Ninth Circuit Considers Whether Dismissal of MDL Proceedings for Failure to Comply with Case Management Orders Was Clear Error

Per In re Phenylpropanolamine (PPA) Producs Liability Litigation, 460 F.3d 1217 (9th Cir. Aug. 29, 2006):

These appeals are from judgments of dismissal entered in a multidistrict litigation (MDL) proceeding for failure to comply with case management orders. The orders were entered with the agreement of all sides that they were necessary to move hundreds of cases and thousands of plaintiffs toward resolution on the merits. The district court found that many plaintiffs inexcusably failed to do what was required, and dismissed their actions. Some appeal. We must decide whether these dismissals were a clear error of judgment.

The principles that guide a court's discretion to dismiss are well settled, but we have never addressed how they play out in the context of multidistrict litigation. We conclude that while the rules are the same as for ordinary litigation on an ordinary docket--that is, a court determining whether to dismiss an action on account of a plaintiff's noncompliance with a court order must weigh the public's interest in expeditious resolution of litigation; the court's need to manage its docket; the risk of prejudice to the defendants; the public policy favoring the disposition of cases on their merits; and the availability of less drastic sanctions--multidistrict litigation is different because of the large number of cases that must be coordinated, its greater complexity, and the court's statutory charge to promote the just and efficient conduct of the actions. 28 U.S.C. § 1407. As a result, the considerations that inform the exercise of discretion in multidistrict litigation may be somewhat different, and may tip the balance somewhat differently, from ordinary litigation on an ordinary docket.Recognizing this, we cannot say that the district court abused its discretion in dismissing the cases before us . . .

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Failure to comply with case management orders in MDL proceedings such as MDL 1407, where both sides agree that the orders serve the important interest of moving the cases along, adversely affects the public interest, as well as the parties' private interest, in expeditious resolution of litigation. A district court cannot manage its docket if such orders are not respected. This harms plaintiffs with meritorious claims whose progress toward resolution is bogged down by others who will neither put up nor shut up; defendants who do not know against whom or what they are defending and so can neither conduct case-specific discovery, seek an early exit by summary adjudication, nor assess the potential value of the plaintiffs' claims for settlement; and the public, whose access to the courts is impeded when judicial resources are diverted from the proper administration of justice to dealing with recalcitrant parties . . . while the factors which guide a court's discretion in ordinary cases on an ordinary docket also inform an MDL court's decision to invoke dismissal as a sanction for failure to comply with its orders, the court's discretion is necessarily informed, and broadened, by the number of actions, their complexity, and its charge in the multidistrict context to promote the just and efficient conduct of actions that are coordinated or consolidated for pretrial purposes. The district court acted within its discretion in deciding that dismissal of the cases before us . . . was warranted.