### The Clerk of Court is directed to amend the caption to * 

### appear as set forth in this opinion. The Honorable Lewis A. Kaplan, United States District ** 

### Judge for the Southern District of New York, sitting by designation. 07-3815-cv; 07-5539-op In re: Zyprexa Products Liability Litigation



### 1 UNITED STATES COURT OF APPEALS 2 FOR THE SECOND CIRCUIT 3 August Term, 2008 4 (Argued: March 12, 2009 Final Submission: June 17, 2009 5 Decided: February 3, 2010 6 Corrected: February 8, 2010)

7 Docket Nos. 07-3815-cv, 07-5539-op 8

------------------------------------- 9 IN RE: ZYPREXA PRODUCTS LIABILITY LITIGATION 10 ******************************* 11 MULLIGAN LAW FIRM, 12 Appellant, 13 -v14 ZYPREXA MDL PLAINTIFFS' STEERING COMMITTEE II and 15 ELI LILLY AND COMPANY, 16 Appellees. *



### 17

------------------------------------- 18 Before: McLAUGHLIN and SACK, Circuit Judges, and KAPLAN, 19 District Judge. ** 

### 20 Appeal from orders of the United States District Court 21 for the Eastern District of New York, No. 04-MD-01596 (Jack B. 22 Weinstein, Judge). This appeal concerns a set of orders by the

### 2 1 district court regarding attorney compensation in this ongoing 2 multidistrict litigation. We conclude that we do not have 3 jurisdiction to hear this interlocutory appeal and that it is not 4 appropriate for us to grant a writ of mandamus. 5 Appeal dismissed; application for a writ of mandamus 6 denied. Judge Kaplan concurs in a separate opinion. 7 ROBERT J. LACK, Friedman Kaplan Seiler & 8 Adelman LLP, New York, NY (Eric 9 Roberson, The Mulligan Law Firm, Dallas, 10 TX, and William David George and Earnest 11 W. Wotring, Connelly, Baker, Wotring 12 LLP, Houston, TX, on the brief) for 13 Appellant. 14 WILLIAM M. AUDET, Audet & Partners, LLP, 15 San Francisco, CA (James M. Shaughnessy, 16 Milberg LLP, New York, NY, on the brief) 17 for Appellee Zyprexa MDL Plaintiffs' 18 Steering Committee II. 19 ANTHONY VALE, Pepper Hamilton LLP, 20 Philadelphia, PA (Nina M. Gussack, 21 Philadelphia, PA, and Samuel J. Abate, 22 Jr., New York, NY, on the brief) 23 for Appellee Eli Lilly and Company.

24 P ER 

### C URIAM 

### : 25 This interlocutory appeal concerns the attorney 26 compensation structure established by the district court in this 27 ongoing multidistrict litigation ("MDL"), and the applicability 28 of that compensation structure to the Mulligan Law Firm 29 ("Mulligan"). Mulligan represents more than two thousand 30 plaintiffs in upwards of seventy cases that have been transferred 31 by the Judicial Panel on Multidistrict Litigation to the United 32 States District Court for the Eastern District of New York (the

### 3 1 "MDL court" or the "district court"), where they are being 2 considered alongside many similar cases. Mulligan asserts that 3 the federal courts do not have jurisdiction over sixty-one of 4 these cases, all of which were originally filed in various state 5 courts, removed to federal courts, and then transferred to the 6 MDL court. It has therefore filed motions in the MDL court to 7 remand the cases to the state courts from which they came. 8 While the motions to remand were pending, the district 9 court instituted several attorney compensation protocols. 10 Included were a cap on attorneys' fees and the creation of a 11 common benefit fund -- generated by a three percent set-aside 12 from funds from all settlements and judgments -- to compensate 13 members of the appellee Zyprexa MDL Plaintiffs' Steering 14 Committee II (the "PSC II") for their work on behalf of all of 15 the MDL plaintiffs. 16 In a pair of orders dated August 17, 2007, the MDL 17 court (Jack B. Weinstein, Judge) ruled that all of Mulligan's 18 cases that were pending in that court were subject to these 19 attorney compensation strictures. The court also enjoined 20 Mulligan from making any disbursements from a fund that it 21 maintained (the "Qualified Settlement Fund") until a fund 22 administrator had certified that the protocols had been adhered 23 to. 24 Mulligan appeals from the August 17 orders. The firm 25 asserts: 1) that the district court lacks jurisdiction over the 26 sixty-one cases for which remand motions are pending, and that it

### 4 1 therefore also lacks jurisdiction to impose a fee cap and a set2 aside requirement with respect to those cases, and 2) that the 3 court abused its discretion in sua sponte placing a cap on 4 attorneys' fees in all of the Zyprexa cases pending in the MDL 5 court. 6 The PSC II and Eli Lilly and Company ("Eli Lilly"), the 7 manufacturer of the drug Zyprexa and the defendant in the 8 underlying litigation, have moved to dismiss this interlocutory 9 appeal. They assert, inter alia, that we lack jurisdiction to 10 hear it. Mulligan disagrees. Mulligan further argues that if we 11 conclude that we do not have such jurisdiction, we should grant 12 its petition for mandamus relief with respect to the sixty-one 13 cases over which, it asserts, the district court lacks 14 jurisdiction. 15 We conclude that we do not have jurisdiction to hear 16 this appeal, and that mandamus relief is unwarranted. We 17 therefore dismiss the appeal. 18 BACKGROUND 19 The multidistrict litigation underlying this appeal 20 consists of hundreds of lawsuits brought by thousands of 21 plaintiffs against Eli Lilly, which manufactures the drug 22 Zyprexa. Zyprexa is an antipsychotic medication that has been 23 approved by the Food and Drug Administration to treat 24 schizophrenia and bipolar disorder. Eli Lilly had been the 25 subject of many lawsuits based on allegations that Zyprexa causes 26 diabetes.

### 5 1 In April 2004, thousands of Zyprexa cases that were 2 pending against Eli Lilly were transferred to the United States 3 District Court for the Eastern District of New York -- the MDL 4 court -- pursuant to an order of the Judicial Panel on 5 Multidistrict Litigation. Transfer Order, In re Zyprexa Prods. 6 Liab. Litig., 314 F. Supp. 2d 1380 (J.P.M.L. 2004). A group of 7 lawyers was established as the Plaintiffs' Steering Committee to 8 help prosecute the cases in the MDL court. That litigation was 9 settled in late 2005. See In re Zyprexa Prods. Liab. Litig., No. 10 04-MD-1596, 2005 WL 3117302, 2005 U.S. Dist. LEXIS 29071 11 (E.D.N.Y. Nov. 22, 2005). A second Plaintiffs' Steering 12 Committee (the "PSC II") was then established to help prosecute 13 the many new Zyprexa cases that had been filed. 14 As part of this second wave of Zyprexa litigation, 15 Mulligan, a Dallas-based law firm, filed scores of cases 16 involving thousands of plaintiffs in state and federal courts 17 throughout the United States. Many of the state-court cases were 18 removed by Eli Lilly to federal court and then transferred to the 19 MDL court. Mulligan asserts that sixty-one of those cases -- 20 brought by more than one thousand plaintiffs -- were improperly 21 removed, and that the federal courts do not in fact have 22 jurisdiction over them. In 2006, Mulligan filed motions to 23 remand these cases to state court. The motions were pending at 24 all times relevant to this appeal. 25 In an order dated March 28, 2006, the district court 26 established the following fee restrictions for the Zyprexa

### When this appeal was briefed, the relevant cases were all 1 

### still pending before the district court, and the settlement 6 1 litigation: 1) all attorneys' fees for claims of less than $5,000 2 were capped at no more than twenty percent of the client's 3 recovery; 2) all other attorneys' fees were capped at thirty-five 4 percent of the client's recovery; and 3) four special settlement 5 masters, whom the court had appointed to oversee settlement 6 negotiations and administer settlement agreements, were given 7 discretionary authority to order reductions or increases of fees 8 down to thirty percent or up to thirty-seven and one-half percent 9 depending on the circumstances. 10 In an order dated December 5, 2006, the district court 11 granted in part a motion by PSC II to establish a common benefit 12 fund to compensate PSC II attorneys for their "significant 13 discovery work." The court ordered a set-aside equal to three 14 percent of judgments and settlements in favor of the plaintiffs 15 in any of the cases in the MDL court, including those for which 16 remand motions were pending, to be paid into the common benefit 17 fund. The court denied PSC II's motion, however, with respect to 18 cases that were at that time in state court. 19 At the end of 2006 or the beginning of 2007, Mulligan 20 reached a tentative settlement of all of the MDL cases against 21 Eli Lilly in which it represents the plaintiffs. The settlement 22 is contingent on certain conditions being fulfilled, including, 23 with respect to each case, the individual approval of the 24 plaintiff or plaintiffs that Mulligan represents. 1

