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In re Wilson

May 15, 2006

IN RE: YUVONNE B. WILSON, ET AL., PETITIONERS


On Petition for a Writ of Mandamus to the United States District Court for the Eastern District of Pennsylvania (Related to MDL-1203) District Judge: Honorable Harvey Bartle, III.

The opinion of the court was delivered by: Sloviter, Circuit Judge

PRECEDENTIAL

Argued December 13, 2005

Before: SLOVITER, SMITH and STAPLETON, Circuit Judges.

OPINION OF THE COURT

The petitioners in this mandamus proceeding, all represented by the same counsel, are several thousand of the approximately 30,000 to 35,000 plaintiffs with suits currently pending before the United States District Court for the Eastern District of Pennsylvania ("the MDL Court") as part of the Multidistrict Diet Drug Product Liability Litigation, MDL-1203. The Judicial Panel on Multidistrict Litigation ("JPML") transferred petitioners' cases to the MDL Court for coordinated or consolidated pretrial proceedings under 28 U.S.C. § 1407(a). Petitioners contend that the generic or common discovery phase has concluded in MDL-1203, and thus they moved the JPML to remand their cases for case-specific discovery and trial in the federal district courts from which they were transferred ("the transferor courts"). The JPML refused to remand because it determined that MDL-1203 continues to promote the just and efficient conduct of proceedings in the diet-drug cases, and the MDL Court itself had declined to suggest the remand of petitioners' cases. Petitioners argue that the JPML committed a clear error of law because a remand was required under § 1407(a) once pretrial proceedings had concluded on issues common to all cases. Petitioners ask, therefore, that we grant mandamus and direct the JPML to return their cases to the transferor courts for further proceedings.*fn1

I.*fn2

On September 15, 1997, respondent Wyeth (then known as American Home Products Corporation) withdrew from sale on the United States market its widely prescribed appetite suppressants, or "diet drugs," which were sold under the trade names of Pondimin and Redux. Approximately six million people in the United States had taken one or both of the diet drugs, which studies have linked to, inter alia, valvular heart damage. After the diet drugs were withdrawn from the market, thousands of lawsuits were filed against Wyeth in state and federal courts nationwide.

In December 1997, the JPML created MDL-1203 and transferred the pending federal cases to the MDL Court "for coordinated or consolidated pretrial proceedings." 28 U.S.C. § 1407(a). In early 1998, the MDL Court formed a Plaintiffs' Management Committee to coordinate discovery and other activities, and it appointed a Special Discovery Master under Federal Rule of Civil Procedure 53. The MDL Court also established numerous requirements for the conduct of discovery, including deposition guidelines, a requirement that plaintiffs complete a fact sheet regarding their individual claims, a list of medical providers, and the submission of medical authorizations to release patients' records.*fn3 The MDL Court created a document depository through which discovery materials are made available to transferor courts upon the remand of cases. The MDL Court further established a system through which each case transferred to MDL-1203 receives a Discovery Initiation Date, which sets in motion a timetable for the completion of fact and expert discovery. Significantly, the MDL Court from its inception envisioned that the conduct of pretrial proceedings in MDL-1203 would encompass fact and expert discovery that was both generic (i.e., of widespread application to many cases) and case-specific (i.e., that pertained solely to an individual plaintiff's claims).

In April 1999, Wyeth and counsel for plaintiffs in the then-pending state and federal court actions began global settlement talks. In November 1999, after almost two years of extensive liability discovery as part of the MDL-1203 proceedings, the parties reached a tentative Nationwide Class Action Settlement Agreement ("Settlement Agreement"). The proposed class of plaintiffs included all persons in the United States, including their representatives and dependents, who had ingested either or both of the diet drugs. The MDL Court held a hearing on fairness, and on August 28, 2000, it certified the class and approved the Settlement Agreement (with four amendments).

