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Reforming 28 U.S.C. section 1407 to fix Lexecon would not only conserve resources, but also help plaintiffs regain bargaining power to reach better settlements.


Multidistrict Litigation ("MDL") is an indispensable mechanism that allows federal courts to centralize related actions pending in various district courts in one venue for the purpose of coordinated pretrial proceedings. MDL centralization is overseen by the Multidistrict Litigation Panel ("PANEL") and is authorized by 28 U.S.C. [section] 1407 to achieve the following goals: (1) centralization of related actions; (2) avoidance of duplicative discovery; (3) prevention of inconsistent trial rulings; and (4) conservation of the resources of the parties, their counsel, and the judiciary. The language of the statute mandates remand of transferred cases to the original courts at the conclusion of the pretrial process in the MDL venue. However, over the course of three decades and under the auspices of Panel rules, MDL judges have regularly self-assigned transferred cases for trial. In 1998, the United States Supreme Court in Lexecon v. Milherg Weiss Bershad Hynes & Lerach brought this long-standing practice to an end, requiring MDL judges to remand transferred cases back to the original court. (2)

Section 1407 has not been reformed to allow self-assignment, despite forceful criticism from the MDL legal community, and the highest ranks of the judiciary who have decried Lexecon's potential blow to the efficiency of the MDL process. Thus, MDL judges are powerless to retain transferred cases for trial at the conclusion of the pretrial stage. Nevertheless, judges and litigants have found creative ways to attempt to avoid the Lexecon holding and harness the perceived advantages of remaining in the MDL court for trial. These avoidance methods, however, are characterized by procedural obstacles that waste the resources of the judiciary and the parties to litigation, and are not able to fully replicate the streamlined self-assignment process available before Lexecon.

Most importantly, by prohibiting self-assignment, Lexecon deprived plaintiffs of significant leverage to reach favorable settlements: the concrete threat of trial in the forum where the parties are expected and pressured to reach a settlement. The loss of this leverage may be particularly harmful to plaintiffs because MDL centralization often benefits defendants more than it benefits the plaintiffs due to the effects of delay and economies of scale. However, some may argue that reform is not warranted because plaintiffs retain considerable power to negotiate fair settlements post-Lexecon by bargaining in a class action manner, and threatening to disperse the conveniently consolidated litigation back to the original venues.

Nevertheless, in the aggregate, the scales tip towards the desirability of reforming [section] 1407 not only to bring an end to the inefficiencies of Lexecon avoidance methods, but to also allow plaintiffs the ability to conduct pretrial litigation under conditions similar to those available in a non-MDL courtroom, such as the prospect of a streamlined transition to trial in the same venue where the settlement is expected to be reached.

Part I of this paper discusses the background of MDL. Specifically, Part I discusses what prompted Congress to enact [section] 1407, how the Panel decides whether centralization is warranted, and what trends can be observed in MDL centralization over time. Part II then discusses the "self-assignment" practice, how the Lexecon case brought the practice to an end, and how the legal community reacted and adapted to the decision. Part III explains why the inability of an MDL court to try transferred cases erodes plaintiffs' bargaining power to settle on favorable terms, examines Lexecon's effect in light of other disadvantages plaintiffs face in MDL, and presents the possible counterarguments that plaintiffs already have enough tools to settle fairly under the Lexecon regime.


A. Judicial Management Challenges Prompt Congress to Enact the MDL Statute

Modern civil litigation has become increasingly characterized by complex lawsuits featuring multiple plaintiffs with claims against a single defendant, or multiple defendants. (3) In the course of the last century, technology has furthered the boundaries of mass production and marketing, allowing the placement of goods and services in the hands of an unprecedented number of customers. (4) As a result, actions of corporate defendants have acquired the potential to injure thousands of people, bringing about mass torts arising under related circumstances. (5) This reality has presented a growing administrative challenge for a judicial system that traditionally has been calibrated to handle "one-on-one" lawsuits where a single plaintiff sued a single defendant for a claim arising out of a single incident. (6)

The problem could no longer be ignored when, in the 1960's, more than 1800 related civil actions involving conspiracy allegations among electrical equipment managers were filed in over thirty federal courts across the nation. (7) To coordinate discovery in the involved courts, Chief Justice Earl Warren created the Coordinating Committee for Multiple Litigation of the United States District Courts ("COMMITTEE"). (8) At the end of its work, the Committee recognized the unequivocal need for an efficient judicial mechanism to manage pretrial issues in the surge of related litigation and recommended a more formal procedure for handling groups of similar cases; Congress obliged by enacting 28 U.S.C. [section] 1407. (9)

The pertinent part of [section] 1407 states the following:

(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 proceedings. Such transfers shall be made by the judicial panel on multidistrict litigation authorized by this section upon its determination 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. 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: Provided, however, That the panel may separate any claim, cross-claim, counter-claim, or third-party claim and remand any of such claims before the remainder of the action is remanded. (10)

B. The MDL Panel Decides Which Cases Satisfy Centralization Requirements

The statute created the Multidistrict Litigation Panel ("PANEL"), which consists of seven sitting federal judges who are appointed by the Chief Justice of the United States Supreme Court. (11) Congress gave the Panel broad powers to transfer groups of cases involving one or more common questions of fact to a single district court for pretrial proceedings without consideration of personal jurisdiction over the parties and without having to meet

the venue requirements of 28 U.S.C [section] 1404. (12) In MDL terms, "the court to which an action or actions are transferred ... under 28 U.S.C. [section] 1407 is referred to as the 'transferee' court, and the court from which the action or actions are transferred is called the 'transferor' court." (13) The purposes of this transfer or "centralization" process are to avoid duplication in discovery; to prevent inconsistent pretrial rulings; and to conserve the resources of the parties, their counsel, and the judiciary. (14)

Moreover, the Panel "is neither a trial court nor an appellate court interested in the merits of litigation.... [Instead, it] acts as a weigh station along the federal highway of docket management." (15) Chief Judge Heyburn, the current Chairman of the Panel, stressed that

The Panel considers only the underlying record on its face and does not attempt to make independent judgments about the state of the record or the reasons for, or the correctness of, a particular transferor court ruling. The Panel does not consider the legal or factual strength of a given case. (16)

Any party to the litigation may move for a [section] 1407 transfer. (17) In addition, the Panel may initiate transfer proceedings sua sponte. (18) When ruling on [section] 1407 motions, the Panel considers two closely related issues: (1) "whether common questions of fact among several pending civil actions exist such that centralization of those actions in a single district will further the convenience of the parties and witnesses and promote the just and efficient con duct of the actions," and (2) "which federal district and judges are best situated to handle the transferred matters." (19)