### agreement was tentative. Since oral argument, we have received a

communication from Mulligan implying that at least some of the individual cases at issue are now in the Indiana state court system, where the distribution of settlement proceeds has begun. See Letter from Robert J. Lack to Clerk of Ct. (June 17, 2009). Neither party has explained the chain of events that led to this, nor have the parties offered any arguments regarding the possible impact of this development on the case at hand. Nor are we aware of the exact status of all (or, indeed, any) of the sixty-one individual cases, originating not just in Indiana but also in California and New Jersey, that underlie this appeal. We therefore address only the arguments that are before us and the facts as they are set forth in the record on appeal. 7 1 At a status conference on June 22, 2007, Mulligan 2 advised the district court of the tentative settlement and 3 inquired of the court as to the status of the fee cap and the 4 common benefit fund. The court responded with a pair of orders 5 dated August 17, 2007, and filed August 23, 2007. The first 6 noted that although Mulligan's contracts with its plaintiffs call 7 for a fee of forty percent of recovery, the firm was nonetheless 8 bound by the March 2006 order and the cap on attorneys' fees 9 there instituted. The second order rendered all of Mulligan's 10 cases pending before the MDL court, including the cases for which 11 motions to remand remained pending, subject to the March and 12 December 2006 orders. The second order therefore enjoined 13 Mulligan from making any disbursements from the Qualified 14 Settlement Fund until a fund administrator had certified that 15 there had been a segregation of funds representing both the 16 amount of fees sought by Mulligan in excess of the fee cap, and 17 the three percent set-aside for the common benefit fund. 18 Mulligan appeals from both of the August 17, 2007 19 orders.

### Mulligan explicitly waives any assertion of jurisdiction 2 

### under 28 U.S.C. § 1291. See Appellant's Reply Br. at 14 ("The steering committee argues that this case is not appealable under 28 U.S.C. § 1291 because the MDL court has not entered a final judgment. The Mulligan Firm agrees. As the Mulligan Firm said in its opening brief, the only appellate jurisdiction is under 28 U.S.C. § 1292(a).") (footnotes omitted). We therefore do not consider whether we have jurisdiction to entertain this appeal under it. 8 1 DISCUSSION 2 I. Jurisdiction 3 Mulligan argues that we have jurisdiction over this 4 appeal under 28 U.S.C. § 1292(a), which confers on the federal 2 

### 5 courts of appeals jurisdiction over, inter alia, "[i]nterlocutory 6 orders of the district courts of the United States . . . 7 granting, continuing, modifying, refusing or dissolving 8 injunctions, or refusing to dissolve or modify 9 injunctions . . . ." Id. § 1292(a)(1). 10 "As a general matter we have interpreted § 1292(a)(1) 11 to authorize an appeal only from an injunctive order that gives, 12 or aids in giving, substantive relief sought in the lawsuit in 13 order to preserve the status quo pending trial. We have held 14 nonappealable under § 1292(a)(1) orders that were unrelated to 15 the substantive issues of the litigation and that instead 16 regulated, or purported to regulate, such matters as pretrial 17 discovery and disclosure." Bridge C.A.T. Scan Assocs. v. 18 Technicare Corp., 710 F.2d 940, 943 (2d Cir. 1983) (citations 19 omitted); cf. Polymer Tech. Corp. v. Mimran, 975 F.2d 58, 64 (2d 20 Cir. 1992) ("An order awarding interim fees during the course of 21 litigation is not an injunctive order subject to interlocutory

### It appears that this is not entirely true, insofar as the 3 

### settlement remains tentative for at least some plaintiffs. While some of the settlement proceeds have already been distributed in part, see Letter from Robert J. Lack to Clerk of Ct. (June 17, 2009), the claims of other plaintiffs remain unresolved, see Certification of Settlement Administrator at 2, Cope v. Eli Lilly & Co., No. 79D01-0602-CT-14, at 2 (Tippecanoe Super. Ct., Ind., June 15, 2009) (referring to cases for which settlement funds had not yet been approved by Eli Lilly). 9 1 appeal."). We have been instructed to "approach [section 2 1292(a)(1)] somewhat gingerly lest a floodgate be opened that 3 brings into the exception many pretrial orders." Switz. Cheese 4 Ass'n v. E. Horne's Mkt., Inc., 385 U.S. 23, 24 (1966). 5 We conclude that the injunction at issue here does not 6 give or aid in giving substantive relief sought in the lawsuit. 7 Indeed, it does not so much as relate to the substantive issues 8 in the litigation. The only argument Mulligan makes in this 9 regard is a conclusory one: Because the only task that remains 10 in these cases is distribution of the settlement proceeds, and 3 

### 11 because the injunction prevents Mulligan from distributing those 12 proceeds in accordance with its contracts with its clients, the 13 injunction "goes directly to the cases' substantive issues" as 14 they currently stand. Appellant's Br. at 7. Those facts simply 15 do not render the issues substantive. 16 "To qualify as an 'injunction' under § 1292(a)(1), a 17 district court order must grant at least part of the ultimate, 18 coercive relief sought by the moving party." Henrietta D. v. 19 Giuliani, 246 F.3d 176, 182 (2d Cir. 2001). The district court 20 orders here at issue do not relate to the ultimate relief that is 21 sought in this litigation. Indeed, to the extent that there is a

### "[A]ll courts established by Act of Congress may issue 4 

### all writs necessary or appropriate in aid of their respective jurisdictions and agreeable to the usages and principles of law." 28 U.S.C. § 1651(a). 10 1 "moving party" -- PSC II filed a motion to create the set-aside 2 fund, compliance with which is one requirement of the injunction 3 before us -- it is not a party to the litigation itself and is 4 therefore not seeking "ultimate, coercive relief." In other 5 words, the injunction at issue does not "give[], or aid[] in 6 giving, substantive relief sought in the lawsuit." Bridge C.A.T. 7 Scan Assocs., 710 F.2d at 943. The orders are collateral to the 8 substance of the lawsuits. 9 We therefore conclude that we lack jurisdiction to hear 10 this appeal. 11 II. Mandamus 12 Anticipating that we might determine, as indeed we now 13 have, that we lack jurisdiction to hear this appeal, Mulligan 14 petitions for a writ of mandamus. 28 U.S.C. § 1651(a) codifies 15 this common law writ. Cheney v. U.S. Dist. Court for Dist. of 4 

### 16 Columbia, 542 U.S. 367, 380 (2004). Mandamus "is a drastic and 17 extraordinary remedy reserved for really extraordinary 18 causes. . . . [O]nly exceptional circumstances amounting to a 19 judicial usurpation of power or a clear abuse of discretion will 20 justify the invocation of this extraordinary remedy." Id. 21 (citations and internal quotation marks omitted). Mulligan has 22 given us no basis in fact or in law on which we might conclude

### 11 1 that the district court usurped its power or clearly abused its 2 discretion. We will deny the petition. 3 Finally, while Judges McLaughlin and Sack are in 4 sympathy with the carefully reasoned concurring views of Judge 5 Kaplan, the issues he addresses need not be resolved by this 6 panel in order to render our judgment here. Judges McLaughlin 7 and Sack therefore decline to use the extraordinary means of an 8 advisory mandamus order for the purpose of resolving those 9 issues. 10 CONCLUSION 11 For the foregoing reasons, we dismiss the appeal for 12 lack of jurisdiction and deny the petition for mandamus.

### 1

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 In re Zyp rex a Prod s. Lia b. Lit ig. , 549 F. S upp . 2 d 4 96, 49 8-

99 (E. D.N .Y. 20 08) . 

### L EWIS 

### A. KAPLAN 

### , District Judge , concurring.

I concur in the dismissal of the interlocutory appeal and denial of the petition for writ of mandamus. I write separately, however, to address whether a district court may order that a percentage of settlement monies paid in pe n ding multidistrict litigation (“MDL”) cases be set aside to fund possible fee awards to counsel whose efforts confer a common benefit when motions to remand those cases remain undecided in the district court.

This question arises frequently in MDLs, often affecting hundreds or thousands of plaintiffs. It i s i mportant and, as it has not been addressed by a n y c i r c u i t, novel. I therefore have concluded that the issue should be addressed head-on.