Under the settlement terms, Wyeth agreed to pay up to $3.75 billion to fund benefits to class members, who agreed in return to release Wyeth from all claims (with one exception not relevant here) arising out of their ingestion of the diet drugs. The Settlement Agreement was also devised to afford medically eligible class members the chance to opt out of its terms at various points in the future to pursue the alternative of filing suit against Wyeth for compensatory damages. Putative class members were entitled to opt out from participation in the Settlement Agreement by March 30, 2000, and thereby forego all benefits and restrictions conferred under the Settlement Agreement by excusing themselves from class membership. Diet-drug users who did not exercise this initial opt-out right became class members but were afforded subsequent opportunities, if medically eligible under criteria specified by the terms of the Settlement Agreement, to exercise a so-called "downstream" opt-out right.*fn4 In re Diet Drugs 369 F.3d 293, 299 (3d Cir. 2004). Class members who choose to opt out downstream receive no compensation under the Settlement Agreement but are permitted to file suit against Wyeth and others with certain restrictions, the most prominent of which is a bar against seeking an award of punitive damages. In return for the limitation on available damages, Wyeth agreed not to assert, inter alia, a statute of limitations defense to the actions.

The thousands of downstream opt-out petitioners presently before us filed suit against Wyeth and other defendants. Some petitioners filed suit individually, although many had joined in multi-plaintiff complaints. It appears that all, or almost all, of the petitioners originally filed their actions in state courts between 2002 and 2004. Wyeth removed the suits to federal court. The JPML then transferred the cases, the majority of which had been docketed in the federal district courts in Texas, to MDL-1203. The rest of petitioners' suits were transferred from federal district courts in twenty different states.

Before petitioners' cases arrived in MDL-1203, the MDL Court initiated a program for suggesting the remand of actions that had completed coordinated pretrial proceedings.*fn5 In May 2001, the MDL Court entered Pretrial Order ("PTO") No. 1962 in which it noted that many of the then-pending cases had completed discovery on the issues amenable to resolution in MDL-1203. The MDL Court promptly suggested approximately thirty-eight cases for remand.

Since May 2001, the number of plaintiffs with cases pending in MDL-1203 has increased dramatically -- from some 3,000 in 2001 to approximately 30,000 to 35,000 as of January 2006. This growth in the MDL-1203 docket appears to have stemmed largely from the structure of the Settlement Agreement itself, which allows class members to opt out "downstream." Class members were required to exercise an intermediate opt-out right by May 3, 2003. Prior to that time, the cases in MDL-1203 were brought mainly by putative class members who had opted out at the initial, pre-class certification stage. After approval of the Settlement Agreement, tens of thousands of diet-drug users exercised downstream opt-out rights and filed suit against Wyeth.*fn6 Wyeth subsequently removed a substantial number of those suits from state to federal court.*fn7 The JPML transferred the cases for inclusion in MDL-1203, which explains the increased caseload. Moreover, many of the cases came to MDL-1203 as multi-plaintiff actions. In March 2004, as part of an effort to facilitate the administration of its docket and to resolve misjoinder issues, the MDL Court ordered the severance of all multi-plaintiff suits and directed each plaintiff to file a Severed and Amended Complaint.*fn8 Consequently, numerous multi-plaintiff actions are now proceeding as individual suits, a fact reflected in the substantial number of pending cases.

Petitioners contend that the increased caseload has rendered the MDL Court unable to continue with its 2001 program of suggesting remand for cases that have completed common discovery. They argue that there is only "plaintiff- specific" discovery to be completed in numerous pending suits, like their own. Petitioners claim that MDL-1203 has become an inefficient vehicle for managing the diet-drug cases. Moreover, they argue that their suits must now be remanded to the transferor courts as a matter of law because generic liability discovery has been completed.

In May 2003, petitioners filed a motion with both the JPML and the MDL Court seeking to dissolve MDL-1203 and asking for a remand of all pending cases to the transferor courts, including cases in which Fleming & Associates, LLP ("the Fleming firm") was not counsel.*fn9 On August 25, 2003, the MDL Court rejected the motion, which it treated as a request for a suggestion of remand. The Court noted that while generic liability discovery had ended, pretrial proceedings on common factual questions had yet to be completed. The MDL Court observed that proceedings were ongoing in most, if not all, cases pending in MDL-1203, and the MDL Court had recently streamlined its discovery process. Furthermore, the ...


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