts for final resolution; rather, more than 90% of cases centralized in mass-tort MDLs, for example, are resolved either on motion or through settlement. Bolch J. Inst., Duke L. Sch., Guidelines And Best Practices for Large and Mass-Tort MDLS 109 (2d ed., 2018) [hereinafter Bolch Guidelines]; Robert H. Klonoff, Federal Multidistrict Litigation in a Nutshell 223 (2020) (noting fewer than 8% of over 200,000 cases in MDLs from 1968-2021 ended in remand).
This module addresses the different ways that MDL courts involve themselves in the settlement process. As a practical matter, settlement negotiations often take place in private among the parties, out of view of the court, and many of the intricacies of such negotiations are not shared with the court or reflected in publicly filed documents. What is better reflected in the public record, and more useful if one seeks to appreciate courts’ impact on MDL settlement activity, is the different ways in which transferee judges engage with the parties to position the litigation for eventual resolution, in whole or part, via settlement.
The degree to which MDL judges involve themselves in the settlement process varies. Many MDL judges “consider[] settlements as the end goal, viewing remands as signs of failure.” Amanda Bronstad, “Judges Feel a Lot of Pressure”: Jurists Debate Path for Unsettled MDL Cases, Law.com (Sept. 14, 2022). Frequently, MDL judges assume an active role in the procedural management of the litigation with a strategic eye towards an eventual settlement. Efforts include: appointing designated settlement counsel early in the litigation, selecting representative cases for fact discovery and bellwether trial, and establishing the infrastructure for a settlement process, such as appointing settlement special masters and/or administrators and establishing mediation or other resolution case “tracks.” Some MDL courts take their involvement further, including, controversially, by opining on the fairness or reasonableness of settlement terms.
Other judges assume a less active role, taking the view, for instance, that “it’s not the job of the MDL judge to make sure these cases settle, and to do anything possible to force everybody to settle”; nor is it a sign of failure if cases are remanded back to their home jurisdictions. Id. Commentators also highlight the potential for conflicts to arise when a judge that has participated in unsuccessful settlement negotiations pivots to oversee continuing litigation. See MCL, supra at 446 (noting that, in this circumstance, some judges “turn over” to another judge the responsibility of trying the case).
This module begins with an overview of basic information about MDL settlements and their foundational dynamics. The module then explores different approaches taken by MDL judges to encourage or facilitate settlement, review the fairness of settlements, and address various post-settlement issues. This module is not intended to offer a comprehensive review of the many issues and complexities that arise when cases, swept into an MDL, are consensually resolved. Nor does it examine different types of settlement structures. For detailed discussions of these and many other settlement-related topics, see MCL, supra at § 22.9; Bolch Guidelines, supra Chapter 8.
MDL settlements may be “global,” or “inventory.” Global settlements are designed to resolve all cases within the scope of the MDL, while inventory settlements are designed to resolve the cases of only certain plaintiffs. Bolch Guidelines, supra at 109.
Master settlement agreements (MSA) in MDLs set forth the terms of the parties’ settlement. The terms of these agreements are tailored to the individual circumstances of each case. Still, many MDL MSAs share key elements, each of which is then customized to the needs of the cases. These include the following terms:
See, e.g., Master Settlement Agreement, In re HOC Rejuvenate and ABG II Hip Implant Prods. Liab. Litig., MDL No. 13-2441 (D. Minn. Sept. 9, 2020); Combat Arms Settlement Agreement, In re Combat Arms Earplugs Prods. Liab. Litig., MDL No. 2885 (N.D. Fla. Aug. 29, 2023); Settlement Agreement, In re Vioxx Prods. Liab. Litig., MDL No. 1657 (E.D. La. Nov. 9, 2007).
As the key focus of this module is on the MDL judge’s role in encouraging and facilitating settlement, we do not examine each of these elements in detail. For further discussion of these elements, see Bolch Guidelines, supra at 109–11 and Matt Garretson et al., Anatomy of a Mass Settlement 2 (Emerging Issues in Mass Torts MDL Conference, Oct. 17, 2016).
MDL judges vary greatly in the extent to which they expressly encourage the parties to settle.
Some courts choose to raise the issue of settlement early in the litigation, if only to ask when the parties believe more focused settlement discussions or mediation may be helpful. The Manual for Complex Litigation notes that the “judge can encourage the settlement process by asking at the first pretrial conference whether settlement discussions have occurred or might be scheduled.” MCL, supra at 167. In doing so, courts implicitly require the parties to put thought into potential settlement before the MDL kicks off in earnest.
Initial Case Management Conference – Topics for Discussion. I expect a discussion of [sic] the conference of procedures that might facilitate the expeditious, economical, and just resolution of this litigation. I will invite discussion (in addition to matters the parties include in the joint proposed agenda) on the following topics.
Other courts have more aggressively signaled the importance of settlement to the parties early in the case. In the Uber Passenger Sexual Assault MDL, for instance, Judge Charles Breyer’s first order in the consolidated case instructed the parties to submit recommendations for a special settlement master.
SETTLEMENT MASTER—All parties are invited to file any suggestions of person(s) to appoint as Special Settlement Master. The submissions must be filed on or before November 3, 2023, and each submission shall not exceed three pages. Any responses, objections, and/or support for persons suggested by other parties shall be filed on or before November 15, 2023.
As the case develops, judges often find it prudent to continue raising the issue of settlement. Judges generally avoid opining on the merits of the parties’ claims, but they may “occasionally . . . suggest that the parties reexamine their positions [on settlement] in light of current or anticipated developments.” MCL, supra at 167. Likewise, courts often inquire into the status of the parties’ settlement discussions during periodic status conferences. And similar to Judge Breyer’s approach in the Uber MDL, courts may check in from time to time to ask whether mediation or appointment of a neutral settlement master would be beneficial. For more on special masters who assist the court regarding settlements, click here.
Transferee courts often appoint individuals to oversee settlement discussions and negotiations. Those individuals may include (a) settlement masters; (b) special masters; and (c) settlement committees. For more on the general use of magistrates, special masters, and other judicial adjuncts, including outside the settlement context, click here.
