All Disputes Must Be Brought Here: Atlantic Marine and the Future of Multidistrict Litigation

Abstract

Multidistrict litigation (“MDL”) is an immensely powerful tool. In an MDL, cases that share a common question of fact are consolidated in a single district for pretrial proceedings. MDLs abide by the general principle that governs all transfers within the federal system: because transfer is no more than a “housekeeping measure,” an action retains the choice-of-law rules of the state in which it was filed. If a case filed in California is transferred to an MDL pending in Iowa, the transferee court in Iowa applies California’s choice-of-law rules. As a result, the cases maintain their identities through the retention of their individual home state’s choice-of-law rules. It is thus a critical feature of MDLs—which have far fewer procedural protections than class actions—that transfer to an MDL does not change the applicable law for any individual action. In non-aggregate litigation, this general transfer rule no longer applies, however, when a case is transferred pursuant to a forum-selection clause. Under the Supreme Court’s 2013 decision in Atlantic Marine Construction Co. v. U.S. District Court, the transferee court applies its own choice-oflaw rules instead. Thus, if a case filed in California is transferred to Iowa in accordance with a forum-selection clause, the transferee court in Iowa applies Iowa’s choice-of-law rules. Although Atlantic Marine involved a non-aggregate proceeding, courts have begun to consider whether this principle should control choice of law in complex litigation governed by a forum-selection clause. This Note argues that it should not. To begin, extending Atlantic Marine to the MDL context might allow the fact of consolidation to change the outcome in a case. Doing so would also expand due process concerns already inherent in aggregate proceedings, and MDL is not an appropriate forum in which to allow parties discretion to craft their own rules of dispute resolution. Accordingly, to preserve the integrity of the MDL process, MDL courts should consistently apply the choice-of-law rules of the transferor court, even when an action is governed by a valid forumselection clause. 1658 CALIFORNIA LAW REVIEW [Vol. 106:1657 Abstract ................................................................................................. 1657 Introduction ........................................................................................... 1658 I. Prioritization of Vertical Uniformity ................................................. 1661 A. The Accident of Diversity Jurisdiction .............................. 1662 B. Transfer as a “Housekeeping” Measure ............................. 1664................................................................................................ 1657 Introduction ........................................................................................... 1658 I. Prioritization of Vertical Uniformity ................................................. 1661 A. The Accident of Diversity Jurisdiction .............................. 1662 B. Transfer as a “Housekeeping” Measure ............................. 1664 C. The Shift in Atlantic Marine .............................................. 1666 II. The Impact of Aggregation .............................................................. 1669 A. Consolidation and Choice of Law ..................................... 1670 B. Not Whether, But Where ................................................... 1672 C. Forum-Selection Clauses and Multidistrict Litigation ....... 1675 III. Multidistrict Litigation Following Atlantic Marine ........................ 1677 A. The Reach of Atlantic Marine ........................................... 1678 B. Maintaining Choice of Law Particularity .......................... 1679 1. Creation of Different Outcomes .................................. 1680 2. Due Process and the Pressure of Aggregation ............. 1684 Conclusion ............................................................................................ 1687