In resolving the first issue regarding whether actions should be centralized, the Panel focuses on whether the parties' legitimate discovery needs are substantially similar in all of the proposed transferee actions: "[T]he Panel looks to whether similar facts are at issue with respect to the various claims in the different cases. Generally, the greater the factual commonality of the cases, the more likely it is that centralization will benefit the involved parties and the system as a whole." (20) In addition, the Panel takes into consideration the relative stage of the pretrial proceedings in question. Cases in their initial phases of discovery and motion practice are more likely to be centralized by the Panel: "Older cases may be less suitable for transfer because significant discovery may have already occurred, and, thus, centralization with other cases could delay the more advanced actions." (21) The sheer number of cases and common parties may also play a part in the Panel's decision to centralize the actions. Usually, "the greater the number of cases and the greater number of common parties, the more likely it is that centralization will create significant efficiencies." (22) Finally, while the Panel is more likely to centralize when all parties agree that transfer is warranted, joint opposition to transfer may be insufficient itself to defeat centralization. (23)

Next, in resolving the second issue concerning which federal court the actions should be centralized to, the Panel's goal is to "pair an experienced, knowledgeable, motivated, and available judge in a convenient location with a particular group of cases." (24) Judge Heyburn stressed that this determination is closely related to the first issue of ensuring that the centralization will benefit the parties and the judicial system. He noted that, at times, it is "the most difficult decision the Panel faces ... [t]he difficulty can arise from an abundance of good options, the absence of them, or from tactical differences among the parties, even among parties ostensibly on the same side." (25) Ideally, the candidate district judge should be familiar with at least one of the cases in the proposed docket. (26) However, if the new docket is particularly complex, the Panel may prefer a district judge with proven experience in managing complex litigation. (27) Notably, the willingness and motivation of a particular judge to handle an MDL is crucial to the assignment, as the judges receive no additional pay for taking MDL responsibilities, and the Panel has neither the power nor the desire to force an MDL docket upon a district judge. (28) Therefore, the Panel members routinely make personal calls to candidate transferee judges, to probe their willingness to manage the new docket. (29)

Additionally, when resolving the second issue, the Panel may consider the geographical location of the transferee court. (30) In some cases, the nature of discovery and the location of witnesses may point toward a superior forum. (31) However, the geographical location of the transferee court may be less important when the litigation is dispersed throughout the federal system and lacks a defined center. (32) The Panel prefers to accommodate the parties in selecting the location of the transferee court and will look favorably at recommendations from the parties for joint or group venues. (33) Nonetheless, the Panel is wary of forum shopping and disfavors attempts to steer the litigation to a particular forum for substantive or procedural advantages. (34)

Also, when deciding the second issue, the Panel may look to additional factors such as the following: the location of the first filed action, the location of related grand jury proceedings, the existence of a qui tam action predicated on the same facts as those at issue in the MDL, and the possibility of coordination with related state court proceedings. (35)

Importantly, when ruling on [section] 1407 motions, the Panel enjoys "considerable and largely unfettered discretion within the unique circumstances that each motion presents." (36) An appeal from a decision ordering transfer is technically available by an extraordinary writ in the court of appeals for the circuit in which the transferee court is located. (37) In practice however, appeal from centralization is very uncommon. Finally, there is no review of a Panel decision denying MDL status. (39) Thus, the Panel's decision is most likely conclusive in an overwhelming majority of cases.

Statistically, the Panel finds that most proposed dockets are eligible for centralization pursuant to the [section] 1407 criteria. (40) However, in the following remark, Judge Heyburn stressed that this trend should not imply that the Panel is necessarily predisposed in favor of centralization:

   [T]he opposite may indeed be true. The Panel is mindful that
   centralization is a limited exception to the generally applied
   rules of venue and jurisdiction. More likely, the data merely
   reflects the clarity of the standards that the Panel has applied
   faithfully and consistently over the years. As a result,
   practitioners who have done their homework will generally refrain
   from bringing unfounded motions that do not satisfy the
   prerequisites of [section] 1407. (41)

Finally, in addition to ruling on motions to create new MDLs, the Panel manages its own docket by transferring new cases to existing MDLs and remanding old cases to the transferor court when the transferee court has finished its work. (42)

C. Centralization Trends and Categories of MDL Dockets

Overall, the Panel has successfully centralized approximately 2,500 dockets, which encompass more than 460,000 cases including millions of claims. (43) The dockets span across a spectrum of litigation categories: mass torts (such as asbestos, pharmaceuticals and other product liability cases), single incidents involving numerous casualties (such as airplane crashes, train wrecks, and hotel fires), as well as patent validity and infringement, antitrust price fixing, securities fraud, and employment practice litigation. (44)

The most recent yearly Panel statistics show the following distribution of MDL dockets: products liability--72; antitrust--57; securities--37; sales practices--34; intellectual property--19; contract --14; employment practices--7; air disasters--4; common disasters--2; and miscellaneous--45. (45)

Notable dockets active as of October 2013 include the following, in the order of more recently centralized dockets to older:

1) MDL 2419, In re New England Compounding Pharmacy, Inc., Products Liability Litigation (injuries from nationwide meningitis outbreak including many fatalities- arising from the alleged contamination of injectable steroids), the actions were centralized on 02/12/2013, with 288 actions out of a total of 291 still pending resolution;

2) MDL 2314, Facebook Internet Tracking Litigation, centralized 02/08/2012 with 27/29 actions pending resolution;

3) MDL 2179, Oil Spill by the Oil Rig "Deepwater Horizon" in the Gulf of Mexico, on April 20, 2010, centralized 08/10/2010, with 2871/2999 actions pending resolution;

4) MDL 2151, Toyota Motor Corp. Unintended Acceleration Marketing, Sales Practices, and Products Liability Litigation, centralized 04/09/2010, with 156/419 cases pending resolution;

5) MDL 2100, Yasmin and Yaz (Drospirenone) Marketing, Sales Practices and Products Liability Litigation, centralized 10/01/2009, with 9873/11276 actions pending resolution; and

6) MDL 875, Asbestos Products Liability Litigation (No. VI), the oldest active docket and the largest historically, centralized 07/29/1991, with 3206/192,030 cases pending resolution. (46)

Importantly, while some MDL dockets are "mega-cases" involving more than a thousand individual actions, most dockets are smaller in size, with about half of dockets comprising a mere ten or fewer constituent actions. (47) In addition, while some MDLs are notorious for remaining in the transferee courts for lengthy periods of time, most are terminated expediently. (48) Importantly, in most instances, cases are resolved through settlement or otherwise in the transferee court and are not remanded back to the transferor court. (49) Recent statistics state that out of a total of 373,378 MDL cases no longer on the docket, 359,548 cases, or 96.3%, were terminated in the transferee court. (50)

The use of the MDL mechanism has proliferated over time, as the number of requests for centralization in new dockets has grown steadily. (51) On average, each year, fifty-seven new dockets were filed between 1995 and 2000, seventy-one between 2001 and 2006, and approximately one-hundred between 2007 and 2012. The Panel attributes the rise, at least in part, to the decreasing availability and desirability of the class action mechanism for some litigants as a consequence of the enactment of the Class Action Fairness Act of 2005 ("CAFA") and the United States Supreme Court decisions in Ortiz v. Fibreboard Corp. and Amchem Products, Inc. v. Windsor. (53)

