Home Depot USA Inc v. Lafarge North America Inc ( 2023 )

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
___________
No. 22-1122
__________
HOME DEPOT USA, INC.,
Appellant
v.
LAFARGE NORTH AMERICA, INC.
_______________________
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Civil No. 2-18-cv-05305)
District Judge: Honorable Michael M. Baylson
______________
Argued: October 3, 2022
Before: CHAGARES, Chief Judge, SHWARTZ, and
SCIRICA, Circuit Judges.
(Filed: February 2, 2023)
Peter E. Davis
Roman Martinez [ARGUED]
Latham & Watkins
555 11th Street, NW
Suite 1000
Washington, DC 20004
Ronan P. Doherty
Frank M. Lowrey, IV
Bondurant Mixson & Elmore
1201 West Peachtree Street, N.W.
3900 One Atlantic Center
Atlanta, GA 30309
Lindsay S. Johnson
George P. Watson
Bryan Cave Leighton Paisner
1201 West Peachtree Street, N.W.
One Atlantic Center, 14th Floor
Atlanta, GA 30309
Counsel for Appellant
Edward Dumoulin
Betsy Farrington
Jennifer L. Greenblatt [ARGUED]
Tarek Ismail
Goldman Ismail Tomaselli Brennan & Baum
200 South Wacker Drive
22nd Floor
Chicago, IL 60606
Counsel for Appellee
2
_________________
OPINION OF THE COURT
_________________
SCIRICA, Circuit Judge
In this interlocutory appeal, we are asked to decide how
the doctrines of law of the case and issue preclusion apply to a
particular dispute in this multidistrict litigation proceeding
(MDL).1 Our answer is that those doctrines generally apply to
each case in this MDL in the same way as they apply to cases
outside of it. Because the District Court’s decision was not
consistent with that principle, we will vacate and remand.
This case involves allegations of a conspiracy to fix
prices in the drywall industry. The District Court relied on
issue preclusion and law of the case to exclude substantial
portions of the testimony of Plaintiff Home Depot’s expert, Dr.
Robert Kneuper. As part of Home Depot’s case against
1
The question has been certified to us for review under 28
U.S.C. § 1292(b). As phrased by the trial court, the question is
“whether a tag-along party’s expert may ignore prior rulings
that were issued by the MDL transferee judge before the tag-
along party joined [the] MDL.” Home Depot U.S.A., Inc. v.
Lafarge N. Am. Inc., No. 2:18-cv-5305, 2021 WL 5177742, at
*3 (E.D. Pa. Nov. 8, 2021). Home Depot instead phrases the
question as “whether prior MDL rulings to which Home Depot
was not [a] party bind Home Depot in this separate lawsuit.”
No. 21-8049, ECF No. 14 at 9. The precise framing of the
question makes no difference to our disposition.
3
Defendant Lafarge, Dr. Kneuper opined that the conduct of
several firms in the drywall industry, including Lafarge, was
consistent with illegal price fixing. The same conduct was at
issue in a class action brought by direct purchasers of drywall
as part of an MDL before the same court. Home Depot’s later-
filed case was consolidated with this MDL over its objection.
The Court found that large portions of Dr. Kneuper’s
testimony were “fundamentally improper” because they were
“contrary to fundamental events” that had occurred in the MDL
before Home Depot filed its case. Home Depot U.S.A., Inc. v.
Lafarge N. Am. Inc., No. 2:18-cv-5305, 2021 WL 3728912, at
*15 (E.D. Pa. Aug. 20, 2021). Specifically, the Court faulted
Dr. Kneuper for failing to conform his testimony to three such
“events”: (1) the Court’s prior grant of summary judgment to
one of the alleged conspirators, CertainTeed, (2) the fact that
another supplier, Georgia-Pacific, had not previously been
sued, and (3) the fact that alleged conspirator USG settled very
early in the class action case. Id. at *14.
The District Court said that Home Depot was “bound by
the[se] underlying events” under the doctrines of issue
preclusion and law of the case. Id. At *15. We believe that was
error. Issue preclusion applies only to matters which were
actually litigated and decided between the parties or their
privies. But Home Depot was not a party (or privy) to any of
the relevant events, and two of the three events to which it was
“bound” were not judicial decisions. Similarly, the law of the
case doctrine applies only to prior decisions made in the same
case. But Home Depot’s case is not the same as the one in
which the decisions were made, and as noted two of the three
events were not decisions. On the facts here, the application of
4
these doctrines was improper. We will vacate the District
Court’s decision and remand for reconsideration.2
I.