Facts Zyprexa is an anti-psychotic drug man ufactured by Eli Lilly and Company (“Lilly”). It has been prescribed for the treatment of schizophrenia and b i polar disorder in over twelve million patients. The l itigation below involved over 30,000 individuals who were prescribed and took Zyprexa and claimed that they consequently suffered injuries. 1



### Many of these individuals filed personal injury law suits in state courts across the country. Lil l y removed most of the cases to federal district courts. Some Zyprexaplaintiffs moved to remand in the districts to which the cases were removed, arguing that the federal courts lacked subject matter jurisdiction.

### 1

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2

2 See In re Zyp rex a Prod s. Lia b. Lit ig. , 314 F. Supp . 2 d 1 380 , 138 2-8 3 ( J.P .M. L. 200 4) 

### . 3 SeeF EDE RAL J UDI CIA L C ENT ER , MANU AL FOR C OMP LEX L IT IG AT ION F OUR TH § 22. 35, at 37 1 ( 200 4) (he rei naf ter“MANU AL ”).

4 SeeIn re Zyp rex a Prod s. Lia b. Lit ig. , No. 04 MDL15 96, 20 04 WL 352 024 5, at *2- 3 ( E.D .N. Y. Jun . 1 7, 200 4).

5 SeeInreZy pre xa Pro ds. Li ab. Li tig . , 467 F. Su pp. 2d25 6, 261 (E .D. N.Y . 2 006 ). 

### Beginning in 2004, t h e Judicial Panel on Multidistrict Litigation (“JPML”) transferred thousands of the Zyprexacases from federal district courts throughout the United States to the Honorable Jack B. Weinstein in the Eastern District of New York for coordinated or consolidat e d pretrial proceedings. Any pending 2 

### motions, including reman d m otions filed in the transferor districts, accompanied the transferred cases. 3



### Soon thereafter, Judge Weinstein appointed a Plaintiffs’ Steering Committee (“PSC I”) composed o f attorneys from thirteen law firms who represented various individual plaintiffs. PSC I

was responsible for, among other things, coordinatin ga nd conducting pretrial discovery for all plaintiffs, speaking for all plaintiffs in pretrial proceedings, making and arguing any motions, and pursuing settlement. 4



### In November 2005, virtually all of the cases then pending in the MDL were settled. The settlement contemplated the creation 5 

### of a claims administration process pursuant to which settling cases were divided into three tracks, attorneys fees were capped for

### 1

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3

6 In re Zyp rex a Prod s. Lia b. Lit ig. , 424 F. Sup p. 2d 488 , 4 90 (E. D.N .Y. 20 06) . 7 Id. at 497 . 8 In re Zyp rex a Prod s. Lia b. Lit ig. , 467 F. Su pp. 2dat 26 3.

9 S e eIn r eZy p r e x a Pr o d s . L i a b . L i t ig. , 46 7 F. Sup p. 2d at 261 . 

### cases in each track, and special masters were appointed to oversee and apply that process. 6



### In early 2006, the district court entered an order which, as far as is relevant here, provided that “the costs, disbursements and fees of the plaintiffs' steering committee shall be paid out of the general settlement fund” to the extent approved by the special masters. This was implemented in part by setting aside one percent

7 

### of the gross settlement amount payable to each settling plaintiff in an escrow fund. 8



### The district court then appointed a se c o n d Plaintiffs’ Steering Committee (“PSC II”) to coordinate pretrial proceedings in the few non-settling early cases and in the thousands of incoming and remaining cases, most of which had been filed, removed to federal court, and subsequently transferred by the JPML following the or i g i nal settlement. Lilly and PSC II moved for the 9 

### establishment of a fund to compensate the attorneys who had worked and wo u l d continue to work for the common benefit of all Zyprexa plaintiffs after the original settlement. The district court granted the motion and provided for the establishment of a common

### 1

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4

10 Id. at 27 5.

11 In r e Zy

p r e x a Pr o d . L i a b . L iti g. , No. 04 MD15 96, 20 07 WL 234 079 0, at *1 (E. D.N .Y. Au g. 17, 20 07) . An e arl ieror der imp ose d ase t a sid e o f ape rce nta ge ofpl ain tif fs’ at tor ney ’s fee s, rat her tha n of eac h pla int iff ’s gro ss re cov ery . Fol low inghe ari ngs be for e asp eci al mas tera nd Ju dge Wei nst ein , the natu re of the se t a sid e w as mod ifi ed. Com par e id. wi th In re Zyp rex a Prod . L iab . L iti g. , 46 7 F. Su pp. 2d at 266 . 12 In re Zyp rex a Prod . L iab . L iti g. , 2 007 WL23 407 90, at *1 . 13 In re Zyp rex a Prod . L iab . L iti g. , 4 67 F. Sup p. 2d at 266 . 14 Id. 

### benefit fund with certain details to be worked out in subsequent proceedings. 10



### In due course, the district court o r d ered that three percent of each remaining plaintiff’s gross recovery, if any, whether from a settlement or judgment, be placed in an escrow account. Half t h e m o n e y was to come from each plaintiff’s

11 

### recovery and half from fees otherwise payable to his or her attorney. Any lawyer who worked for the c o mm o n benefit of all

12 

### federal Zyprexaplaintiffs, including but not limited to members of PSC II, were eligible to apply for compensation from this account. Compensation would be granted only on a showing that the attorney “provided significant assistance to all plaintiffs.” If any money 13 

### remained in the fund after all claims on it settled, it would be distributed on a pro rata basis to those who had paid portions of their recoveries into the account. 14

### 1

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5

15 A-3 19, 34 9, 393 , 5 89.

16 In r e Zy

pre xa Pro d. Lia b. Lit ig. , N o . 0 4 M D1 5 9 6 , 2 0 0 7 WL 234 079 1, at *1 (E. D.N .Y. Au g. 17, 20 07) . 17 Ora l A rg. 11 :34 -36 . 18 Id. 

### Petitioner–appellant the Mulligan Law Firm (“Mulligan”) represents over two thousand plaintiffs who originally filed their actions in state and federal courts in seven states and whose cases against Lilly are pending in the MDL. Motions to remand sixty-one 15 

### of these cases to state courts remain pending in the district court. In December 2006, Mulligan and Lilly agreed in principle to settle all of Mulligan’s Zyprexacases, although the settlement had not yet been implemented as of the d a t e of argument, because the settling plaintiffs had not fully satisfied the preconditions to c o n s u mm a t i o n . H e n c e , i t w a s n o t t h e n c e r t a i n t h at the 16 

### settle m e nt funds in fact will be distributed to the Mulligan plaintiffs. 17



### Anticipating that the settlement would be finalized, the district court enjoined Mulligan from distributing settlement funds to itself or i t s clients until the fund administrator certified that three percent of the funds designated for e ach settling plaintiff had been set aside. It specified that “[p]ayments may 18 

### be made to individual plaintiffs as soon as that can be done while ensuring that sufficient funds have been held back to comply with

### 1

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6

19 Id.

20 Ora l a rg. 11 :04 -05 ; 1 1:2 4-2 7.

21 A-8 16.

22 Ex par te Fah ey , 3 32 U. S. 2 58, 26 0 ( 194 7); seeal so Are f v . Uni ted St ate s , 4 52 F.3 d 202 , 206 (2d Cir . 2 006 ) ( “Ma ndamus is an ext rao rdi nar y r eme dy, av ai la ble on ly in ext rao rdi nar y cir cum sta nce s.” (c iti ng In re Uni ted St ate s , 10 F.3 d 931 , 9 33 (2dCi r. 199 3)) ); In re Nag y , 8 9 F.3 d 115 , 117 (2d Cir . 1 996 ) 

### the three percent common benefit assessment.” As of the date of 19 

### oral argument, however, the court below had not awarded any fees or costs out of the fund. Mulligan acknowledges that it will have the opportunity to oppose any award of fees in the event fee applications are filed. 20



### Plaintiffs appeal the district court’s order enjoining them from distributing any settlement funds without a certification that the set-aside had been made. Alternatively, they seek a writ 21 

### of mandamus ordering the district court to vacate the injunction.

Discussion

I. Mandamus A. The Traditional Mandamus Standard Mand a mu s and other prerogative writs “are reserved for really extraordinary causes.” Mandamus is “not to be use d a s a 22

### 1

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7

(re qui rin g a n “ ext rao rdi nar y s how ing ” t o g et man damus rev iew in lie u o f a ppe al fro m f ina l j udgmen t ( cit ing In re Dre xel Burnham L amb ert Inc . , 8 61 F.2 d 1 307 , 1 312 (2 d C ir. 198 8)) ); In re Rep eti tive S tre ss Inj ury Li tig . , 11 F.3 d 368 , 373 (2dCi r. 199 3) (“T he gra nti ng of a w ritofma ndamus is anex tra ord ina ry mea sur e a nd sho uldbe do ne spa ringl y. ”); Uni ted St ate s v . Vic tor ia- 21 , 3 F. 3d 571 , 5 75 (2dCi r. 199 3) (“S uchwr its ma y not be us ed as a mere su bst itu te foranap pea l, butra the r t he pow er sho uldonlybe ex erc ise d i n e xtr aor din arysi tua tio ns. ”) (in ter nal qu ota tio ns omi tte d).

