Rapoport v. Showa Denko K.K.

953 F.2d 162
CourtCourt of Appeals for the Fourth Circuit
DecidedJanuary 10, 1992
DocketNo. 91-8074
StatusPublished
Cited by4 cases

This text of 953 F.2d 162 (Rapoport v. Showa Denko K.K.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fourth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rapoport v. Showa Denko K.K., 953 F.2d 162 (4th Cir. 1992).

Opinion

NIEMEYER, Circuit Judge:

We are asked to review an administrative order, Order No. 7, entered in the L-Tryp-tophan multi-district litigation, MDL Docket No. 865, pending in the District of South Carolina, where over 470 federal cases have been consolidated for pretrial proceedings. Showa Denko K.K. and Showa Den-ko America, Inc. (collectively Showa Den-ko), together with some 300 other defendants, are sued for damages for personal injury resulting from the ingestion of pills containing the amino acid L-Tryptophan.

The district court entered Order No. 7 to provide a funding mechanism to reimburse members of a steering committee of plaintiffs’ lawyers, principally for discovery-generated expenses incurred on behalf of the plaintiffs. The intent of the order is to require each plaintiff in the United States who has a claim based on injury from L-Tryptophan to pay $1,000 into a common fund, plus 0.5% of any settlement reached or verdict entered (with a credit for the initial $1,000 assessment), on the theory that, whether a plaintiff settles or litigates, he or she benefits from the discovery. Consequently, the order attempts to reach not only plaintiffs in cases pending in the multi-district litigation, but also plaintiffs in federal cases not transferred to the mul-tidistrict litigation, plaintiffs in some 683 pending state cases, and approximately 180 claimants known to Showa Denko who have not yet filed suit in any court. The district court’s order seeks to enforce the assessments by requiring Showa Denko to “certify” that the assessments have been paid by plaintiffs and claimants whenever it settles or pays a verdict in a case or discloses discovery materials generated in the multi-district litigation. The order provides, in pertinent part:

2.In all cases presently filed or later filed in these proceedings, plaintiff’s counsel shall initially deposit One Thousand Dollars ($1,000.00) for each injured plaintiff (excluding consortium claims) into Plaintiffs’ Expense Fund....
3. At the close of any of these cases by settlement, verdict or otherwise, plaintiff’s counsel shall deposit into Plaintiffs’ Expense Fund one-half of one percent (0.5%) of the total sum, including consortium claims, for discovery and other approved expenses. A credit shall be applied for prior assessments paid....
4. The assessments contained in paragraphs 2 and 3 above shall also apply to actions venued in state courts, untrans-ferred federal cases, and unfiled claims in which any MDL defendant is a party or payor.
5. At the close of any case by settlement, verdict, or otherwise, defendants [Showa Denko] shall certify that payments in amounts described in paragraphs 2, 3, and 4 above have been made ... provided that upon notice and cause shown by the plaintiff or defendants in non-MDL cases the court may order such payments to be reduced or waived. No party shall furnish to any non-MDL plaintiff any product of the MDL discovery or permit its use until ascertaining that such plaintiff has complied with this court’s confidentiality orders and is current in payments of the assessments herein.

The court concluded its order with the certification required for immediate appeal pursuant to 28 U.S.C. § 1292(b).

Showa Denko appeals, alleging jurisdiction in this court under 28 U.S.C. §§ 1291 and 1292(a) (1988), and petitions for permission to appeal under 28 U.S.C. § 1292(b). On the merits, Showa Denko does not contest the district court’s authority to establish the plaintiffs’ expense fund and to require fixed contributions by plaintiffs in actions before the court. It does, however, contend that paragraphs 3, 4 and 5 of the order exceed the district court’s authority because they (1) will impair Showa Denko’s ability to settle cases with state court plaintiffs; (2) may prevent Showa Denko from providing state court plaintiffs’ discovery [165]*165in state proceedings; (3) may prevent Sho-wa Denko from complying with state court orders; (4) will conflict with judgments rendered against Showa Denko in state courts; and (5) will interfere with Showa Denko’s ability to keep settlements confidential.

The plaintiffs’ steering committee contests our jurisdiction, principally on the ground that Order No. 7 is merely an interlocutory order concerning pretrial matters left to the district court's discretion. Substantively, it argues that the district court’s power under Fed.R.Civ.P. 26(f) to allocate expenses incurred for discovery allows the court to ensure that the steering committee’s expenses in conducting discovery be shared by all plaintiffs because all benefit from the steering committee’s work. Furthermore, the district court’s power under Rule 26 over discovery materials used in the MDL proceedings, the committee asserts, enables the court to reach plaintiffs not in the MDL proceedings who use the materials.

I

Generally we are reluctant to review any administrative order entered early in litigation for fear of interfering with the district court’s appropriate discretion and supervision in pretrial matters. Cf. In re Recticel Foam Corp., 859 F.2d 1000, 1006 (1st Cir.1988) (refusing to issue writ of mandamus in part because “[decisions regarding the scope of discovery, the allocation of expenses, the most appropriate areas for enforced economy, and the protections to be afforded parties in the discovery process, are ordinarily left to the informed judgment of the district judge”). Moreover, interlocutory review implicates the strong policy against piecemeal appellate review.

Nevertheless, the peculiar circumstances of Order No. 7 entered in this case justify its immediate review. A serious question is raised about the power of a district court overseeing multi-district litigation to enter an order reaching nonparties and affecting state court proceedings. Moreover, the impact of Order No. 7 is magnified because of its purported applicability to hundreds of litigants and claimants. The district court recognized the order’s significance by including a certification for review under 28 U.S.C. § 1292(b). A ruling on these important issues now will, in our judgment, advance the ultimate disposition of the litigation, and therefore we permit the appeal under § 1292(b). Review is also justified under 28 U.S.C. § 1292(a) to the extent that the order enjoins Showa Denko to certify compliance with its terms when participating in settlements and paying judgments entered in other proceedings beyond the scope of the multi-district litigation.

II

We recognize that a district court needs to have broad discretion in coordinating and administering multi-district litigation. See In re San Juan Dupont Plaza Hotel Fire Litigation,

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Bluebook (online)
953 F.2d 162, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rapoport-v-showa-denko-kk-ca4-1992.