When parties submit consolidated complaints, MDL appeals can get complicated.
December 9, 2020
Actions consolidated in multidistrict litigation (or MDL) normally retain their individual character for finality purposes. So the resolution of a single action in an MDL is final and appealable regardless of whether other actions remain pending.
Things can get complicated, however, if the parties file consolidated pleadings after the actions are joined in the MDL. Those consolidated pleadings can divide up single actions into separate ones. What does that do to MDL appeals? Are the individual actions still individual for finality purposes, such that the resolution of all claims in an original complaint is appealable even if those claims are now spread out across multiple consolidated complaints? Or are actions now measured by the consolidated complaints, such that resolution of all claims in a consolidated complaint is final?
In Bell v. Publix Super Markets, Inc., the Seventh Circuit held that the time to appeal runs from the resolution of all claims in a consolidated complaint so long as that complaint superseded the individual ones. The case involved five consolidated complaints against sellers and manufacturers of powdered Parmesan cheese. The district court dismissed all of the claims in two of the consolidated complaints. The plaintiffs then waited nearly a year—when the district court entered a Rule 54(b) partial judgment on similar claims in the other complaints—to appeal. That was too late, the Seventh Circuit concluded. Those consolidated complaints superseded the original collection of complaints. So the resolution of all claims in a consolidated complaint marked the end of an action. The Seventh Circuit also urged district courts and plaintiffs to be as clear as possible on whether consolidated complaints supersede the originals; confusion over this issue can lead to parties forfeiting their right to appeal.
The Parmesan Cheese Mislabeling Litigation
Simplifying a bit, Bell sprang from the MDL concerning false-advertising claims against manufacturers and retailers of the Parmesan cheese that comes in green shaker tubes. The labels advertise these products as “100% Grated Parmesan Cheese.” But they contain more than just cheese. They also contain preservatives and anti-caking agents.
Claiming that they were deceived by the labels’ claims of 100% cheese, consumers across the country sued the manufacturers and retailers of these products. The complaints alleged that the labels violated state consumer-protection laws. I call these the “false-labeling claims.” Some of the complaints included additional claims. The existence of those claims is important; their details are not.
The Judicial Panel on Multidistrict Litigation consolidated these suits in the Northern District of Illinois. The district court initially dismissed all of the false-labeling claims. The plaintiffs responded by filing five consolidated class-action complaints, each targeting a particular defendant or group of defendants. Then, in November 2018, the district court again dismissed all labeling claims.
For two of the consolidated complaints—those against retailers Publix and Target—that decision resolved all of the plaintiffs’ claims. But the district court did not enter a Rule 58 final judgment in favor of Publix or Target. The other three complaints, which contained additional claims, remained pending.
Almost 300 days later, in August 2019, the district court finally entered a final judgment on the actions against Publix and Target. The district court also entered a partial judgment under Federal Rule of Civil Procedure 54(b) on the dismissed false-labeling claims against the other three groups of defendants. The plaintiffs then appealed the dismissal of their false-labeling claims.
Too Late for Publix and Target
The Seventh Circuit held that the appeal was untimely as to the claims against Publix and Target. In doing so, the court first determined that the consolidated complaints had superseded the original complaints and become the operative pleadings. That changed the finality calculus. The actions were now measured by the consolidated complaints, not from the original collection of complaints. So the resolution of all claims in a consolidated complaint marked the end of an action for finality purposes. The plaintiffs’ delay in appealing thus forfeited their right to appeal.
Appeals in MDLs & Consolidated Complaints
As a general rule, actions joined in an MDL retain their individual character. That means that the resolution of a single action in an MDL is final and appealable, regardless of the status of any other actions joined in the same MDL.
But sometimes the plaintiffs in an MDL replace their original collection of individual complaints with a consolidated complaint. The consolidated complaint can supersede the original complaints and become the operative pleading. At that point, a consolidated complaint represents a single action (at least for appeal purposes). So the resolution of all claims in a consolidated complaint marks the end of an action, at which point the appeal clock begins running.
