Category: Procedural Issues

By Gerald L. Maatman, Jr., Jennifer A. Riley, and Shaina Wolfe

Duane Morris Takeaways: In the proceeding entitled In Re National Prescription Opiate Litigation, No. 21-4051, 2022 U.S. App. LEXIS 31328 (6th Cir. Nov. 10, 2022), the Sixth Circuit denied a petition for writ of mandamus regarding a District Court’s Scheduling Order in the giant opioid multidistrict class action and its allowance of the late pleadings amendments as to new defendants, Meijer Distribution, Inc., and Meijer Stores Limited Partnership (“Meijer Defendants”).  The newly-added Meijer Defendants argued that the District Court violated the Rule 16(b) of the Federal Rules of Civil Procedure by allowing Plaintiffs to improperly join them in the ongoing 3-year old case without first seeking leave of court and without demonstrating good cause.  The Sixth Circuit held that the District Court acted within its broad discretion and did not violate the Federal Rules of Civil Procedure because it provided a cut-off date that allowed for the specific amendments.  The Sixth Circuit explained “[t]hough unconventional, the District Court’s actions are not so extraordinary as to warrant mandamus.”  Id. at *1. The decision illuminates the broad discretion that district courts enjoy in managing class action litigation and the important role that scheduling orders play throughout the entire litigation.

Case Background

In July 2018, Plaintiffs filed the underlying lawsuit against a group of pharmacies.  The case was removed to federal court and ultimately became part of the opioid multidistrict class action proceeding entitled In Re National Prescription Opiate Litigation, 1:17-MD-2804 (N.D. Ohio 2017) (“MDL”).

Significantly, in the underlying case, the district court entered an order on May 3, 2018, which amended its Case Management Order and provided that “‘[i]f a case is later designated as a bellwether for motion practice or trial, a separate CMO will be entered that will provide further opportunity to amend.’” (“2021 Bellwether Order”).  See Petition at 4-5.

In 2021, the District Court selected the underlying case to proceed as a bellwether case against the pharmacies.  See Sixth Circuit Order at 1. Subsequently, on May 19, 2021, Plaintiff filed a supplemental pleading, adding the Meijer Defendants to the underlying case.  See id.; Petition at 5.  The amendments were made nearly three years after Plaintiff filed suit and more than 26 months after the deadline to add new defendants.

After unsuccessfully moving to strike the Meijer Amendments and certify the Court’s 2021 Bellwether Order for interlocutory appeal, on November 9, 2021, Defendants filed a petition for a writ of mandamus with the Sixth Circuit.  See Petition at 7.  In the Petition, the Meijer Defendants argued that the District Court allowed Plaintiff to add the Meijer Defendants years after the deadline for amending pleadings passed and without requiring Plaintiff to demonstrate good cause, as required by Rule 16(b) of the Federal Rules of Civil Procedure.  See Petition at 1.  The Meijer Defendants requested that the Sixth Circuit issue a writ ordering the District Court to strike the untimely amendments and dismiss the Meijer Defendants from the case.  See id. at 2.

The Sixth Circuit’s Ruling Denying The Writ Of Mandamus

The Sixth Circuit denied the writ of mandamus. It held that the District Court’s order, while “unconventional,” fell within the parameters of Rule 16(b).  See Sixth Circuit Order at 1.  The Court of Appeals explained that Rule 16(b) requires that “scheduling orders limit the time to join other parties” and the District Court’s 2021 Bellwether Order “explicitly provided permission for plaintiffs to amend their complaint if their case was selected as a bellwether.”  Id.  The Sixth Circuit reasoned that because Plaintiffs exercised their right to amend after the underlying case was chosen as a bellwether, Plaintiffs did not need to seek permission from the District Court.  Id. at 2.

The Sixth Circuit noted that the 2021 Bellwether Order allowed plaintiffs to amend whenever their case was selected as a bellwether, and there was no cut-off for amendments.  Id.  The Sixth Circuit acknowledged that, under the 2021 Bellwether Order and without any cut-off date, the amendments could have gone differently (i.e., made on the eve of trial or adding a defendant that was completely new to the litigation).  Id. at 2.  Instead, the Sixth Circuit determined that the Meijer Defendants suffered little, if any, prejudice.  Id. at 2-3.  Thus, the Court of Appeals explained, “[t]hat unusual aspect of the scheduling order did not clearly violate Rule 16 because it provided some limit (when the case was selected as a bellwether), although the order went right to the edge of the district court’s discretion under Rule 16.”  Id. at 2.