Settlement Masters: Courts frequently appoint one or more settlement masters to oversee and facilitate the parties’ settlement discussions, especially in large MDLs with numerous cases, multiple alleged injury categories, and/or other special complexities that might be a barrier to a negotiated resolution. As the Bolch Guidelines suggest, “[p]rompt appointment of a settlement master when parties are willing to negotiate should be the norm.” Bolch Guidelines, supra at 108. Indeed, “[c]ourts have come to realize that the appointment of a neutral third-party who is granted quasi-judicial authority to act as a buffer between the court and the parties can provide a useful approach to reaching a settlement.” Hon. Stephen R. Bough & Hon. Anne E. Case-Halferty, A Judicial Perspective on Approaches to Case Management, 17 UMKC L. Rev. 971, 976 (2021).
Often, courts will elicit feedback from counsel regarding who should be appointed as a settlement master, given the importance of appointing an individual who commands the respect and trust of the parties and can establish strong working relationships with all sides. Courts frequently appoint as settlement masters experienced mediators or attorneys with a strong background in MDLs or other complex litigation.
As the Court noted at the initial status conference, there is an urgent need to determine if all or some of the pending matters can be resolved by the parties sooner rather than later. To that end, the Court invited the parties to suggest persons to be appointed by the Court to facilitate settlement discussions among the parties. Pretrial Order No. 1 (Dkt. No. 2). The Court has carefully reviewed the suggestions, and after given [sic] the issue considerable thought, gives notice of its intent to appoint Robert S. Mueller, III as settlement master.
Mr. Mueller served as the sixth Director of the FBI from September 2001 through 2013. He was nominated by President George W. Bush, and his initial ten-year term was extended for an additional two years at the request of President Barack Obama and pursuant to congressional legislation. He is currently a partner at WilmerHale in Washington, D.C.
The Court has known Mr. Mueller professionally for more than 40 years, beginning with his service as an Assistant United States Attorney in the Northern District of California, and including his tenure as the United States Attorney for the Northern District of California from 1998 through 2001. There are few, if any, people with more integrity, good judgment, and relevant experience than Mr. Mueller. Mr. Mueller will not adjudicate, or assist the Court with adjudicating, any issues in these consolidated proceedings; rather, his role will be to use his considerable experience and judgment to facilitate settlement discussions among the various parties in these complex matters. His government and private practice experience makes him uniquely qualified to work with and earn the trust of the parties, including the consumer and car dealer plaintiffs, the United States government, the Volkswagen defendants, and the interested state governments.
The Court shall give the parties an opportunity to respond to the Court’s suggestion of the appointment of Mr. Mueller.
Once the parties have weighed in, transferee judges formally appoint the settlement master. They do so in an order outlining the settlement master’s authority, which is typically broad and can include the authority to schedule settlement discussions, to decide who will participate in those discussions, and to choose how those discussions will be structured.
IT IS HEREBY ORDERED that pursuant to Fed. R. Civ. P. 53, Ellen K. Reisman, partner at Reisman Karron Greene, LLP in Washington, DC, [an attorney specializing is dispute resolution] is appointed as a special master to assist the court in efficiently coordinating settlement discussions in these proceedings.
. . .
As relates to settlement, the special master shall have the full authority provided in Rule 53(c). The special master may, without limitation:
Upon the parties’ joint agreement, the Court hereby appoints John Jackson [an attorney specializing is dispute resolution] as settlement master. The settlement master will facilitate discussions among and between the parties as he deems necessary, appropriate and as directed by the Court, and will provide status reports to the Court on a frequent and timely basis. The settlement master shall have the power and authority to engage in ex parte communications with all parties, counsel, and the Court.
In some cases, courts will appoint settlement masters to facilitate the settlement of only certain cases. In the GM Ignition Switch MDL, for instance, the court repeatedly appointed Daniel J. Balhoff—an attorney with significant experience mediating complex litigations—to oversee the resolution of certain groups of plaintiffs’ claims.
Pursuant to Federal Rule of Civil Procedure 53(a)(1)(C), this Court appoints Daniel J. Balhoff of the law firm Perry, Balhoff, Mengis & Burns, LLC, to act as a Special Master for the purpose of serving as a mediator to facilitate settlement discussions between Plaintiffs and New GM. The Court is familiar with Mr. Balhoff’s credentials, and it is the judgment of this Court that he is well qualified for this appointment. (A copy of Mr. Balhoff’s curriculum vitae is attached as Exhibit 1.) Mr. Balhoff has already served as court appointed Special Master for many settlements in this MDL.
Magistrate Judges: Sometimes, an MDL judge will appoint other federal district court judges or magistrate judges to oversee settlement discussions.
Pretrial Order No. 5, In re Guidant Corp. Implantable Defibrillators Prods. Liab. Litig., MDL No. 05-1708 (D. Minn. Jan. 31, 2006).
Mediation-Settlement: Immediate Contact with Magistrate Judge Arthur J. Boylan. Lead Counsel for each party is ordered to separately confer with Magistrate Judge Arthur J. Boylan by calling his chambers . . . within 10 days of the date of this Order. The purpose of this conference will be to advise Magistrate Judge Boylan in his role as an ADR neutral, on the parties’ positions regarding early settlement efforts on one or more issues. This contact may be ex parte and any communications shall be considered to be strictly confidential and, absent agreement between the parties, shall not be subject to disclosure to other parties, including United States District Judge Donovan W. Frank, assigned to this case, or any other District Judge assigned to one or more cases. Discussion of settlement of one, more than one, or all issues may include, but will not be limited to, any cases identified as representative or so-called bellwether cases; any issues of general applicability that will permit the parties to focus on outcome determinative issues in the case, whether they relate to liability or damages; and any and all issues that promote the efficient administration of this case, including settlement, resolving pretrial issues—be they discovery or other issues—and resolving issues that will promote the early resolution of one or all cases with or without trial.
Both parties shall keep Magistrate Judge Arthur J. Boylan informed as to all settlement discussions including, but not limited to, any global, group, or other settlement negotiations, including the status of such negotiations, if any, in individual state cases.
Settlement Committees: Some MDL courts appoint settlement committees—made up of select plaintiffs’ and defendants’ counsel—and charge those committees with leading settlement efforts. Courts may appoint a settlement committee early in the MDL to encourage early settlement discussions. There may be overlap between plaintiffs’ and defendants’ leadership counsel and the members of a settlement committee. Note that work on a settlement committee typically qualifies as compensable common benefit work. (For more on common benefit funds, click here).
