When Remand is Appropriate in Multidistrict Litigation

• Author: Edward F. Sherman
• Pages: 455-474

When Remand is Appropriate in Multidistrict Litigation Edward F. Sherman * INTRODUCTION The 1968 Multidistrict Litigation Act (the “MDL Act”) created the Panel on Multidistrict Litigation (the “Panel”) to transfer multiple cases with “common questions of fact” to a single federal judge for coordinated or consolidated pretrial proceedings. 1 Transfer is authorized if the Panel determines that “transfers for such proceedings will be for the convenience of parties and witnesses and will promote the just and efficient conduct of such actions.” 2 The transfer to a single district court is made without consideration of personal jurisdiction over the parties and without having to meet federal venue requirements. 3 The transferee court has broad authority to dispose of all motions and issues that arise in the pretrial context, including all discovery matters and dispositive motions such as those for dismissal and summary judgment. The Act provides that: “Each action so transferred shall be remanded by the panel at or before the conclusion of such pretrial proceedings to the district from which it was transferred unless it shall have been previously terminated . . . .” 4 No guidelines are provided for determining when “the conclusion” of the proceedings occurs, and now, after almost fifty years of practice under the Act, significant issues remain as to when remand should take place. I. SELF-TRANSFER AND L EXECON For several decades after passage of the MDL Act, it became an accepted practice for transferee judges to use the power under section 1404(a) to transfer to a more convenient forum in order to keep MDL cases in their district for trial or disposition. 5 Writing in Copyright 2014, by EDWARD F. SHERMAN. 1. 28 U.S.C. § 1407(a) (2012). 2 . Id . 3. For an account of these developments, see Richard L. Marcus, Cure–All for an Age of Dispersed Litigation? Toward a Maximalist Use of the Multidistrict Panel’s Transfer Power , 82 TUL. L. REV. 2245 (2008). 4. 28 U.S.C. § 1407(a) (2012). 5. See id. § 1404(a) (“For the convenience of the 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 . . . .”). 456 LOUISIANA LAW REVIEW [Vol. 75 1978, Judge Stanley Weigel reported that “[i]n point of fact, slightly less than five percent of the actions transferred by the Panel have been remanded.” 6 It remains true that the great majority of cases are resolved in the transferee forum, and that most are resolved by some sort of settlement. 7 But over time, the practice of transferee courts to dispose of the cases transferred to them came into question. From the start, there was a debate over whether transferring cases under the Act should allow transferee courts to do more than just prepare cases for trial. 8 It was argued that the transferee judge would develop expertise in managing the litigation that could be of great benefit if that judge could hold on to the cases for trial, either individually or in the aggregate. This view was reflected in the practice of “self-transfer” that became dominant and was enshrined in a Panel regulation. 9 The debate over allowing transferee courts to hold onto cases for trial mirrored the long-time debate over whether to aggregate cases in the first place. The interests of efficiency, economy, and consistency in resolution of like cases were cited in favor of aggregation. 10 In opposition to aggregation were concerns for honoring the plaintiff’s choice of forum, individualized due process, and the jurisdictional integrity of the court where the suit was originally filed. 11 That debate is still ongoing, enhanced in recent years by court hostility to class actions 6. Stanley A. Weigel, The Judicial Panel on Multidistrict Litigation, Transferor Courts and Transferee Courts , 78 F.R.D. 575, 583 (1978). 7. M. MARCUS, E. SHERMAN, & H. ERICHSON, COMPLEX LITIGATION: CASES AND MATERIALS ON ADVANCED CIVIL PROCEDURE 169 (5th ed. 2010). 8. See Stephen Scotch-Marmo & Michael James Ableson, At What Price Efficiency? – Judicial Self-Assignment for Trial in Multidistrict Litigation , Prod. Safety & Liab. Rep. (BNA) No. 42, at 934 (Aug. 25, 2014) (reviewing the debate in the context of the passage of the Act). 9. The JPML has blessed self-transfer by Rule 14(b), which provides that the Panel will not send a case back for trial if the district court handling pretrial matters transfers the case to itself, and by case law holding that the JPML will not even consider remanding so long as the district court is considering a self-transfer motion. See Rules of Procedure of the Judicial Panel on Multidistrict Litigation, Rule 14(b), 277 F.R.D. 480 (2011) [hereinafter Panel Rules] (superseded, in part, by Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26 (1998)); see also In re CBS Color Tube Patent Litig . , 342 F. Supp. 1403, 1405 (J.P.M.L. 1972) (“In view of the pendency of [a section 1404(a)] motion, we expressly refrain from granting this motion for remand and interfering in matters within the discretion of the transferee judge.”). 