While the increase in the number of requests for centralization may be attributed in part to litigants steering away from the class action mechanism, it is important to note that MDL dockets may include putative class actions. (54) Commentators note that CAFA was successful at channeling most class actions into the federal system, streamlining some of the putative class actions into the MDL mechanism. (55)


A. Before Lexecon, Transferee Judges Routinely Assigned Cases to Themselves for Trial at the Completion of MDL Proceedings

After centralization, the Panel steps back while the transferee judge assumes full and exclusive authority over the cases in the docket for the purpose of coordinated pretrial proceedings. (56) The transferee judge controls all aspects of pretrial litigation, including discovery, motions to dismiss, and motions for summary judgment. (57) Notably, the MDL court's authority also extends to class certification. (58) Although the transferor court's orders remain in effect, the transferee judge has the authority to vacate or modify any such order. (59) Additionally, the judge can terminate a case pursuant to a settlement and enter a consent decree. (60)

Between 1968 and 1998, a practice developed in which transferee judges permanently transferred to themselves [section] 1407 actions not settled or otherwise dismissed at the end of the MDL proceedings, instead of remanding the actions back to the transferor court. (61) The "self-assignment" was accomplished via 28 U.S.C. [section] 1404(a) or 28 U.S.C. [section] 1406(a), as [section] 1407 authorizes transfer for pretrial proceedings only. (62) The practice was expressly authorized by the Panel in former Rule 14(b), which stated that "[e]ach transferred action that has not been terminated in the transferee district court shall be remanded by the panel to the transferor district for trial, unless ordered transferred by the transferee judge to the trans feree or other district under 28 U.S.C. [section] 1404(a) or 28 U.S.C. [section] 1406." (63)

Accordingly, MDL judges routinely assigned transferred cases to themselves for consolidated or exemplary trials (which could be binding by agreement of the parties on all consolidated actions) on liability issues at the conclusion of pretrial proceedings and subsequently remanded cases back to the transferor courts for trials on damages. (64)

B. Lexecon and the End of Self-Assignment

In 1998, the United States Supreme Court decided Lexecon v. Milberg Weiss Bershad Hynes & Lerach and held that all actions transferred by the Panel pursuant to [section] 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. (65) The Court reasoned that in [section] 1407(a), Congress unconditionally mandated remand and precluded self-assignment for trial in the MDL court via [section] 1404(a) or [section] 1406(a). (66)

Lexecon was a defamation suit filed by Lexecon, a consulting firm, against a law firm that had represented a plaintiff class in the Lincoln Savings and Loan litigation in Arizona. (67) Initially, Lexecon had been joined as a defendant to the class action, which was centralized and transferred by the Panel in the District of Arizona. (68) While the pretrial stage was still in process in the MDL court, Lexecon managed to dismiss the claims against it by reaching an agreement with the plaintiffs. (69) Then, Lexecon filed a defamation suit against the law firm that represented the plaintiff class in the Northern District for Illinois. (70) Subsequently, the law firm successfully moved to transfer the defamation suit under [section] 1407 to the District of Arizona, where the Panel centralized the underlying Lincoln Savings and Loan litigation. (71) After the conclusion of the MDL pretrial, the Arizona transferee court employed the [section] 1404(a) change of venue statute to assign the defamation case to itself for trial. (72) Lexecon appealed the self-assignment after losing the trial in the transferee court. (73) While the Ninth Circuit upheld the transferee court, (74) eventually, in an opinion delivered by Justice Souter, the United States Supreme Court invalidated the self-assignment practice and Panel Rule 14(b). (75)

In reaching its conclusion, the Court examined both the plain language and the legislative history of the MDL statute. (76) The pertinent language in [section] 1407(a) states: "[E]ach 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." (77) The Court observed that "shall" is a mandatory verb which "normally creates an obligation impervious to judicial discretion ... [requiring] the Panel to remand any pending case to its originating court when, at the latest, those pretrial proceedings have run their course." (78) The Court added that, in order to read the statute as a harmonious whole, it had to give effect "to this plain command ... even if doing that will reverse the longstanding practice under the statute and the [Panel] rule." (79)

Furthermore, the Court observed that "the legislative history tends to confirm that self-assignment is beyond the scope of the transferee court's authority." (80) A pertinent House Report stated:

   The proposed statute [[section] 1407] affects only the pretrial
   stages in multidistrict litigation. It would not affect the place
   of trial in any case or exclude the possibility of transfer under
   other Federal statutes.... The subsection [[section] 1407(a)]
   requires that transferred cases be remanded to the originating
   district at the close of coordinated pretrial proceedings. The bill
   does not, therefore, include the trial of cases in the consolidated
   proceedings. (81)

In addition, the bill's sponsor confirmed the legislative intent that MDL would not affect the place of the action's trial by unequivocally stating that "when the deposition and discovery is completed, then original litigation is remanded to the transferor district for trial." (82)

Importantly, however, the Court rejected an invitation to evaluate whether the benefits of allowing transferee courts to make self-assignments outweighed the desirability of preserving the plaintiffs original choice of venue--to the degree that [section] 1407(a) does so--by compulsory remand. (83) This, the Court reasoned, was an inquiry for Congress to make. (84)

C. Critics Urge Congress to Reform [section] 1407 to No Avail, While Parties Resort to Lexecon Avoidance Methods

Lexecon proved to be a controversial decision and managed to generate substantial opposition from the legal community from the very start. District judges warned that the inability to self-assign would irreparably harm the efficiency of the MDL process, and, consequentially, the Panel advocated for an immediate statutory reform. (85) However, because reform efforts in Congress did not result in a bill, transferee judges remain without power to self assign cases for trial at the conclusion of pretrial proceedings. (86)

1. The Benefits of Trial in the Transferee Court vs. Preserving Plaintiffs Choice of Transferor Court as Venue for Trial

Both the arguments in favor and against reforming [section] 1407 tend to focus on whether the benefits to the judicial system and the parties resulting from streamlining the MDL process by allowing self-assignment outweigh the benefits of preserving the plaintiffs original choice of trial forum by taking the power of self-assignment away from the MDL judge and ensuring remand, an issue the Supreme Court left unresolved in Lexecon.