In denying the writ, the Sixth Circuit held that the Meijer Defendants “ha[ve] shown that the district court’s scheduling order was unconventional but not a judicial usurpation of power nor a clear abuse of discretion.”  Id. at 3.

Implications For Companies

The Sixth Circuit’s order recognizes the broad discretion that district courts have in managing their dockets and illustrates the importance that scheduling orders play in all types of cases, and specifically in MDLs and class actions.  Companies should pay close attention to all of the proposed deadlines included in any scheduling orders, and try to prevent these types of amendments from being entered at the outset.

By Gerald L. Maatman, Jr., Jennifer A. Riley, Shaina Wolfe

Duane Morris Takeaways – Requiring a legal team’s diversity in the courtroom is part of a growing trend by federal judge in selecting lead counsel in a class action. On both sides of a class action, plaintiffs and defense teams are increasingly staffing cases with junior and diverse attorneys, and allowing them meaningful opportunities to participate in litigation. In turn, federal judges are viewing such staffing methodologies as part and parcel of good practice management.

Background

The push for diversity in the law is hardly new.

Federal district judges around the nation – including judges in California, Illinois, Massachusetts, New York, and Texas – have issued general standing orders that encourage legal teams to allow diverse and less experienced attorneys take the lead in various segments of court proceedings. And in 2021, George Washington Law School released a leading guide to best practices for MDL and class actions, which advocated that judges “make appointments consistent with the diversity of our society and justice system.” George Washington Law School, Inclusivity and Excellence: Guidelines and Best Practices for Judges Appointing Lawyers to Leadership Positions in MDL and Class-Action Litigation, at 1 (March 15, 2021).

Over the last couple of years, some judges have acted on George Washington Law School’s advice by facilitating opportunities for diverse and/or junior attorneys to have a role in their cases. For example, recently, on October 26, 2022, Magistrate Judge Gabriel Fuentes of the U.S. District Court for the Northern District of Illinois advised the parties in multidistrict litigation that he would be holding a video hearing to discuss expert discovery and argue motions, and that he expected junior attorneys to take the lead. John Gross and Co., Inc., et al. v. Agri Stats, Inc., et al., 1:19-CV-08318 (N.D. Ill. Oct. 26, 2022).

Other judges in class action lawsuits have strongly encouraged, or even required, counsel to be diverse. For example, Judge Susan Illston of the U.S. District Court for the Northern District of California approved lead counsel in a class action lawsuit but noted “the apparent lack of diversity, including by female lawyers, among the group that argued” at a recent hearing. Sayce v. Forescout Technologies, Inc., No. 20-CV-00076, 2020 WL 6802469, at *9 (N.D. Cal. Nov. 19, 2020). Judge Illston “strongly urge[d] all parties to this case to make meaningful litigation opportunities available to junior and underrepresented lawyers throughout the pendency of this action.” Id.

With the increase in newly appointed judges, it is likely that even more federal judges will follow suit by not only instituting standing orders, but also in requiring law firms to send their junior and diverse attorneys to court. Now, more than ever, it is important for law firms to hire diverse attorneys, teach diverse attorneys to handle small and complex matters, and retain their diverse attorneys by allowing them to meaningfully participate in legal proceedings.

Implications for Law Firms

We expect that more courts and clients will begin to consider, and perhaps require, the diverse makeup of legal teams at increasing rates. Law firms can prepare for this critical demand of diverse legal teams by hiring, retaining, and actively involving diverse and junior lawyers, in both big and small cases, at the outset.

By Gerald L. Maatman, Jr, Jennifer A. Riley, and Gregory Tsonis

Duane Morris Takeaways – In Mellowitz v. Ball State University and Board of Trustees of Ball State University, et al, No. 22A-PL-337 (Ind. Ct. App. Oct 5, 2022), the Indiana Court of Appeals struck down a 2021 law that sought to protect in-state universities from class action liability related to the shutdown of university campuses during the COVID-19 pandemic.  While the law stated that individuals “may not” bring class actions against universities resulting from actions taken to defend against the spread of COVID-19, the Indiana Court of Appeals held that the statute was “procedural” and in conflict with Rule 23 of Indiana’s Rules of Trial Procedure, which states that individuals “may” proceed as a class under certain circumstances.  The Court’s ruling is important, as it puts at risk other statutes passed in Indiana and other states restricting class actions against businesses for COVID-19-related claims.

