52 Pages Posted: 28 Aug 2016
Date Written: August 23, 2016
In this article, we address one of the most controversial and current questions in federal civil procedure: What is the proper role of the judge in the settlement of mass-tort multidistrict litigation, or MDL? Due to the Supreme Court’s hostility to class actions, MDL proceedings have begun to dominate the federal civil docket. To wit, nearly half of the federal civil caseload is MDL. Although MDL is structurally different from a class action, the procedure replicates — and in many ways complicates — the principal-agent problems that plagued the class action. Like a class action, nearly all MDL cases are resolved by a comprehensive global settlement agreement, but, unlike a class action, in MDL the judge has no authority to reject a settlement agreement as unfair to the potentially thousands of parties ensnared in the litigation. Here, we argue that, given this limitation, the judge should act as an “information-forcing intermediary,” who reserves the right to offer a non-binding opinion about the fairness of the settlement to send an easy-to-understand signal directly to the parties about their lawyers’ performance. Such a signal will mitigate many of the agency problems inherent to MDL and allow parties to exercise informed consent when choosing whether to accept a settlement. More generally, this article is a call for judges to embrace an information-forcing role at the head of consolidated MDL proceedings.
Keywords: multidistrict litigation, MDL, aggregate settlement, class action, mass torts, information forcing, intermediary, aggregate litigation, quasi class action
JEL Classification: K13, K40, K41
Suggested Citation: Suggested Citation
Bradt, Andrew and Rave, D. Theodore, The Information-Forcing Role of the Judge in Multidistrict Litigation (August 23, 2016). California Law Review, Forthcoming; UC Berkeley Public Law Research Paper No. 2828461; U of Houston Law Center No. 2016-A-15. Available at SSRN: https://ssrn.com/abstract=2828461