Aggregation on Defendants' Terms: Bristol-Myers Squibb and the Federalization of Mass Tort Litigation

Abstract

Although it is destined for the personal-jurisdiction canon, the Supreme Court’s 8-1 decision in Bristol-Myers Squibb v. Superior Court does little to clarify that notoriously hazy doctrine. It does, however, significantly alter the balance of power in complex litigation. Bristol-Myers is a landmark because it makes both mass-tort class actions and mass joinders impracticable in almost any state courts outside of the defendant’s home states. With federal courts already hostile toward class actions, if plaintiffs want to aggregate, they will have to do so on the defendant’s terms: either on the defendant’s home turf or in federal multidistrict litigation (MDL). Faced with this choice, we believe that most plaintiffs will turn to MDL. The result will be the culmination of a trend toward the federalization of mass-tort litigation in MDL, which has grown to make up an astonishing one-third of the federal docket. In this paper, we examine why Bristol-Myers will have this effect and explain how MDL’s hybrid structure facilitates centralized mass-tort litigation in federal courts, even as the Court’s restrictive view on personal jurisdiction prevents similar aggregation in state court. MDL cuts this Gordian knot by formally adhering to the vision of vertical and horizontal federalism underlying both diversity jurisdiction and Bristol-Myers, while also paradoxically undermining that vision in service of mass resolution. What will result is centralization of even more power over mass-tort litigation in the hands of the MDL judge and lead lawyers that judge selects to run the litigation — a prospect that comes with both opportunities and risks.

Keywords: MDL, Multidistrict Litigation, Class Action, Aggregate Litigation, Complex Litigation, Personal Jurisdiction, Choice of Law, CAFA, Federalism, Mass Tort, Bristol-Myers Squibb

JEL Classification: K41