Who Will Manage Complex Civil Litigation?: The Decision to Transfer and Consolidate Multidistrict Litigation

Abstract

The United States Judicial Panel on Multidistrict Litigation may transfer factually related actions filed in different federal districts to a single judge for consolidated pretrial litigation. This transferee judge has significant discretion over the management of the litigation, and nearly all cases are resolved without returning to the original district court. Thus, as a practical matter, the Panel controls where these disputes will be litigated. And, the Panel has substantial discretion in making that decision. In its forty years of existence, the Panel has transferred roughly 325,000 lawsuits including high-profile securities and derivative lawsuits (the collapse of Lehman Brothers and the Ponzi scheme of Bernie Madoff), consumer claims (Countrywide Mortgage’s lending practices), and mass torts ranging from the Vioxx litigation to the Union Carbine disaster in Bhopal to the bombing of Pan Am Flight 103. BP already has moved to consolidate and transfer more than 100 Gulf of Mexico oil spill suits filed against it in the various districts along the Gulf coast to the Southern District of Texas for pre-trial litigation, and potentially related suits filed in the future are likely to be transferred as well. The current study provides the first empirical investigation of the Panel’s decision to transfer and consolidate pending federal civil lawsuits, examining the rationale for transfer and for the selection of a specific district court and judge to handle the consolidated litigation. The results provided here represent a draft paper based on a sample from an ongoing data project which ultimately will include all Panel orders.

Keywords: Federal Courts, U.S. Judicial Panel on Multidistrict Litigation, Multidistrict Litigation, Civil Litigation, Complex Litigation, District Judges, Text Analysis

JEL Classification: K41