Current Decisions.

BANKRUPTCY

Medical Malpractice Judgment Dischargeable in Bankruptcy

A garden-variety medical malpractice judgment based on negligent or reckless conduct is dischargeable in bankruptcy, the U.S. Supreme Court held.

The question was whether Section 523(a)(6) of the Bankruptcy Code precluded the judgment from being discharged. That subsection provides that any debt "for willful or malicious injury by the debtor to another entity or the property of another entity" cannot be wiped out in bankruptcy. The bankruptcy court held the judgment debt nondischargeable, 172 B.R. 916 (E.D. Mo. 1994), but the Eighth Circuit reversed, 93 F.3d 443 (1996), 113 F.3d 848 (1997 en banc). Since this result was in conflict with cases in the Sixth and 10th Circuits, the Supreme Court granted certiorari.

In an opinion by Justice Ginsburg, the Court viewed the problem as whether the statutory language encompassed any acts done intentionally that cause injury or only acts done with the actual intent to cause injury. She parsed the provision as stating that nondischargeability "takes a deliberate or intentional injury, not merely a deliberate or intentional act that leads to injury." (Court's emphasis.) "Had Congress meant to exempt debts resulting from intentionally inflicted injuries," Justice Ginsburg continued, "it might have described instead `willful acts that cause injury.'"

A broader interpretation, the Court stated, could encompass a wide range of situations in which the act is intentional but the injury is unintended--that is, neither desired nor in fact anticipated.

Kawaauhau v. Geiger, 118 S.Ct. 974 (1998).

CIVIL PROCEDURE

MDL Transferee Court Can't Entertain Self-assignment

Ending a practice that had gone on in federal courts, the U.S. Supreme Court held that U.S. federal district courts to whom multidistrict litigation has been assigned cannot invoke their assignment power to assign MDL cases to themselves after the completion of pretrial proceedings.

The interaction of two statutory provisions and one court rule was involved. 28 U.S.C. [sections] 1407(a) authorizes the Judicial Panel on Multidistrict Litigation to transfer actions with common issues of fact "to any district for coordinated and consolidated pretrial proceedings" but imposes a duty on the panel to remand the actions to the original district "at our before the conclusion of such pretrial proceedings." On the other hand, 28 U.S.C. [sections] 1404(a) states that civil actions involving one or more common questions of fact pending in different districts may be transferred to "any district" for coordinated and consolidated pretrial proceedings. Then, to add another complexity, the Multidistrict Panel's Rule 14(b) allows transferee judges to order transfers to "the transferee or other district."

Lexecon Inc., a law and economics consulting firm, was caught up in the MDL litigation in the District of Arizona that followed the failure of Lincoln Savings, in which it was named a defendant but was dismissed. Lexecon then commenced a diversity action in the Northern District of Illinois against two law firms representing the plaintiffs' in Lincoln Savings, claiming malicious prosecution, abuse of process, tortitous interference, commercial disparagement, and defamation. The Multidistrict Panel ordered the Illinois suit assigned to the judge handling the multidistrict litigation in Arizona. Acting under Section 1404(a), the transferree court assigned the Illinois case to itself. The Ninth Circuit affirmed. 102 F.3d 1524.

Reversing in an opinion by Justice Souter, the Supreme Court concluded that the command of Section 1407(a) for transfer back to the original district court trumped a district court's transfer powers under Section 1404(a) and the MDL Panel's rule. Justice Souter noted that the self-assignments had occurred in a number of MDL cases, but he rejected that circumstance as an argument for continuation in the face of the clear command of Section 1407(a), and he also turned down several attempts to read the MDL statute as approving assignment to the transferee court. "In sum," he wrote for the Court, "none of the arguments raised can unsettle the straightforward language imposing the panel's responsibility to remand, which bars recognizing any self-assignment power in a transferee court and consequently entails the invalidity of the panel's Rule 14(b)."

Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach, 118 S.Ct. 956 (1998).

DAMAGES

MICRA Applies to EMTALA in California

California's limit on the recovery of non-economic damages in medical malpractice...