Monday, June 19, 2017

Coordination Good.

In re Ford Motor Warranty Cases, No. B277725 (D2d8 May 8, 2017)

Where federal court has multi-district litigation proceedings, California has “coordination” under Code of Civil Procedure § 404.1. When there’s a potential for coordination, the Judicial Council assigns the matter to a “coordination motion judge,” whose job it is to decide if coordination is merited. And if it is, the matter is then assigned to a “coordination trial judge” whose job is to manage the litigation, to decide common legal, factual, and procedural questions, and then to farm cases out for trial. 

In this case, the coordination motion judge assigned 775 breach of warranty cases over an auto defect to a coordination trial judge in LA, designating the 2d District as the situs of any appeals. Defendant then moved to add 467 more cases to the coordinated proceedings. Most had been filed after the coordination order, but some were inadvertently excluded from the prior motion, and a few were originally excluded because they had early trial dates that had since been continued. The coordination trial judge, however, denied the motion, largely based on the idea that the new cases were different enough from one another that coordination wasn’t merited. He also thought (for some reason) that there were product liability claims strewn amongst the original warranty cases, although there actually weren’t any.

Defendant took a writ. In response, the Court of Appeal issued an alternative writ to the trial court ordering it to add the cases or show cause. But the coordination trial judge declined to follow it, so the Court of Appeal now issues a peremptory writ ordering him to so.

The Court first settles an issue with the standard of review. Generally, the call about whether to coordinate is a highly discretionary balancing of costs and benefits. But prior cases hold that an initial coordination decision is nonetheless reviewed de novo, reasoning that it is essentially a matter of judicial administration and policy considerations that an appellate court is equally well-placed to judge. The Court finds this reasoning continues to be persuasive as to decisions regarding adding on new cases to an existing coordinated proceeding. It’s not the kind of daily administrative decision of the coordination trial judge that would merit a more deferential abuse of discretion review.

So far as the merits, the standard for adding on cases is basically the same as for coordination at the outset, although the relative state of development of both the coordinated and the to-be-coordinated cases is relevant. Given that the cases to be added were “substantively indistinguishable” and not in a state of development that would impair the schedule, the coordination trial judge erred by refusing to consolidate them. Indeed, the trial judge’s ruling basically took issue that the cases should not have been consolidate in the first place, which was not his call to make.

And in any event, even if the trial judge could re-weigh the coordination factors, the § 404.1 factors clearly favored coordination. Although warranty claims present certain individualized issues, there were nonetheless areas of substantial overlap in both legal and factual questions. The cases would benefit from centralized management of discovery. The wasn’t substantial inconvenience to parties, witnesses or counsel, particularly given that most meetings and appearances could be worked out through Court Call or other remote communications, and discovery could be maintained in a centralized repository that can be accessed remotely. Although coordination does not require trial of every case in one forum, it does promote the use of bellwethers, which can lead to efficient valuation and resolution of large volumes of cases. It avoids inconsistent or duplicative rulings on common issues. And it appears to promote (or at least it does not impair) settlement. (About 500 of the cases had already settled around the time the writ was filed.)

Justice Flier concurs. She believes that the “relative development of the actions and the work product of counsel” should have been the primary criterion in evaluating the add-ons. But since even the coordination trial judge agreed that that factor, in particular, supported consolidation, she agrees that the add-on cases should have been consolidated.

Writ granted.

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