1. Settlement Committee Appointment. The court HEREBY appoints the following 3 counsel to serve as the chair and vice chairs for the Settlement Committee:
The co-lead counsel shall coordinate with the members of the Settlement Committee and are ex-officio members of the Settlement Committee. Ms. Liebenberg, Ms. Gorshe, and Mr. Stroyd may attend all meetings of the co-lead counsel, the PSC, or subcommittees to further their efforts to settle the cases in this MDL. These appointments do not serve as an exhaustive list of the members and this order does not identify all the duties of the Settlement Committee.
Order at 1, In re National Prescription Opiate Litig., MDL No. 2804 (N.D. Ohio Feb. 7, 2018).
The Court earlier requested that various groups identify negotiating teams to discuss settlement. These groups asked and received permission to name more than six attorneys each. The Court now confirms the negotiating teams will be composed as set forth below, and these teams will work with the Special Masters and the Court to identify possible resolutions of economic and non-economic issues in this litigation. The Court reserves the right to modify the composition of these teams as discussions go forward, and these teams may appoint “support committees” to assist with negotiations as they see fit.
[setting forth committee members]
Pretrial Order #4, In re 3M Combat Arms Earplugs Prods. Liab. Litig., MDL No. 2885 (N.D. Fla. Apr. 19, 2019) (setting forth responsibilities of a Joint Settlement Committee).
Scholars and judges have noted that establishing “tracks” for cases in an MDL can help facilitate a speedier resolution. Bough & Case-Halferty, supra at 979. Tracking promotes the resolution of similar cases, leading to the settlement of at least a portion of the litigation. This, in turn, allows the parties to shift their focus to the remaining cases. There is no exclusive basis on which to establish case “tracks.” Cases have been grouped based on their complexity, representativeness, the stage of the litigation, factual commonalities, relief sought or other relevant factors.
One common option is to “fast track” a selection of cases for discovery and/or bellwether trials. (For more on bellwether trials, click here). The resolution of “fast track” cases can provide parties in the “regular track” with information that prompts settlement discussions. That was the case in the Pharmaceutical Industry Average Wholesale Price MDL—an industry-wide MDL in which several classes were certified. As we show below, the court fast-tracked “Track One” cases involving five defendants for a bench trial, after which the court issued substantial findings of fact and conclusions of law. Following the issuance of those decisions, the “Track Two” parties negotiated settlements. For more on this strategy, see Catherine R. Borden, Federal Judicial Center, Managing Related Proposed Class Actions in Multidistrict Litigation 12 (2018).
Often, state court cases are litigated alongside the federal MDL—and there is some value in resolving the state and federal cases in one fell swoop. To promote this objective, the FJC advises that state and federal judges should “encourage joint comprehensive settlement negotiations and alternative dispute resolution procedures.” Barbara J. Rothstein & Catherine R. Borden, Fed. Jud. Ctr., Managing Multidistrict Litigation in Products Liability Cases: A Pocket Guide for Transferee Judges 27 (2011).
Common methods of coordinating procedures are: (1) sharing settlement information between state and federal courts; (2) engaging in joint settlement efforts; and (3) using a shared settlement master.
(1) Sharing Settlement Information: Some courts find it appropriate to apprise state courts of significant developments related to the transferee court’s efforts to settle claims pending in the MDL.
On November 23, 2010, this Court appointed Jerome Shestack as Settlement Master to all pending actions in the MDL, with “full authority to implement such measures and advise the court on any orders deemed necessary to facilitate the mediation process.”… The same day the Court ordered that all cases in the MDL were to “proceed simultaneously on a litigation track and a mediation track…
. . .
And now to further implement the effectiveness of the settlement and mediation tracks established by this COURT in Pre-trial Order No. 122, IT IS ORDERED that the following procedure is hereby established.
[Setting forth procedures for mediation]
The Court is providing a copy of this Order to those State courts where Avandia-related claims are pending to advise those Courts of this mediation effort.
(2) Coordinated Settlement Conferences. Other federal and state judges hold joint conferences to discuss settlement with state and federal court litigants in attendance.
THE COURT: This multi-district litigation has been pending, as many of you in the room know, since June of 2013. And it has been proceeding, what I will call, in tandem with the multi-county litigation commenced in January of 2013 before Judge Brian R. Martinotti in the Superior Court of New Jersey, Bergen County, as well as some other jurisdictions around the country. And I have had, myself, contact with not just Judge Martinotti, but other Judges around the country.
We have scheduled this proceeding, as I think most of you know in the room, to occur simultaneously to maximize fairness and transparency with the hearing in New Jersey before Judge Martinotti to announce an agreement between the parties in the various coordinated proceedings to settle what I believe to be thousands of cases brought by individuals implanted with Stryker’s ABG II and Rejuvenate Modular Hip Stems.
The court in the Vioxx MDL took a similar tack, as recounted in a decision regarding certain settlement-related motions:
In re Vioxx Prods. Liab. Litig., No. MDL 1657, 2010 WL 724084, at *2 (E.D. La. Feb. 18, 2010).
The Court convened a conference in New Orleans on December 8, 2006. In addition to the undersigned Transferee Judge, state judges from Texas, New Jersey, and California attended. Also in attendance was an official of the Defendant, lead and liaison counsel for the Defendant, and lead and liaison counsel for the Plaintiffs’ Steering Committee. The Judges expressed the view that it was timely for the parties to begin serious settlement discussions. With the benefit of experience from the bellwether trials, as well as this encouragement from the several coordinated courts, the parties soon began settlement discussions in earnest.*
*In their efforts to develop a comprehensive, joint settlement agreement, counsel for Merck and the Negotiating Plaintiffs’ Counsel (“NPC”) met together more than fifty times and held several hundred telephone conferences. Although the parties met and negotiated independently, they kept this Court-as well as the coordinated state courts of Texas, New Jersey, and California-informed of their progress in settlement discussions.
(3) Coordination by a Settlement Master. Courts may also appoint a settlement master to coordinate settlement activity among federal and state cases.