23 Sch lagenh auf v. Ho lde r , 3 79 U .S . 104 , 1 10 (19 64) (c ita tio ns omi tte d); acc ord Ban ker s Life &Ca s. Co. v. Ho lla nd , 3 46 U.S . 379 , 3 83 (19 53) ; Roche v. Evaporate d M ilkAs s’n , 3 19 U.S . 2 1, 30 (19 43) ; In re Ivy , 9 01 F.2 d 7 , 1 0 ( 2d Cir . 1 990 ) ( quo tin g Roche ); cf. InreTraffic Exe cut iveAs s’n -E. R. R.s , 6 27 F.2 d 631 , 6 34 (2dCi r. 198 0) (de nyi ng wri t where dis tri ct cou rt dis app rov ed set tle men t a gre eme nt, no tin g t hat“[ t]h e lik eli hoo d t hat cl ass me mbe rs will fin d i t t edi ous an d t ime con sum ingtopr ove th eirlo sse s d oes no t mak e th is an out -of -th e-o rdi nar y c ase ”).

24 E.g . , Mos es H. Con e Mem ’l Hosp. v. Mer cur y Cons tr. Co rp. , 4 60 U.S . 1 , 1 8 ( 198 3); Ban ker s L ife , 3 46 U.S . a t 3 84; In re Cer tai n U

nde rwr ite r , 2 94 F.3 d 2 97, 30 2 ( 2d Cir . 2 002 ); In re Agu inda , 2 41 F.3 d 1 94, 20 2 ( 2d Cir . 2 001 ); Dre xel , 8 61 F.2 d a t 131 2.

25 E.g . , Uni ted St ate s v . Giffen , 4 73 F.3 d 3 0, 38 n.7 (2 d C ir. 200 6); Uni ted

St ate s v . A

man te , 4 18 F.3 d 2 20, 22 2 ( 2d Cir . 200 5); In re SEC

ex re l. Glo tze r , 3 74 F.3 d 1 84, 18 7-8 8 ( 2d Cir . 2 004 ); Uni ted St ate s v . Copp a , 2 67 F.3 d 1 32, 13 8-3 9 ( 2d Cir . 2 001 ); In re vonBu low , 8 28 F.2 d 9 4, 98- 99 (2dCi r. 198 7). 

### substitute for appeal, even though hardship may result from delay

an d [ a ] p erhaps unnecessary trial.” Indeed, it often has been 23 

### said that mandamus is not available unless the petitioner’s right to relief is “clear and indisputable” and a direct appeal from a 24 

### final judgment would not be an adequate remedy. Moreover, while 25 

### traditional formulations of the standard have spoken of using the

### 1

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8

26 See , e .g. , Pa rr v. Uni ted St ate s , 3 51 U.S . 5 13, 52 0-2 1 ( 195 6); Ban ker s L ife , 3 46 U.S . a t 3 82- 83; Roche , 3 19 U.S . a t 2 6; Hon g Mai Sav. Do e , 4 06 F.3 d 1 55, 15 9 ( 2d Cir . 2 005 ) ( cit ing Richar dso n Gree nsh iel ds Sec s., In c. v. Lau , 8 25 F.2 d 6 47, 65 2 (2dCi r. 198 7)) . 27 See , e .g. , Ex pa rteCh ica go, R. I. & Pac. Ry . Co. , 2 55 U.S . 273 , 2 75- 76 (19 21) (B ran dei s, J.) (m and amu s d oes no t lie to rev iewdo ubt ful di str ictco urtju ris dic tio nal de termin ati on) ; In re Ivy , 901 F. 2d at 10 (“[ T]h e w ritwi ll not issue to rev iewanor derov err uli ng a p leato th e j uri sdi cti on . . . .” (qu oti ng Roche , 3 19 U.S . a t 3 1)) ; War d B aki ng Co. v. Ho ltz off , 164 F. 2d 34, 36 (2 d C ir. 19 47) (d eny ingwr it whe re “[w ]e are not sa tis fie d t hatth e d ist ric t c our t ‘ cle arl y’ lac ks jur isd ict ion ”); seealsoUn ite d S tat es v. DiS tefano , 4 64 F.2 d 845 , 8 50 (2dCi r. 197 2) (Fr iendl y, J.) (“ [M] ere er ror , e ven gro ss err or in a p art icu larcase , a s d ist ing uis hedfr om a cal cul ate d a nd re pea teddisr ega rd of gov ern ingru les , d oes no t suffi ce tosu ppo rt iss uan ce of the wr it. ”); acc ord , e .g. , Nat ’l Rig

ht to Work L ega l D ef. v. Ri chey , 5 10 F.2 d 1 239 , 1 242 (D. C. Cir . 1 975 ) ( “Ifth e low er co urtis cl ear ly wit hou t jur isd ict ion , th e w ritwi ll ord ina ril y b e g ran ted . If, how eve r, the ju ris dic tio n o f t he low er cou rt is dou btf ul . .

. t h e w r i t w i l l o r d i n a r i l yb e d e n i e d . ” ( qu o t i n g Expa rte Chi cago , 2 55 U.S . at 275 )) (ci tat ion s o mit ted ); Com for t E qui p. Co. v. St eck ler , 2 12 F.2 d 3 71, 37 3 ( 7thCi r. 195 4) (“I f a rat ion al andsubs tan tia l leg al ar gumentcan be ma de insu ppo rt of the qu estio nedju ris dic tio nal ru lin g t he cas e i s n ot app rop ria te forma ndamus or p roh ibi tio n e venth oug h o n n orm al app eal a re vie win g c our t m igh t f indre ver sib le err or. ” (q uot ingAm . A irl ine s v . Form an , 2 0 4 F . 2 d2 3 0 , 2 3 2 ( 3 dCi r. 195 3)) ). 

### wri t t o c o nfine a lower court to the exercise of its proper jurisdiction, it long has been clear th a t m a n d amus will not lie 26 

### to review a claim of mere error in a lower court’s jurisdictional determination. Indeed, any different view would conflict with the 27 

### requirement that the petitioner’s right to relief be clear and indisputable.

Mulligan argue s t hat this Court may grant its petition under the traditional mandamus standard because the district court

### 1

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 9

28 Mo s e sH . Co n eM em ’ l Ho sp. , 46 0 U .S. at18 ; se e a lsoInre Vaz que z-B ote t , 4 64 F.3 d 5 4, 57 (1s t Cir. 2 006 ) 

### (“‘[E]ven where the merits clearly favor the petitioner, relief may be withheld for lack of irreparable injury[.]’” (citing In re Ma r t i nez-Catala , 129 F.3d 213, 217 (1st Cir. 1997))); In re Nat’l Presto Indus., Inc. , 347 F.3d 662, 663 (7th Cir. 2003) (requiring showing of irreparable harm before granting mandamus relief); United States v. Wexler , 31 F.3d 117, 128 (3rd Cir. 1994) (same).

29 379 U. S. 104 . 

### lacked jurisdiction to issue the set aside order in sixty-one of the cases Mulligan originally filed in state court. At least until the district court actually awards fees out of the common benefit fund, however, Mulligan cannot demonstrate a need for traditional mandamus because it has not yet suffered any injury. In any case, it lacks a “clear and indisputable” right to relief even assuming 28 

### that the set aside order were erroneous. But traditional mandamus is not the only potentially relevant standard.

B. Advisory Mandamus The stringencies of traditional mandamus standards admit of a limited exception for what has been termed “advisory mandamus” – the use of mandamus to provide guidance on a novel question of general or exceptional importance to the administration of justice that should not await review by appeal from a final judgment.