10. Edward F. Sherman, Aggregate Disposition of Related Cases: The Policy Issues , 10 REV. LITIG. 231 (1991) (comparing policies favoring aggregation—such as economy, efficiency, and consistency of result—with policies disfavoring litigant autonomy and fairness in individual treatment). 11. Scotch-Marmo & Ableson, supra note 8 (discussing congressional testimony and court concerns over aggregation). 2014] WHEN REMAND IS APPROPRIATE 457 and academic concerns over class action abuses. 12 The narrower debate over exactly when MDL cases should be remanded back to their original jurisdictions is the subject of this Symposium. 13 The self-transfer approach still had its limits. Self-transfer was possible only if the transferee judge sat in a district in which a case could originally have been brought. Furthermore, a high percentage of all cases settle before trial, and that is especially so when the MDL process—intended to foster settlement—is invoked. Thus, a large number of transferred cases would always be resolved by settlement accomplished under the jurisdiction of the transferee court. Finally, transferee judges have authority to rule on all pretrial matters, including dispositive motions such as motions to dismiss and for summary judgment. 14 Thus, transferee courts could dispose of many of the cases transferred under MDL, obviating the need to remand to the original district where they were filed. Despite the broad acceptance of self-transfer pursuant to section 1404(a), the Supreme Court held that it was improper in the 1999 decision of Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach . 15 The Court concluded that the statutory requirement that, at the completion of pretrial proceedings, the action “shall be remanded . . . unless it shall have been previously terminated” did not contemplate that transferee courts would hold on to cases past the pretrial preparation stage. 16 In Lexecon , the transferee judge had resolved all but one of the claims by summary judgment. 17 Over the plaintiff’s objections, the transferee court transferred the case to itself for trial of that claim pursuant to section 1404(a). 18 The defendant prevailed at trial, but the Supreme Court reversed because the statute “obligates the Panel to remand any pending case to its originating court when, at the latest, those pretrial proceedings have run their course.” 19 The Court rejected the 12. See Martin H. Redish, Class Actions and the Democratic Difficulty: Rethinking the Intersection of Private Litigation and Public Goals , 2003 U. CHI. LEGAL F. 71 (2003); see generally Linda Mullenix, Ending Class Actions as We Know Them: Rethinking the American Class Action , 64 Emory. L.J. (forthcoming 2014), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2457429 ##, archived at http://perma.cc/F9YW-UZ94?type=pdf. 13. For an edited and excerpted transcript of the discussions at the Louisiana Law Review ’s 2014 Symposium entitled “The Rest of the Story, Resolving the Cases Remanded by the MDL,” see 75 LA. L. REV. 342, 342–97 (2014). 14. See text at notes 43 & 44, infra . 15. See 523 U.S. 26 (1998). 16. Id. at 35 (internal quotation marks omitted). 17. Id. at 31. 18. Id. 19. Id. at 34. 458 LOUISIANA LAW REVIEW [Vol. 75 defendant’s argument that the granting of the section 1404(a) motion constituted a termination that obviated remand, and concluded that the defendant “may or may not be correct that permitting transferee courts to make self-assignments would be more desirable than preserving a plaintiff’s choice of venue (to the degree that § 1407(a) does so), but the proper venue for resolving that issue remains the floor of Congress.” 20 II. MEANS OF AVOIDING REMAND AFTER L EXECON There are still ways for transferee judges to retain control of cases by doing something comparable to a section 1404(a) transfer. As the chair of the MDL Panel, Judge John G. Heyburn II, noted: “Transferee judges are nothing if not resourceful where necessity dictates and several appropriate strategies are available by which the Lexecon conundrum may be avoided.” 21 He provided the following examples: [P]rovided the plaintiff is amenable and venue lies in the transferee district, the action could be refiled there. The parties could also agree to waive objections to venue. Alternatively, the transferee court could try a “bellwether” case that was originally filed in the transferee district, the result of which may promote settlement of the transferred actions in the MDL. Another option, suggested in the Lexecon opinion itself, is for the transferor court to transfer the action back to the transferee court under § 1404(a). Still another option would be for the transferee judge to follow the action to the transferor court after obtaining an intracircuit or intercircuit assignment. 22 The first three techniques...