MDL consolidation of aviation disaster cases before and after Lexecon.

AuthorStegich, Stephen R.

Pending legislation may restore the ability of transferee courts to retain cases for trial and possibly determination of damages

IN 1998, the U.S. Supreme Court decided Lexecon v. Milberg Weiss Bershad Hynes & Lerach,(1) holding that all actions transferred by the Multidistrict Litigation Panel, pursuant to 28 U.S.C. [sections] 1407, for consolidated pretrial proceedings must be remanded to the transferor courts at the conclusion of pretrial proceedings, unless settled or otherwise disposed of in the transferee court. Lexecon overturned nearly 30 years of precedent and invalidated a rule of procedure of the panel that allowed transferee courts to retain cases for consolidated liability trials after pretrial proceedings. This had been accomplished through a motion for self-transfer in the MDL court made pursuant to 28 U.S.C. [sections] 1404(a). Lexecon has ended self-transfer, at least temporarily, and courts are now obligated to remand remaining cases to transferor courts at the conclusion of pretrial proceedings.

What is the effect of Lexecon on aviation disaster litigation in the federal courts? One must begin with an overview of that litigation prior to 1968 for an examination of options faced by litigants seeking consolidation before Section 1407 was enacted, and as it exists, to some extent, after Lexecon, or until Congressional action nullifies the adverse impact of the decision.

CONSOLIDATION PRIOR TO 28 U.S.C. [sections] 1407

Under Rule 42(a) of the Federal Rules of Civil Procedure, federal courts have the power to consolidate cases "involving a common question of law or fact" pending in their own districts. Consolidation is permitted in appropriate cases in order to avoid unnecessary costs or delay in litigation.(2) It may be briefly noted that mass aviation disaster cases were rare until the 1950s and afterwards.(3)

With the rise of interstate commerce and transportation, the likelihood increased that related actions would be brought in more than one district. The doctrine of forum non conveniens, which the U.S. Supreme Court condoned in 1947 in Gulf Oil Corp. v. Gilbert,(4) provided a crude and uncertain procedural means to effect multidistrict consolidation. An action in one district could be dismissed, but on condition that it be recommenced in another district where a related action was pending.(5) The cases could then be consolidated under federal and local rules of procedure.

In 1948, Congress simplified procedures for transferring cases with 28 U.S.C. [sections] 1404, which provides: "For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought."

Section 1404 is similar to forum non conveniens, but because it allows transfer without the formality of first dismissing an action, the threshold for establishing inconvenience in the original forum is lower. Even so, Section 1404 provided, at best, an uncertain means of consolidating aviation accident cases commenced in different districts.

For one thing, as with forum non conveniens, there remained a strong presumption in favor of the chosen forum if the plaintiff (or the plaintiff's decedent) was a resident or had a domicile in that district. Moreover, the "public" and "private" interest factors used to determine the relative convenience of competing forums may not justify transfer in some cases. For example, consolidation may be convenient with respect to liability but not damage issues. Section 1404 also prohibits transfer to a district if any defendant is not subject to personal jurisdiction there.(6)

In short, assuming all defendants were subject to jurisdiction in the proposed transferee forum, the possibility of consolidating related cases was only one of several non-decisive factors that courts considered in deciding motions to transfer. The possibility of consolidation was decisive in Rodgers v. Northwest Airlines Inc.,(7) in which a judge in the U.S. District Court for the Southern District of New York transferred a case to Illinois because 20-odd cases arising from the same accident already had been consolidated there. But in Schindelheim v. Braniff Airways, Inc.,(8) the same judge denied a motion to transfer two related actions to Texas, where several cases arising from of the same crash were pending.

