Map of United States made up of pills.

The Opioid Multidistrict Litigation, Federal Rule 23, and the Negotiation Class

By Laura Karas

A recent Sixth Circuit decision dashed hopes of a faster resolution to the federal opioid multidistrict litigation (MDL).

The MDL (In re National Prescription Opiate Litigation, Docket No. 1:17-md-02804) consolidated many thousands of suits against opioid makers and distributors.

Thus far, action in the MDL has presaged the enormity of corporate responsibility for the opioid crisis. Roughly one year ago, the first bellwether trial in the MDL, involving two Ohio counties, was averted due to a last-minute settlement by Teva Pharmaceuticals and the “Big Three” drug distributors (AmerisourceBergen, Cardinal Health, and McKesson). A $465 million verdict last year against Johnson & Johnson “abated” one year’s worth of damage to the state of Oklahoma from the opioid crisis, which was held to be a public nuisance under Oklahoma law. And another bellwether trial involving pharmacy chains including Walgreens and CVS is scheduled to take place next year, despite the pharmacy chains’ strong pushback.

As part of the MDL, the U.S. District Court for the Northern District of Ohio had certified a new kind of class, distinct from a litigation or settlement class — a “negotiation class” of cities and counties throughout the United States — under Federal Rule of Civil Procedure 23, the Federal Rule that governs class actions.

But on September 24, a decision by the U.S. Court of Appeals for the Sixth Circuit reversed this decision.

Plaintiffs found support for a negotiation class in the “open-ended wording” of Rule 23(b)(3).  But a majority of the Sixth Circuit’s three-judge panel rejected the validity of the negotiation class, calling it “a new form of class action” that is “wholly untethered from Rule 23.” (The panel decision was split 2 to 1, with one judge — Judge Moore — dissenting.)

The negotiation class, the majority writes, “simply is not authorized by the structure, framework, or language of Rule 23.”

They continue, “the Rule does not mention certification for purposes of ‘negotiation’ or anything along those lines. While negotiation may lead to settlement, there is no discussion in Rule 23 identifying negotiation as a separate category of certification distinct from settlement.”

The opinion goes on to conclude, “Ultimately, the speculative possibility that this negotiation class will settle a broad swath of the MDL does not bring it within the narrow textual confines of Rule 23 . . . .” (emphasis added).

What significance will the reversal of negotiation class certification have for progress toward a settlement of the opioid MDL? It is hard to say.

The negotiation class would have required plaintiffs to make a decision as to whether to opt out prior to the beginning of the negotiation process (a point of distinction from a settlement class, in which plaintiffs retain the right to opt out until after the terms of the settlement have been proposed). This distinction is key because plaintiffs in the negotiation class would have to make an opt-out decision before knowing an agreed-upon settlement figure.

In these respects, the negotiation class was intended to accelerate settlement while giving the defendants certainty with respect to class size.

However, the existence of a negotiation class would not have mandated that defendants negotiate, or reach a settlement, with the certified class, thus permitting the defendants flexibility. And individual opioid MDL cases would have continued notwithstanding the existence of a negotiation class.

The latter point was a source of contention for the Sixth Circuit panel majority. In the majority’s view, the inability of the negotiation class to aggregate common claims for collective adjudication represented a point of divergence from the litigation class, which helped to render the negotiation class entirely novel.

(The panel decision also expressed concern regarding treatment of disparate state law claims that the negotiation class might, or might not, be in a position to address. Of note on this point, if a supermajority of the negotiation class were to approve of the settlement, all class members would be bound, which could deprive opposing class members of substantive rights to litigate claims unsatisfactorily resolved by the negotiation class’ ultimate settlement.)

In sum, the panel’s decision boiled down to the following: the courts are not in a position to sanction classes outside of those expressly described in Rule 23, no matter how useful such a new class may be for the resolution of the opioid MDL.

The Sixth Circuit panel majority contended that the district court, in certifying the negotiation class, relented to an overly broad interpretation of Rule 23. But did the Sixth Circuit panel majority, in turn, read Rule 23 too rigidly? Is the negotiation class a product of the district court’s judicial imagination or wishful thinking, as the Sixth Circuit panel majority would have it, or can it fairly be grounded within Federal Rule 23 itself?

The panel majority momentarily considers, and quickly brushes aside, the possibility that Rule 23 may indeed permit a negotiation class with the features the plaintiffs describe: “But even if not unauthorized, it is unlikely that the problems presented by the negotiation class, as conceived by the district court, can be overcome.” (emphasis added)

Though the panel majority could not envision the negotiation class’ treatment of diverse state law claims in a manner consistent with Federal Rule 23’s predominance requirement, for example, the robust dissent by Judge Moore sounds a differing and more optimistic note.  Judge Moore suggests that a permissible interpretation of Federal Rule 23 may allow room for a negotiation class, especially in light of the history of judicial interpretation of that rule to further the courts’ efficient and practical adjudication of class actions.

It’s also worth noting Judge Moore’s reminder that neither “litigation class” nor “settlement class,” which the majority present as fixed binary alternatives, appears in the text of Rule 23 itself.

Stay tuned for my next post (During the COVID-19 Pandemic, the Opioid Epidemic Continues), in which I turn to the public health dimension of the opioid crisis and discuss actions that states and localities should take to address a worsening of opioid abuse and opioid-related deaths during the pandemic.

Laura Karas

Dr. Laura Karas is a student at Harvard Law School and a Petrie-Flom Student Fellow for the 2020-21 academic year.

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