In Schlagenhauf v. Holder , the Supreme Court “departed 29 

### in some degree” from the tradition a l mandamus standards to

### 1

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10

30 Kau fma n v. Ed els tei n , 5 39 F.2 d 8 11, 81 7 ( 2d Cir . 1 976 ) (Fr ien dly , J .). Seege nerall y Not e, Sup erviso ry and Ad vis ory Man dam us Und er theAl l W rit s A ct , 8 6 HARV . L. REV . 595 (1 973 ) (he rei naf ter“H arv ardNo te” ). The Su pre me Cou rt has rec ogn ize d a s eco nd lim ite d e xce pti on to tra ditio nal m and amu s s tan dar ds forth e e xer cis e o f “su per vis oryco ntr ol of the Di str ictCo urt s b y t he Cou rts of Appea ls. ” La Buy

v. Ho wesLe ath er Co. , 3 5 2 U . S . 2 4 9 , 2 59- 60 (19 57) . In La Buy , t he dis tri ct cou rt, no twi ths tan din g p rio r adm oni tio ns by the Sev en th Ci rcu it aga ins t e xce ssi ve use of spe cia l m ast ers , r efe rre d t wo a nti tru st cas es to spe cia l mas ter s o n t he gro undth at its do cke t w as tooco nge ste d. It didso inli ne wit h apr iorpr act ice ofto o f requen t refe re nces to spe cia l m ast ers th at the Su pre me Cou rt cha rac ter ize d a s “li ttl e l ess th an an abd ica tio n o f t he jud ici al fun cti on. ” 3 52 U.S . a t 256 , 2 58. I n t hos e cir cums ta nces, th e C our t h eldth at sup erv iso ry man damus was a p p r o p r i a te. Id. at 259 -60 . T he cas e t her efo re app ear s t o aut hor ize “s upe rvi sor y” man damus “wh en a pla usi ble ca se cou ld be mad e for the dan ger of fre que nt rec urr enc e” of a “ pro bab ly err one ous pr act ice .” SeeHa rva rd Not e, 86 H ARV . L. REV . at 609

- 10; seeal so, e. g. , Un ite d S tat es v. Yem ita n , 7 0 F .3d74 6, 748 (2dCi r. 199 5) (“[ A]n arb itr ary pra cti ce of sen ten cin g w ith out pro fer red[s ic] re aso ns wou ld amo untt o an abd ica tio n o f jud ici al res pon sib ili ty sub jec t t o m and amu s.” ) ( dic tum ). As dem ons tra tedbyth e d isc uss ionbelo w, bec aus e t he pra cti ce cha lle nge d h ere wa s n ot “pr oba blyer ro ne ou s,” mu ch les s a n “ab dic ati on of the ju dicia l f unc tio n,” su per vis oryma ndamus has no pr ope r r ole inth is cas e. 31 379 U. S. at 110 -11 . 

### countenance the use of the writ for such advisory purposes. 30 

### There, the Court indicated that mandamus may be used to settle import a n t questions of first impression where there is a “substantial allegation of usurpation of power” by the district court. T h u s , courts of appeals have some scope for use of

31 

### mandamus to settle novel q u e s t i o n s. On the other hand, as this Court has written, “[n]o one could reasonably suppose that the [Supreme] Court has now subscribed . . . to a doctrine that any

### 1

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 11

32 Kau fma n , 5 39 F.2 d a t 8 19 (ci tat ion s o mit ted ).

33 687 F. 2d 591 (2 d C ir. 19 82) . 34 418 F. 3d 220 . Add iti ona lly , t his Co urtha s r ead Sch lagenh auf as cre ati ng an “es cap e h atc h” fr omthe fin ali ty rul e i n t he con tex t o f dis cov ery , when the “qu est ion is of ext rao rdi nar y s ign ifi can ce or th ere is extr eme needfor rev ers al of the di str ictco urt ’s man dat e b efo re the ca se goe s t o judgme nt. ” Am. Ex pre ss War eho usi ng, Lt d. v. Tra nsamer icaIn s. Co. , 380 F.2d277, 28 2 (2dCir. 1967 ). Subs equ entdisc ove ry ca ses also have in vok ed thi s s tan dar d. See, e. g. , In re Att orn ey Gen . o f t he Uni ted Sta tes , 5 96 F.2 d 5 8, 63 (2dCi r. 197 9); Nat ’l Sup er Spu ds, Inc . v . N .Y. Merc an til e Exch . , 5 91 F.2 d 1 74, 18 1 ( 2d Cir . 197 9); seeal so Glo tze r , 374 F. 3d at 187 (quot ing Cop pa , 267 F.3 d a t 1 37- 38 (appl yi ng same s tan dar d, butwi tho ut cha rac ter izi ng man damus rev iewas “a dvi sor y”) ). The se cas es est abl ishth at man damus someti mes ma y b e g ran ted to rev ers e a n e rro neo us dis cov eryru lin g whe re th e r uli ng ord ers di sco ver y t hatco uldno t b e u ndo ne on app eal fr om a fin al jud gme nt bec aus e t he all ege dlyun dis cov era ble inf orm ati on wil l h ave bee n dis clo sed . Butth e d isc ove ry cas es she d l itt le lig ht on the ap pro pri ate co urs e i n t his ca se, in par t b eca use Mu lli ganwo uldsu ffe r no co gni zab le harm i f rev iewwe re den iedun les s a nd unt il the re is a f ina l o rde r t o dis bur se mon ey it con tri but es to the se t a sid e. 

### non-frivolous claim of error in a decision is a claim of ‘usurpation of power’ on the theory that courts are bound to decide all issues correctly.” 32



### The Second Circuit’s decisions subsequent to Schlagenhauf do not resolve entirely the uncertainty as to the criteria dividing

a p p ropriate from inappropriate uses of advisory mandamus. The cases that bear most strongly on the facts at bar are In re In t e rn a t i o n a l B u s i n e s sM a ch i n e sC orp. and United States v. 33 

### Amante. In IBM, the Circuit granted mandamus to halt the district

34

### 1

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 12

35 15 U.S .C. § 16( e)( 1).

36 The di str ict co urt ha d h ear d a rgumen t o n t he iss ue butha d n ot yet is sue d ade cis ion . 687 F. 2d at 596 . 37 Id. at 60 0.

38 Id. at 59 9-6 00.

39 Id. at 60 0-0 2. 

### court’s consideration of whether the Tunney Act requ i r e ment of judicial approval of consent decrees in government antitrust cases 35 

### appli e dt o s t i p u l a t i o n s o fd i s m i s s a l u n d e rF e d e r a l Ru l e o fC i vil Pro c e du r e 4 1 ( a ) ( 1 ) . I t d i d s o , h o w e v e r , n o t s i mp l y b e c ause it 36 

### disagreed with the district court’s retention of juris d i c tion to consider the issue, but for three other reasons. First, both parties were united in their desire that the case be dismissed outr i g h t . Second, the case already had gone on for thirteen

37 

### years, tying up “one of the nation’s largest industrial concerns,” during which time “m a n y of the underlying products [had become] commercially outmoded.” Finally, there was no serious basis for 38 

### the assertion that the Tunney Act applied to a Rule 41(a)(1) dismissal in light of t h e plain language of the statute and “the clear and indisputable legislative history.” 39



### Amante concerned a different question, viz. whether a distri c t court had erred in bifurcating a simple felon-inposses s i o n firearm case to require first a trial on the issue of possession and then a se p a r ate trial on the issue of the prior

### 1

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 13

40 418 F. 3d at 222 . 41 Id. at 222 ; seeal so IBM, 6 87 F.2 d a t 6 03.

42 539 F. 2d 811 . 

### felony conviction, the latter of which would take place only after a jury finding of possession. In granting mandamus to vacate the bifurcation order, the Circuit relied upon its conclusions that (1) the issue was significant because “[i]ts resolution will affect

numerou s defendants in similar trials and will aid in the administration of criminal justice,” and (2) “no remedy [wa]s available to the government other than mandamus.” 40



### Both IBM

and Amantedemonstrate that this Court has granted mandamus for advisory purposes when presented with questions of significance and the d i s t r ict court had committed a clear abuse of discretion and usurpation of power. In addition, 41 

### both cases reached the merits of the issues presented by the petitions as, of course, the Court was compelled to explain the district court’s error. But they did not involve the question whether this Court may reach the merits for advisory purposes to deny a pet i t i o n for mandamus where the issue and need for review are sufficiently pressing.

