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What are the differences between a class action and multi-district litigation?

While many people have heard of class action lawsuits, fewer have heard of a “multi-district litigation,” or MDL. Yet this type of lawsuit has become an increasingly important part of the legal landscape, especially in recent years, as many companies face mass lawsuits for defective products and dangerous drugs. Here’s a primer to help you understand the difference between a class action and an MDL, and how it affects your legal rights.

What Is a Class-Action Lawsuit?

In order for a lawsuit to become a valid class action, it must first go through a process called class certification, in which a court makes a decision about whether the lawsuit can proceed as a class action or not. A class action may be filed in a state or a federal court. Once the go-ahead has been given, the process of preparing for trial begins.

Class action lawsuits are designed for situations where multiple people have suffered identical injuries due to the same basic cause. However, the injuries to each individual in the lawsuit may not be so severe that it’s financially worth just one person pursuing a relatively minor claim. If every individual had to file a separate lawsuit, the cost of litigation may outweigh the potential award. The courts would also face the burden of handling hundreds or even thousands of cases that are all substantially identical, which could quickly overwhelm the judicial system.

This is where a class action shines. A lead plaintiff (representative party) files a lawsuit (an “action”) on the behalf of all injured parties, who collectively join together as the “class.” The representative party has a duty to attempt to contact as many unknown members of the class of injured people as possible, often via television or newspaper, or increasingly, via the Internet. In some situations, injured parties may have to opt in to join the class action and claim a portion of the settlement or award. In other situations, they may automatically be members and must opt out if they do not wish to participate, such as those who wish to pursue litigation on their own.

The disadvantage to a class action lawsuit is that all members of the class are bound to the outcome of the class action. If the lawsuit is won, members of the class are typically no longer allowed to file their own lawsuits over the issue. The flipside of this, though, is that when a class action suit is won, all members of the class action typically receive some form of award—even if it’s not an amount that fully covers the damages.

What is a Multi-District Litigation?

An MDL is similar to a class action lawsuit, in that it’s designed for multiple injured parties to pool resources together in situations where the resources of the defendant, such as a large company, far outweigh those of any one individual. However, the decision to form an MDL is not made by the parties involved in a lawsuit. Instead, a panel of federal district court judges makes the decision.

The injuries of the individuals in an MDL are often too different to be considered for a class action suit. But the legal questions around the cause of the injuries must be the same for the suits to qualify for an MDL. The MDL allows for consolidation of many pre-trial issues for these cases, including the discovery process, trial scheduling issues, and settlement conferences. This saves significant time and money for all parties involved.

After the pre-trial phase, several cases are then chosen to serve as “bellwether trials.” The outcomes of the bellwether trials are used as a basis for the remainder of the lawsuits, so that all parties can get an idea of the impact of the remaining cases, including the potential settlement amounts. The remaining cases in the MDL may then return to their originating courts and either settle, continue, or be dismissed on an individual basis.

The biggest advantage of the MDL is that, like a class action, it allows for multiple injured parties to pool resources against a better-funded opponent, but with the added freedom to pursue individual lawsuits that address the specific needs of each injured party.

Confused? Ask an Attorney

It’s a lot of information to take in, but don’t worry. Your attorney can help you determine the class action or MDL status of your case and guide you through every step of the process of seeking the compensation that you are owed for your injuries.

Wayne Wright LLP has been standing up for the rights of victims of corporate greed for decades. To talk to an experienced attorney about your legal situation, reach out to us today by telephone, email, or use the live chat box and arrange a free, no-obligation consultation about your case.