On August 31st, the U.S. Court of Appeals for the Fifth Circuit denied DePuy Orthopaedics’ petition for a writ of mandamus instructing the U.S. District Court for the Northern District of Texas, which is presiding over the Pinnacle hip implant litigation (In re DePuy Orthopaedics, MDL No. 2244), not to try direct-filed MDL cases where personal jurisdiction is lacking. Despite denying the petition, the Fifth Circuit nonetheless “request[ed]”—based on its review of the record and its conclusion that the MDL court lacks personal jurisdiction over cases that, but-for the MDL, could not have been brought in that court—that the MDL court “vacate its ruling” and “withdraw its order for a trial beginning September 5, 2017.” The plaintiffs have filed a petition for rehearing en banc in the Fifth Circuit, and the district court, “in deference to the Fifth Circuit,” has since postponed the trial until September 18, 2017, in light of these developments.
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Generally, an MDL court is powerless to try a case where venue and personal jurisdiction are lacking, unless the parties waive their objections pursuant to what is known as a “Lexecon waiver.” Lexecon references the U.S. Supreme Court’s decision in Lexecon v. Milberg Weiss, 523 U.S. 26 (1998), in which the Supreme Court held that an MDL court lacks the power to try an out-of-district case transferred to it via the MDL process. In the Pinnacle hip implant MDL, DePuy had waived Lexecon with regard to the first two bellwether trials. But before the third bellwether trial—in which the MDL court informed the parties that it would be a multi-plaintiff trial made up of California plaintiffs who had directly filed their cases in the MDL—DePuy raised a Lexecon objection and moved to dismiss for lack of venue and personal jurisdiction over the cases. The MDL court rejected those arguments, holding that DePuy had globally waived Lexecon and, thus, its objections to personal jurisdiction and venue. The multi-plaintiff case went to trial and resulted in a verdict for the plaintiffs. Before the fourth scheduled bellwether trial—also a multi-plaintiff trial, this time involving New York residents—DePuy again renewed its venue and personal jurisdiction objections, and the MDL court again held them waived.
DePuy petitioned the Fifth Circuit for a writ of mandamus, asking the Fifth Circuit to prohibit the MDL court from trying cases in the MDL over which it lacks personal jurisdiction. A divided panel of the Fifth Circuit held that DePuy had not waived its venue and jurisdiction objections under Lexecon (see In re DePuy Orthopaedics, Inc., __ F.3d __, 2017 WL 3768923 (5th Cir. Aug. 31, 2017)). The majority held that the MDL statute, 28 U.S.C. § 1407, recognizes a presumption in favor of remanding cases to their “home” districts for trial and, accordingly, a Lexecon waiver must be “clear and unambiguous.” The communications that the MDL court found sufficient to waive Lexecon all contained or referred to limiting language, and therefore could not effect a global waiver applicable to all 9,300 cases. The same majority also concluded that mandamus would generally be appropriate because the MDL court’s order had implications beyond the immediate case; accordingly, a majority of the court “request[ed] the district court to vacate its ruling on waiver and to withdraw its order for a trial beginning September 5, 2017.” But a different majority of the court held that mandamus was unnecessary because DePuy Orthopaedics had an adequate remedy—the ordinary appeals process. Accordingly, the Fifth Circuit denied the petition for a writ of mandamus while also finding serious error in the MDL court’s Lexecon waiver rulings and in its exercise of jurisdiction.
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Two circuits—the Fifth Circuit and the Seventh Circuit—have now addressed the standard for effecting a Lexecon waiver, and both courts have imposed a high bar (see also Armstrong v. LaSalle Bank Nat’l Ass’n, 552 F.3d 613 (7th Cir. 2009)). The Fifth Circuit’s decision establishes that, when arguing that a defendant has waived its objections to Lexecon and can face trial in an MDL court that would otherwise lack jurisdiction, MDL plaintiffs must overcome a “powerful presumption” in favor of remand and must show that a Lexecon waiver was “clear and unambiguous.” But perhaps more broadly, the Fifth Circuit’s decision signals that, in appropriate cases, parties may be able to obtain guidance regarding “serious” legal errors even where the standard for mandamus relief is not met.