This case arises out of the decade-old domestic drywall
MDL. In 2012 and 2013, direct purchasers of drywall—not
including Home Depot—sued multiple drywall suppliers for
conspiring to fix prices. In re Domestic Drywall Antitrust
Litig., 163 F. Supp. 3d 175, 180-82 (E.D. Pa. 2016). Those
cases were centralized in an MDL before Judge Baylson in the
Eastern District of Pennsylvania. In re Domestic Drywall
Antitrust Litig., 939 F. Supp. 2d 1371 (J.P.M.L. 2013). In June
2013, the purchasers filed a consolidated class complaint
against the drywall supplier defendants. Domestic Drywall,
163 F. Supp. 3d at 181-83. Home Depot was a member of that
putative class but was not a named plaintiff. Named as
defendants were seven of the industry’s leading firms: USG,
TIN, CertainTeed, Lafarge, National, American, and PABCO.
Id. at 181-82. Another supplier, Georgia-Pacific, was not sued.
Before any class-certification or dispositive motions
were filed, Plaintiffs reached a settlement with defendants
USG and TIN. The terms of the settlement preserved
participating class members’ rights to sue non-settling
defendants. In 2015, the District Court preliminarily certified
two settlement classes. Home Depot did not opt out. Following
2
Home Depot has asked us either to “reverse the order
excluding Dr. Kneuper’s testimony” or to vacate it and remand
“for the court to clarify whether Dr. Kneuper’s reports need to
be revised” for other reasons. Reply Br. 25. We choose the
latter course for the reasons explained in Part III.
5
final approval of the USG and TIN settlements in August 2015,
the Court granted summary judgment to defendant
CertainTeed. Domestic Drywall, 163 F. Supp. 3d at 255, 260.
The Court denied summary judgment as to the remaining
defendants: American, National, Lafarge, and PABCO. Id. at
260.
In 2016, the named plaintiffs settled with Lafarge. The
Court certified a new settlement class, but Home Depot opted
out. A final judgment followed, to which Home Depot was not
bound.
The class action then continued against the three
remaining defendants—National, American, and PABCO. In
August 2017, the Court certified a litigation class of drywall
direct purchasers. In re Domestic Drywall Antitrust Litig., 322
F.R.D. 188, 194, 235 (E.D. Pa. 2017). Before notice could be
given to the class, however, the three remaining defendants
agreed to settle. The Court certified a new settlement class with
terms similar to the USG/TIN settlement—i.e., one which
preserved the right of class members to pursue claims against
alleged co-conspirators other than the settling defendants. This
time, Home Depot elected to remain in the settlement class.3
The Court entered final judgment on July 17, 2018, ending the
class action.
In June 2018, Home Depot, acting alone, sued Lafarge
in the Northern District of Georgia. Home Depot never bought
3
In total, direct purchaser class members received nearly $170
million in settlements—$125 million from National,
American, and PABCO, $39.25 million from USG, and $5.25
million from TIN.
6
drywall from Lafarge, but argued that antitrust law made
Lafarge liable for the overcharges Home Depot paid its own
suppliers. The Judicial Panel on Multidistrict Litigation
transferred the suit to Judge Baylson over Home Depot’s
objection.
At the close of discovery, Home Depot produced expert
reports from Dr. Robert Kneuper in which he opined that the
pricing behaviors of Lafarge and other drywall suppliers,
including USG, CertainTeed, and Georgia-Pacific, were
indicative of a conspiracy to fix prices.
Lafarge then moved to exclude Dr. Kneuper’s
testimony under Rule 702 of the Federal Rules of Evidence4
and moved for summary judgment. The Court requested
supplemental briefing to address whether the prior MDL
proceedings bound Home Depot under the doctrines of issue
4
Rule 702 provides:
A witness who is qualified as an expert by
knowledge, skill, experience, training, or
education may testify in the form of an opinion
or otherwise if:
(a) the expert’s scientific, technical, or other
specialized knowledge will help the trier of fact
to understand the evidence or to determine a fact
in issue;
(b) the testimony is based on sufficient facts or
data;
(c) the testimony is the product of reliable
principles and methods; and
(d) the expert has reliably applied the principles
and methods to the facts of the case.
7
preclusion or law of the case. In August 2021, the Court struck
Dr. Kneuper’s report and ordered him to submit a new one.
Home Depot, 2021 WL 3728912, at *19. In the Court’s
opinion, it described the “issue presented” as whether Home
Depot “can present opinions by an economist that [i]gnore
relevant facts and prior decisions in the same case” and that
“ignore the benefits Home Depot received as a member of a
settlement class.” Id. at *1. The Court struck the expert report
for two reasons: first, because Dr. Kneuper’s opinions “cross
the line from economist to attorney-juror-judge,” and second,
“because they lack a fundamental acknowledgement of the
unique and important procedural history . . . that binds Home
Depot as a member of the direct purchaser settlement class, and
contradicts [Kneuper’s] conclusions.” Id. at *12.