As described in the Coordination Order Related to Settlement, numerous lawsuits have been filed in various federal and state courts arising from Syngenta’s development and sale of com seeds containing genetically modified traits known as MIR 162 and Event 5307 (used in products called Viptera and Duracade) before China’s approval to import corn with those traits. Cases are pending in this multidistrict litigation (“MDL”) proceeding in the United States District Court for the District of Kansas, captioned In re Syngenta AG MIR162 Corn Litigation, MDL Docket No. 2591, before U.S. District Judge John W. Lungstrum and U.S. Magistrate Judge James P. O’Hara. Additional federal actions are pending in the United States District Court for the Southern District of Illinois before U.S. District Judge David R. Herndon. In Minnesota State Court, a large number of cases are consolidated before Judge Thomas M. Sipkins in a case captioned In re Syngenta Litigation, No. 27-cv-15-3785. In addition, cases are pending in Illinois State Court before Judge Brad K. Bleyer and in Louisiana State Court before Judges Madeline Jasmine and Emile R. St. Pierre.
Because of the quantity and complexity of these related cases and the common interest in a fair and expeditious resolution, the presiding judges have determined, and the parties have agreed, that it would be beneficial to appoint a special master to explore settlement of all the cases, in all of the courts in which they are pending, at the same time those cases proceed toward trial on a traditional litigation track. As required by Fed. R. Civ. P. 53(b)(1), the parties were given an opportunity to be heard and to suggest candidates for appointment. After reviewing written submissions from the parties and conducting an in-person status conference, the court enters this order appointing a special master for the MDL proceedings. It is recommended that this order, or one substantially similar to it, be entered in each of the related state and federal cases that are being coordinated with the MDL proceeding.
IT IS HEREBY ORDERED that pursuant to Fed. R. Civ. P. 53, Ellen K. Reisman, partner at Reisman Karron Greene, LLP in Washington, DC, is appointed as a special master to assist the court in efficiently coordinating settlement discussions in these proceedings.
Order Designating Special Master, In re Total Body Formula Prods. Liab. Litig., MDL No. 1946 (N.D. Ala. May 25, 2010) (appointing a special settlement master).
The Special Master is explicitly allowed to (and is expected to) consult with this Court, one or more Mediators, Counsel for the Parties, the Plaintiffs Executive Committee, Insurance Carriers and their Counsel, State Courts and other persons as he may choose in carrying out his duties.
Unlike in certified class actions, where, per Federal Rule of Civil Procedure 23(e), a court must approve every settlement and must find, prior to approval, that the settlement is “fair, reasonable, and adequate,” MDL courts are not required or expressly authorized to approve the settlement of claims in an MDL. There are isolated circumstances where particular types of claims pending in an MDL may require court approval for settlement, such as class actions or claims involving minors or plaintiffs otherwise lacking legal capacity. However, for the vast majority of individual claims in an MDL, no court approval is necessary for settlement. For more on the differences between class actions and MDLs on this dimension, click here.
Still, MDL courts sometimes take it upon themselves to opine as to whether a proposed MDL settlement is fair or reasonable. There is strong debate about whether this practice is proper.
One camp believes judges should not express their opinion regarding settlement fairness or reasonableness; in fact, some argue that it is not within their judicial authority to do so. A judge’s opinion risks “shedding doubt on an already-negotiated settlement deal and creating conflicts between attorneys and clients.” Nora Freeman Engstrom et al., Deborah L. Rhode Ctr. on the Legal Pro., Plaintiffs and Attorneys in Multidistrict Litigation: Strengths, Deficits, and Paths Forward 49 (2022). Moreover, it is unclear what process a critical opinion might trigger. See id. And a non-binding opinion could be deemed to constitute an advisory opinion, which judges are not permitted to issue under their Article III powers. Id. See also Alexandra N. Rothman, Note, Bringing an End to the Trend: Cutting Judicial “Approval” and “Rejection” Out of Non-Class Mass Settlement, 80 Fordham L. Rev. 319, 351–52 (2011) (criticizing an outsized judicial role in approving MDL settlements as restricting a claimants’ autonomy and inconsistent with the adversarial system).
Others recognize the reality that most MDL plaintiffs will lack critical information about the MDL settlement when deciding whether to accept it or not. Engstrom et al., supra at 14. Indeed, “[b]ecause there is no putative or provisional class, there is no requirement that individual claimants be kept apprised of case developments or the attorneys’ efforts in resolving the litigation,” leaving the parties’ counsel with nearly unfettered discretion in their settlement negotiations. Linda Mullenix, Policing MDL Non-Class Settlements: Empowering Judges Through the All Writs Act, 37 Rev. Litig. 129, 156 (2018). Thus, some argue that MDL judges—who do have substantial insight into a case—should opine on the fairness of a settlement. They point out that an MDL judge’s remark, even if informal, regarding the perceived unfairness of the settlement often sends “an easy-to-understand signal” directly to the parties about their lawyers’ performance and can encourage parties to push their lawyers to renegotiate a better deal. Andrew D. Bradt & Theodore Rave, The Information-Forcing Role of Judge in Multidistrict Litigation, 105 Cal. L. Rev. 1259, 1265 (2017). By the same token, a judge’s approval may signal to parties who are on the fence about a settlement agreement that it may be worth joining. The judge thus becomes an “information-forcing intermediary.” Id. at 1264.
The Bolch Guidelines highlight the court’s responsibility in the context of a global settlement to ensure a fair settlement process, as distinct from weighing in on the fairness of the settlement itself. The Guidelines urge that global settlements, “which effectively terminate the MDL and thus affect the rights of the remaining non-parties to the settlement, should be examined by the MDL court pursuant to its oversight authority to facilitate and ensure the fairness of the overall settlement process.” Bolch Guidelines, supra at 109.
“Suggestions” or “Recommendations.” Transferee judges sometimes express verbal opinions on settlements at status conferences. As reflected in the following transcript excerpts, judges may couch these comments as “suggestions” or “recommendations” that counsel and their clients can consider.
Transcript of Conference, In re Zyprexa Litig., MDL No. 1596 (E.D.N.Y. Nov. 9, 2005) (discussing various aspects of the proposed settlement).
. . .
THE COURT: [Regarding the medical criteria to be used for plaintiffs to determine whether they were entitled to be a part of “Track B” settlement cases] I thought they were too complex. It seemed to me they ought to be simplified with a simple letter from a medical person who is admitted, subject to control at the state level. If you find too many from the same doctor… just don’t take them, and require another doctor. I would simplify that. I think that if you are going to use a matrix, try to make it as simple as possible.
