Opinion ID: 150891
Heading Depth: 3
Heading Rank: 1

Heading: Standing to Challenge the MSA

Text: The Dier plaintiffs first challenge the validity of the MSA. Standing, however, is a prerequisite to this court’s exercise of jurisdiction. Doe v. Tangipahoa Parish Sch. Bd., 494 F.3d 494, 496 n.1 (5th Cir. 2007) (en banc). This court has recognized that, in the context of class settlements, non-settling parties generally have no standing to challenge the settlement. Transam. Refining Corp. v. Dravo Corp., 952 F.2d 898, 900 (5th Cir. 1992); see also Agretti v. ANR Freight Sys., 982 F.2d 242, 246 (7th Cir. 1992) (“‘[N]on-settling defendants in a multiple defendant litigation context have no standing to object 5 Case: 09-30446 Document: 00511176837 Page: 6 Date Filed: 07/16/2010 No. 09-30446 to the fairness or adequacy of the settlement by other defendants.’”) (quoting 2 H ERBERT B. N EWBERG, N EWBERG ON C LASS A CTIONS § 11.54 (2d ed. 1985)). The rationale behind this general rule is that settlement will not affect any substantive legal rights of non-settling parties. Transam. Refining Corp., 952 F.2d at 900. An exception to the general rule may apply if the settlement agreement strips non-settling parties of rights to contribution or indemnity, see id., or in some other manner results in “plain legal prejudice” to a non-settling party. Agretti, 982 F.2d at 246–47; see also Bass v. Phoenix Seadrill/78, Ltd., 749 F.2d 1154, 1160 n.10 (5th Cir. 1985) (stating that the court may consider “an attempt by a non-party to the settlement to void portions of the agreement that purport to affect the rights of non-settlors”). But “[m]ere allegations of injury in fact or tactical disadvantage as a result of a settlement simply do not rise to the level of plain legal prejudice.” Agretti, 982 F.2d at 247. Because the MSA was structured as an “opt-in” private settlement rather than an “opt-out” agreement, the Dier plaintiffs cannot show that they have suffered the type of legal prejudice that would afford them standing to challenge the MSA. The Dier plaintiffs therefore lack standing to challenge the MSA. B. Judge Fallon’s Decision to Not Recuse The Dier plaintiffs contend that Judge Fallon cannot serve as both presiding judge in the Vioxx MDL and chief administrator of the MSA without presenting the appearance of partiality. They assert that Judge Fallon’s dual roles “clearly permit[ ] an inference” that he encouraged participation in the MSA. Therefore, they argue, Judge Fallon must either recuse himself from the case or resign as chief administrator of the MSA. Addressing the Dier plaintiffs’ contentions in its order of December 10, 2008, the district court declined to recuse on the basis that: 6 Case: 09-30446 Document: 00511176837 Page: 7 Date Filed: 07/16/2010 No. 09-30446 The facts of the instant case do not warrant recusal. As Chief Administrator of the [MSA], the Court serves in an administrative capacity that has no substantive effect on its management of the MDL proceedings. See In re Vioxx Prods. Liab. Litig., MDL No. 1657, 2008 WL 4091672, at  (E.D. La. Aug. 27, 2008) (explaining that the Court “has consistently exercised its inherent authority over the MDL proceedings in coordination with its express authority under the terms of the Settlement Agreement to ensure that the settlement proceedings move forward in a uniform and efficient manner”). The Court played no role in drafting the private settlement agreement reached by the parties; the Court has taken no position as to what types of claims should or should not have been included in the settlement; and, finally, the Court has consistently stated that it neither encourages nor discourages participation in the settlement. “A motion to disqualify is committed to the sound discretion of the judge and her decision will only be reversed if there has been an abuse of that discretion.” In re Hipp, Inc., 5 F.3d 109, 116 (5th Cir. 1993). The federal recusal statute provides that “[a]ny justice, judge, or magistrate judge of the United States shall disqualify himself in any proceeding in which his impartiality might reasonably be questioned.” 28 U.S.C. § 455. “The very purpose of § 455(a) is to promote confidence in the judiciary by avoiding even the appearance of impropriety whenever possible.” Liljeberg v. Health Servs. Acquisition Corp., 486 U.S. 847, 865 (1988) (citing S. R EP. N O. 93-419, at 5 (1974) and H.R. R EP. N O. 931453, at 5 (1974)). “Thus, it is critically important in a case of this kind to identify the facts that might reasonably cause an objective observer to question [the judge’s] impartiality.” Id. In applying § 455, the court employs an objective test, finding recusal warranted“if the reasonable man, were he to know all the circumstances, would harbor doubts about the judge’s impartiality.” IQ Prods. Co. v. Pennzoil Prods. Co., 305 F.3d 368, 378 (5th Cir. 2002) (quotation omitted).
