The Judicial Panel on Multidistrict Litigation: time for rethinking.

• Author: Rhodes, Blake M.

[I]t is time for the Panel [and Congress] to reevaluate and redefine the future use of section 1407.(1)

The Judicial Panel on Multidistrict Litigation (Panel) is in its twenty-third year of existence. It was created to coordinate the discovery, or pretrial, phase of cases involving common questions of fact that have been filed in different federal district courts.(2) The Panel's objective is to promote efficient and expeditious processing of these factually related cases.(3) It has affected tens of thousands of cases in the federal judicial system(4) and, no doubt, will continue to do so. The Panel's role in multidistrict litigation, however, needs to be enhanced.

The statute governing the Panel, 28 U.S.C. Section 1407,(5) permits the Panel to transfer cases solely for pretrial purposes--it is forbidden to transfer cases for consolidated trial.(6) Nonetheless, through manipulation of other venue statutes, the courts receiving the cases consolidated by the Panel often decide on their own to retain the cases for trial. Despite the benefits that may be realized from this practice, Congress's scheme for multidistrict litigation does not permit these courts to try the transferred actions. Moreover, the "experts" in multidistrict litigation--the judges on the Panel--are completely eliminated from the serious decision of whether to consolidate for trial.

This Comment addresses the impropriety and shortcomings of the ad hoc system developed by the courts to try the cases transferred for pretrial proceedings. Yet recognizing the advantages of consolidated trial in some instances, this Comment urges modification of Section 1407 to permit the Panel to consolidate cases for trial. Part I provides a brief account of the events giving rise to the Panel's creation. A short explanation of the Panel's purpose and operation follows in Part II.(7) Part III discusses techniques for terminating litigation in the transferee forum.(8) Termination can occur through dispositive motions during pretrial (Part III.A) or through trial in the transferee forum (Part III.B). The benefits of consolidated trial are reviewed in Part III.C.

Part IV.A analyzes the primary method of effecting trial in the transferee court: using Section 1404(a)(9) in conjunction with Section 1407. It demonstrates that this practice violates the legislative history, language, and purpose of Section 1407. Part IV.B shows that the alternative trial technique--consent of the parties--is also highly suspect under the present statutory scheme. Beyond these "legalistic" arguments, however, are practical problems with the present system for obtaining consolidated trial. Part IV.C shows the desirability of expanding the Panel's power to include transfer for trial. Modifying Section 1407 in this manner would, among other things, permit an impartial, expert body--the Panel--to scrutinize the appropriateness of consolidated trial, eliminate the rigid and prohibitive limitations on transfer under Section 1404(a), and increase the flexibility in selecting the trial forum. This change would create a highly pragmatic system for multidistrict litigation. Part V examines how the Panel would wield its expanded power.

1. THE ORIGINS OF THE PANEL

   In the early 1960s federal courts were swamped with electrical equipment antitrust cases. After successful criminal prosecutions of the manufacturers, some 2,000 private damage actions were filed in thirty-five federal district courts during a twelve-month period.(10) Massive duplication of pretrial efforts was imminent, creating fears of interminable discovery delays. In response, Chief Justice Earl Warren, following a recommendation of the Judicial Conference of the United States, created the Coordinating Committee for Multiple Litigation of the United States District Courts (Coordinating Committee).(11) Using uniform pretrial and discovery orders, national depositions,(12) and central document depositories, all of the cases were concluded by 1967.(13) The vice chairman of the Coordinating Committee, Judge Edwin A. Robson, estimated that without the ad hoc committee cases might have lingered for as long as twenty years.(14)

   Although judges were quite pleased with the expeditious termination of the electrical equipment cases,(15) the shortcomings of the Coordinating Committee were readily evident. The procedure was inefficient. Often thirty or more district judges had to coordinate their personal schedules to convene in one location to discuss problems and meet with counsel. In addition, the voluntary process hinged upon complete agreement among the judges.(16) The Coordinating Committee's members envisioned a legislatively created judicial panel designed to deal efficiently with instances of mass, multidistrict litigation. Their vision soon became a reality.