THE COURT: [Regarding a provision that allowed some plaintiffs to opt-out of the current settlement and “wait and see” for future developments] That opt-out provision seems to me to be impossible. You’re either in or out, right from the beginning. Either you believe that the system is fair, you have some confidence in the Special Masters, or you don’t. If you don’t want it, it seems to me you are out, and we’ll give you pretrial and trial as needed.
It seems to me that the criteria are sensible and generous, and beyond that, a later opt-out makes no sense at all to me. It just seems to me you ought to revise that out of the case.
Transcript of Status Conference, In re Guidant Corp. Implantable Defibrillator Prods. Liab. Litig., MDL No. 1708 (D. Minn. Dec. 17, 2007) (PDF of transcript unavailable).
[I]t is without any reservations that I recommend this 25-page settlement agreement and the options that it gives to individual Plaintiffs… I am confident that it is not only fair, globally, but it is fair individually to individuals [sic] Plaintiffs… I know more about the case than I would if it was more from the old days, so to speak, a class action approach… So, I can say honestly, and I would to each of the Plaintiffs if they were here, that not only do I believe that they will receive fair treatment if they opt in and participate in this agreement, but I would make the observation that they might get more fair treatment than if they stood alone.
Opinions Based on Contractual Authority. Some parties contractually delegate to the judge the power to review the settlement. Bradt & Rave, supra at 1296. This is sometimes done in the settlement agreement itself, as in the following example from the Vioxx MDL:
Settlement Agreement Between Merck & Co., Inc. and the Counsel Listed on the Signature Pages Hereto, In re Vioxx Prods. Liab. Litig., MDL No 1657 (E.D. La. Nov. 9, 2007) (defining the powers of the Chief Administrator, here Judge Fallon, who oversaw the litigation).
[I]t is further the desire, and intent and agreement, of the Parties that if the Chief Administrator (or, if applicable… the Special Master or any court) determines that any provision of this Agreement is prohibited or unenforceable to any extent or in any particular context but in some modified form would be enforceable, the Chief Administrator (or, if applicable… the Special Master or any court) shall have the power to, and shall, (x) modify such provision for purposes of such proceeding in accordance with clauses (i), (ii) and (iii) of the preceding sentence and otherwise to the minimum extent necessary so that such provision, as so modified, may then be enforced in such proceeding, and (y) enforce such provision, as so modified pursuant to clause (x), in such proceeding. In any event, upon any such determination that any term or other provision is invalid, illegal or unenforceable, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible to the fullest extent permitted by applicable law.
Judicial oversight of class action settlements and MDL settlements differs considerably. For one, the defaults are different. In a Rule 23(b)(3) class action, class members are bound to the settlement unless they affirmatively opt-out. The same is not true in MDLs, which consist of individually filed lawsuits—plaintiffs must instead opt-in to a settlement.
MDL and class actions settlements also differ in terms of whether judicial approval is required. In part because of a proposed class action settlement’s binding nature, Federal Rule of Procedure 23 requires courts to analyze such a settlement to ensure that it is fair and reasonable. Fed. R. Civ. P. 23(e)(2). In doing so, courts must hold a hearing regarding the settlement at which class members are invited to submit objections. Id. There is no such rule in MDLs—indeed, MDL judges have no formal authority to reject a settlement agreement as unfair.
Of course, some MDLs include class actions that have been consolidated along with individually filed cases. In those cases, courts still must satisfy the necessary requirements under Rule 23(e)(2) with respect to those class actions (but not the other individual cases in the MDL that may be subject to similar terms). Moreover, if a defendant issues equity or other securities as a part of the settlement, judicial approval may be required under 15 U.S.C. § 77c(a)(10). See, e.g., Order, In re 3M Combat Arms Earplug Prods. Liab. Litig., MDL No. 2885 (N.D. Fla. Oct. 18, 2023) (scheduling a settlement fairness hearing as required by 15 U.S.C. § 77c(a)(10)).
Notably, a minority of MDL judges have referred to MDL proceedings as “quasi-class actions,” pointing out that, like class actions, MDLs are a “coordinated litigation of many individual yet related cases.” In re Guidant Corp. Implantable Defibrillators Prods. Liab. Litig., MDL No. 05-1708, 2008 WL 682174 (D. Minn. Mar. 7, 2008); see also In re Zyprexa Prods. Liab. Litig., 424 F. Supp. 2d 488, 491 (E.D.N.Y. 2006); In re Vioxx Prods. Liab. Litig., 650 F. Supp. 2d 549, 558–62 (E.D. La. 2009). These judges have, in some instances, claimed that MDL’s “quasi-class action” nature provides license to more expressly consider the fairness of an MDL settlement. See Zyprexa, 424 F. Supp. 2d at 491 (noting that the judicial role in an MDL, including in establishing common benefit funds and appointing settlement masters, “reflect[ed] a degree of court control supporting its imposition of fiduciary standards to ensure fair treatment to all parties and counsel regarding fees and expenses”). That position has been widely criticized by scholars. See, e.g., Charles Silver, The Suspect Restitutionary Basis for Common Benefit Fee Awards in Multi-District Litigation, 101 Tex. L. Rev. 1652, 1674 & n.100 (2023) (collecting citations and remarking that “[a]cademic commentators have criticized the use of the quasi-class action metaphor repeatedly”); Linda S. Mullenix, Dubious Doctrines: The Quasi-Class Action, 80 U. Cin. L. Rev. 389 (2012) (criticizing the concept of a quasi-class action).
For more on the distinctions between settlements and class actions, see Bolch Guidelines, supra at 100–02; Howard M. Erichson, What MDL and Class Actions Have in Common, 70 Vand. L. Rev. En Banc 29 (2017).
The work of an MDL court and the parties does not end once a settlement has been inked. At that point, a lengthy, post-settlement process begins—a process that involves informing plaintiffs about the details of the settlement, collecting plaintiff opt-ins, scrutinizing individual claims to ensure that the individual actually qualifies under the settlement criteria, resolving third-party liens against plaintiffs’ causes of action (often, liens created by Medicare or insurance companies for reimbursement for medical care costs), and facilitating payouts. This ongoing work—often called the MDL’s “settlement tail”—can be lengthy and onerous: Experts estimate that, in product liability MDLs, post-settlement work averages somewhere between 18 and 36 months. Garretson et al., supra.
