The County of Genesee v. McKinsey & Company, Inc.

Background

The order addresses motions by plaintiffs in two related actions: the County of Westchester action and the County of Genesee action. The plaintiffs are political subdivisions of New York, and the two actions collectively involve 44 plaintiffs. The cases were originally filed in New York state court, removed by McKinsey to the Eastern District of New York, and then transferred by the Judicial Panel on Multidistrict Litigation to the Northern District of California for coordinated pretrial proceedings.

After most political-subdivision actions and other plaintiff groups’ actions settled, the New York plaintiffs argued that centralized proceedings should end for their cases. They asserted that coordination was no longer efficient because fewer actions remained and that a federal court in New York would be better positioned to address the state-law issues in their cases. In their reply brief, they also raised jurisdictional remand motions filed in the transferor court before centralization. The court stated that those jurisdictional issues should be addressed promptly, but that they were separate from the request for a suggestion of remand.

Legal standard

Under the multidistrict-litigation statute, the Judicial Panel on Multidistrict Litigation generally remands an action to the federal district where it began at or before the end of pretrial proceedings. Before those proceedings are complete, remand generally requires good cause. The transferee court applies the same guidelines the Panel would apply. The key question is whether the case would benefit from further coordinated proceedings and whether the transferee court’s work has been completed. The party seeking early remand bears the burden of showing that remand is warranted.

Court’s analysis

The court concluded that the New York plaintiffs had not shown that remand was appropriate at that time. Six political-subdivision actions remained pending, involving 77 subdivisions from four states, and the cases continued to share factual issues concerning McKinsey’s conduct. The court also noted that claims by another plaintiff group were expected to proceed to discovery and that individual personal-injury and wrongful-death actions remained in the multidistrict litigation.

The court identified several additional reasons to retain the cases. First, two potentially dispositive preliminary motions—the Res Judicata/Release Motion and a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6)—were pending and had already been extensively briefed. The court said deciding those motions in the coordinated proceeding would be more efficient and would reduce the risk of conflicting pretrial rulings.

Second, discovery was not complete. The court expected substantial discovery, including fact and expert witness depositions, and noted that some discovery had already occurred. Magistrate Judge Kim had established discovery procedures and developed familiarity with issues likely to produce discovery disputes. Third, the court had gained significant familiarity with the factual and legal issues, and remand could undermine the benefits of that experience. Fourth, the court rejected the importance of New York law as a reason for remand because multidistrict courts routinely decide pretrial motions involving multiple states’ laws. The court also said unresolved jurisdictional objections supported retaining the cases because those objections would largely involve federal law and overlapping issues.

Disposition

The court denied the motions for a suggestion of remand for the County of Westchester and County of Genesee actions. It did not decide the separate jurisdictional remand motions in this order and instead stated that a briefing schedule had been set for them.