TAMPA, Fla. (Legal Newsline) – Nearly 40 percent of civil cases pending in federal courts across the country are consolidated into multidistrict litigation, resulting in “a shift away from the rule of law to a system of arbitrary justice,” says Tampa attorney Brian Donovan in his new book on his experience and frustrations with MDL.
In “Collusion: Judicial Discretion vs. Judicial Deception – The Impending Meltdown of the United States Federal Judicial System,” released in late December, Donovan details the alleged collusion he witnessed firsthand while representing clients in In Re: Oil Spill by the Oil Rig “Deepwater Horizon” in The Gulf of Mexico, or MDL 2179, over the past seven years.
“It’s an excellent idea, and the MDL statute really will increase efficiency if it’s handled properly, but what’s happened is rather than consolidate coordinating cases from various districts to maximize efficiency, the end game has not been remand,” said Donovan. “It’s settlement.
“It’s called a ‘black hole,’ because once you enter a MDL, you never get out.”
Donovan - who practices U.S. and international business law, securities law and corporate law - explains in his book that Congress created the Judicial Panel on Multidistrict Litigation in 1968 to determine if civil cases pending in different federal districts involved similar questions of fact and could be transferred to one federal district for consolidated pre-trial proceedings.
He points out that the initial purpose of the MDL process was to avoid duplication of discovery, prevent inconsistent pre-trial rulings and conserve the resources of parties and witnesses. However, he says, cases that were transferred to an MDL were also supposed to be remanded to their original court before their pre-trial proceedings were concluded.
According to Donovan’s statistics, the JPML has centralized 553,249 civil cases for pre-trial proceedings since its creation. By the end of 2015, only 15,844 cases—roughly 2.9 percent—had been remanded for trial.
Donovan says in his own experience, Judge Carl Barbier of the U.S. District Court for the Eastern District of Louisiana - who presides over MDL 2179, which is expansive litigation resulting from the 2010 Deepwater Horizon explosion and oil spill in the Gulf of Mexico - made it clear from the beginning that all motions, including motions to remand, were stayed until he decided otherwise.
Donovan’s cases, which were filed as early as February 2011, are still pending. They name BP administrator Kenneth Feinberg as the primary defendant and assert claims of gross negligence, negligence, negligence per se, fraud, fraudulent inducement, promissory estoppel and unjust enrichment.
“After seven years, you start to get tired of being totally ignored,” Donovan said. “The public has a right to know what’s happening.”
“It’s also amazing how many lawyers have no experience whatsoever with MDL,” he added.
Donovan also contends in his book that federal judges in MDLs have approved fund approaches and settlement class actions in order to limit the liability of defendants.
In the BP case, he says, Feinberg required plaintiffs to sign a “Release and Covenant Not to Sue” in order to receive payments from the $20 billion BP Deepwater Horizon Disaster Victim Compensation Fund. Plaintiffs would then receive $5,000 and be barred from participating in the settlement class action.
In Donovan’s estimates, Feinberg eliminated 220,000 plaintiffs from the subsequent Deepwater Horizon Economic and Property Damages Class Settlement Agreement.
He also points out that at least 60 percent of plaintiff claims submitted to both the victim compensation fund and the settlement program were denied.
“So, on the front end, you had the victims’ compensation fund, and on the back end, you had the settlement class action, and it just isn’t acceptable,” Donovan said. “It flies in the face of both the MDL statute and the U.S. Supreme Court decision in Lexecon.”
In 1998, the Supreme Court ruled in Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach that a district court conducting coordinated pre-trial proceedings in MDL may not reassign a transferred case to itself for trial.
An additional key point Donovan makes in his book is that a small group of attorneys continue to be “grossly over-compensated” for acting as “dealmakers” in MDLs.
He references a study by University of Georgia law professor Elizabeth Burch showing that the same attorneys held more than 63 percent of available leadership positions in plaintiffs’ steering committees in 72 product-liability and sales-practice MDLs that were pending as of May 2013.
“If you go from one MDL to another, you will see those repeat players,” Donovan said. “They hone their craft, and once they have one or two MDLs under their belt, it’s easy to get into the next one because it’s a small circle of attorneys.”
Donovan contends that once the plaintiffs’ steering committee was appointed in the BP case, they first worked to divvy up the $20 billion fund. Through the process, he estimates that 19 law firms have been compensated nearly $3 billion.
“It was deal-making,” he said. “It was nothing involving litigation.”
Donovan shares his thoughts on how these ongoing issues with MDLs can be avoided in the future. For him, the primary solution is simple – return to the roots of MDL.
“The answer is to go back to the statute and enforce the statute and enforce the Lexecon decision from the Supreme Court, and consolidate, coordinate, hear discovery and send the cases back,” he said.
Otherwise, he says, the current MDL process could lead to a total meltdown of the judicial system.
“I don’t think I am exaggerating,” he said. “The percentage of cases is increasing in the MDLs, and the manner in which they are handling these cases is becoming more and more deplorable.”