While much of the day-to-day work of overseeing the settlement process can be delegated to the parties, special masters, and specialized settlement administrators, courts nonetheless continue to play a significant role. As further discussed in this module, MDL judges have, in particular, taken active roles in (a) establishing qualified settlement funds and appointing settlement fund administrators; (b) informing plaintiffs about the settlement terms and claims process; (c) monitoring and encouraging dismissals of settled cases; and (d) remanding remaining cases to transferor courts.
A qualified settlement fund, or “QSF,” is defined by 26 U.S. Code § 468B and Treasury Regulation Sections 1.468B-1, et seq. Essentially, it is a court-created fund administered by a third-party into which defendants deposit a gross settlement amount, which is then distributed to individual claimants according to the terms of the parties’ settlement.
Holding monies in a QSF can ensure that the funds are protected in case a defendant has any solvency issues while the funds are making their way to individual plaintiffs. Such Funds also help plaintiffs receiving income-dependent benefits, e.g., Medicaid, avoid losing eligibility while they navigate the process for receiving their settlement payments, and it further gives plaintiffs flexibility to decide how they would like to receive such fund (e.g., lump-sum or periodic payments), while delivering immediate tax benefits to defendants making the payments. Bolch Guidelines, supra at 111–12.
After a settlement has been reached, Courts typically establish a QSF and appoint a fund administrator. Fund administrators generally receive broad authority to administer the fund in line with the terms of the settlement agreement.
Pretrial Order #199, In re Boston Scientific Corp. Pelvic Repair System Prods. Liab. Litig., MDL No. 2326 (S.D.W.V. Nov. 1, 2018) (granting motion to establish QSF and appoint a QSF administrator).
[T]he Motion seeks an Order (1) to establish a Qualified Settlement Fund (the “Fund”) within the meaning of section 468B of the Internal Revenue Code of 1986, as amended (“Code”) and Treasury Regulation sections 1.468B-l,et seq.(“Regulations”); (2) to appoint Providio MediSolutions LLC (“Providio”), as the Qualified Settlement Fund Administrator (the “QSF Administrator”) pursuant to the terms, conditions, and restrictions of the MSA; and (3) to appoint Esquire Bank (“the Bank”) as the financial institution that will hold the Fund.
The Court, having reviewed the Motion, and finding good and sufficient cause therefore, hereby FINDS and ORDERS as follows:
Pending is an Unopposed Motion for Approval of Qualified Settlement Fund [ECF No. 7197]. Fitzgerald Law Group, LLC (“Fitzgerald Law Group”), as counsel for certain plaintiffs in MDL No. 2327, has moved the Court for entry of an Order to aid in the efficient processing and administration of a Confidential Settlement Agreement (the “Settlement Agreement”) between Defendant Ethicon, Inc. and certain related companies (“Ethicon”) and Fitzgerald Law Group to resolve the claims of certain claimants against Ethicon relating to the implant of Ethicon Pelvic Mesh Products (as defined in the Settlement Agreement). The Court, having reviewed the Motion, and finding good and sufficient cause, FINDS and ORDERS the following:
The Parties have reached an agreement that purports to settle the more than 240,000 Combat Arms Earplug Product Liability cases pending in this Court upon the satisfaction of conditions set forth in a Master Settlement Agreement (“MSA”). The Court maintains jurisdiction over all those pending cases until such time as all conditions to settlement have been satisfied and the cases have been dismissed from this Court. In the exercise of the Court’s authority to manage its docket and to ensure the timely and efficient performance of the actions necessary to satisfy the conditions of settlement, it is ORDERED:
. . .
5. ARCHER, as QSF Administrator, shall be solely responsible for payments directly to all Eligible Claimants, their healthcare lienholders, and… Counsel for attorneys’ fees and costs upon the satisfaction of all conditions precedent prior to distribution of settlement proceeds.
Courts use various tools to notify and educate plaintiffs about MDL settlement agreements, including public hearings, websites, and webinars.
Scheduling Order: Public Hearing on Settlement, In re Atrium Medical Corp. C-Qur Mesh Prods. Liab. Litig., MDL No. 2753 (D.N.H. Feb. 7, 2022) (setting an informational hearing to discuss the settlement with plaintiffs).
With this order, the court is scheduling an informational hearing (via video) so that plaintiffs will have an opportunity to pose questions to Lead Counsel and other members of plaintiffs’ leadership group about the settlement process. The Special Master, Attorney Ellen Reisman, will also be present to answer questions about her role in the process. The hearing is scheduled for March 17, 2022, at 2:00 p.m., and the court has reserved the entire afternoon for this hearing.
In the Volkswagen “Clean Diesel” MDL, Judge Breyer established websites providing plaintiffs with information about the terms of the various settlements reached in that case, which included settlements of both class actions and individual claims. (Notably, the settlement websites were targeted to the settlements in class actions, not the individual claims. Nonetheless, they provide helpful models for websites targeted to non-class, or “pure,” MDLs). The websites also directed plaintiffs to resources where they could turn with additional questions. One of those websites is excerpted below, and in addition to the website itself, a PDF of its content is also linked. For more on MDL websites, see Todd Venook & Nora Freeman Engstrom, Toward the Participatory Approach: A Low-Tech Step to Promote Litigant Autonomy, in Legal Tech and the Future of Civil Justice (David Freeman Engstrom ed., 2023).
Executive Summary of Final Class Settlement Program (2.0 Liter Engine Vehicles), United States District Court for the Northern District of California, https://www.cand.uscourts.gov/judges/breyer-charles-r-crb/in-re-volkswagen-clean-diesel-mdl/final-2-0-l-settlement/, accessed Aug. 1, 2024
The goal of the Volkswagen Class Settlement Program is to compensate everyone who owned or leased a Volkswagen or Audi 2.0-liter TDI vehicle (“Eligible Vehicle”) on September 18, 2015 (the date the emissions allegations became public), or who now owns an Eligible Vehicle. Volkswagen has agreed to create a single funding pool of a maximum of $10,033,000,000 from which Class Members will be compensated under the Class Settlement Program.