The Court did not extensively discuss the first reason,
but it appears from the Court’s discussion of the facts that it
objected to Dr. Kneuper’s “implications that Georgia-Pacific
and CertainTeed were conspirators,” id., which it thought gave
a “false impression of the drywall industry,” id., and went “far
beyond what prior experts in this case have written and what
this Court has held,” id. at *10.
The second reason was discussed in more detail. The
Court noted that it “must be careful to respect Home Depot’s
constitutional right to have its own claims, and proceed to a
jury trial, against Lafarge.” Id. at *13. But what it found “most
important” was that Home Depot had “conveniently forgotten
this case’s history.” Id. The Court refused to “countenance”
what it viewed as Home Depot’s “strategy” of “ignor[ing] the
many rulings that this Court has made over the prior ten years
of this litigation.” Id. at *14.
8
In particular, the Court found three aspects of Dr.
Kneuper’s testimony “fundamentally improper.” Id. First, the
Court thought that “Dr. Kneuper’s conclusions about Georgia-
Pacific must be excluded” because “[n]o party has ever
litigated against Georgia-Pacific” and “it was not part of the
MDL.” Id. Second, the Court found that Home Depot “waived
any right to make any claim” that CertainTeed’s conduct was
“consistent with the economics of collusion.” Id. This was
because Home Depot did not take new discovery from
CertainTeed, and because “relying on discovery about
CertainTeed would have run contrary to this Court’s
conclusion that CertainTeed was entitled to summary
judgment. . . .” Id. Third, the Court prohibited Dr. Kneuper
from expressing opinions about USG. “Because USG . . .
settled very early in the class action case,” the Court explained,
“this Court had no occasion to conclude anything about their
role in the alleged conspiracy . . . .” Id.Home Depot asked the Court to clarify its opinion,
which it declined to do, and then moved for interlocutory
review under 28 U.S.C. § 1292(b). Lafarge opposed
certification, accusing Home Depot of “pretending that issue
preclusion and law of the case were, by themselves, dispositive
of the Court’s Rule 702 decision,” and arguing that the Court’s
decision was based “on a variety of valid reasons.” Response
in Opposition to Home Depot’s Motion for Certification at 1,
Home Depot U.S.A., Inc. v. Lafarge N. Am., Inc., No. 2:18-cv-
5305 (E.D. Pa. 2021), ECF No. 143. The Court rejected this
characterization. In granting § 1292(b) certification for appeal,
it confirmed that it “relied on principles of ‘issue preclusion’
and ‘law of the case,’” Home Depot, 2021 WL 5177742, at *2,
explained that “Home Depot [was] bound by rulings issued in
this MDL before Home Depot joined it,” id., and indicated that
9
those issues would “directly affect the trajectory of this case,”
id. We granted leave to appeal over Lafarge’s objection.
II.
The District Court had original jurisdiction under 28
U.S.C. § 1331. We have appellate jurisdiction under 28 U.S.C.
§ 1292(b) as a result of the District Court’s certification and
our grant of leave to appeal.
“We review a district court’s decision to exclude expert
testimony for abuse of discretion.” ZF Meritor, LLC v. Eaton
Corp., 696 F.3d 254, 268 (3d Cir. 2012). We review questions
of law—including the application of issue preclusion and law
of the case—de novo. In re Zoloft (Sertraline Hydrocholoride)
Prods. Liab. Litig., 858 F.3d 787, 792 n.22 (3d Cir. 2017). A
district court “abuses its discretion when it makes an error of
law.” In re Hydrogen Peroxide Antitrust Litig., 552 F.3d 305,
312 n.9 (3d Cir. 2008) (quoting Koon v. United States, 518 U.S.
81, 100 (1996)).
III.
A.
The District Court “rel[ied] on the law of the case
doctrine” in excluding Dr. Kneuper’s testimony. Home Depot,
2021 WL 3728912, at *16. It held that this doctrine bound
Home Depot to the three events already mentioned: the grant
of summary judgment to CertainTeed, the lack of summary
judgment as to USG, and the fact that Georgia-Pacific was not
sued. Id. at *14. We will vacate and remand.
10
The law of the case doctrine “prevents reconsideration
of legal issues already decided in earlier stages of a case.”