Background Of The Case

In 2020, Plaintiff Keller J. Mellowitz, a student at Ball State University, filed a putative class action asserting claims for breach of contract and unjust enrichment against Ball State as a result of the university’s decision to cancel in-person classes during the COVID-19 pandemic.  Id. at 3.  After the complaint was filed, the Indiana General Assembly in 2021 enacted Public Law 166-2021, part of which was codified as Indiana Code Section 34-12-5-7 (“Section 7”) and barred class actions against post-secondary educational institutions for claims of breach of contract and unjust enrichment arising from COVID-19.  Ball State subsequently sought relief from Plaintiff’s lawsuit under Section 7, which the trial court granted, and Plaintiff appealed.  Id. at 5.

The Appellate Court’s Ruling Reversing And Remanding the Trial Court’s Decision

Plaintiff argued on appeal that, as a procedural statute, Section 7 impermissibly conflicts with Indiana Trial Rule 23, which governs class-action procedures and sets forth the requirements to proceed as a class action, thus rendering Section 7 a “nullity.”  The Indiana Court of Appeals began its analysis recognizing longstanding precedent establishing that in a conflict between a procedural statute and the Indiana Rules of Trial Procedure, “the trial rules govern,” however trial rules “cannot abrogate or modify substantive law.”  Id. at 6-7.  Whether a law was “substantive,” the Court explained, depended on whether it established “rights and responsibilities” whereas procedural laws merely prescribed “the manner in which such rights and responsibilities may be exercised.”  Id. at 7.

In analyzing the specific statutes at issue, the Court of Appeals examined Indiana’s analog to Federal Rule 23, which sets forth the criteria for bringing a class action.  The Court of Appeals noted that Indiana Trial Rule 23 was indisputably a procedural rule that allows a plaintiff, when the appropriate criteria are met, to assert his or her claims on behalf of others.  Turning to Section 7, the Court of Appeals explained that the statute did not affect any plaintiff’s substantive right to bring a suit for breach of contract or unjust enrichment, but simply “frustrates them by encouraging a multiplicity of lawsuits from similarly situated plaintiffs.”  Id. at 14.  While Ball State argued that the law protected Indiana universities from “widespread legal liability” from actions taken to combat and mitigate the spread of COVID-19, the Court of Appeals found the argument “unpersuasive,” explaining that since Section 7 did not prevent any individual plaintiff from asserting the same claims against universities, it therefore “does not reduce the institutions’ potential legal liability in the slightest.”  Id. at 14-15. Ball State also argued that adopting Plaintiff’s “extreme position” would endanger two similar laws passed by the Indiana Legislature, which sought to protect business owners from class-action tort liability.  Id. at 15 n.6.  The Court rejected Ball State’s argument. It determined that it had “no opinion” on those statutes since they were not before it in the appeal.  Id.

With Indiana Trial Rule 23 stating that a plaintiff “may” bring a class action and Section 7 stating the plaintiff “may not,” the Court of Appeals held that both laws could not apply in a given situation and, as a result, Section 7 was a “nullity.”  Id. at 15. The Court of Appeals therefore reversed the trial court’s ruling and remanded the case for further proceedings.

Implications for Employers

While Ball State will very likely appeal this decision to the Indiana Supreme Court, the rationale adopted by the Indiana Court of Appeals could undermine similar statutes meant to protect Indiana employers from class action liability resulting from actions taken in response to the COVID-19 pandemic.  As many other states throughout the country similarly passed laws meant to protect businesses from liability due to COVID-19, the Mellowitz decision provides a potential avenue for plaintiffs to challenge laws in other states.   Mellowitz demonstrates that employers should continue to be aware of the potential for class action lawsuits stemming from response to the COVID-19 pandemic, despite efforts by Indiana’s legislature and other states’ legislatures to prevent such costly, high-risk litigation.