Cars sometimes change hands, so Class Members are grouped into three different categories: Eligible Owners, Eligible Sellers, and Eligible Lessees.
Most Class Members owned an Eligible Vehicle on September 18, 2015, and still have possession of that car. These Class Members have two options: (1) have Volkswagen buy back the car (“Buyback”) immediately, or (2) wait to see whether the EPA and CARB approve a modification of the vehicle to reduce emissions (“Approved Emissions Modification”) for the car’s engine type, and then decide whether to sell their car back to Volkswagen or accept a free Approved Emissions Modification.
Class Members who had an active lease for an Eligible Vehicle on September 18, 2015 also have two options: (1) terminate their lease with no early termination penalty (“Lease Termination”), or (2) keep their car and receive an emissions modification to the vehicle, if approved by the EPA and CARB (“Approved Emissions Modification”).
Class Members who do not exclude themselves from the Class Settlement Program will receive a cash payment in addition to either the Buyback / Lease Termination or the free Approved Emissions Modification, as described below. If you exclude yourself from the Class, you may still obtain an Approved Emissions Modification if available for your car, but you cannot receive a Buyback or Lease Termination, and you will not receive any cash payment…
Another approach is to issue case management orders tailored to informing claimants about the settlement and claims process.
Accordingly, the Court enters this Order to: (1) explain key elements of the current implementation of the Settlement Program; (2) remind all Primary Counsel of their obligation to keep all clients adequately apprised of their claim and payment status; and (3) ensure compliance with the procedures adopted by the Settlement Administrator.
This Order, albeit lengthy, contains important information about the Claims Review and Payment Process. Primary Counsel, Claimant/clients, and Pro Se Claimants are directed to read the entire Order. Going forward, all Counsel and all Claimants will be charged with knowledge of its content…
Reaching a global or inventory settlement is only the beginning of the process for resolving claims in the MDL. Because MDL settlements generally require plaintiffs to opt-in to the terms of the settlement, individual plaintiffs must first agree to participate in the settlement via communications with plaintiffs’ leadership and their own individual counsel, and if they do decide to settle, then counsel must dismiss each settling plaintiff’s case. While seeking each client’s consent to the proposed settlement, each plaintiffs’ lawyer must comply with his or her ethical responsibilities, including ABA Model Rule 1.2(a) and 1.8(g) (or the state counterpart).
Courts employ various strategies to effectively oversee this process. For instance, judges often require parties to provide the court periodic updates on the number of cases that have been terminated and counsels’ plans to dismiss such cases.
On June 24, 2020, Bayer announced that it has agreed to settle the large majority of pending lawsuits involving Roundup. One month later, virtually no dismissals have been filed, at least in this MDL. A case management conference is scheduled for Thursday, August 6, 2020 at 10:00 AM. A joint case management statement is due July 30.
In the case management statement, the parties should identify the federal cases that have been settled, identify all pending motions that can be terminated as a result of these settlements, and explain when and how dismissals will be filed in these cases.
When parties reach a settlement yet permit claims to linger in an MDL, the court may need to press the parties to move individual cases forward. For instance, in the Boston Scientific Corp. MDL, the court instructed the parties that cases could not linger, unterminated, on an “inactive docket,” but must instead either be dismissed or litigated on an expedited schedule.
The court has previously permitted the placement of cases on an inactive docket for a defined (and originally brief) period of time where the parties represented to the court that the cases had settled or entered into a settlement model. When it began, the inactive docket was intended as a short stop over for cases that had settled and simply needed additional time to wrap up settlement details in this massive litigation. Unfortunately, at present, several thousand cases remain on the inactive docket and have resided there for much longer than intended. Some cases on the inactive docket have resided there since as early as 2015.
For reasons appearing to the court, the court ORDERS as follows:
MDL judges also may remind the parties of their ethical duties to diligently conclude the settlement process.
The vast majority of cases filed in MDLs 2187, 2325, 2326, 2327 and 2387 have been settled subject to the terms of Master Settlement Agreements entered into by plaintiff’s counsel and defendants. As is common in all multidistrict litigation, those agreements trigger necessary communications between lawyers and their individual clients as well as final resolution of third-party claims among other requirements. This court is keenly aware that the processes that follow a Master Settlement Agreement require some reasonable period of time. That said, the court notes that what is a reasonable amount of time assumes the diligence of plaintiff’s counsel.
The court is satisfied that leadership counsel have worked diligently to assist and expedite the completion of settlements. Nevertheless, daily monitoring of the status of cases led the court to conclude months ago that a minority of plaintiff’s lawyers were not devoting the necessary resources to bring these individual cases to a conclusion for their clients. The court found it necessary to enter orders that, put plainly, force lawyers to act in a reasonably expeditious manner to complete settlements, or in default of such actions, to prepare to try such cases in short order. Those orders were also addressed to defense counsel as some unjustified delays could be attributed to their inattention.
It has come to the court’s attention that a few lawyers now blame other parties and the court for their own delays. Again, ethical considerations remind counsel that “reasonable diligence does not require the use of offensive tactics or preclude the treating of all persons involved in the legal process with courtesy and respect.” Model Rules Of Prof’l Conduct r. 1.3 cmt. [] Counsel are once again reminded of their ethical obligations to “act with reasonable diligence and promptness in representing” their clients. Id. Unreasonable delays undermine client’s confidence in counsel and in the legal process. The court expects and ORDERS each counsel to promptly and competently conclude their settlements.
To further promote settlement, some transferee judges have issued Lone Pine orders to “bring recalcitrant lawyers to heel” by requiring non-settling claimants to produce evidence in support of their claims (else risk dismissal). Bradt & Rave, supra at 1300. (Click here for more information on Lone Pine orders). In deploying Lone Pine orders, especially after settlements of individual claims have begun, courts should be careful to avoid coercing plaintiffs into settlement, potentially in violation of the Model Code of Judicial Conduct R. 2.6(B) (“A judge may encourage parties to a proceeding and their lawyers to settle matters in dispute but shall not act in a manner that coerces any party into settlement.”). See also Nora Freeman Engstrom, The Lessons of Lone Pine, 129 Yale L. J. 2, 36 & n.143 (2019).