Bedrosian v. IRS, 42 F.4th 174, 181 (3d Cir. 2022). The
doctrine “only applies within the same case,” Farina v. Nokia
Inc., 625 F.3d 97, 117 n.21 (3d Cir. 2010), and affects only
issues that were “expressly” or “necessarily resolved” by prior
decisions in the same case, PDX N., Inc. v. Comm’r N.J. Dep’t
of Lab. & Workforce Dev., 978 F.3d 871, 881 n.10 (3d Cir.
2020).
The law of the case doctrine cannot be applied across
distinct actions in this multidistrict proceeding. Cases
centralized in an MDL “retain their separate identities” unless
they choose to proceed on a consolidated “master” complaint.
Gelboim v. Bank of Am. Corp., 574 U.S. 405, 413 & n.3 (2015).
“That means a district court’s decision whether to grant a
motion . . . in an individual case depends on the record in that
case and not others.” In re Nat’l Prescription Opiate Litig., 956
F.3d 838, 845 (6th Cir. 2020).
The law of the case doctrine cannot bind Home Depot
to decisions in the direct purchaser class action because Home
Depot’s case and the class action are different cases. All of the
binding “events” in the class action occurred before Home
Depot filed this lawsuit on June 11, 2018. The cases proceeded
on different complaints. And, as already noted, the different
cases brought together in an MDL remain separate. Gelboim,
574 U.S. at 413; see, e.g., In re Interest Rate Swaps Antitrust
Litig., 351 F. Supp. 3d 698, 703 (S.D.N.Y. 2018) (“Although
[plaintiff’s] complaint has been consolidated with these earlier
cases for pretrial supervision in this MDL, it is formally a
separate case. The law of the case doctrine thus does not apply
11
here.”). Therefore, law of the case cannot bind Home Depot to
decisions in the prior direct purchaser class action.
Moreover, the doctrine does not apply because “[l]aw
of the case only extends to issues that were actually decided in
prior proceedings.” Farina, 625 F.3d at 117 n.21 (citing 18B
Charles Alan Wright, Arthur R. Miller & Edward H. Cooper,
Federal Practice & Procedure § 4478, at 649 (2d ed. 2002)).
But two of the events relied on by the Court—the absence of a
summary judgment ruling as to USG and lack of a suit against
Georgia-Pacific—were not decisions. Not having been
“actually decided,” law of the case cannot reach these events.
Id.
The Court appeared to believe that the MDL procedure
created an exception to usual law of the case rules. It quoted
approvingly from a district court’s opinion in Philadelphia
Housing Authority v. American Radiator & Standard Sanitary
Corp., 323 F. Supp. 381, 383 (E.D. Pa. 1970), where that court
concluded without much analysis that the doctrine could be
applied across different cases in the same multidistrict
proceeding. Whatever the merits of this opinion in 1970, it is
not applicable after Gelboim. As discussed above, separate
cases brought together for pretrial proceedings “retain their
separate identities.” Gelboim, 574 U.S. at 413. The MDL
process “does not merge the suits into a single cause, or change
the rights of the parties, or make those who are parties in one
suit parties in another.” In re TMI Litig., 193 F.3d 613, 724 (3d
Cir. 1999) (quoting Johnson v. Manhattan R.R. Co., 289 U.S.
479, 496-97 (1933)). And neither MDL centralization nor any
other procedural device can “impose the heavy toll of a
diminution of any party’s rights.” Bradgate Assocs., Inc. v.
Fellows, Read & Assocs., 999 F.2d 745, 750 (3d Cir. 1993).
12
The District Court said that the fact that Home Depot
“benefited from the direct purchaser settlement” in the class
action allowed it “to rely on the law of the case doctrine.”
Home Depot, 2021 WL 3728912, at *16. But any benefit that
Home Depot received did not make the two actions part of the
same case, and so this cannot justify the Court’s decision.
The Court also said that law of the case applied because
“Home Depot did litigate and argue—extensively—to this
Court during the prior MDL proceedings.” Id. The parties
appear to agree that this was not accurate. See Home Depot Br.
39; JA188 (Lafarge’s statement that “Home Depot is not a
party to the MDL and has limited knowledge about what
discovery has already been conducted in the MDL”).
Regardless, Home Depot’s participation in the earlier class
action would not have made this case the same as that one. So
this too does not support application of law of the case.
B.
The District Court held that issue preclusion “applies to
Home Depot in this case” and bars the admission of Dr.
Kneuper’s testimony. Home Depot, 2021 WL 3728912, at *15.
