Multidistrict Litigation (MDL) vs. Class Action Lawsuits: What's the Difference? [2024 Guide]

Understanding Multidistrict Litigation (MDL)

Multidistrict litigation is a federal case consolidation process that handles several similar lawsuits filed in different federal district courts.

Federal courts have used this legal action since 1968 to centralize cases involving similar questions of fact.

This process streamlines pretrial proceedings to increase efficiency and consistency in handling complex cases.

Definition and Purpose

MDL, or multidistrict litigation, is a special civil action in the U.S. federal court system designed to streamline complex cases that involve common factual and legal issues.

It consolidates multiple lawsuits filed from different federal courts into a single federal district court for pretrial proceedings, which can include discovery and motions.

The primary purpose of MDL is to enhance efficiency and consistency in handling these cases, minimize duplicative discovery, avoid conflicting rulings from different judges, and conserve the resources of the parties, witnesses, and the judicial system.

The United States Judicial Panel on Multidistrict Litigation (JPML) is the government body overseeing all the decisions related to MDL formations.

This organization comprises seven circuit and district judges selected by the Chief Justice of the United States.

The JPML selects the MDL court or the federal court, appoints the MDL judge or lead counsel to oversee the civil action, selects the cases to include in the MDL, and orders its consolidation.

How multidistrict litigations are formed include:

• Initial Lawsuits: Multiple plaintiffs file lawsuits in various federal district courts.
• Request for Consolidation: One or more parties involved in these lawsuits (typically the plaintiffs or the defendants) file a motion to transfer the cases to a single federal district court for coordinated pretrial proceedings.
• Review by the JPML: The panel will review the motion and the parties’ arguments to decide whether consolidation is appropriate.
• Centralization Order: If approved, the JPML will issue a centralization order that transfers all the cases to a specific MDL court for pretrial proceedings and appoints an MDL judge to manage them.
• Pretrial Proceedings: To streamline the process, the centralized court handles all pretrial activities, such as discovery, motions, and negotiations.
• Bellwether Trials: In some cases, the MDL court may select a few representative cases (called “bellwether” cases) to be tried before a jury. These trials can help both parties assess their strengths and weaknesses, potentially leading to global settlements.
• Resolution: Once pretrial proceedings are completed, remaining cases in the transferee court may be remanded back to their original courts for trial or resolved through multidistrict litigation settlements.

Applications of MDLs

MDLs are particularly effective in handling cases involving widespread issues across different jurisdictions, such as pharmaceutical, environmental, and complex product liability cases.

How MDLs are commonly used in these scenarios include:

• Pharmaceutical MDLs: An excellent example of a pharmaceutical MDL is the Tepezza lawsuit filed against Horizon Therapeutics over the medication’s undisclosed side effects, which caused hearing loss in many patients. A more recent example would be the Ozempic lawsuits filed against Novo Nordisk over allegations of acute pancreatitis caused by the Type 2 diabetes medication.
• Environmental MDLs: Environmental MDLs are often used in cases involving widespread environmental contamination, such as the AFFF (aqueous film-forming foam) litigation over PFAS (per- and polyfluoroalkyl substances) contamination.
• Product Liability MDLs: In cases where a defective product has caused widespread harm, such as the Pressure Cooker MDL against Tristar Products Inc. over their exploding pressure cookers, and the MDL filed against the giant social media companies over their faulty algorithm that allegedly exacerbated mental health issues.

MDLs serve as a crucial mechanism in the U.S. legal system to manage large-scale, complex litigation effectively and fairly.

Understanding Class Action Lawsuits

Another vital civil procedure in the U.S. legal system is class action lawsuits, which are filed on behalf of a group of people similarly harmed by the same defendant.

These lawsuits allow individuals to combine their claims into a single, more powerful case, increasing their chances of achieving fair compensation.

Class action lawsuits are particularly effective for addressing widespread issues such as consumer fraud, defective products, or corporate misconduct.

