By Gerald L. Maatman, Jr. and Christina M. Janice

Seyfarth Synopsis: In the latest development in the ultra-high stakes nationwide Prescription Opiate Litigation, the U.S. Court of Appeals for the Sixth Circuit recently granted the petition of six Ohio cities to appeal the  class certification order of U.S. District Court Judge Daniel A. Polster creating a new and innovative type of class action — the “negotiation class.” In In Re National Prescription Opiate Litigation, No. 19-0306, 2019 U.S. App. LEXIS 33629 (6th Cir. Nov. 8, 2019), the Sixth Circuit determined that Judge Polster’s “negotiation class” is so novel and relevant to class litigation in general that a prompt, interlocutory appeal of the legality of the certification order is warranted. Corporate counsel should keep this on their radar, as it signals how and to what extent class certification procedures might be construed in “tough cases” and in novel circumstances.


As previously reported here, on September 11, 2019 Judge Daniel A. Polster, presiding over the nationwide prescription opiate multidistrict litigation, certified for the first time ever an innovative “negotiation class” mechanism to structure a formal process for 34,448 cities, counties and municipalities in over 2,000 lawsuits to negotiate lump sum settlements with prescription opiate manufacturers and distributors. In Re National Prescription Opiate Litigation, No. 1:17-MD-2804, 2019 U.S. Dist. LEXIS 155118 (N.D. Ohio Sept. 11, 2019).

The hallmark of the district court’s order is the expansion of Federal Rule 23, which allows for class actions for trial and settlement purposes. The order creates a new type of class action before trial or settlement, comprised of a multi-step process: (i) allocating a lump sum settlement and a plan for class members to vote on its reasonableness; (ii) moving for class certification under Rule 23, including judicial approval of the proposed allocation and voting plan; (iii) issuing court-authorized notice to the class and opt-out period; (iv) engaging in lump sum settlement negotiations once the class size is set; and (v) and pursuing the approval process including preliminary judicial approval of the settlement, objections, voting on the settlement, and final judicial approval of the plan. Id. at 5-7; 33-40.

The district court certified the innovative “negotiation class” in the run up to the first scheduled bellwether trial for two Ohio county Plaintiffs, Cuyahoga County and Summit County.  The move to certify a “negotiation class” drew objections from most state attorneys general, numerous municipalities, and several drug manufacturers and distributors that the order would not allow for global settlement or would require parties to opt-out before fully knowing the terms of settlement.

Six cities in Northern Ohio – North Royalton, East Cleveland, Mayfield Heights, Lyndhurst, Huron and Wickliffe – objected to class certification without success. On September 25, 2019, these municipalities filed their petition for interlocutory appeal with the Sixth Circuit, arguing that the “negotiation class” was novel; that the district court was unlikely to reconsider the legality of its order until after the negotiation process plays out and settlements are reached; and that an appeal should be allowed to determine the legality and constitutionality of the order.

The Sixth Circuit’s Ruling

Observing that under Rule 23(f) there is no “hard-and-fast” rule for when it can permit an appeal from the grant or denial of a motion for class certification, the Sixth Circuit considered four factors in determining whether to allow an appeal that is interlocutory ─ before the entry of a final judgment or order: (i) whether the case raises novel or unsettled question; (ii) the likelihood of the petitioner’s success on the merits; (iii) the costs of continuing litigation; and (iv) the posture of the case before the district court. Id. at 2.

Here, the Sixth Circuit determined that whether the negotiation class is permitted under Rule 23 “is both novel and relevant to class litigation in general.” Id. The Sixth Circuit also viewed the order as sufficiently final to warrant review, stating that “the district court entered a final order to certify the class, with no indication that it will review its decision in the future.” Id.

The appeal will be briefed in the upcoming months. The implications of the appeal on proceedings in the district court, where the first bellwether trial scheduled for October 21, 2019 was settled just prior to the start of trial, is not yet clear.

Implication For Employers:

The Sixth Circuit’s decision to pump the brakes on the district court’s expansion of Rule 23 to create a new kind of class certification device will be watched by courts and litigants across the country. As class actions grow in breadth and complexity it is likely that the Prescription Opiate Litigation is the first of several trial balloons for innovation in case handling in the complex litigation arena. We will keep our readers apprised of developments in the emerging area.