This question was answered in the affirmative in Kaufman v. Edelstein . There, two expert witnesses whom t h e g o v e rnment 42 

### had subpoenaed to testify in a civil antitrust case petitioned for a writ of mandamus directing the district court to quash the subp o e n a s . O b s e r v i n g t h a t t h e d i s t r i c t c o u r t ’ s d e n i a l o fthe

### 1

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 14

43 Id. at 81 9.

44 Id. at 819 , 8 21.

45 Id. at 82 2; seeal so Sta ns v. Gaglia rdi , 4 85 F.2 d 1 290 , 1 292 (2dCi r. 197 3.

46 The Ma nua l for Com ple x L iti gat ion ins tru cts cour ts “[e ]ar ly in the li tig ati on” to “det erm ine the met hodof c omp ens ati on” 

### motions to quash “clearly was no ‘usurpation of power’” nor a clear ab u s e of discretion, the Court, speaking through Judge Friendly, stated that the only argume n t i n f a v or of granting the writ was that the case presented a “novel and important” issue. The Court 43 

### then discussed the merits of the case at some length, concluding tha t , a l t h o u g ht h e r e e x i s t e dn o p r i v i l e g e p r o t e c t i n ge x p e rt witnesses from being called to testify, courts in their discretion could protect expert witnesses when good cause was shown. Judge 44 

### Friendly listed a number of factors pertinent to deciding whether a particular expert witness merited the protection of the court. 45



### In sum, we have hel d t h a t i t is appropriate for us to discuss the merits of a challenged district court action to deny mandamus when the question is of sufficient importance and there is a dearth of guidance on the issue.

C. Application To This Petition The district court’s set aside order, in my view, raises just such a question. The issue never has been addressed by this Circuit. Y e t i t arises frequently in MDLs, many encompassing 46

### 1

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 15

forle ad andli ais on co uns el “a nd es tab lis h arr ang eme nts fo r the ir compen sat ion , i ncl udi ng set ting up a fu nd to whi ch des ign ate d p art ies sh oul d c ontri but e i n s pec ifi ed pro por tio ns. ” MANU AL § 1 4.2 15, at 20 2.

47 Se e, e.g. , In re Wil son , 4 5 1 F . 3 d1 6 1 , 1 6 3 ( 3 dC i r . 2 006 ) (30 ,00 0 - 35 ,0 00 pl ain tif fs wit h s uit s p end ingbe for e M DL cou rt) ; In r eD i e tD r u gs , 36 9 F.3 d 2 93, 29 8 ( 3d Cir . 2 004 ) (MD L in vol ved18 ,00 0 i ndi vid ual la wsu its an d o ver10 0 put ati ve cla ss act ion s); In re Ort hop edi c Bon e Scr ew Pro ds. Lia b. Lit ig. , 1 93 F.3 d 7 81, 78 4 ( 3d Cir . 19 99 ) (“t hou san ds of pla int iff s” in MDL ); In re SanJu an Dup ontPl azaHo tel Fir e L iti g ., 111 F. 3d 220 , 2 22 (1s t C ir. 19 97) (“ hun dre ds of cl aim s” fil ed by “th ous and s o f p lai nti ffs ” c ons oli dat ed in MDL ); In re Dow

Co rni ng Cor

p. , 8 6 F .3 d 48 2, 485 (6t h C ir. 199 6) (44 0,0 00 pla int iff s ele cte d to bec ome cla ss member s f or pur pos es of set tl eme nt in MDL ); In re Foo d L ion , Inc. Fa ir Lab orStan dar ds Act“E ffe cti ve Sch edu lin g” Lit ig. , 7 3 F .3d 528 , 531 (4t h Cir . 199 6) (ne arl y 1,0 00 pla int iff s in MD L); In reAgen t Ora ngeProd . L iab . L iti g. , 818 F.2 d 1 45, 16 5-6 6 (2dCi r. 198 7) (24 0,0 00 cla ima nts inMD L).

48 SEC

v. St ewa rt , 4 76 F.2 d 7 55, 75 8 ( 2d Cir . 1 973 ) ( dis cus sin g sta nda rd forsu per vis oryma ndamus ). 

### hundreds and sometimes thousands of cases and affecting hundreds or thousands of plaintiffs. A resolution of the issue here would be 47 

### “applicable to [this] entire class of cases.” A decision on the 48 

### merits thus would offer guidance to both courts and litigants and aid the efficient administration of justice.

II. The District Court’s Order A. Subject Matter Jurisdiction The fundamental question here is whether a district court has subject matter jurisdiction – power – to order that settlement funds be set aside to fund possible fee awards to counsel in MDL cases that have been removed to federal court and in which motions

### 1

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 16

49 Uni ted

St ate s v . U

nit ed Min e Work ersof Am . , 3 30 U.S . 2 58, 29 1 (19 47) ; Kuh ali v. Re no , 266 F. 3d 93, 10 0-0 1 ( 2d Cir . 2 001 ).

50 Sin och em Int ’l Co. , L td. v. Mal ays ia Int ’l Shi ppi ng Cor p. , 5 49 U.S . 4 22, 43 1 ( 200 7) (ci tin g Ruh rga s A G v . M ara tho n O il Co. , 526 U. S. 574 , 5 85 (19 99) an dSt eel Co . v . Citi zen s for a Bet ter En v’t , 5 23 U.S . 8 3, 100 -01 & n.3 (1 998 )).

51 SeeSi nochem , 5 49 U.S . a t 4 31 (re cog niz ingth at fed era l c our t “ha s l eew ay ‘to ch oos e amongt hresh oldgr oun ds forde nyi ng aud ien ce to a c ase on t he mer its ’” bef ore de termin ing jur isd ict ionan d n oti ng permis sib ili ty of dis mis sal ofst ate lawcl aim s o n d isc ret ion arygr oun ds, dism iss al bas ed on You nge r

ab ste nti on, anddi smi ssa l u nde r Tot tenv. Un ite d Sta tes , 9 2 U .S. 10 5 ( 187 6) , all be for e c ons ide rin g jur isd ict ion al que sti ons ); Un ite d M ineWo rke rs , 3 30 U .S . at 290 (d ist ric t c our t “ unques tio nab ly hadth e p owe r t o i ssu e a res tra ini ng ord er . . . pen din g ade cis ionupon i ts own jur isd ictio n” ); se e a lsoid . at 295 (n oti ng Sup reme C our t wou ld aff irm

di str ictco urt ’s jud gme nt of cr imi nal cont emp t a s 

### to remand remain undecided in the district court. In essence, Mulligan argues that it does not and that we therefore either shoul d( 1 ) d e c i d e t h e j u r i s d i c t i o n a l i s s u e s t h a t w e r e n o t p a s sed upon below and exempt from the set aside order any cases in which removal was improper or, a l ternatively, (2) exempt all of these cases from the set aside order on the theory that the entry of the set aside order in advance of determination of the remand motions was erroneous. These contentions are unpersuasive.

The starting point for this analysis is the proposition that a federal court has jurisdiction t o d e termine its own jurisdiction. While it must make this determination before it 49 

### reaches the merits of the case before it, it is empowered to issue 50 

### non-dispositive o r d ers between the filing of the action and its ultimate determination on the merits. 51

### 1

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 17

val idl y p uni shi ng vio lat ion s o f o rde r t henou tst and ing , e ven if it was la terde termin ed tha t t he di stric t c our t l ack ed jur isd ict ion ).

52 Pet . B r. at 32- 34.

53 487 U. S. 72 (19 88) . 54 Id. at 76. 

### Mulligan nevertheless argues that federal courts are permitted, prior to a ruling disposing of any s u bject matter juri s d i c t i o n c h a l l e n g e , t o t a k e o n l y s u c h a c t i o n s a s m a y a i d in determining their jurisdiction and that actions reaching the merits are void. The district c ourt’s set aside order, in its view,

52 

### reached the merits and thus went beyond the limits of the court’s authority. Mulligan relies for this proposition on United States Catholic Conference v. Abortion Rights Mobilization, Inc. 53



### Ca t h o l i cC o n fe r e n ce i n volved an appeal from an order holding two non-party witnesses in civil contempt, over their obj e c t i on that the district court lacked subject matter jurisdiction, for refusing to comply with a subpoena. The Supreme Court held th a t a non-party witness can challenge the subject matter jurisdiction of a court in defense of a civil contempt citation. I t s t a t e d further that the contempt orders would be

54 

### void if the district c o urt lacked subject matter jurisdiction. Mulligan argues that Catholic Conference therefore stands for the proposition that federal courts are permitted only to “take actions

### 1

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 18

55 Pet . B r. at 32.

56 503 U. S. 131 (2 001 ).