Reform advocates often identify three main policy reasons as justification for allowing transferee courts to self-assign transferred cases for trial: (1) during the often protracted time of the [section] 1407 assignment, the transferee judge gains a solid understanding of the case, and it makes sense for trial to be conducted by the judge with the greatest understanding of the litigation; (2) the transferee judge may already be trying the constituent centralized action(s), and there may be efficiencies in adjudicating related actions or portions thereof in one trial; and (3) the transferee judge, if empowered to try the centralized actions, may have a greater ability to facilitate a global settlement. (87)

Pro-Lexecon advocates counter that the plaintiffs choice of forum outweighs these concerns. Larson explained this argument in the following manner:

   Lexecon marks a victory for the right of the plaintiff, whose cause
   of action is transferred for consolidated pretrial proceedings
   under [section] 1407, to have his case tried in the forum of his
   choice following the conclusion of those pretrial proceedings. This
   presumptive right of plaintiffs had, in many respects, been
   subordinated to countervailing concerns of efficiency expressed by
   federal judges encumbered with the demands of multidistrict
   litigation. (88)

Not preserving the plaintiffs choice of forum may be of particular consequence for the plaintiffs choice of law in light of the decision in In re Korean Air Lines Disaster. (89) In that case, Justice Ginsburg, writing for the United States Court of Appeals for the District of Columbia, held that a transferee court should apply its own circuit's interpretation of federal law, rather than a different interpretation of the transferor court. (90) Ultimately, although the court advised transferee courts to closely consider transferor courts' interpretation, it stressed that a transferee court is not bound by the other circuit's precedent. (91) This meant that, pre

Lexecon, a plaintiff who chose a particular circuit by relying on its interpretation of a key federal issue might have been forced to have a trial in the MDL court in another circuit, which interpreted the issue in a less favorable manner. In other words, one could argue that self-assignment "hijacked" the trial with complete disregard to the plaintiffs initial choice of law. (92) The United States Supreme Court has not yet addressed the decision in Korean Air Lines.

Reform proponents advocate fixing the MDL statute in a manner designed to alleviate these concerns. (93) One proposal is to change [section] 1407 to allow for self-assignment only if a plaintiff consents to remain in the MDL venue for trial at the conclusion of pretrial proceedings. (94) This would provide rigid protection of choice of forum for plaintiffs who choose to return to their original venue. (95) At the same time, a consent requirement would allow a more flexible and streamlined approach under the statute by empowering plaintiffs who reconsider their initial choice of forum and wish to remain in the transferee court for trial. (96)

2. Lexecon Avoidance Methods are Inadequate and Waste Resources

Reform proponents argue that plaintiffs often engage in Lexecon avoidance methods, evincing demand to reform 28 U.S.C. [section] 1407 to allow a streamlined trial of transferred cases in the MDL venue. (97) In response to this demand, and in the absence of a Congressional reform of [section] 1407, courts and lawyers have come up with creative ways to avoid the Lexecon problem. (98) Common tactics include: (1) transferring the action to the MDL district pursuant to 28 U.S.C. [section] 1404 instead of under [section] 1407; (2) dismissing the action and refiling it in the transferee court; (3) moving to transfer from the transferor court to the transferee court under [section] 1404 or [section] 1406 after the Panel remands; (4) obtaining defendants' consent to change the venue to the transferee court; (5) reaching an agreement to be bound by the results of "bellwether" trials (e.g. on causation, liability); and (6) obtaining an inter-circuit or intra-circuit assignment of the transferee judge. (99) However, critics point out that these alternatives come with significant limitations and are generally unsuccessful at fully replicating the benefits of self-assignment. (100) These Lexecon avoidance methods, as well as the shortcomings of these tactics, are discussed in further detail below.

The first method to avoid Lexecon involves transferring the action to the MDL district under [section] 1404(a) instead of [section] 1407. When an action is transferred under [section] 1404(a), the action becomes permanently assigned to a district court and the need to remand the case to the court of original jurisdiction is eliminated. (101) However, one limitation of this method is that the option to transfer under [section] 1404(a), instead of [section] 1407, applies only to "tag-along actions." Tag-along actions are civil actions that, while pending in the district court, share common questions of fact with actions that the Panel had previously centralized for MDL proceedings. (102) Moreover, the party moving for transfer under [section] 1404(a) must show that the transfer is "[f]or the convenience of the parties and witnesses" and "in the interest of justice." (103)

Another limitation of a [section] 1404(a) transfer is that, unlike a transfer under [section] 1407, a [section] 1404(a) transfer is bound by proper venue requirements, which some plaintiffs may be unable to satisfy due to the more stringent requirements under [section] 1404(a). (104) Furthermore, [section] 1404(a) does not consolidate the action for pretrial proceedings with the rest of the MDL docket; instead, it merely facilitates a transfer to a particular district. (105) Thus, there is no guarantee that the judge who manages the pertinent MDL docket will even hear the case. (106) Moreover, when the number of tagalong cases becomes too large to adequately manage, courts tend to deny [section] 1404(a) motions in favor of consolidating the cases within the transferee district pursuant to [section] 1407. (107)

Finally, the Panel appears to favor motions for transfer under [section] 1407 as opposed to those filed under [section] 1404(a). In In re Oxycontin Antitrust Litigation, the Panel indicated that a transfer under [section] 1407 is favorable because it has the "salutary effect of placing all actions in [a] docket before a single judge who can formulate a pretrial program that ensures that pretrial proceedings will be conducted in a manner leading to the just and expeditious resolution of all actions to the overall benefit of the parties." (108) In sum, although the [section] 1404(a) transfer can successfully avoid remand in some cases, it does not provide an adequate alternative to transfer under [section] 1407 because the benefits of MDL centralization are lost in the process.

The second Lexecon avoidance method involves the plaintiff dismissing the action in the original court and refiling it in the pertinent MDL district. The inadequacy of this method was explained by Silver as follows:

   Though this method is relatively simple, it does not come without
   challenges. It imposes the added expenses of time and money that
   could be avoided if self-transfer to the transferee district was
   permitted. Additionally, venue must be proper in the transferee
   district ... [and] the cooperation of the defendant may be needed
   in order to waive venue if it is improper in the new district or if
   the statute of limitations has run. (109)

The third Lexecon avoidance method involves a motion in the transferor court, after remand, to transfer the action back to the transferee district via [section] 1404(a) or [section] 1406(a). (110) As with all [section] 1404(a) motions, the moving party has the burden to show that venue is proper in the transferee court and that the transfer is in the interest of justice and for the convenience of the parties and witnesses. (111) Although a positive recommendation from the transferor court to the Panel may increase the likelihood of the court granting the motion, as discussed previously, a successful [section] 1404(a) transfer to the desired district or division does not guarantee that the former MDL transferee judge will hear the action, as preferred (112) Although this method is relatively straightforward, it nevertheless requires a "compulsory and mechanical series of transfers" that burden the litigants and defeat the MDL statute's goal of enhancing judicial economy. (113)

The fourth Lexecon avoidance method is to obtain the parties' consent to trial in the transferee court before remand. (114) In the alternative, after remand, the parties may stipulate that venue in the transferee court is proper in order to facilitate a [section] 1404(a) or [section] 1406(a) transfer back to the MDL district. (115) Many jurisdictions disfavor the stipulation method to avoid remand and commentators have suggested that the method is likely improper. (116) In contrast, stipulation to venue after remand is less controversial and may help move the case back to the desired district; however, it raises the aforementioned concerns regarding the burden of additional time and expense of litigation. (117)

