Sixth Circuit Rejects a Novel Concept: Certification of “Negotiation Class” in Opioid Multidistrict Litigation

Carlton Fields
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Carlton Fields

The Sixth Circuit recently addressed whether a novel negotiation class could be certified to facilitate possible future settlement negotiations in multidistrict litigation (MDL).

The Sixth Circuit’s decision arises from the opioid MDL in the Northern District of Ohio, on which we previously reported. In June 2019, 51 of the plaintiff cities and counties moved to certify a “negotiation class” under Federal Rule of Civil Procedure 23(b)(3). The plaintiffs sought to include in the class every city and county within the United States, unless a prospective class member opted out within 60 days of class certification. Plaintiffs reasoned that certifying the class would promote negotiation of a possible settlement between class members and the defendant opioid manufacturers, distributors, and retail pharmacies.

The district court certified the negotiation class, stating that the process would not interfere with the underlying individual litigation, and found that the plaintiffs’ federal RICO and Controlled Substance Act (CSA) claims satisfied the requirements of Rule 23(a), as well as predominance and superiority requirements of Rule 23(b)(3). Objecting opioid distributors and retail pharmacies, as well as six cities, appealed the certification order.

The Sixth Circuit reversed, holding that the negotiation class was beyond the scope of Rule 23. In so doing, the court addressed the differences among litigation, settlement, and negotiation classes. While a litigation class is formed to aggregate and try common issues, the plaintiffs’ negotiation class was designed to arrive at a settlement without disrupting the underlying individual MDL cases. Unlike a settlement class, which is formed after a deal has been reached and the parties wish to formalize their agreement, the plaintiffs’ negotiation class addressed the certification and opt-out process prior to a settlement being reached in order to “fix a class size and provide Defendants a sense of the precise scope of the group with whom they are negotiating.”

The Sixth Circuit then explained that, while Rule 23 references both litigation and settlement classes, it does not identify a negotiation class as a separate category of certification. Thus, the court emphasized that “this new form of class action, wholly untethered from Rule 23, may not be employed by a court.” The Sixth Circuit rejected the plaintiffs’ comparison of negotiation classes to settlement classes, stating that the development of settlement classes had a textual basis in Rule 23, whereas the Rule 23 does not support certification of a class to explore the possibility of negotiating a settlement.

The Sixth Circuit further explained that the portions of Rule 23 governing litigation classes did not save the negotiation class, as aggregation of common issues could not occur where the underlying individual cases continued. The court disagreed with the district court’s framing of the negotiation class as an “issue class,” because it would be permitted to negotiate not only the RICO and CSA claims, but also “those arising out of a common factual predicate,” which would include disparate state law claims. Additionally, the plaintiffs did not suggest that either litigation or settlement classes were infeasible.

The Sixth Circuit ultimately found that, while negotiation classes could be an innovative and effective addition to resolving mass tort claims, the current requirements under the Federal Rules do not allow for certification of such a class, and that the Rules Advisory Committee would be the proper vehicle to address changes to the Federal Rules. In contrast, the dissent advocated for certification of the negotiation class, arguing that courts should be in the business of encouraging resourcefulness of such a novel concept, and that the negotiation class honors the Federal Rules’ heritage, and complemented the history and development of the settlement class.

In re National Prescription Opiate Litig., — F.3d —, 2020 WL 5701916 (6th Cir. 2020)

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