57 Id. at 13 7.

58 Id. 

### in aid of determining [their] jurisdiction.” But he overreads the 55 

### decision. In Willy v. Coastal Corp. , the Suprem e Court upheld a 56 

### district court’s Rule 11 sanctions order notwithstanding a subsequent determination that the district court had lacked subject matter jurisdiction, and it rejected the petitione r ’ s contention that this result was precluded by Catholic Conference. As the Court explained:

“[a] final determination of lack of subject-matter jurisdiction of a case in federal court, of course, precludes further adjudication of it. But such a determination does not automatically wipe out all proceedings had in the district court at a time when the district court operated under the misapprehension that it had jurisdiction.” 57 

### Thus, a district court’s order that is “collateral to the merits” may be upheld despite a later conclusion that the court lacked subject matter jurisdiction over the litigation. 58



### In thi s c a s e, the set aside order simply imposed an

a s s e s s m e n t i n o r d e r t o c r e a t e a f u n d t h a t c o u l d b e u s e dto compensate attorneys who demonstrate that their efforts conferred

### 1

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59 In re Zyp rex a Prod . L iab . L iti g. , 4 67 F. Sup p. 2d at 266 . 60 See , e .g. , Coo ter & Gel l v . Hartmarx Corp . , 4 96 U.S . 3 84, 39 5 (1 99 0) (“I t i s w ell es tab lis hedth at a f ede ral co urtma y con sid er col lat era l i ssu es afte r a n a cti on is no lon ger pen din g. Forexample , dis tri ct co urt s mayawar d cos ts af teran act ionis di smi sse d f or wan t o f j uri sdi cti on. ”); Moo re v. Per man ent e M

ed. Gr oup , Inc. , 9 81 F.2 d 4 43, 44 5 ( 9thCi r. 200 3) (“I t i s c lea r t hatanaw ardofat tor ney ’s fee s i s aco lla ter al mat terov er whi ch a c our t n orm all y r eta ins ju ris dic tio n e ven a f t e rb e i n gd i v e s t e do fj u r i s d i c t i o no nt h e m e r i t s .”) ; see als o In r e Nine tee n A ppe als , 98 2 F .2dat 60 9 ( “[A ]n ord er whi ch def ini tiv elyres ol ves cl aim s f or att orn ey’ s f ees an d exp ens es pay ab le out of a c omm on fun d i s s eve rab le fro m t he dec isi on on the me rit s.” ) ( cit ing Tru ste es v. Gre eno ugh , 1 05 U.S . 5 27, 53 1 ( 188 1)) ; Ove rse as De v. Dis c Corp . v . S angamo Con str . Co. , 8 40 F.2 d 1 319 , 1 324 (7 th Cir . 1 988 ) ( dec lar ingit to be “se ttl ed tha t ade cis ionaw ard ingorde nyi ng att orn ey’ s fee s a nd exp ens es fro m aco mmo n f und. . . is se ver abl e f rom the d eci sio n o n t he mer its ”); Mem ph i s Sh e r a t o n C o r p . v. Kirkley , 61 4 F.2d 131 , 1 33 (6t h C ir. 19 80) (a war d o f att orn ey’ s f ees fromcomm on fu nd “i s col lat era l” to the mer its (ci tin g Spragu e , 3 07 U.S . a t 7 80) ). 

### a benefit on Zyprexa plaintiffs generally. It is even less 59 

### related to the ultimate merits than orders awarding at t o r ney’s fees, which are collater a l m a tters over which a court retains j u r i s d i c t i o ne v e ni fi t u l t i m a t e l yi s d e t e r m i n e dt o l a c ksubject matter jurisdiction. It does not preclude the Mulligan plaintiffs 60 

### from challenging any proposed distribution of funds on the ground that they did not benefit from the efforts of counsel to whom a distribution might be made. At least in these circumstances, the set aside order was collateral to the m e r i ts and well within the district court’s power.

The district court’s determination to defer consideration of the jurisdictional chal l e n ges also was comfortably within the bounds of its discretion. While it usually is advisable for

### 1

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61 Lan disv. No rthAm . C o. , 2 99 U.S . 2 48, 25 4-5 5 ( 193 6).

62 See , e .g. , Gal ati v. Eli Li lly & Co . , N o. 05- 433 8-C V-C -NK L, 200 5 WL 353 338 7, at *1 (W.D . Mo. De c. 22, 20 05) (h und red s o f rem andmo tio ns pen din g i n Zyp rex a MD L).

63 A-8 14- 15. 

### district courts to rule on a n y c h allenge to subject matter jurisdiction early in a lawsuit, district courts have broad scope to manage their own dockets in light of considerations of “economy of time and effort for itse l f , f o r counsel, and for litigants.” 61 

### The impact of such considerations in this case, and in some other MDL and mass tort cases, often may suggest a different course.

Alleged mass torts, as the term implies, spawn masses of litigation. Plaintiffs understandably sue in forathat they regard as convenient or likely t o b e favorable including, in many instances, state courts. Indeed, s o m e frame their complaints in ways that raise issues concerning removability. Defendants, moved by similar considerations, frequently remove many of these cases to federal courts. These tactical steps in turn often provoke large numbers of reman d m o t i o ns, as occurred in this MDL. Indeed, 62 

### Mulligan alone has filed motio n s to remand in over 50 of its Zyprexacases. 63



### A district judge managing such a comp l e xsituation reasonably may conclude that the court’s time, especially early in the litigation, is better spent on activities other than deciding

scores or hundreds of individual remand motions. It often would be appropriate to conclude that many of the cases in which such

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64 See, e.g . , In re Zyp rex a Prod s. Lia b. Lit ig. , 4 6 7 F . S u p p. 2d at 261 -62 . 65 28 U.S .C. § 140 7. 

### motions are filed are likely to settle and that the expenditure of judicial resources on remand motions likely wo u l dbe wasted. Moreover, even if an MDL or comparable court dealt immediately with remand motions pending at a given moment, new cases and new remand motions are likely to be filed throughout the pendency of the litigation. Deciding each motion prior to addressing other issues 64 

### common to all or most cases therefore could require a significant expenditure of judicial time and resources, derailing the progress of the litigation as a whole. Delays of this nature could well frustrate the purpose of MDLs, which is “to promote just and efficient conduct” of actions involving common questions of fact. 65



### While every case turns on its own facts, I cannot say that the dist r i c t court’s decision to give priority to moving thousands of Zyprexa cases towards settlement or other disposition over focusing p r o mp tly on the hundreds of pending remand motions was an improvident exercise of the broad discretion that inheres in its docket management function.

B. The Common Fund Doctrine The di s t r ict court’s set aside order raises also the question whether a district court in an MDL or other litigation involving a large number of separately represented individ u al claimants, in which any recovery will be unique to each plaintiff,

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66 See , e .g. , A lye skaPi pel ineSe rv. Co . v . Wi ldern essSo c’y , 421 U. S. 240 , 2 47 (19 75) . 67 Boe ing

Co . v. VanGemer t , 4 44 U.S . 4 72, 47 8 ( 198 0) (ci tin g Cen t. R.R . &Ba nki ng Co. v. Pe ttu s , 113 U. S. 116 (1 885 ) a nd Tru ste es v. Gre eno ugh , 1 05 U.S . 5 27 (18 82) ).

68 Id. ; Aly esk a , 4 21 U.S . a t 2 45; Mil ls v. Ele c. Aut o-L iteCo . , 396 U.S . 375 , 392 -92 (1 970 ); Spr agu e v. Tic oni c Nat ’l Ban k , 307 U. S. 161 , 1 64- 65 (19 39) ; Cen t. R.R . , 1 13 U.S . a t 1 24- 25; Gre eno ugh , 1 05 U.S . a t 5 32.

69 Boe ing , 4 44 U.S . a t 4 78 (ci tin g Gre eno ugh , 1 05 U.S . a t 532 -37 ). 

### has the authority to create a fund out of those recoveries for the purpose of financing an award of fees and expenses to those counsel whose work benefits the entire group of plaintiffs. The answer to this question lies in the common fund or common benefit doctrine.

The so-called “American rule” is that the prev a i l i ng litigant ordinarily must bear the litigant’s own attorney’s fees. 66 

### Since the nineteenth centu r y , however, the Supreme Court has recognized an equitabl e e x c e p tion to this rule – known as the 67 

### common fund or common benefit doctrine – that permits litigants or lawyers who recover a common fund for the benefit of persons other than themselves to o b tain reasonable attorney’s fees out of the fund, thus spreading the cost of the l itigation to its beneficiaries. The doctrin e “ r e flects the traditional practice 68 

### in courts of equity,” which recognized “that persons who obtain 69 

### the benefit of a lawsuit without contributing to its cost are

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70 Id. (ci tin g Mil ls , 3 96 U.S . a t 3 92) . 71 Id. (c iti ng Mil ls , 3 96 U.S . a t 3 94) . 72 Aly esk a , 421 U.S . at 264 n. 39; seeBo ein g , 444 U.S. at 4 78- 79; In re Nin ete en Appe al s Arisi ng Outof Sa n JuanDupon t Pla za Hot el Fir e L iti g , 982 F. 2d 603 , 6 07 (1s t C ir. 19 92) . 73 See , e .g. , Boe ing , 4 44 U.S . 4 79- 81; In re Age nt Ora ngePr od. Lia b. Lit ig. , 8 18 F.2 d 2 26, 23 7 ( 2d Cir . 1 987 ). 