The fifth Lexecon avoidance method is for the parties to agree to be bound by the results of "bellwether" trials. (118) The transferee court has the jurisdiction to conduct trials of those actions from the MDL docket that are originally filed in the transferee court and therefore are not remanded anywhere else. Thus, parties to transferred cases may stipulate to be bound by "bellwether" trials--randomly selected, representative actions, filed and tried in the MDL venue--on common issues such as causation and liability, leaving only the remaining issues, such as damages, to be resolved on remand in the transferor court. (119) The benefits of the method are twofold: (1) it allows parties that prefer the original forum for trial on damages to remand the action to the transferor court while conserving resources by deferring to the transferee court's resolution of all other issues in a representative sample from the docket; and (2) it may facilitate reasonable settlements by allowing both sides to gauge the strength of their case via the jury's treatment of the representative sample, reducing the probability of a trial in the originating court. (120) However, relying on bellwether trials raises a number of issues, including the following: (1) it requires the cooperation of the defendant(s), as stipulation may not always be in the defendant's best interest; (2) the remanded cases must still go through the procedural hassles of remand and then wait for the outcome in the "bellwether" cases; (3) since it is not always clear whether the sample was indeed representative of the larger batch of cases to which the plaintiff's action belongs, the transferor court must invest time and effort to ensure that the results of the "bellwether" trials can be used; and, (4) if a settlement is not reached, the remanded cases must go to trial on the remaining issues in the transferor court. (121)

The sixth and the final of the methods commonly used to avoid Lexecon is for the transferee judge to request an intercircuit or intracircuit transfer under 28 U.S.C. [section] 292 or [section] 294 in order to preside over the trial of a remanded action in its originating district. (122) The transferee judge needs to request the chief judge of the destination district or circuit to certify the need for transfer and receive an approval from the Chief Justice of the United States. (123) Although this method, in theory, achieves the objective of pairing the experienced MDL judge with the remanded case, the transfer requires a significant effort from the transferee judges and is a cumbersome and inefficient procedure--much more complicated and time-consuming than simply transferring the cases directly to the transferee judge's trial docket. (124)

While the perceived inadequacy of the Lexecon avoidance methods may or may not warrant a reform of [section] 1407 in and of itself, one may argue that reform is not required simply because remand is a marginal issue. Ninety-six percent of the actions at the MDL stage are terminated by settlement, which would not require remand to the transferor court. (125) However, the fact that most of the actions are settled during the MDL stage raises important questions as to the possible impact of Lexecon on the bargaining positions of the parties in light of the general dynamics of the MDL process.


At first glance, MDL centralization for pretrial purposes may appear to be inconsequential, merely a prequel to the trial that will take place on remand. However, as in non-complex litigation, MDL pretrial is likely to be the final resting place of the lawsuit. All parties involved in the process--plaintiffs, defendants, and judges--realize this and act accordingly. Just like they do during the ordinary pre-trial process, judges likely try to promote settlements and opposing parties attempt to leverage optimal positions for negotiations. (127) Before Lexecon, these strategic movements and preparations to settle transferred cases took place under the strong possibility that the trial may very well proceed in the transferee court--an important condition that the MDL courtroom shared with a "normal," non-MDL pretrial venue. (128)

However, by prohibiting streamlined self-assignment, Lexecon made it highly unlikely that any case not originally filed in the transferee court would see trial in the MDL venue, either individually or as part of a consolidated trial on liability. Moreover, while technically a trial in the transferor court on remand is still an option, it remains a distant and unlikely prospect that does not empower the plaintiffs to the same extent as a pre-Lexecon trial in the MDL court. The absence of this important leverage--a concrete prospect of trial in the forum where the settlement is expected to be reached--may significantly erode plaintiffs' power to reach favorable results. (12)

A. Losing Leverage is Especially Problematic for Plaintiffs due to Three MDL Features

Lexecon's impact on plaintiffs' leverage to reach favorable settlements in transferred cases must be examined in the context of three important MDL characteristics that may already keep plaintiffs and their attorneys at a significant disadvantage. These conditions include MDL's uneven effects of delaying the resolution of the action, uneven effects of economies of scale achieved via centralization, and pressure from the bench to settle before remand.

1. Uneven Effects of Delay

The first issue is MDL's uneven effect on the opposing parties in delaying the final resolution of the action. The MDL playing field is not level for plaintiffs and defendants almost by default. First, the mere transfer itself is often a small but crucial victory for the defendants, as it allows defendants to strategically delay the resolution of the action. Silver and Miller note the following:

"Commentators generally agree that MDL practice favors the defense ... [t]his is partly because MDL practice is slow, very slow. Plaintiffs usually favor early trials. Defendants prefer to put off the day of reckoning. By forcing plaintiffs to incur substantial delays, MDLs reduce the value of their claims." (130)

Second, if the defendant so desires, the MDL process provides ample opportunities to achieve even further strategic delay by, for example, miring the already complicated discovery process with objections to productions, prompting time consuming and costly reviews of thousands of documents. (131)

Third, plaintiffs' attorneys, who are often the individuals financing the litigation on their client's behalf in the hope of recouping the investment via contingency fees, may be as vulnerable to strategic delay as their clients. This is especially problematic due to the increasing use of the MDL as an alternative to class action. (132) Generally, MDLs are more expensive to finance than large class actions. (133) MDLs also provide a plaintiff attorney with less certainty that the investment can be recouped via contingency fees. (134) This financial pressure, especially when exacerbated by MDL's delay of resolution, strains the attorney-client relationship and may drive attorneys to unethically counsel their clients to settle for less, thereby allowing the attorney to move on to the next case.

2. Uneven Effects of Economies of Scale

The second issue that makes erosion of leverage especially problematic for MDL plaintiffs is that the economies of scale achieved via centralization often benefit defendants more than they benefit the plaintiffs. For the defendant, centralization conveniently brings multiple actions pending in various district courts across the nation to a single forum. This enables the defendant to conserve resources, especially with respect to discovery costs, by dealing with pretrial issues of tens, perhaps hundreds of related actions, in a single proceeding. The plaintiffs, on the other hand, must overcome organizational challenges and conflicts of interest before they can negate the disadvantage of centralization and begin bene fitting from economies of scale. (135) One commentator described this MDL dynamic as asymmetry of Biblical proportions as follows:

   It is a David versus Goliath dynamic where a corporate defendant's
   formidable resources are brought to bear on loosely organized and
   often competing groups of plaintiff lawyers that form temporary
   (and often strained) alliances to combat the national mega-law
   firms that routinely service the world's largest and most powerful
   corporations. (136)

Importantly, for many plaintiffs, centralization often results in loss of control over the course of litigation, leading to less favorable settlement results. Customarily, for management purposes, MDL judges appoint lead and liaison attorneys to various executive and steering committee positions that are highly coveted for superior control and remuneration. Erichson explains the effect of the appointments as follows:

