July 2006

Legislative Solution Proposed to Lexecon

Judge Wm. Terrell Hodges (M.D. Fla.), chair of the U.S. Judicial Panel on Multidistrict Litigation (Judicial Panel), last month appeared before a Senate subcommittee to ask Congress to enact the “Multidistrict Litigation Restoration Act.” The bill already has been passed by the House as H.R. 1038.

Currently, the multidistrict litigation process established in 28 U.S.C. § 1407 allows civil cases pending in multiple judicial districts involving common questions of fact to be centralized for coordinated or consolidated pretrial proceedings before one “transferee” judge by the Judicial Panel. Transferee judges had used the venue statute for 30 years to transfer these cases for trial purposes as well, until in 1998 the Supreme Court held in Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach that such cases must be remanded upon completion of pretrial procedures.

“In cases that have been centralized by the Judicial Panel,” Hodges testified, “this legislation will give the transferee judge and the litigants the desirable option of transferring a case to the transferee judge for trial purposes, as was often done for 30 years until the Supreme Court’s Lexecon holding in 1998.”

According to Hodges the legislation would benefit both plaintiffs and defendants with substantial savings of time and money. “Parties should not be subjected to the uncertainties, delays, and expense created by unnecessary duplication of litigation or subjected to possible inconsistent adjudications,” he said.

Hodges testified on behalf of the Judicial Conference before the Senate Judiciary Subcommittee on Administrative Oversight and the Courts. Judge Thomas W. Thrash, Jr. (N.D. Ga.) also testified in support of the bill at the invitation of the subcommittee. Thrash related an example from his own judicial experience where litigation was unnecessarily prolonged and expensive to the courts and the parties because of Lexecon.

The Judicial Conference first asked Congress in September 1998 to amend the multidistrict litigation statute to permit transferee judges to retain certain MDL cases for trial.

“This legislation is needed for three primary reasons,” Hodges told the subcommittee. “First the legislation will facilitate settlements in these complex, multi-state cases. Second, it will reduce the needless waste that stems from litigating these cases in multiple jurisdictions, thereby conserving scarce judicial resources and reducing litigants’ expenses. Third, the legislation will directly benefit litigants who will be better served by improving efficiency in the handling of these cases.”