Issue preclusion bars a party from relitigating an issue when
“the identical issue was decided in a prior adjudication,” “there
was a final judgment on the merits,” “the party against whom
the bar is asserted was a party or in privity with a party to the
prior adjudication,” and “the party against whom the bar is
asserted had a full and fair opportunity to litigate the issue in
question.” In re Bestwall LLC, 47 F.4th 233, 243 (3d Cir. 2022)
(quoting Doe v. Hesketh, 828 F.3d 159, 171 (3d Cir. 2016));
accord Burlington N. R.R. v. Hyundai Merch. Marine Co., 63
13
F.3d 1227, 1231-32 (3d Cir. 1995). Each “event” to which the
Court purported to bind Home Depot fails these requirements.
We first consider the Court’s grant of summary
judgment to CertainTeed in February 2016. As noted,
preclusion “binds only the parties to a suit, subject to a handful
of discrete and limited exceptions.” Smith v. Bayer Corp., 564
U.S. 299, 312 (2011). Home Depot was not a party in February
2016. At that time, Home Depot’s only relationship to the
litigation was as an absent member of a putative class. “It is
axiomatic that an unnamed class member is not ‘a party to the
class-action litigation before the class is certified.’” N. Sound
Cap. LLC v. Merck & Co., 938 F.3d 482, 492 (3d Cir. 2019)
(quoting Smith, 564 U.S. at 313). Nor was Home Depot in
privity with any party.5 See Taylor v. Sturgell, 553 U.S. 880,
893-95 (2008) (describing the types of privies, including
“preceding and succeeding owners of property,” members of a
certified class, and those who litigate “through a proxy”); 18A
Charles Alan Wright, Arthur R. Miller & Edward H. Cooper,
Federal Practice & Procedure § 4448, at 313-17 (3d ed. 2017)
(similar). Home Depot cannot be bound by those doctrines
here.
5
The use of the term “privity” has been known to cause
confusion, and in its loosest forms “simply expresses a
conclusion that preclusion is proper.” 18A Charles Alan
Wright, Arthur R. Miller & Edward H. Cooper, Federal
Practice & Procedure § 4449, at 337 (3d ed. 2017). We use the
term in the stricter sense to refer only to the “substantive legal
relationships justifying preclusion” under the Supreme Court’s
decision in Taylor v. Sturgell, 553 U.S. 880, 894 & n.8 (2008).
14
Given that Home Depot was not a party to the summary
judgment proceeding, it is unsurprising that it also lacked the
“full and fair opportunity to litigate” the issue. See Taylor, 553
U.S. at 892-93. As such, preclusion would be contrary to “our
deep-rooted historic tradition that everyone should have his
own day in court.” Richards v. Jefferson Cnty., 517 U.S. 793,
798 (1996).
The other “events”—the absence of a summary
judgment decision as to USG, and the fact that no party sued
Georgia-Pacific—are not proper subjects of preclusion either.
Home Depot was not a party to these events, and so preclusion
is inappropriate for that reason alone. Moreover, these events
were not decisions and so could not have been actually litigated
and decided. Since “issue preclusion attaches only ‘when an
issue . . . is actually litigated,’” it is not appropriate here.
Arizona v. California, 530 U.S. 392, 414 (2000) (quoting
Restatement (Second) of Judgments § 27 (1982)).
The Court appeared to believe that a departure from
these principles was warranted because Home Depot, as a class
member, benefited from settlements with the other defendants
in the class action. Home Depot, 2021 WL 3728912, at *15
(“Home Depot cannot retain an expert who presents opinions
contrary to fundamental events that took place while Home
Depot was a member of the settlement class . . . and benefitted
from that settlement.”). But these settlements did not have that
effect. The settlements produced final judgments, but the
ruling as to CertainTeed was not actually litigated and decided
as part of those settlements, and so can have no issue preclusive
effect. See Burlington, 63 F.3d at 1231-32. Settlements
“ordinarily occasion no issue preclusion,” unless the parties
clearly “intend their agreement to have such an effect.”
15
Arizona, 530 U.S. at 414. There is no evidence these parties
intended that effect. In fact, these settlements preserve class
members’ rights to pursue claims against others.
The District Court’s concern with Home Depot “having
taken its money and ignored the [prior] rulings of the Court,”
Home Depot, 2021 WL 3728912, at *13, is understandable.
But the necessary effect of making important rulings (like
those on summary judgment) before certification is that “the
decision will bind only the named parties.” 7AA Charles Alan
Wright, Arthur R. Miller & Edward H. Cooper, Federal
Practice & Procedure §1785, at 384 (3d ed. 2005); see also
Katz v. Carte Blanche Corp., 496 F.2d 747, 758-62 (3d Cir.
1974). The district court has broad authority to structure and
manage the MDL proceeding to promote efficiency and avoid
unfairness. But it does “not have the authority to create special
rules” to “bind plaintiffs by the finding of previous proceedings
in which they were not parties, even by a proceeding as
thorough as the multidistrict common issues trial.” TMI, 193
F.3d at 726 (quoting DeLuca v. Merrell Dow Pharms., Inc.,
911 F.2d 941, 952 (3d Cir. 1990)).
C.