Definition and Purpose

A class action lawsuit is a type of legal action where one or more plaintiffs, known as class representatives, file a lawsuit on behalf of a larger group of individuals with similar claims.

This group of individuals is referred to as the “class.”

Class action lawsuits are designed to efficiently handle complex cases in which many people are affected similarly by the actions of a defendant, such as a corporation, government entity, or other organization.

Class actions also make it easier for individuals with smaller claims to seek justice as they can join the lawsuit collectively rather than filing individual lawsuits, which may be costly and time-consuming.

Like MDLs, class actions consolidate multiple lawsuits into one significant claim, which reduces the burden on the court system and avoids the inefficiency of handling numerous similar cases separately.

By resolving all the claims in a single lawsuit, class actions ensure consistent rulings and settlements for all the plaintiffs, avoiding the possibility of different outcomes in separate lawsuits.

Forming a class action lawsuit follows the same general structure as MDLs, with a few key differences.

Structure of a class action includes:

• Filing the Lawsuit: One or more plaintiffs file a lawsuit for themselves and the proposed class.
• Class Certification: The court must certify the lawsuit as a class action. This certification involves a legal process in which the judge determines whether the case meets the requirements of commonality, numerosity, typicality, and adequacy.
• Notification: This notification informs them about the lawsuit, their rights, and how to leave the class if they do not want to be part of the legal action.
• Discovery and Pretrial Proceedings: The case proceeds through the discovery phase, where both parties gather evidence, followed by pretrial motions and potential settlement discussions.
• Trial or Settlement: If the case is not settled, it goes to trial. The outcome of the trial or the terms of any settlement applies to all remaining class members.
• Distribution of Damages: If the class action is successful, damages or settlements are distributed among the class members according to a plan approved by the court.

Class action lawsuits play a vital role in the legal system by allowing individuals to collectively seek redress for widespread harm, promoting efficiency in the courts, and encouraging corporate and organizational accountability.

Applications of Class Action Lawsuits

Class action lawsuits are used similarly to MDLs in cases involving widespread issues across different jurisdictions, which is why you’ll often encounter cases with MDLs and class actions simultaneously.

There are instances when class actions are more appropriate.

Instances include:

• Consumer Fraud: When a company engages in deceptive practices, such as false advertising, selling defective products, or engaging in unfair business practices, many consumers may be affected similarly. A class action allows these consumers to band together to seek redress.
• Product Liability: If a defective product, such as a faulty medical device, unsafe automobile, or hazardous household item, harms multiple people, a class action can consolidate these individual claims into one lawsuit against the manufacturer or distributor.
• Employment Practices: When an employer engages in illegal employment practices, such as wage theft, discrimination, or violation of labor laws, a class action allows affected employees to collectively seek justice and compensation.
• Environmental Damage: When a company or entity causes environmental harm, such as pollution, oil spills, or chemical leaks, impacting a large number of residents or property owners, a class action can address the collective damage and seek remediation.
• Securities Fraud: Investors who suffer financial losses due to corporate fraud, misrepresentation, or insider trading can file a class action to recover their losses. These issues are common in cases where a company’s misleading statements or actions have led to a drop in stock value, affecting numerous shareholders.
• Data Breaches: In the event of a data breach in which a company’s failure to protect sensitive information exposes personal data, affected individuals can file a class action to seek compensation for potential damages, such as identity theft or financial loss.

What Sets Them Apart?

While these civil lawsuits share a number of similarities, there are a few key differences that set each of these civil actions apart.

Differences include:

• Structure and representation
• Case outcome
• Common use cases
• Certification and consolidation

Structure and Representation

In MDLs, the JPML consolidates multiple similar cases from different federal districts into one district court for pretrial proceedings.

Each case remains separate but is managed collectively to streamline processes like discovery and pretrial motions.

Despite having a lead MDL counsel, each plaintiff retains their legal representation.

