The Shortest Distance: Direct Filing and Choice of Law in Multidistrict Litigation

The amount of multidistrict litigation (MDL) in the federal courts is skyrocketing, particularly in the areas of mass torts and products liability. One significant reason for the explosion of MDL has been the difficulty of maintaining nationwide or multistate class actions in these areas, due in large part to the choice-of-law problems created by operation of many different states' laws to plaintiffs' claims. One comparative benefit of MDL is that individual cases within the consolidated pretrial proceedings retain their "choice-of-law identity "--that is, that transfer of a case into a pending MDL does not change the choice-of-law rules that would otherwise apply to a plaintiffs case had it proceeded in its original home forum. In other words, the case carries the choice-of-law rules of the original forum state with it into the MDL. Because MDL is purportedly a consolidation only for pretrial proceedings, unlike a class action, the application of different choice-of-law rules to different plaintiffs' claims does not render the MDL proceeding itself infeasible. This framework, however, is in disarray due to the advent and increasing popularity of a practice called "direct filing." In direct filing, plaintiffs bypass the transfer process and file their cases directly into an MDL court. Amid the growing popularity of this practice, the question of what choice-of law rules ought to apply to direct-filed cases has been left unaddressed. This paper seeks to expose and resolve the problem by permitting direct filing, but requiring plaintiffs to declare a proper home district whose choice-of-law rules would apply to their claims. Such an approach would both preserve the efficiency benefits of direct filing, and be consistent with the values of federalism and litigant autonomy underlying the choice-of-law framework in diversity cases. INTRODUCTION Aggregate litigation and choice of law are poor bedfellows. Aggregate litigation is driven by the need to resolve many cases efficiently in a single consolidated proceeding by emphasizing the commonalities of cases. (1) Choice of law demands attention to the uniqueness of individual cases, requiring analysis of potentially conflicting state policies and interests in light of the particular circumstances of cases. (2) Aggregation seeks sameness, while choice of law focuses on particularity. When aggregation of cases based on state law proceeds in a federal court under diversity jurisdiction, the complexity increases. Federal courts sitting in diversity must respect states' choice-of-law rules because those rules represent states' choices about the scope of their laws in cases in which they have regulatory interests, (3) and in order to ensure that diversity jurisdiction does not change the substantive law that would otherwise apply to a plaintiffs case. (4) As numerous commentators have observed, choice of law matters to the outcomes and values of cases, but it also represents differences in states' approaches to regulating disputes in which they have interests. (5) For aggregation and choice of law to coexist peacefully, and to avoid running afoul of these federalism considerations, the aggregation mechanism must accommodate the individual nature of cases within the collective. In other words, federal aggregation structures should seek choice-of-law neutrality for the cases within in the aggregate. Given these issues, it should come as no surprise, then, that choice of law has presented a seemingly intractable problem for the nationwide, diversity-based, mass-tort class action. (6) Indeed, the federal courts, where most large class actions are now litigated due to the Class Action Fairness Act of 2005 (CAFA), (7) have come to a consensus that the operation of choice-of-law rules demands that different state laws apply to different plaintiffs within the class, and that those differences render the classes insufficiently cohesive for class certification. (8) Calls for federal choice-of-law rules that ensure that a single state's law can apply in a nationwide mass-tort case have fallen on deaf ears, in part because Congress has little interest in facilitating class actions, (9) but also because any such rule would raise serious potential federalism and due-process-related objections. …