Why St. Louis is currently the center of the Ashley Madison world
Remember Ashley Madison?
It's the website owned by a Toronto-based company that promised a discreet place for men and women to arrange affairs.
But any veneer of discretion -- and of security -- went out the window in August when a group calling itself the Impact Team released the personal information of all 37 million Ashley Madison customers. That data included the usual -- names, e-mail addresses, credit card numbers -- but also more intimate details like sexual fantasies.
The hack predictably resulted in a multitude of lawsuits against Avid Life Media, the parent company. And it'll be up to a St. Louis-based judge with the Eastern District of Missouri to sort it out - at least at first.
A tangled web
As of Friday, there had been a total of 19 civil suits related to the Ashley Madison hack filed in 11 different federal districts.
The charges are all very similar -- fraud, breach of contract, false advertising, unjust enrichment, violation of federal consumer protection clauses. Many also allege a violation of state consumer protection laws. All of the plaintiffs also seek to represent different groups of Ashley Madison customers, known as classes.
The 'comb' -- multi-district litigation
Congress established what's known as the United States Judicial Panel on Multi-District Litigation in 1968. It was a response to a 1960s price-fixing scandal involving General Electric and other manufacturers of electrical equipment, in which nearly 2,000 plaintiffs filed lawsuits with nearly 25,000 claims in 35 different judicial districts.
"The idea behind multi-district litigation is when you have a bunch of cases that are raising common factual issues, it would be more efficient to have those common issues explored in one proceeding rather than duplicate proceedings all over the country," said Pauline Kim, a professor of constitutional law and political science at Washington University.
Multi-district litigation doesn't create one mega-case. It functions a bit like a centralized prep kitchen One judge -- in this case, John Ross -- manages all of the pre-trial motions and the process of discovery. The "cooking," if you will, would be done in the court where the cases originated.
"In theory, all these cases should go back to the district in which they were filed when it comes time for trial," Kim said. "In practice, once cases are brought together in a single district, they're very often settled in that pre-trial process."
What's the benefit?
Creating an MDL can be a huge cost savings for a defendant like Avid Life Media, said Kim. Discovery involves filing court motions, taking depositions, and reviewing documents. All of that adds up to a lot of billable hours. Consolidating the process means it only has to be done once, not as many as 19 different times.
There's also a financial benefit for plaintiffs, too, said Ann Scarlett, a professor at Saint Louis University law school.
"They can pool their resources to conduct what is oftentimes very expensive litigation," she said. Cases that are highly technical in nature -- like ones involving computer hacks -- require the testimony of experts, who are generally paid for their services.
Additionally, Scarlett said, the judicial system benefits. Consolidating the cases in one court frees up the others. And an MDL prevents inconsistencies that could lead to additional litigation later on in the process.
But Scarlett said plaintiffs' attorneys will sometimes fight having their cases become part of an MDL.
"They feel like they've lost control of their cases, and to some extent, that's probably true, especially if they're not on that lead counsel committee for the plaintiffs," she said.
Why St. Louis?
Location, location, location.
"[The Eastern District of Missouri] is a geographically central and accessible forum for this nationwide litigation," the panel wrote in its order creating the MDL by centralizing five of the cases. "The Eastern District of Missouri is also relatively convenient for defendants, which are located in Toronto, Canada. The first-filed action is pending in this district, and the district has the support of both plaintiffs and defendants."
Kim said the MDL panel will also look at the experience a judge has in handling complex litigation, and whether he or she is currently managing any other MDL's.
Wait. Five? I thought you said there were 19 cases.
There are. And eventually, all 19 will probably end up in John Ross's courtroom, unless one side or the other can successfully argue that their case raises issues that are different enough to be heard separately. It's just that attorneys in the five cases -- from Alabama, California, Missouri and Texas -- acted first to create an MDL.
What juicy details could Ross order revealed?
There's probably not much left to be revealed, given the nature of the hack. Kim, the WashU professor, expects most of the discovery will focus on the technical aspects of the breach: "how it occurred, and who was responsible," she said.
Follow Rachel Lippmann on Twitter: @rlippmann
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