In the latest development in the ultra-high stakes nationwide Prescription Opiate Litigation, the U.S. Court of Appeals for the Sixth Circuit granted the petition for writ of mandamus brought by twelve pharmacy defendants to overturn a November 2019 order by the U.S. District Court allowing two county plaintiffs to amend their respective complaints to allege new and untimely claims against the pharmacies, as part of a larger effort to increase efficiencies in the overall Opiate multidistrict litigation ("Opiate MDL"). In In Re National Prescription Opiate Litigation, No. 20-3075 (6th Cir. April 15, 2019), the Sixth Circuit determined that the District Court's order – allowing plaintiffs to amend their complaints and add new claims some nineteen months after the deadline for amendment of pleadings and ten months after the close of discovery – prejudiced the pharmacies in a way that could not be corrected on appeal, thereby warranting the extraordinary remedy of a writ to the District Court to strike the amended claims.
As previously reported here and here, Judge Daniel A. Polster of the U.S. District Court for the Northern District of Ohio is steering into unchartered waters in the mammoth nationwide Opiate MDL consisting of 2,700 individual cases brought by 34,448 cities, counties, and municipalities against the drug's manufacturers and distributors. Last September, Judge Polster issued an innovative class certification order expanding the interpretation of Rule 23 to authorize certification of a novel settlement "negotiation" class. In Re National Prescription Opiate Litigation, No. 1:17-MD-2804, 2019 U.S. Dist. LEXIS 155118 (N.D. Ohio Sept. 11, 2019). That order remains on appeal to the Sixth Circuit.
As certain pharmacy defendants started to settle claims against them in advance of scheduled trials, the District Court on November 19, 2019 granted an order allowing two Ohio counties with claims scheduled for trial to amend the complaints in their two cases to allege new "dispensary" claims against the pharmacy defendants. The amendments were permitted nineteen months after the deadline to amend pleadings had expired, and ten months after the close of discovery. By the same order, the District Court also refused to adjudicate the pharmacies' motions to dismiss. The District Court then ordered the pharmacies to produce nationwide prescription data, despite the pending claims being limited to Ohio's Cuyahoga and Summit counties. In so ordering, the District Court acknowledged that the nationwide prescription data would be inadmissible in the two Ohio county cases, but reasoned that the data would be available for future trials in the Opiate MDL.
The pharmacies filed a petition for writ of mandamus to the Sixth Circuit, seeking an order directing the District Court to strike the amended claims, to allow the pharmacies to file motions to dismiss, and to limit discovery of prescription data of tens of millions of nationwide customers.
The Sixth Circuit's Ruling
Observing that a writ of mandamus is granted "only in "exceptional circumstances" involving a "judicial usurpation of power" or a "clear abuse" of discretion, the Sixth Circuit considered: (i) if the pharmacies had any other adequate means of relief from the District Court's orders, such as an appeal; (ii) whether the damage or prejudice to the pharmacies caused by the orders could be corrected on appeal; and (iii) if the order "manifests a persistent disregard of the federal rules." Id. at 4-5.
The Sixth Circuit determined that while Rule 16(b) requires a party seeking untimely amendment of claims to demonstrate good cause for the untimely amendment, no attempt to show good cause was made. Id. at 6. The Sixth Circuit rejected the District Court's rationale of increasing efficiencies in the Opiate MDL by allowing amendment, opining that efficiencies are "no substitute for the showing of diligence required by [Rule 16(b)]." Id. at 7.
Stating that the District Court "is notably conscientious and capable, and we fully recognize the complexity of his task in managing the MDL here," id. at 7, the Sixth Circuit rejected any idea that Judge Polster was authorized by law to allow the late amendment; particularly by Rule 1, which provides that the Civil Rules should be construed "to secure the just, speedy and inexpensive determination of every action and proceeding." Id. The Sixth Circuit observed that MDL litigation is "not some kind of judicial border country, where the rules are few and the law rarely makes an appearance... [n]or can a party's rights in one case be impinged to create efficiencies in the MDL generally." Id.
For these reasons, the Sixth Circuit granted the writ, and directed the District Court to strike the amendments adding "dispensary" claims to the counties' litigations. Finding the remaining grounds for the writ moot, the Sixth Circuit further cautioned that the District Court may not refuse to adjudicate motions to dismiss properly brought under Rule 12, and that additional discovery must be proportionate the needs of the case. Id. at 9.
Implication For Employers:
The Sixth Circuit's grant of a writ of mandamus demonstrates the real world tension that judges face in complex litigation when called on to construe the protections afforded to litigants by specific Federal Civil Rules, in light of the Rules' express requirement to construe the Rules to serve the goal of speedy and efficient determinations of cases. The decision also is a reminder to employers that strenuous assertion of individual protections in complex cases is not without reward.
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