   In federal MDL, the lawyers on the plaintiffs' steering committee,
   discovery committee, and similar positions generally dominate the
   conduct of pretrial litigation, and sometimes settlement
   negotiations as well ... numerous plaintiffs depend upon the work
   of counsel with whom they have no meaningful individual
   lawyer-client relationship, over whom they have no meaningful
   control, and whose loyalty is directed primarily to the interests
   of the group as a whole. (137)

Thus, centralization creates two tiers of plaintiffs within the docket: those who call the shots and those who potentially become the bargaining chips in a global settlement on less than favorable terms. (138)

Finally, in effect, [section] 1407 allows the defendants to conveniently consolidate plaintiffs' cases for pretrial purposes without the critical mass of a class action heading to trial. At the same time, Lexecon assures the defendants that any plaintiffs who "survive" the MDL process (cases that do not settle or get dismissed) will face additional costs and delays on remand, and that the defendants will be able to tackle those cases on a one-by-one basis.

3. Pressure from the Bench

The third issue that exacerbates Lexecon's detrimental effect on plaintiffs' bargaining power is that the judiciary exerts significant pressure on parties to reach a settlement before a case is remanded. The Manual for Complex Litigation ("Manual"), an official publication closely relied upon by MDL judges, provides the following guidance:

   One of the values of multidistrict proceedings is that they bring
   before a single judge all of the federal cases, parties, and
   counsel comprising the litigation. They therefore afford a unique
   opportunity for the negotiation of a global settlement. Few cases
   are remanded for trial; most multidistrict litigation is settled in
   the transferee court. As a transferee judge, it is advisable to
   make the most of this opportunity and facilitate the settlement of
   the federal and any related state cases. (139)

Accordingly, the judiciary, through its official guidelines, authorizes and expects transferee judges to take an active role in "shepherding" the cases to resolution. (140) The Manual emphasizes that effective judicial management of complex litigation is "active, substantive, timely, continuing, firm but fair, and careful." (141) An entire section is dedicated to the judge's role in the settlement process, prescribing techniques such as firm trial dates, references to other judges for impartiality, mandatory attendance at settlement conferences, confidential discussions with the judge, appointment of special masters, and other strategies. (142) In fact, transferee courts can even withhold remand for the purpose of settlement facilitation. (143)

Moreover, transferee judges often exert pressure to settle not only because settlements are generally regarded as the most efficient and favorable outcome of the MDL, but because remand may be viewed as a judge's personal failure to manage the docket. (144) Importantly, this incentive is heightened post-Lexecon, be cause when parties fail to settle, the transferee judge is not able to "contain" the damage by self-assigning the case for trial. As a result, the transferee judge is letting down a colleague -the transferor judge--who has to deal with the consequences of a failure to facilitate a settlement. (145)

In sum, while the parties are expected and pressured to settle during the MDL, the MDL playing field is tilted towards the defendants with the benefit of strategic delay and uneven economies of scale. Already disadvantaged with the MDL, plaintiffs' bargaining power was further eroded by Lexecon by taking away plaintiffs' important leverage--a threat of a streamlined transition to trial in the transferee court.

B. Counterargument: Plaintiffs Retain Significant Leverage after Lexecon

1. Threat of Remand is a Potent Tool Because Mass Litigation is More Manageable for Defendants if Concentrated in a Single Forum

Conversely, an argument can be made that plaintiffs have retained significant leverage after Lexecon because plaintiffs can use the threat of remand as leverage in an efficient and organized manner to force the defendants into concessions. When a significant number of plaintiffs insist on trial in the original venue, which is the law under Lexecon, the threat of remand becomes an effective leverage tool because the defendants recognize that mass litigation is more manageable while concentrated in a single forum. (146) Defendants are interested in avoiding remand because they strive for an expedient and comprehensive resolution of the litigation, and the MDL presents an excellent opportunity for a global settle ment, as it brings all the parties to the negotiating table in a unique manner. (147) Thus, defendants may be amenable to compromise when some of the plaintiffs undermine this goal by insisting to remand the cases back to the transferor court for trial.

2. Plaintiffs Can Organize to Make Threat More Potent

To increase this leverage, plaintiffs can cooperate to prepare "trial packages" that individual counsel can easily and efficiently use to prepare and present their clients' cases after remand: "Apart from a global settlement, an effective trial package is the ultimate goal of any MDL. The prospect of thousands of trials across the country brought by lawyers who are well prepared to try their clients' cases poses an enormous economic threat to any defendant." (148) The trial packages empower all of the plaintiffs by utilizing the experience and the resources of the leading attorneys, ensuring that every case remanded back to the transferor court is a potentially serious liability for the defendants. (149)

3. Lexecon Leads to More Reasonable Settlements Because MDL Artificially Empowers Plaintiffs to Bargain in a Class Action Manner

Finally, it may be argued that, by virtue of centralization for pretrial purposes, Lexecon actually reduced the number of inadequate settlements, because MDL plaintiffs--all bringing individual actions--artificially acquire leverage equivalent to that of a class action without class certification. In turn, this compels the defendants to accept inflated settlements that neither the Panel nor the MDL court can verify as fair and adequate. (150) Arguably, the ban on self-assignment negates this effect to some extent, helping defendants to settle the claims on reasonable terms.


The United States Supreme Court's decision in Lexecon remains a controversial aspect of multidistrict litigation. Absent a Congressional reform of [section] 1407 to allow MDL courts to try transferred cases, transferee judges and litigants will continue to waste valuable time and resources to avoid mandatory remand. In addition, by prohibiting self-assignment, Lexecon eliminated the threat of a streamlined trial of transferred cases in the MDL venue. The absence of a concrete threat of trial in the forum where the parties are expected to reach a settlement may negatively impact the plaintiffs' leverage to reach fair settlements. This loss of leverage is especially problematic for plaintiffs because the parties are pressured to settle during the MDL but are not situated similarly; defendants have more bargaining power because they enjoy centralization's uneven effects of delay and economies of scale.

On the other hand, it could be argued that plaintiffs may have retained significant bargaining power after Lexecon. Plaintiffs can use Lexecon's prospect of mandatory remand to their advantage by threatening the defendant with dispersing the litigation that otherwise would have been conveniently centralized and prone to comprehensive resolution in the MDL forum--thereby frustrating defendant's ultimate goal of finality. Additionally, plaintiffs can increase the efficacy of remand as leverage by organizing and ensuring that every potentially remanded case presents a credible threat to the defendant. Finally, Lexecon may have helped to reach more reasonable settlements from defendant's perspective, because it tends to negate the unjustified class action type leverage plaintiffs achieve via MDL centralization.