### unjustly enriched at the successful litigant’s expense.” A court 70 

### acting in equity theref o r e m ay assess attorney’s fees proportionally among those benefitted by the suit. 71



### In Alyeska Pipeline , the Supreme Court identified several characteristics of cases i n which the application of the common benefit doctrine may be appropriate. These include the ease in identifying the persons, or classes of persons, benefitted by the recovery, ease in tracing the benefit flow from the fund to those persons, and confidence that the costs of litigation can be shifted with some exactitude to those benefitted by the litigation. 72



### Courts rou t i n ely employ the common benefit doctrine in awarding fees to counsel in class actions which, when successful, 73 

### often result in lump sum recoveries that benefit identifiable classes. Class ac t i o n s present also the free-rider problems the common fund doctrine was designed to remedy, as class members who do not hire counsel nonetheless benefit from any recovery. The doctrine thus prevents the unjust enrichment of these class members at the expense of class counsel by c o mp ensating counsel in

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74 Boe ing , 4 44 U.S . at 477 ; Lin dy Bro s. Bui lde rs, In c. v. Am. Rad iat or & S tan dar d S ani tar y C orp . , 4 87 F.2 d 1 61, 16 5 ( 3d Cir . 1 973 ); 4 N EWB ERG ON C LAS S A CTI ONS § 1 4:6 (4 th ed. 20 02) . 75 Gol dbe rge r v. Int egr ate d R es. , Inc. , 209 F.3 d 43, 47 (2dCi r. 200 0).

76 Forex amp le, inma ny MDL s inv olv ing per son al inj urycl aim s, cou rts ha ve den iedcl ass ce rti fic ati on pur sua nt to F ED . R. C IV . P. 23( b)( 3) bas ed on fin din gs tha t q uesti ons a ffe cti ng ind ivi dua l m emb ers ofth e putat ive cl ass re gar din g i nju ry, cau sat ionan d/o r d ama ges pre dom ina te ove r que sti ons of fac t or lawco mmo n t o t he put ati ve cla ss. See , e .g. , In re Rez uli n Pro ds. Lia b. Li tig . , 2 10 F.R .D. 61 , 6 6-6 8, 71 

### proportion to the benefit they have obtained for the entire class, rather than just the named c l a ss representatives with whom they contracted. Likewise, it prevents the unjust enrichment of class members at the expense of the class representatives who contracted with attorneys to prosecute the action. 74



### Application of the do c t r ine to class actions is straightforward. The class generally is repre s e n ted by counsel. Any p r o ceeds from the litigation are awarded to the class as a whole or by a formula that permits determination of the amount of the aggregate benefit conferred on the class. Courts may set some pe r c e n t a g e o ft h e l u mps u mr e c o v e r ya s t h e f e e o r , u s i n gthe “lodesta r approach,” ascertain the number of hours reasonably billed to the class, multiply it by an appropriate hourly rate, and deduct the product from any recovery. 75



### The situation is somewhat different with respect to MDLs consisting of individual cases prosecuted by individual plaintiffs, sometimes numbering in the thousands, and ot h e r litigation 76

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(S. D.N .Y. 20 02) ; In re Phe nylpr opano lam inePr ods . L iab . Lit ig. , 208 F. R.D . 6 25, 63 3 ( W.D . W ash . 2 002 ); seeal so In re Prempr o , 2 30 F. R.D . 5 55, 56 6-6 7 ( E.D . A rk. 20 05) (c ons ume r fra ud cla im) . 77 See , e .g. , Sm i l ey v . S i n c off , 958 F. 2d 498 , 4 99 (2dCi r. 199 2) (di str ict c ou rt didno t a bus e i ts dis cre tio n i n req uir ing tha t att orn ey fee pai d t o p lai nti ffs ’ c omm itt ee be dis tri but ed prora taam ongco mmit tee me mbe rs) ; Vin cen t v . HughesAi r West , Inc. , 5 57 F.2 d 759 , 774 -75 (9t h Cir . 1 977 ) (di str ict co urt ha d a uth ori ty to di rect app oin tme nt of commit tee of l eadco uns el) ; MacAli ste r v . G ute rma , 2 63 F.2 d 65, 68 (2d Cir . 195 8) (ap pro vin g app oin tme nt of “g ene ral cou nse l” andco nso lid ati on ofacti ons for pre tri al pur pos es to av oidunne ces sar y exp ens es, dupl ica tio n a nd del ay in thr ee sto ckh old ers ’ d eri vat ive ac tio ns) ; MANU AL § 10. 221 at 24 -25 . 

### involving large numbers of separately represented claimants. Unlike most class actions, recoveries by individual plaintiffs or groups of plaintiffs in such matters may occur at different times,

a n d i n d i v i du a l p l a i n t i f f s o r g r o u p s o f p l a i n t i f f s , u n l i k e most individual class members, usually are represented by individual counsel. Nevertheless, there are substantial similarities to class actions as well. As an initial matter, the efficient handling of such cases demands a similar approach to case management. District courts typically appoint a lead counsel or plaintiffs’ steering committee to coordinate and conduct pretrial proceedings on behalf of all plaintiffs in order to avoid what otherwise might well become c h a otic. Moreover, while individual plaintiffs are 77 

### separately repres e n ted, they typically benefit also – often predominantly – from the work of the lead counsel or committee.

The same equitable considerations that warrant payment of class counsel out of common funds generated by their efforts apply in these circumstances as well. The desirability – indeed, the

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78 SeeInreDi et Dru gs , 5 82 F.3 d 5 24, 54 6 ( 3d Cir . 2 009 ) (ap pro vin g d ist ric t cou rt’ s a ppo rti onmentofse ttl eme nt fun ds amo ng cla ss cou nse l i n M DL pur sua nt to co mmo n b ene fit doc tri ne) ; In reAi r Cras h Disa ste r , 5 49 F.2 d 1 006 , 1 016 , 101 8-1 9 (5t h C ir. 19 77) (h old ingth at dis tri ct cou rt pro per ly exe rci sedit s a uth ori ty to awa rd fee s t o MD L l eadco uns el commit tee pa id by oth er pla int iff s’ cou nse l pur sua nt to co mmo n ben efi t d oct rin e); seeal so Spragu e , 3 07 U.S. at 166 (“ Tha t the pa rty. . . ne ith er pur por tedto su e f or a c la ss no r formal ly est abl ish ed by lit iga tio n a fun d ava ila ble t o the cla ss, do es not se em to be a d iff ere nti ati ng fac torso fa r a s it aff ect s t he sou rce ofth e r eco gni zedpo werofequit y t o gra nt rei mbu rse men ts. ”); Smi ley , 9 58 F.2 d a t 499 , 501 (h old ing tha t d ist rict c ou rt didno t a bus e i ts dis cre tio n i n est abl ish ingfe e s tru ctu re whe reb y n on- commit tee me mbe r att orn eys pl aced per cen tag e o f t hei r f ees ines cro w f or pro rat adi str ibu tio n amon g c omm itt ee member s).

79 Zyp rex a , 4 67 F. Sup p. 2d at 265 -67 . 

### compelling need – to have pretrial proceedings managed or at least

co o r d i n ated by lead counsel or a steering or executive committee demands the existence of a source of compensation for their efforts on behalf of all. The logical, and a most equitable, source of that compe n s a t i on is recoveries of individual plaintiffs who benefit from that work. Indeed, foreclosing those recoveries as a source of funding for the common benefit work would enrich the noncontributing individual plaintiffs unjustly at th e expense of either or both of the lead counsel and any contributing individual plaintiffs. The district court thus acted within the scope of its 78 

### discretion when it established an account to compensate counsel for common benefit wor k f u n d e d by a set aside of future ZyprexaMDL recoveries. 79



### Conclusion

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For the foregoing reasons, I conclude that the district court did not err as a matte r of law or abuse its discretion in ordering a set aside of settlement monies in a common benefit fund. I therefore concur in the denial of the petition and dismissal of the appeal.