The Dier plaintiffs submit that the district court’s statement that it “has consistently stated that it neither encourages nor discourages participation in 7 Case: 09-30446 Document: 00511176837 Page: 8 Date Filed: 07/16/2010 No. 09-30446 the settlement” takes “too myopic a view” of the court’s role as both chief administrator of the MSA and as presiding judge in the MDL litigation. They point to the Conference Order, which required all non-settling plaintiffs to appear at conferences “to ensure that plaintiffs who are eligible for the Vioxx settlement program but who have not enrolled in the program have all necessary information available to them so they can make informed choices,” and argue that this order permits the inference that the district court encouraged settlement. The Conference Order, however, did not inappropriately encourage settlement. It “is not unusual to require the parties as well as counsel to appear at settlement conferences.” Bilello v. Abbott Labs., 825 F. Supp. 475, 479 (E.D.N.Y. 1993). For example, Federal Rule of Appellate Procedure 33 authorizes courts of appeals to “direct the attorneys—and, when appropriate, the parties—to participate in one or more conferences to address any matter that may aid in disposing of the proceedings, including . . . discussing settlement. A judge or other person designated by the court may preside over the conference.” F ED. R. A PP. P. 33. Nothing about the settlement conferences would give a reasonable observer any doubt about Judge Fallon’s impartiality.
In support of their argument that the district court’s impartiality could reasonably be questioned, the Dier plaintiffs assert that at least one plaintiff lacked confidence in the district court’s impartiality as a result of its dual responsibilities. But because the test for impartiality is an objective one, see IQ Prods. Co., 305 F.3d at 378, an individual plaintiff’s subjective beliefs are irrelevant to the analysis. For the reasons articulated by Judge Fallon, his decision not to recuse falls well within the bounds of his discretionary authority. C. Pre-Trial Order 28 Requiring Production of a Doctor’s Report 8 Case: 09-30446 Document: 00511176837 Page: 9 Date Filed: 07/16/2010 No. 09-30446 The Dier plaintiffs’ final argument is that it was an abuse of discretion for the district court to issue the case-specific expert disclosure requirement in PTO 28. They contend that Merck was aware of the nature of their alleged injuries and the injuries’ purported link to Vioxx. They further assert that even if issuance of PTO 28 was generally within the district court’s discretion, in instances where state law requires no expert opinion as part of the evidence to support the claim, imposing such a requirement is an abuse of discretion and contravenes the Erie doctrine. See Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78–80 (1938). 1. The Court and Merck were Already Apprised of Plaintiffs’ Injuries A district court’s adoption of a Lone Pine order and decision to dismiss a case for failing to comply with a Lone Pine order are reviewed for abuse of discretion. Acuna, 200 F.3d at 340–41. Relying on Acuna, the district court stated that “it is not too much to ask a plaintiff to provide some kind of evidence to support their claim that Vioxx caused them personal injury.” In re Vioxx Prods. Liab. Litig., 557 F. Supp. 2d at 744. In Acuna, over 1,000 plaintiffs brought personal injury claims allegedly arising from uranium mining activities. The district court issued pre-discovery Lone Pine orders that required plaintiffs to provide expert affidavits specifying the injuries suffered by each plaintiff, the substances causing the injury, the dates and circumstances of exposure to the injurious materials, and the scientific and medical bases for the expert’s opinions. Acuna, 200 F.3d at 338. The district court ultimately dismissed plaintiffs’ claims for failure to comply with the Lone Pine orders. Id. at 340. On appeal, plaintiffs challenged the Lone Pine orders as imposing too high a burden at too early a stage in the litigation. Id. This court stated that “[i]n the federal courts, such orders are issued under the wide discretion afforded district judges over the management of discovery under F ED. R. C IV. P. 16.” Id. The court then held that the Lone Pine orders 9 Case: 09-30446 Document: 00511176837 Page: 10 Date Filed: 07/16/2010 No. 09-30446 essentially required that information which plaintiffs should have had before filing their claims pursuant to F ED. R. C IV. P. 11(b)(3). Each plaintiff should have had at least some information regarding the nature of his injuries, the circumstances under which he could have been exposed to harmful substances, and the basis for believing that the named defendants were responsible for his injuries. Id. (citing Beanal v. Freeport-McMoran, Inc., 197 F.3d 161, 165 (5th Cir. 1999)). Thus, the Acuna court concluded that the district court did not commit an abuse of discretion by dismissing plaintiffs’ claims for failure to comply with the Lone Pine order. Id. at 341. The Dier plaintiffs contend that this case is distinguishable from Acuna because here the plaintiffs have alleged precise injuries and both the court and Merck are on notice of the nature of the injuries and the injuries’ relationship to Merck’s conduct. These grounds are insufficient, however, to warrant bypassing the clear holding in Acuna that it is within a court’s “discretion to take steps to manage the complex and potentially very burdensome discovery that the cases would require.” Id. at 340. 2. Requirement of Proof of Physical Injury for Emotional Distress Claims The Dier plaintiffs also argue that PTO 28 was improper because expert testimony is not required for claims of negligent infliction of emotional distress under New York law.4 But the Dier plaintiffs all pleaded physical injuries, and none attempted to withdraw those physical injury claims. Thus, PTO 28 would apply regardless of whether the Dier plaintiffs might have had a viable negligent infliction of emotional distress claim along with their physical injury claims.