Lafarge does not seriously dispute any of the above
analysis. Instead, it urges us to affirm on alternative grounds—
that Kneuper’s opinions give improper “legal conclusions,”
Lafarge Br. 3, and that the Court “independently rejected
Kneuper’s opinions because he failed to present evidence
supporting them,” id. at 4 (emphasis omitted). But affirmance
on these grounds would not be justified by the record in this
case, which makes clear that the trial judge “relied extensively”
on the doctrines of law of the case and issue preclusion in
16
excluding Kneuper’s testimony. See Home Depot, 2021 WL
5177742, at *2.
It is possible that Dr. Kneuper’s testimony is not
admissible for other reasons, including some of those given in
the District Court’s opinion. Because we are a court of review,
not first view, Allen v. Ollie’s Bargain Outlet, Inc., 37 F.4th
890, 900 (3d Cir. 2022), we decline to weigh in on factual
determinations better left to the District Court, Miller v.
Bolger, 802 F.2d 660, 666-67 (3d Cir. 1986), and leave them
to its sound discretion on remand.
On remand, the Court should consider the admissibility
of Dr. Kneuper’s testimony afresh, unencumbered by reliance
on the doctrines of law of the case and issue preclusion. The
decision should instead be shaped by the traditional evidentiary
principles governing the admissibility of expert testimony—
“qualifications, reliability, and fit.” Elcock v. Kmart Corp., 233
F.3d 734, 741 (3d Cir. 2000). In considering the parties’
pending motions for summary judgment, the Court need not
blind itself to its prior decisions. But the Court may only apply
its prior reasoning after it has allowed Home Depot to put forth
new legal theories and to raise new arguments based on newly
developed or preexisting evidence. It should also consider
Home Depot’s arguments that prior rulings in the MDL should
not be followed.
IV.
Complex multidistrict cases like this one demand much
from transferee courts. The MDL process requires a judge to
move hundreds or thousands of cases towards resolution while
respecting each litigant’s individual rights. Managing an MDL
17
may be “fundamentally . . . no different from managing any
other case.” U.S. Judicial Panel on Multidistrict Litig. & Fed.
Judicial Ctr., Ten Steps to Better Case Management: A Guide
for Multidistrict Litigation Transferee Judges 3 (2d ed. 2014).
But the complexity of most MDLs makes it harder to safeguard
the procedural values which underlie all cases while
simultaneously pursuing an efficient resolution on the merits.
MDL judges have risen to this challenge by devising
efficient, effective, and fair case management techniques.
Nothing in our opinion should be taken to disparage the
“creativity and innovation” which is so “highly prized among
MDL judges.” Abbe R. Gluck & Elizabeth Chamblee Burch,
MDL Revolution, 96 N.Y.U. L. Rev. 1, 58 (2021). Nor should
we be taken to mandate rigid adherence to stultifying
procedures or “arid ritual[s] of meaningless form.” Staub v.
City of Baxley, 355 U.S. 313, 320 (1958). We endorse the
considerable authority which is vested in MDL transferee
courts to efficiently and fairly manage complex cases.
In this case, the District Court tried to protect one of our
legal system’s central values—finality. It recognized the “vital
interest” in protecting “judicial determinations that were the
products of costly litigation and careful deliberation.” Jean
Alexander Cosmetics, Inc. v. L’Oreal USA, Inc., 458 F.3d 244,
254-55 (3d Cir. 2006). It accordingly tried to protect “the many
rulings that [it] ha[d] made over the prior ten years of this
litigation.” Home Depot, 2021 WL 3728912, at *13. Lafarge
similarly appeals to values of “judicial economy,” Lafarge Br.
17, and objects to the idea that “MDL courts cannot even
consider or refer to their own prior rulings in deciding later
motions,” id. at 20 (emphasis omitted).
18
On the facts here, we disagree with the trial court’s use
of the doctrines of law of the case and issue preclusion. But we
understand that preserving the finality of past rulings is
essential “to secure the peace and repose of society,” “for the
aid of judicial tribunals would not be invoked for the
vindication of rights” if “conclusiveness did not attend” their
judgments. S. Pac. R.R. Co. v. United States, 168 U.S. 1, 49
(1897). And the District Court has called for appellate
guidance on applying these principles in this MDL proceeding.
See Home Depot, 2021 WL 5177742, at *4-5. As such, we
discuss two aspects of finality—judicial economy and fairness
to litigants—and identify proper methods of vindicating these
values.