Not all consolidated complaints supersede the original pleadings. Sometimes these complaints exist for administrative purposes—to help manage the action—in which case the consolidated complaint does not affect the finality calculus. The distinction can be crucial for appeal timing.
The Test for the Operative Complaint
So the Seventh Circuit had to determine whether the consolidated complaints in Bell superseded the originals. If they had, the dismissal of all claims against Publix and Target would have marked a final, appealable decision—and the start of the appeal clock—in two of the five actions. But if the original complaints were still operative, it’s possible that the time to appeal began running only after the district court entered a Rule 54(b) partial judgment on all of the false-labeling claims.
To see why, imagine one of the original complaints. It might have brought claims against, say, Publix, Target, and another defendant. Resolution of the all claims against Publix and Target would not have resolved all claims in that complaint. So the action represented by that complaint would not have been final once the district court dismissed all claims against Publix and Target.
Although the Seventh Circuit doesn’t say as much, the five consolidated complaints—by separating the claims against each defendant or group of defendants—likely divided up some or most of the original complaints. Finality could thus turn on which group of complaints—the originals or the consolidated ones—were operative.
To determine whether the consolidated complaints superseded the originals, the Seventh Circuit adopted the Sixth Circuit’s test from In re Refrigerant Compressors Antitrust Litigation. The court considered “(1) how the plaintiffs labeled the new complaint, (2) whether the plaintiffs served the defendants with the new complaint instead of the original pleadings, (3) whether key deadlines were set in relation to the new complaint, (4) whether the court entertained motions to dismiss the consolidated complaint, and (5) whether the parties and the court looked solely to the allegations in the consolidated complaint when arguing and deciding such motions.” The court also suggested that the last factor—what the parties looked to when arguing motions to dismiss—was the most important.
Turning to the consolidated complaints in Bell, the Seventh Circuit determined that they had superseded the originals:
The plaintiffs did not fashion this set of complaints as mere administrative summaries. Rather, they filed them as “amended consolidated” complaints. The court then held a status hearing to ask whether defendants “intend[ed] to answer or move to dismiss the amended complaints.” The defendants said they would move to dismiss, and the court set motions deadlines. The court invited and expected Rule 12 motions aimed at the new complaints. By this point, the judge and all parties were treating them as the legally operative pleadings, and the defendants moved to dismiss the consolidated complaints, not the original pleadings. When litigating and adjudicating those motions, both sides and the court examined the sufficiency of only the consolidated complaints.
The court noted, though, that confusion over the operative complaint could lead to parties forfeiting their right to appeal. The Seventh Circuit accordingly “urge[d] district judges and MDL plaintiffs to indicate clearly whether a consolidated MDL complaint is to be treated as the operative pleading for purposes of judgment and appeal or instead as merely an administrative convenience.”
Too Late, Even Without a Rule 58 Judgment
The actions against Publix and Target were accordingly final once the district court resolved all of the claims in them. There was, however, one last potential twist: the district court delayed in entering a separate final judgment under Rule 58. Normally the time to appeal runs from the district court’s filing of that separate document. When a district court neglects to do so, Rule 58(c)(2)(B) says that the judgment is deemed entered 150 days after the entry of the judgment on the docket.
The plaintiffs thus had 180 days—150 days for entry of the judgment plus the normal 30-day civil appeal deadline—to file their notice of appeal. So their notices—filed almost 300 days after the district court dismissed their complaints—were still several months late.
A Reversal on the Other False-Labeling Claims
The Seventh Circuit reversed the dismissal of the false-labeling claims in the other three complaints, concluding that the plaintiffs had “plausibly alleged that the prominent ‘100%’ labeling deceives a substantial portion of reasonable consumers, and their claims are not preempted by federal law.”
Bell v. Publix Super Markets, Inc., 2020 WL 7137786 (7th Cir. Dec. 7, 2020), available at the Seventh Circuit and Westlaw.