2. CREATION AND FUNCTIONING OF THE PANEL

   In the spring of 1968, Section 1407 was added to the United States Judicial Code.(17) Congress enacted into law, for the most part, the blueprint drafted by the Coordinating Committee;(18) it created the Judicial Panel on Multidistrict Litigation.

   A. The Statutory Scheme

   The Panel consists of seven circuit and district court judges chosen by the Chief Justice of the United States Supreme Court.(19) The Panel is empowered to transfer to any federal district court "civil actions involving one or more common questions of fact ... for coordinated or consolidated pretrial proceedings."(20) Two points warrant emphasis. First, the Panel can transfer an action to any district; jurisdiction and venue objections will not prevent the Panel from transferring a case.(21) Second, transfer is only for pretrial purposes. When pretrial affairs are completed, the case "shall be remanded ... to the district from which it was transferred."(22)

   Proceedings to consolidate may be initiated by the Panel sua sponte(23) or upon motion "by a party in any action in which transfer ... may be appropriate."(24) After consolidation proceedings are initiated, "the parties in all actions in which transfers ... are contemplated"(25) receive notice of a hearing at which the issue of transfer is argued. Consolidation is ordered "upon [the Panel's] determination that transfers for such [coordinated and consolidated pretrial] proceedings will be for the convenience of parties and witnesses and will promote the just and efficient conduct of such actions."(26) If a party disagrees with a Panel decision ordering transfer, review is sought by extraordinary writ.(27) An order denying transfer for pretrial, however, is not reviewable.(28)

   Congress has granted the Panel authority to promulgate rules "for the conduct of its business."(29) The Panel has adopted nineteen rules governing ministerial and procedural aspects of its involvement in multidistrict litigation.(30)

   B. The Panel in Action

   1. The Mechanics of a Panel Session

      Once every two months the Panel holds hearings to determine if the matters before it should be consolidated for pretrial proceedings.(31) On a hearing day, the Panel entertains arguments in the morning and retires to an executive meeting in the afternoon.(32) In a typical morning session, it hears oral argument on eight to fifteen matters.(33)

      A "matter" is a group of closely related cases, ostensibly having one or more common questions of fact, that are being considered under a motion to consolidate. Because of the enormous number of actions that may be transferred in one order, counsel in each individual case is usually not heard.(34) On each new matter, a maximum of one-half hour of oral argument is permitted; parties with different viewpoints are allotted equal amounts of time.(35) The Panel grants argument time sparingly and is very strict with its time limits.(36) It keeps a stringent clock because lawyers often want to argue the merits of their cases(37) when the issues before the Panel typically are narrow: do the actions warrant Section 1407 treatment and, if so, where is the appropriate transferee forum?(38) Although these issues are fundamental in multidistrict litigation, they are relatively straightforward; limited oral argument encourages counsel to focus on the transfer issues. In special circumstances the Panel will allow for more argument.(39) A hearing on each matter is not necessary, however, and oral argument is not encouraged.(40) Sometimes parties waive oral argument, allowing the Panel to decide a transfer motion on the basis of briefs.(41)

      In the afternoon executive conference, the Panel discusses cases argued in the morning session and addresses other pertinent business.(42) A decision regarding transfer of "tag-along" actions is usually made within a week.(43) Rulings on new matters may take longer. The Panel cannot transfer cases, however, until it receives consent from the proposed transferee court.(44) Generally, the entire process, from oral argument to transfer, is completed within a month.(45)

   2. Factors Influencing the Transfer Decision

      In the Panel's early years, most of its decisions/orders were published. The Panel was resolving novel issues, and multidistrict litigants needed its guidance. Since that time, the Panel has, for the most part, simply applied the existing doctrine to issues arising under Section 1407. As a result, the Panel no longer publishes every order.(46) The decision to publish is made on a case-by-case basis.(47) To aid the consolidation of all claims related to the incident, orders dealing with large numbers of victims, such as air crash disasters or toxic torts, are typically published,(48) as are orders entailing new developments.

      Thus, to find in-depth treatment of Section 1407 issues, rulings from the Panel's formative years must be consulted. Novel rulings do exist(49) and the Panel's recent orders do offer rationales for their conclusions, but the record of the late 1960s and 1970s is much richer than that of recent years.(50) The following skeletal treatment of factors affecting transfer is...