It is significant that the Schindelheim plaintiffs resided in New York but the Rodgers plaintiffs did not. In Schindelheim, moreover, the defendants sought to transfer a passenger claim to a district in Texas where only the hull action was pending.(9)

There also was no assurance that post-transfer consolidation would occur. In Scaramuzzo v. American Flyers Airline Corp., a New York case arising from a crash in Oklahoma, the federal district court described consolidation as "attractive, although somewhat illusory."(10) In Schmidt v. American Flyers Airline Corp., which arose from the same accident, another New York district court judge was more emphatic after concluding that "the prospects of achieving centralization [in this case] are so dim that the posited single trial is only a fanciful hope of the defendant."(11) Consolidation was unrealistic because actions arising from the same accident were pending in six courts in four states. Choice of law problems and the need for separate damage trials in the transferee forum also were noted. The court advised the defendants to seek the advantages of consolidation by other means, such as by co-operating with plaintiffs and using collateral estoppel principles and protective orders as a means of avoiding duplication of efforts.(12)

In a case that reached the U.S. Supreme Court under the title of Van Dusen v. Barrack,(13) the defendants attempted to consolidate more than 100 cases resulting from a 1960 crash of an Eastern Airlines flight from Boston to Philadelphia. The case incidentally spawned a significant ruling on choice of law application. The defendants moved to transfer 40 actions brought in Pennsylvania to Massachusetts, where more than 100 related actions were pending. The plaintiffs opposed transfer, in part because of concern that Massachusetts law, which at that time limited wrongful death damages to $20,000, would be applied after transfer.

The district court concluded that the applicable law was irrelevant to transfer and granted the motion. The plaintiffs petitioned for a writ of mandamus, which the Third Circuit issued on the ground that the plaintiffs were not qualified representatives in Massachusetts and, therefore, Massachusetts was not a district in which the actions "might have been brought."

The Supreme Court concluded that both the district and appeals court had "erred in their fundamental assumptions regarding the state law to be applied." The Third Circuit's writ was vacated and the case ordered remanded to the district court. The Court held that a change of venue under Section 1404(a) "generally should be, with respect to state law, but a change of courtroom." The Third Circuit, the Court stated, had erroneously assumed that Massachusetts law would automatically determine standing in any cases transferred from Pennsylvania.

On remand, the district court reconsidered defendants' motion and this time denied transfer:

In summary, the defendants allege that a transfer is warranted because of the inconvenience to liability witnesses, because of the possibility of a consolidation and because of inability in this forum to bring in the Massachusetts Port Authority among other factors, including a uniform decision. All of these factors we believe are very relevant. However, in this case we must conclude that they are not sufficient to overcome the fact that plaintiffs will rely heavily on compensatory damage witnesses, that the controlling conflicts law will be that of this state, and that the controlling procedure will probably be that of this forum and that the plaintiffs are residents of this forum. The latter circumstance itself coupled with less inconvenience than present in this case has been enough to warrant courts in refusing to transfer similar cases. We have considered all of the points raised by the arguments of defendants and believe that we have weighed them properly in determining not to transfer.(14) In short, the consolidation of related federal cases was possible, but far from likely, before Section 1407 was enacted. Lexecon has not eliminated Section 1407's benefits during pretrial proceedings, but only the benefits gained through a consolidated liability trial. These benefits could be restored through legislative action, with a slight but important amendment to the MDL statute, which has greatly facilitated complex litigation over the last 30 years.


In the early 1960s, a "wave of litigation threatened to engulf the courts," to use the words of a Congressional committee, in the wake of the federal government's successful prosecution of antitrust claims against a number of electrical manufacturers. More than 1,800 separate private antitrust and related actions were filed in 33 federal district courts.(15) In that litigation, all of the parties, numerous presiding judges, and a coordinating committee cooperated in order to create a consolidated discovery schedule, uniform pretrial and discovery orders covering common issues of fact, and central document depositories. Designated lead counsel took primary responsibility for conducting depositions nationwide. These coordinated efforts enabled the parties to resolve all of the cases by 1968.

Inspired by these results, Congress in 1968 passed the Multidistrict Litigation Act, codified at 28 U.S.C. [sections] 1407, which provides in pertinent part:

(a) When civil actions involving one or more common questions of fact are pending in different districts, such actions may be transferred to any district for coordinated or consolidated pretrial...

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