Professor Theodore Rave presents a comprehensive survey of methods courts and litigants have used to promote case closure. Theodore Rave, Closure Provisions in MDL Settlements, 85 Fordham L. Rev. 2175 (2017). These include, for instance, provisions requiring that attorneys agree not to bring similar claims against the defendant in the future; provisions that automatically enroll plaintiffs in settlements; and most-favored-nation clauses that provide that, if a defendant subsequently settles on more favorable terms with a claimant outside of a mass settlement, the defendant will retroactively increase the previous settlement amounts. Id. As Professor Rave explains, each of these (and many other) methods comes with certain pros and cons. In addition, any settlement provision that restricts an attorney’s future practice risks running afoul of ABA Model Rule 5.6(b), which forbids these “lockout” agreements. See also Jonathan K. Villa, Practice Restrictions in Settlement Agreements, Collateral (June 2007).
Increasingly, courts are charged with resolving third-party liens that apply to plaintiffs’ recoveries in MDLs. See generally Eric Helland, The Role of Health Care Liens in Litigation and Recovery, RAND (2018) (discussing the increasing prevenance of health care liens). In particular, Medicare, Medicaid, and other forms of government provided insurances “have been given far more extensive lien rights,” often impacting MDL plaintiffs. Id. at 3. For instance, Medicare liens—which take priority over all other liens—are taken directly out of an MDL plaintiffs’ settlement. Id. at 4.
Because MDL courts must contend with third-party liens when disbursing a settlement, courts often appoint a lien resolution master to oversee and facilitate the lien resolution process.
Upon the Motion of the Court-appointed Plaintiffs’ Coordinating Lead Counsel and Plaintiffs’ Executive Committee in the Transvaginal Mesh (“TVM”) Consolidated Multi-District Litigation (“MDL”) (hereinafter “Plaintiffs’ Executive Committee”) and for good cause shown, the Court hereby Orders as follows:
In some cases, the master settlement agreement will outline a process for lien resolution and the appointment of a lien administrator, which a court will then adopt.
Pursuant to the uncontested motion and in accordance with the terms of the Personal Injury Master Settlement Agreement (“MSA” or the “Settlement”), the Court hereby appoints a Lien Administrator, as set forth in more detail below…
ORDERED:
Pursuant to 28 U.S.C. § 1407, a case coordinated in an MDL “shall be remanded… to the district from which it was transferred” once pretrial proceedings are completed. In practice, relatively few cases are remanded—instead, they are resolved—typically, through pre-trial dismissals or settlement.
Frequently, courts will begin to consider remanding cases only after the parties have agreed to a settlement framework and/or a significant number of cases have settled, leaving only a minority of plaintiffs who opted out of settlement for remand to transferor courts. For claims in the process of settling or likely to settle in the future, MDL courts typically retain jurisdiction to oversee resolution instead of remanding them. Notable commentators have suggested that courts should more quickly remand cases back to the transferor court, including to avoid cases becoming stagnant in dragging along in the MDL. See Hon. Joseph R. Goodwin, Remand: The Final Step in the MDL Process — Sooner Rather than Later, 89 UMKC L. Rev. 991 (2021) (remarking on the need for remand to ensure cases in an MDL are efficiently resolved); D. Theodore Rave & Francis E. McGovern, A Hub-and-Spoke Model of Multidistrict Litigation, 84 L. & Contemp. Probs. 21 (2021) (proposing a model of more frequent remands in “mega mass tort” MDLs).
In the Bard IVC Filters MDL, the court issued the following order establishing a schedule and procedure for handling cases subject to potential settlement following a bellwether trial, including retaining jurisdiction over cases likely to settle. The court noted, however, that it did not “intend to delay remand or transfer of MDL cases after a reasonable opportunity to settle.”
By July 1, 2019, Plaintiffs’ lead counsel and defense counsel shall file with the Court a joint memorandum identifying all cases in this MDL that fall within the two tracks:
By July 15, 2019, for all cases in this MDL that are not in Track 1 or Track 2, the Court will recommend that cases transferred to the MDL be remanded by the Judicial Panel on Multidistrict Litigation (“JPML”) to the transferor districts (see JPML Rule 10.1(b)) and, if cases were directly filed in this MDL and did not originate in Arizona (see Doc. 363 at 3), will transfer these cases to the proper district under 28 U.S.C. § 1404(a).
The court in the Ford Motor Co. Speed Control MDL issued the following order remanding cases nearly seven years into the MDL and after numerous cases had been resolved, and after significant discovery and motions practice.
. . .
The federal multidistrict litigation statute, 28 U.S.C. § 1407, mandates that each transferred action “shall be remanded by the panel at or before the conclusion of such pretrial proceedings to the district from which it was transferred unless it shall have been previously terminated.” 28 U.S.C. § 1407(a). A transferee judge should suggest remand to the MDL Panel only when the judge “perceives his or her role in the case has ended.” Kinley Corp. V. Integrated Resources Equity Corp., 851 F.Supp. 556, 562 (S.D.N.Y. 1994). A suggestion of remand is appropriate only where a case will not “benefit from further coordinated proceedings as part of the MDL…” McKinney v. Bridgestone/Firestone, Inc., 128 F.Supp. 2d 1196, 1197 (S.D.Ind. 2001), and “when everything that remains to be done is case specific.” Id.
Over the past six and a half years, in its role as transferee court, this Court has handled substantial motion practice and has overseen an extensive discovery process. Pursuant to the Court’s Order Referring Incident Claims to Mediation, dated March 29, 2010 [] and with the assistance of a mediator agreed to by the parties, numerous cases have been resolved. At this point, all common fact and expert discovery is complete in these cases, and all case-wide issues amendable to resolution in this transferee court have been resolved. The Court is thus of the view that coordinated proceedings are no longer of benefit in these cases, that all remaining proceedings will be case specific, and that there would be little if any benefit to continuing this matter as an MDL proceeding. For the foregoing reasons, the Court concludes that MDL 1718 has fulfilled the objectives set forth in 28 U.S.C. § 1407 and that dissolution of this MDL will serve the interests of the parties and judicial economy…
The Court requests that it retain jurisdiction over those cases that have reached settlement in principal, but for which the parties are completing the settlement documentation. Further, the Court requests that it retain jurisdiction to oversee the final disposition of any funds held in the Ford SCD Switch MDL No. 1718 Common Benefit Fund Account, as established by Order dated December 17, 2008.