In the aggregate, however, the arguments for a reform of [section] 1407 to fix Lexecon are more convincing. Lexecon avoidance is costly and inefficient, and reform can accommodate concerns of plaintiff's choice of forum by requiring consent to a trial in the MDL court. Most importantly, although the MDL mechanism aims primarily at increasing the federal court system's administrative efficiency when dealing with related dispersed litigation, centralization also inadvertently situates the defendants on higher ground. To minimize this disadvantage, plaintiffs caught in the MDL pressure-cooker should be entitled to conduct pretrial under conditions that resemble those in the original court of their choice. Specifically, opposing parties should approach the settlement table with the understanding that failure to agree on fair terms would guarantee a streamlined transition to trial in the MDL court and not merely further delay in the resolution of the action.

Michael Cutler (1)

(1) Third-year law student, Univ. of California Los Angeles, J.D. Candidate, 2014; Univ. of California Los Angeles, B.A., summa cum laude, 2011.

(2) 523 U.S. 26 (1998).

(3) Thomas C. Galligan, Jr. & Richard J. Arsenault, A Practitioner's Guide to Class Actions 317, 318 (Marcy Hogan Greer ed., 2010).

(4) Id.

(5) Id.

(6) Id.; see also Abram Chayes, The Role of the Judge in Public Law Litigation, 89 Harv. L. Rev. 1281, 1281-84 (1976) ("In our received tradition, the lawsuit is a vehicle for settling disputes between private parties about private rights. [One of] [t]he defining features of this [traditional] conception of civil adjudication [is that] ... [t]he lawsuit is bipolar. Litigation is organized as a contest between two individuals or at least two unitary interests, diametrically opposed, to be decided on a winner-takes-all basis.... [In contrast,] [t]he characteristic features of the public law model are very different from those of the traditional model. The party structure is sprawling and amorphous, subject to change over the course of the litigation.").

(7) See Kyle Brackin, Comment, Salvaging the Wreckage: Multidistrict Litigation and Aviation, 57 J. Air L. & Com. 655, 663-64 (1992); see also Yvette Ostolaza & Michelle Hartmann, Overview of Multidistrict Litigation Rules at the State and Federal Level, 26 Rev. Litig. 47,48-49 (2007).

(8) Ostolaza & Hartmann, supra note 7, at 48-49.

(9) John G. Heyburn II, A View from the Panel: Part of the Solution, 82 Tul. L. Rev. 2225, 2226 (2008).

(10) 28 U.S.C. [section] 1407(a) (2012).

(11) 28 U.S.C. [section] 1407(d).

(12) Heyburn, supra note 9, at 2227-28; see 28 U.S.C. [section] 1404(a) (2012) ("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 or to any district or division to which all parties have consented.") (amended by the Federal Courts Jurisdiction and Venue Clarification Act of 2011, PL 112-63, 125 Stat. 758 to include "or to any district or division to which all parties have consented.").

(13) Heyburn, supra note 9, at 2225 n. 1.

(14) Manual for Complex Litigation (Fourth) [section] 20.131 (2004); see also In re Plumbing Fixture Cases, 298 F. Supp. 484 (J.P.M.L. 1968).

(15) Fred. S. Longer, The Federal Judiciary's Supermagnet: A Multidistrict Litigation Pulls Together Cases from Across the Nation for Uniform Treatment in One Forum. Consolidating Cases Can Apply Critical Mass to the Defendants and Encourage a Just Resolution, Trial, July 2009, at 18, 19.

(16) Heyburn, supra note 9, at 2237.

(17) 28 U.S.C. [section] 1407(c) (2012).

(18) Id.

(19) Heyburn, supra note 9, at 2228.

(20) Id. at 2237.

(21) Id. at 2238.

(22) Id. at 2238-39.

(23) David F. Herr & Nicole Narotzky, The Judicial Panel's Role in Managing Mass Litigation, 249 (ALI-ABA Course of Study, Mass Litigation, 2008).

(24) Heyburn, supra note 9, at 2241.

(25) Id. at 2239.

(26) Id. at 2240.

(27) Id.

(28) Id. at 2242, 2244.

(29) Heyburn, supra note 9, at 2242.

(30) Id. at 2239.

(31) Id.

(32) Id.; see also Transfer Order at 3, In re Vioxx Products Liability Litigation (2005) (No. 1657) available at (stating that "Given the geographical dispersal of constituent actions and potential tagalong actions, no district stands out as the geographic focal point for this nationwide docket. Thus we have searched for a transferee judge with the time and experience to steer this complex litigation on a prudent course. By centralizing this litigation in the Eastern District of Louisiana before Judge Eldon E. Fallon, we are assigning this litigation to a jurist experienced in complex multidistrict products liability litigation and sitting in a district with the capacity to handle this litigation.").

(33) Id. at 2241.

(34) Id.

(35) Id. at 2239-40.

(36) Heyburn, supra note 9, at 2228.

(37) 28 U.S.C. [section] 1407(e) (2012).

(38) Heyburn, supra note 9, at 2228.

(39) 28 U.S.C. [section] 1407(e).

(40) From 2003 to 2012, the Panel granted 572 docket requests, denying only 197 requests. Thus, average approval rate in those years is approximately 66%; see Calendar Year Statistics of the U.S. Judicial Panel on Multidistrict Litigation (2012), available at

(41) Heyburn, supra note 9, at 2229. For an example of a rejected motion to transfer, see In re Reglan/Metoclopramide Products Liability Litigation, 622 F. Supp. 2d, 1380, 1381 (J.P.M.L 2009) (holding that although eleven actions at issue shared common factual issues as to whether the drug metoclopramide caused neurological injuries, centralization under [section] 1407 was not warranted because (1) there were no common defendants and (2) five of the actions were ongoing for three to four years with significant amount in discovery completed).

(42) Heyburn, supra note 9, at 2223.

(43) United States Judicial Panel on Multidistrict Litigation, Statistical Analysis of Multidistrict Litigation (Fiscal Year 2013), available at t_Litigation-2013_0.pdf.

(44) United States Judicial Panel on Multidistrict Litigation, Overview of Panel,

(45) Calendar Year Statistics of the U.S. Judicial Panel on Multidistrict Litigation (2012), available at ear _Statistics-2012.pdf.

(46) See Judicial Panel on Multidistrict Litigation, Pending MDLs by MDL Number as of October 17, 2013, available at r-October-17-2013.pdf.

(47) Heyburn, supra note 9, at 2230.

(48) Id.

(49) Id. at 2231.

(50) See United States Judicial Panel on Multidistrict Litigation, Statistical Analysis of Multidistrict Litigation (Fiscal Year 2013), supra note 46.

(51) Heyburn, supra note 9, at 2232.

(52) Calendar Year Statistics of the United States Judicial Panel on Multidistrict Litigation (2012), supra note 45.

