More from the Zantac MDL – Census Registries and Enforcement of Forum Selection Certifications

This post is not from the Reed Smith, Dechert, or Holland & Knight side of the blog.

We’re pretty sure no one teaches about MDL census registries in law school. They’re a relatively new creation, and we previously blogged about them here. Essentially, registries create a mechanism where plaintiffs’ counsel can park potential claims without paying a filing fee while records are collected to determine if the claimant can establish Rule 11 basics like product use and injury.  Records are typically collected by a vendor—for which the MDL defendants pay half the costs. The benefit defendants receive is a commitment that, if the claim is ultimately filed, it has to be filed in the MDL or other federal court.

Today’s Zantac decision is a denial of remand, but it’s much more than that. It involves enforcement of an agreement by potential plaintiffs that, if they entered into the MDL registry and ultimately filed their cases, they would file in the MDL or other federal court and not oppose transfer to the MDL. In re: Zantac (Ranitidine) Prod. Liab. Litig., 2024 WL 3083342 (S.D. Fla. June 21, 2024). 

Before addressing the disputed remand motion, the Court walked through the history of the registry in the MDL and a prior attempt at forum shopping.  That history is important to modifications made to the registry and the ultimate outcome of the motion to remand.  

The Court created a census and registry process fairly early in the MDL. The order establishing the registry was explicit in terms of the commitment to file in federal court:

Claimants who participate in the Registry commit to filing any action relating to Zantac or any ranitidine products, if at all, before this Court in MDL No.2924. . . . Claimants further commit, to the extent that they file an action, to name only those defendants that they have a good faith belief marketed or manufactured Zantac or ranitidine products that such Claimants ingested or that they in good faith believe they may have a valid claim against for other reasons.

Id. at *1.  Soon after the establishment of the registry, the Court entered the first of a number of initial orders that the plaintiffs likely viewed as unfavorable to them (we’ve blogged about a number of those orders here, here, here, here, here, and here). That triggered the first round of actions by claimants in the registry to try and avoid potentially unfavorable rulings and file in state court.  Following the first (of many) rulings that limited plaintiffs’ claims, a member of the plaintiffs’ leadership team withdrew a number of claims from the registry and filed them in state court.  Defendants removed the claims, had them transferred to the MDL, and cried foul based on the plaintiffs’ violation of the registry requirement.

The Court addressed plaintiffs’ motion to remand in a prior opinion, but summarized it here because of how it led the Court to try and tighten the requirements in the registry to prevent future forum shopping.  On the prior remand motion plaintiffs took the position that, since they could decide whether to name a non-diverse defendant, they could ultimately choose to file in state court—meaning the forum selection clause in the registry essentially had no effect.  The defendants pointed out that the language in the original registry order was intended to prohibit this forum shopping, particularly if claimants in the registry were going to withdraw and attempt to file claims in state court if they thought the MDL rulings were going against them.  The Court agreed with the defendants and denied the prior motion to remand based on a state court statute that created a liability shield for retailers that sell FDA approved, over the counter medicines. Id. at *2-3. But importantly, the Court recognized that the existing language in the registry—which did not explicitly prevent the naming of a non-diverse defendant by a claimant who filed suit—was not sufficient to prevent further forum shopping attempts. It held that the registry had to be modified to prevent plaintiffs from forum shopping by naming non-diverse defendants and filing in state court.

The Court then entered an amended registry order that permitted claimants enrolled in the registry to choose whether to certify that their claims would be filed in federal court.  There was not a requirement to certify, but the Court underscored that, if many of the claimants did not certify, the value of the registry would be called into question and perhaps ended. Approximately 80% of the claimants then certified under penalty of estoppel that they would file their claims in federal court.[1] 

After those certifications, the Court conducted its Rule 702 hearing and ultimately issued an opinion excluding the plaintiffs’ general causation experts.  That opinion essentially ended the MDL and plaintiffs’ claims.  As you may have guessed, claimants who certified that they would file their claims in federal court pursuant to the amended registry order quickly turned tail and filed their cases in state court.  Those filings and the defendants’ removal and transfer of the claims to the MDL are the subject of today’s decision.

Plaintiffs moved to remand, but the MDL Court had no difficulty denying remand based on the unequivocal certifications from the claimants that they would file in federal court:

Here, the Defendants have easily established the burden for fraudulent joinder. Pursuant to Pretrial Order 72, each Plaintiff agreed to be estopped from opposing the dismissal of any Defendant that destroyed diversity jurisdiction. For that reason, the Plaintiffs could never prevail on any claim against a diversity-destroying Defendant. That is the standard for fraudulent joinder.

Id. at *5.

That’s a good outcome for the defendants, and it suggests that the certification requirement used in the amended order would be an enforceable mechanism to prevent forum shopping in future MDL registries.  But the Court’s opinion included some language that leaves the door open for shenanigans. The plaintiffs who brought the remand motion were represented by new counsel, and they claimed that they did not authorize their prior counsel to certify their claims to federal court. The Court noted that the plaintiffs’ certifications had not been set aside or vacated, and that they remain binding unless they are set aside or vacated. The Court directed the plaintiffs to file a motion specific to that relief and ordered the defendants and the plaintiffs’ prior counsel to respond by July 24, 2024.

That follow up briefing and the Court’s decision is worth watching, and we’ll keep you posted. If plaintiffs are ultimately permitted to vacate their certifications despite the MDL Court’s targeted efforts to establish an enforceable system where the defendants received the benefit of their bargain for the establishment of a registry, then future MDL defendants should exercise extreme caution before agreeing to any limitations tolling associated with these sorts of registry systems.

[1] It’s worth noting that, as pointed out in a prior post, the primary use of registry information appears to be to establish the universe of claims for purposes of prioritizing expert admissibility rulings under Fed.R. Evid. 702. That appears to be what the Zantac MDL Court did.