A.
The first value at stake is judicial economy. The trial
court and Lafarge have both emphasized the importance of
ensuring that transferee judges remain able to “maximize” the
“judicial economy” that MDLs “were designed” to further. Id.
at *5; see also Lafarge Br. 20. An MDL transferee court has a
variety of options at its disposal to avoid the needless
duplication of work across the cases that make up the
proceeding. We detail several possibilities.
First, a court may rely on its prior decisions as
persuasive, and demand good reasons to change its mind.6 Both
6
In MDLs, like in other litigation, a district court may apply
prior rulings to new cases if a party presents no new facts,
evidence, or arguments to warrant a departure. For example,
suppose that in this case Dr. Kneuper had previously been
offered as an expert in the class action, and suppose that the
19
parties here agree that this procedure is appropriate. See Oral
Arg. Tr. at 9:20-25, 10:1, 28:3-17.
A judge may formalize this process through the use of
case management orders.7 This practice is regularly employed
in MDLs—a judge may enter an order with respect to one party
and then provide that it will be automatically extended to other
parties if they do not come forward and show cause why it
should not be applicable. See, e.g., Order of Jan. 24, 2018, In
re Terrorist Attacks on Sept. 11, 2001, No. 03-MD-1570, at 2
(S.D.N.Y. Jan. 24, 2018) (“Any order entered into, or decision
rendered, in this MDL that relates to all actions shall apply to
all Tag-Along Actions without the need for separate motions
and orders, unless counsel in a Tag-Along Action show good
cause why the order should not apply to that Tag-Along
Action.”); Order to Show Cause as to the B3 Claims Against
the Clean-Up Responder Defendants, In re Oil Spill by the Oil
Rig Deepwater Horizon, No. 10-MD-2179 (E.D. La. Jan. 7,
2016) (similar); Order No. 50, In re Gen. Motors LLC Ignition
Switch Litig., No. 14-MD-02543, at 8 (S.D.N.Y. Apr. 24, 2015)
(implementing a show-cause procedure for applying rulings
made on the basis of consolidated pleadings to non-
consolidated actions).
Court had excluded his testimony for permissible reasons. It
would be appropriate for it to adhere to that decision in Home
Depot’s case if Home Depot could not present a sufficient
reason why it should not be followed.
7
For example, courts often “require plaintiffs to produce
threshold prima facie support for their claims, such as expert
reports and medical records.” Hamer v. LivaNova Deutschland
GmbH, 994 F.3d 173, 178 (3d Cir. 2021).
20
This is a technique that we have approved. See In re
Asbestos Prods. Liab. Litig. (No. VI), 718 F.3d 236, 240-41,
247-49 (3d Cir. 2013) (affirming dismissal of claims for failing
to produce diagnostic information as required by a case
management order). Just last year, we said:
In an MDL case, management orders are
essential tools in helping the court weed
out non-meritorious or factually distinct
claims. Accordingly, an MDL court needs
to have broad discretion to keep the parts
in line by entering Lone Pine orders that
drive disposition on the merits. Such
orders may impose preliminary discovery
requirements, like the production of
relevant expert reports, or may require
plaintiffs to furnish specific evidence like
proof of a medical diagnosis, with the
goal of winnowing non-compliant cases
from the MDL. That said, efficiency must
not be achieved at the expense of
preventing meritorious claims from going
forward.
Hamer v. LivaNova Deutschland GmbH, 994 F.3d 173, 178 (3d
Cir. 2021) (cleaned up).
Even without such an order, parties will be unlikely to
relitigate issues on which the judge has already ruled without a
compelling reason. “New parties will figure out quickly which
efforts to litigate issues already decided by the judge at the
urging of others will be futile.” Joan Steinman, Law of the
21
Case: A Judicial Puzzle in Consolidated and Transferred
Cases and in Multidistrict Litigation, 135 U. Pa. L. Rev. 595,
669 (1987); see also Eldon E. Fallon, Jeremy T. Grabill, and
Robert Pitard Wynne, Bellwether Trials in Multidistrict
Litigation, 82 Tulane L. Rev. 2323, 2338 & n.73 (2008).
