FAQs – Frequently Asked Questions Regarding Attorney Ethics in Federal Multidistrict Litigation (MDL) Cases

FAQ #1 – Do the Federal Rules of Civil Procedure (FRCP) provide a clear set of guidelines for attorney ethics requirements that are unique to multidistrict litigation?

There is a surprising dearth of ethics rules specific to multidistrict litigation. Indeed, legal commentators have concluded that it is a fertile area for further development by both the Judicial Panel on Multidistrict Litigation (JPML) and the MDL courts themselves. See SK Endo, Ethical Guardrails to Unbounded Procedure, 93 Fordham Law Review 49 (2024).

The Federal Rules of Civil Procedure certainly provide ethical guidelines for attorneys generally. For example, FRCP Rule 11 addresses sanctionable conduct that may (not always) cross the line into ethical areas.

Furthermore, certain local districts have adopted a version of the Rules of Professional Conduct. Two examples are the District of New Jersey’s Local Civil Rule 103.1 and the Southern District of New York and the Eastern District of New York’s Local Civil Rule 1.5.

FAQ #2 – Do the federal statutes provide a clear set of guidelines for attorney ethics that is unique to multidistrict litigation?

While it is true that 28 U.S.C. § 1407 contains language to the effect that “[t]he panel may prescribe rules for the conduct of its business not inconsistent with Acts of Congress and the Federal Rules of Civil Procedure,” the more typical scenario is that the local district courts in which the case is pending will adopt an ethical framework that will govern in that district. Likewise, the specific court hearing the MDL matter may impose certain ethical guidelines in the case management (or other) orders as it may deem appropriate.

It should also be noted that if the attorney is accused of “unreasonable and vexatiously …multiplying the proceedings”, 28 U.S.C. § 1927 may apply as well. (“Any attorney or other person admitted to conduct cases in any court of the United States or any Territory thereof who so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorneys’ fees reasonably incurred because of such conduct.”)

FAQ #3 – To what extent do the Rules of Professional Conduct that govern the attorneys’ state bar licenses apply to activities undertaken by them in federal multidistrict litigation?

This is a particularly important question because it touches upon reciprocal discipline. The essential point is that conduct undertaken by attorneys in the course of federal multidistrict litigation is also governed by the Rules of Professional Conduct in the various states in which that attorney is licensed.

While it is true that this will normally result in discipline in multiple jurisdictions for the same act or omission, there is always the possibility that one or more of them may decide not to impose reciprocal discipline. See supra. This uneven approach is not typical, though it does occur.

FAQ #4 – What are the most typical attorney ethics issues that come up in multidistrict litigation?

There are a few Rules of Professional Conduct that are uniquely applicable to multijurisdictional practice. They are not the only ones that may be applicable but given the exigencies of handling MDL cases that involve such an enormous number of clients, they are often implicated.

The first is RPC 1.8(g) which states, “[a] lawyer who represents two or more clients shall not participate in making an aggregate settlement of the claims of or against the clients… unless each client gives informed consent, in a writing signed by the client. The lawyer’s disclosure shall include the existence and nature of all the claims or pleas involved and of the participation of each person in the settlement.” Its applicability is based upon the inherent problems of communicating with thousands of clients at the same time about highly complicated legal matters. Through no fault of their own, the clients may not fully understand what they are reading, and the notice that the attorney provides may not adequately explain the material terms of what is being contemplated.

The second is RPC 1.7 which prohibits “[a] concurrent conflict of interest [which] exists if: (1) the representation of one client will be directly adverse to another client; or (2) there is a significant risk that the representation of one or more clients will be materially limited by the lawyer’s responsibilities to another client, a former client or a third person or by a personal interest of the lawyer.” This RPC is particularly applicable when there is an aggregate settlement involving such a plethora of clients. Under such circumstances, the factual basis for conflicts of interest with respect to any one of them can be extremely hard to parse out.

Likewise, in order for the multidistrict litigation process to come to a point of fruition, there must be a sufficient opportunity for the allegedly damaged plaintiffs to join in the action; that typically involves advertising. Under RPC 7.1 “[a] lawyer shall not make a false or misleading communication about the lawyer or the lawyer’s services. A communication is false or misleading if it contains a material misrepresentation of fact or law or omits a fact necessary to make the statement considered as a whole not materially misleading.” One of the more challenging questions regarding attorney advertising in MDL matters is the interplay between (a) the court orders entered in the case relating to the matter and manner of advertising which may or may not address some of its content issues and (b) the potential review by an ethics committee that may take place years after that advertisement was published. 

FAQ #5 – May an attorney provide financial assistance to their client in multidistrict litigation?

An issue that often comes up in multidistrict litigation is the extent to which a law firm can provide financial assistance to their client. This can range from assisting a client who is in financial straits to simply advancing court costs such as filing fees.

Interestingly, those two examples are actually on opposite sides of the ethical spectrum elucidated in RPC 1.8(e) which states, in part, “[a] lawyer shall not provide financial assistance to a client in connection with pending or contemplated litigation, except that… a lawyer may advance court costs and expenses of litigation, the repayment of which may be contingent on the outcome of the matter…” Emphasis added.

Attorney Ethics Representation by the Nissenbaum Law Group for Attorneys Handling Multidistrict Litigation

The Nissenbaum Law Group welcomes inquiries from attorneys facing professional responsibility issues in the course of handling multidistrict litigation (MDL).