In class action, a single lawsuit is filed on behalf of a group of individuals (the class) with similar claims against the defendant.

The case proceeds as one unified legal action.

The class is represented by one or more class representatives and their attorneys.

These representatives and their legal team act on behalf of the entire class.

Individual class members do not have separate attorneys in the context of class action.

Case Outcome

After the pretrial phase, individual cases in an MDL can be settled, dismissed, or remanded back to their original courts for trial.

Each case is resolved on its own merits, so outcomes can vary for different plaintiffs.

Plaintiffs may negotiate settlements collectively, but they need approval from individual plaintiffs.

If they occur, trials are separate for each plaintiff’s case, potentially leading to different verdicts and compensation for each.

The outcome of a class action applies to all class members.

If the class action is settled or goes to trial, the result — whether it’s a judgment or a settlement — affects everyone in the class.

The class action results in a single resolution that binds all class members who have not opted out.

Compensation and any injunctive relief are distributed according to a court-approved plan.

Common Use Cases

MDLs are commonly used for complex cases involving multiple plaintiffs across different jurisdictions, such as product liability (e.g., defective drugs, medical devices), environmental disasters (e.g., oil spills), and large-scale consumer fraud.

MDL focuses on consolidating pretrial proceedings to improve efficiency and consistency, after which plaintiffs may return their cases to their original court for a separate resolution.

Class actions, on the other hand, are often used when the harm is widespread but similar across all plaintiffs, such as consumer fraud, employment discrimination, securities fraud, and certain types of product liability cases.

The focus is on resolving all claims in a unified action, providing a collective remedy for all class members.

Certification and Consolidation

MDLs do not require a certification process.

The JPML decides whether to consolidate cases based on common factual and legal issues.

Cases are consolidated for pretrial purposes but retain their individual identities and can diverge after pretrial proceedings.

Class action lawsuits require a formal certification process where the court must determine that the case meets criteria such as commonality, numerosity, typicality, and adequacy of representation.

Once certified, the case proceeds as a unified lawsuit covering all class members.

Why MDL Is the Better Option for Personal Injury

While both MDL and class action lawsuits accomplish the goal of streamlining legal proceedings and providing a collective remedy for plaintiffs, MDLs offer distinct advantages in personal injury cases.

Advantages include:

• Individual Control and Representation: Not all cases in an MDL will have the same outcome as they are resolved on their own merits. This individualization allows plaintiffs to maintain control over their case and potentially receive higher compensation tailored to their specific damages.
• Potential for Higher Individual Awards: As each case is decided individually, there is a possibility for higher individual awards compared to a class action where all plaintiffs receive the same settlement or verdict.
• Effective for More Complex Litigation: MDLs are better suited for complex litigation, such as personal injury cases, where individual circumstances and damages may vary significantly. This flexibility allows for more personalized representation and outcomes that reflect the unique aspects of each case.
• Greater Transparency: In MDLs, plaintiffs have access to all pretrial proceedings, which can provide greater transparency into the litigation process. Plaintiffs can also participate in crucial decision-making processes, such as deciding whether to settle or go to trial.

These factors make MDLs a better option than class action lawsuits in scenarios where the individualized nature of the plaintiff’s claims and the complexity of the cases require a more nuanced and tailored approach.

TorHoerman Law: Book a Free Legal Consultation Today

While MDLs are objectively the better option among the two, there are circumstances when a class action may be more appropriate.

If the plaintiff doesn’t have enough resources to pursue an individual lawsuit or if the harm is widespread and similar, a class action may be more efficient and cost-effective.

It’s best to bring your case to an experienced attorney who can evaluate the specifics and advise you on the best course of action.

At TorHoerman Law, we specialize in complex litigation, including MDLs and class actions.

Our team of skilled attorneys is dedicated to fighting for justice and securing fair compensation for our clients.

Schedule a free legal consultation today to discuss your case and learn more about our services.

You can also use our chatbot to perform a quick case evaluation.