A transferee judge may also make use of consolidated
complaints to simplify the litigation.8 See In re Fosamax
(Alendronate Sodium) Prods. Liab. Litig., 852 F.3d 268, 302
n.171 (3d Cir. 2017). The Manual for Complex Litigation
provides an order that a court may easily use to direct the
plaintiffs to file such a complaint. Manual for Complex
Litigation (Fourth), § 40.21, at 737 (“To pursue class action
treatment, plaintiffs must file by [date], a single, consolidated,
special master amended complaint.”); see also In re Nat’l
Football League Players Concussion Injury Litig., 821 F.3d
410, 421 (3d Cir. 2016) (“The Court also ordered plaintiffs to
submit a Master Administrative Long-Form Complaint . . . to
supersede the numerous then-pending complaints.”). In the
same vein, guidance provided to judges by the Judicial Panel
on Multidistrict Litigation and the Federal Judicial Center
emphasizes the value of grouping related cases. See Catherine
R. Borden, Fed. Jud. Ctr., Managing Related Proposed Class
Actions in Multidistrict Litigation 3-5 (2018). Plaintiffs may
be grouped in any number of ways, including “by the nature of
the claims brought,” by “substantive state-law differences,” by
geography, by the “time of filing,” by “which subset of
8
Rulings made in connection with a consolidated complaint
are law of the case for all parties named in that complaint. See
Bell v. Publix Super Markets, Inc., 982 F.3d 468, 489 (7th Cir.
2020) (citing In re Refrigerant Compressors Antitrust Litig.,
731 F.3d 586, 588 (6th Cir. 2013)).
22
defendants is being sued,” or even “whether they have opted
out of arbitration or not.” Id. at 4-5. We commend the creativity
of transferee judges in devising these groups and other methods
to manage litigation—bounded, of course, by the Federal Rules
and the Constitution.
B.
The second value at stake is fairness to litigants. The
District Court was concerned by the possibility of late-arriving
plaintiffs free-riding on the work of their predecessors. See
Home Depot, 2021 WL 3728912, at *15. In its certification
order, the Court noted the “need for additional guidance from
appellate courts” on the treatment of “tag-along parties who
first opted out of a class as to one defendant, but who later
joined the MDL . . . .” Home Depot, 2021 WL 5177742, at *4.
This is a distinct problem from the one discussed above and
calls for different resolutions.
A court may avoid unfairness through the use of
appropriate discovery management orders. We do not
prescribe any “single, undifferentiated approach,” but endorse
wide “latitude” for “judicial oversight . . . to manage the
availability of discovery obtained in one case for use in
another. . . .” Am. L. Inst., Principles of the Law of Aggregate
Litigation § 2.07, cmt. g (2010); see also In re
Bridgestone/Firestone, Inc., Tires Prods. Liab. Litig., 659 F.
Supp. 2d 1371, 1372-73 (J.P.M.L. 2009) (“We see no reason
why the parties in subsequent actions, subject to the same
conditions as those imposed on parties to the MDL, should not
be able to avail themselves of the documents and depositions
accumulated [in the MDL].”).
23
The judge might also deal with monetary aspects of the
problem by assessing common benefit fees. In multidistrict
cases, “it is standard practice for courts to compensate
attorneys who work for the common benefit of all plaintiffs by
setting aside a fixed percentage of settlement proceeds.” In re
Zyprexa Prods. Liab. Litig., 467 F. Supp. 2d 256, 265
(E.D.N.Y. 2006); In re Zyprexa Prods. Liab. Litig., 594 F.3d
113, 128-30 (2d Cir. 2010) (Kaplan, J., concurring) (approving
this order). We have upheld the use of such fees in situations
where an attorney “confer[s] a substantial benefit to members
of an ascertainable class.” In re Diet Drugs, 582 F.3d 524, 546
(3d Cir. 2009). The American Law Institute endorses the use
of common benefit fees to compensate lawyers for work they
do on behalf of others. See Principles of the Law of Aggregate
Litigation § 2.07, cmt. G (recommending that the use of
discovery obtained by class counsel be compensated by “order
of the class-action court to sequester a portion of any recovery
obtained by the exiting claimant to account for the benefit
obtained from the class discovery”); In re Linerboard Antitrust
Litig., 292 F. Supp. 2d 644, 653-54, 661-62 (E.D. Pa. 2003)
(making such an order).
No particular approach will be suitable in every case.
We describe these options as examples of alternatives that may
be available. A district court charged with the responsibility of
achieving this goal across “the multiplicity of actions in an
MDL proceeding must have discretion to manage them that is
commensurate with the task.” In re Phenylpropanolamine
(PPA) Prods. Liab. Litig., 460 F.3d 1217, 1231 (9th Cir. 2006).
***
24
Following remand, the District Court should reconsider
the admissibility of Dr. Kneuper’s testimony without reference
to issue preclusion and law of the case. It should allow Home
Depot to make new arguments based on new or preexisting
evidence, and it should consider Home Depot’s arguments that
rulings in other cases in this MDL should not be followed, as
more fully described in Part III of our opinion.
We VACATE the judgment of the District Court and
REMAND for further proceedings consistent with this opinion.
25