Class Action

Class Action Defense Cases—In re Chrysler: Judicial Panel On Multidistrict Litigation (MDL) Grants Plaintiff Motion To Centralize Class Action Litigation In District Of New Jersey

By Michael J. Hassen

Judicial Panel Grants Plaintiff Request for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407, Opposed by Common Class Action Defendant, and Transfers Class Actions to District of New Jersey

Five class actions – one each in California, Florida, Illinois, New Jersey, and New York – were filed against Chrysler arising out of an alleged defect in the 2.7 liter engine used in several Chrysler cars; specifically, the class actions alleged that design defects made the 2.7 liter engine “prone to the formation of oil sludge, which causes the engine to malfunction.” In re Chrysler LLC 2.7 Liter V-6 Engine Oil Sludge Products Litig., ___ F.Supp.2d ___ (Jud.Pan.Mult.Lit. February 10, 2009) [Slip Opn., at 1]. An additional class action was filed in Massachusetts, and treated by the court as a potential tag-along action, id., at 1 n.2. Plaintiffs in the New Jersey class action filed a motion with the Judicial Panel for Multidistrict Litigation (MDL) requesting centralization of the class actions pursuant to 28 U.S.C. § 1407 in the District of New Jersey; defense attorneys opposed centralization, and argued alternatively that the class action should be centralized in Illinois. Id. The argued that the class actions do not involve “duplicative discovery” because “the proposed classes do not overlap,” that informal coordination of discovery can adequately address any risk of overlapping discovery, and that common plaintiffs’ counsel in four of the class actions “supports coordination among the parties as a superior method of streamlining discovery.” Id., at 1-2. The Judicial Panel granted the motion to centralize the class action lawsuits and agreed that the District of New Jersey was the appropriate transferee court, id., at 1.

The Judicial Panel recognized that the five class actions seek certification of statewide classes under the laws of five different states, but discovery will still overlap. In re Chrysler, at 2. The Panel found that the class actions “involve common questions of fact,” and that centralization “will eliminate duplicative discovery; prevent inconsistent pretrial rulings; and conserve the resources of the parties, their counsel and the judiciary.” Id., at 1. Put simply, the class actions “are nearly identical in terms of the facts alleged, and discovery undoubtedly will overlap.” Id., at 2. Pretrial coordination “will enable one judge to streamline pretrial proceedings and make consistent rulings on discovery disputes, dispositive motions, and issues relating to experts.” Id. The different issues presented by class certification, then, do not affect the propriety of centralization; rather, “the transferee judge may find that, eventually, the just and efficient conduct of these actions would best be served by suggesting to the Panel that the Panel remand these actions to the transferor courts for class certification considerations.” Id. But at least for purposes of discovery, centralization was warranted and the District of New Jersey is the appropriate transferee court because the New Jersey class action has been pending longer than the other class actions. Id. Accordingly, the Panel ordered the class actions transferred to New Jersey. Id.

Full post as published by Class Action Defense Blog on March 06, 2009 (boomark / email).