(53) Heyburn, supra note 9, at 2232; see 28 U.S.C. [section] 1712 (2012) (containing provisions of CAFA that relate to coupon settlements); see also Ortiz v. Fibreboard Corp., 527 U.S. 815, 821 (1999) (holding that applicants for certification of a mandatory settlement class on a limited fund theory under Rule 23(b)(1)(B) "must show that the fund is limited by more than the agreement of the parties, and has been allocated to claimants belonging within the class by a process addressing any conflicting interests of class members."); Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 620 (1997) (holding that although a district court faced with a request for settlement-only class certification need not inquire if the case, if tried, would present intractable management problems, other requirements of Rule 23, e.g., adequate representation and common questions of law and fact, "demand undiluted, even heightened, attention.").

(54) See MDL No. 1657,

In re Vioxx Marketing, Sales Practices and Products Liability Litigation.

(55) Longer, supra note 15, at 19; see 28 U.S.C. [section] 1332(d)(2) (requiring only minimal diversity); see also 28 U.S.C. [section] 1453(b) (eliminating the one-year removal deadline).

(56) Manual for Complex Litigation (Fourth) [section] 20.132 (2004).

(57) Id.

(58) 17-112 Moore's Federal Practice--Civil [section] 112.07 (Georgene Vairo).

(59) Manual for Complex Litigation (Fourth) [section] 20.132 (2004).

(60) Id

(61) Id

(62) Id.; see 28 U.S.C. [section] 1404(a) ("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 or to any district or division to which all parties have consented.") (emphasis added); see also 28 U.S.C. [section] 1406 (a) ("The district court of a district in which is filed a case laying venue in the wrong division or district shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought") (emphasis added).

(63) Manual for Complex Litigation (Fourth) [section] 20.132 (2004); see also 28 U.S.C. [section] 1407(f) ("The panel may prescribe rules for the conduct of its business not inconsistent with Acts of Congress and the Federal Rules of Civil Procedure.").

(64) Stephen R. Stegich & David P. Yates, MDL Consolidation of Aviation Disaster Cases Before and after Lexecon, 67 Def. Counsel J. 226, 230-31 (2000); see Pfizer, Inc. v. Lord, 447 F.2d 122 (2d Cir. 1971); see also 2-18 Kreindler Aviation Accident Law [section] 18.02 (Matthew Bender) ("Under the practice prior to Lexecon, after transferring the multidistrict litigation cases to itself, the transferee district court would then consolidate the actions for trial under Rule 42(a) of the Federal Rules of Civil Procedure. Typically, the court then used Rule 42(b) to bifurcate and order separate trials on liability and damages. If punitive damages were at issue, that issue was tried with liability. If the jury made a finding of liability, the transferee court then could recommend remand by the Panel to the original transferor courts for damages trials. If the liability issue involved complex conflict-of-law problems, with the possibility of different law applying to different plaintiffs, a consolidated liability trial in the transferee court was not warranted.").

(65) Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26,40 (1998).

(66) Id.; see Manual for Complex Litigation (Fourth) [section] 20.132, n. 666 (2004) ("The Court infers that MDL transferee judges may not use section 1404(a) to transfer to any district at all, neither to a third district or back to the section 1407 transferor district. By analogy and further inference, an MDL transferee judge likewise now may not transfer under section 1406."); see also 2-18 Kreindler Aviation Accident Law [section] 18.02 (Matthew Bender) ("The Second Circuit had to decide whether the Supreme Court's decision in Lexecon prevented the transferee court from assigning a case to itself for trial, if the transfer was made under 28 U.S.C.S. [section] 157(b)(5), a bankruptcy statute, rather than under 28 U.S.C.S. [section] 1404(a). The court concluded that the reasoning of Lexecon applies equally to transfers pursuant to any venue statute.").

(67) Lexecon, 523 U.S. at 30.

(68) Id. at 28-29.

(69) Id. at 29.

(70) Id.

(71) Id.

(72) Id. at 31.

(73) Lexecon, 523 U.S. at 31-32.

(74) Id. at 32; see Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach (In re American Continental Corporation/Lincoln S&L Secs. Litig.), 102 F.3d 1524 (9th Cir. 1996) (Kozinski, J., dissenting).

(75) Lexecon, 523 U.S. at 40.

(76) Id. at 34.

(77) 28 U.S.C. [section] 1407(a) (emphasis added).

(78) See Lexecon, 523 U.S. at 34-35.

(79) Id at 35.

(80) Id. at 39.

(81) Id. at 40; see also H.R. Rep. No. 1130, 90th Cong., 2d Sess., p. 4 (1968).

(82) Id.

(83) Lexecon, 523 U.S. at 40.

(84) Id.; see S.Rep. No. 454, 90th Cong., 1st Sess., p. 5 (1967).

(85) Heyburn, supra note 9, at 2234 n.47 ("In response to the Lexecon decision and at the Panel's recommendation, the Judicial Conference of the United States immediately urged Congress to enact a statutory fix, and has continued to advocate such a change, as has the Panel. Indeed, two past Panel chairs, Judge Hodges in 2006 and Judge Nangle in 1999, testified before Congress and, echoing the views of many experienced transferee judges, strongly urged that [section] 1407 be amended to fix the situation that Lexecon created.").

(86) The Multidistrict Litigation Restoration Act: Hearing Before the Subcomm. on Admin. Oversight and the Courts of the Senate Comm, on the Judiciary, 98th Cong. 2 (2006) (statement of Sen. Jeff Sessions, Chairman, S. Subcomm. on Admin. Oversight and the Courts) ("The House of Representatives has passed legislation to address the Lexecon decision--the so-called 'Lexecon fix'--in the 106th, 107th, and 108th Congresses. The Senate passed its own Lexecon fix in the 106th Congress as well.... None of these bills has become law to date, however.").

(87) Manual for Complex Litigation (Fourth) [section] 20.132 (2004).

(88) Benjamin W. Larson, Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach; Respecting the Plaintiff's Choice of Forum, 74 Notre Dame L. Rev. 1337, 1338 (1999); see also Lexecon, 102 F.3d at 1540 (Kozinski, J., dissenting) ("Since the Judicial Panel on Multidistrict Litigation (JPML) was created in 1968, it has transferred 92,562 cases for consolidated pretrial proceedings. Only 3,508 of these--less than four percent--have been sent back for trial in the district where the complaint was filed.... These numbers tell the story of a remarkable power grab by federal judges who have parlayed a narrow grant of authority to conduct consolidated discovery into a mechanism for systematically denying plaintiffs the right to trial in their forum of choice.").

(89) 829 F.2d 1171 (D.C. Cir. 1987) (addressing claims arising from the tragic interception of Korean Air Lines Boeing 747 Flight 007, en route from New York to Seoul, by a Soviet military aircraft over the Sea of Japan on Sept. 1, 1983, resulting in 269 fatalities).

(90) Id. at 1175-76.

(91) Id. at 1176.

(92) But see id. at 1175 (explaining that "venue provisions are designed with geographical convenience in mind, and not to 'guarantee that the plaintiff will be able to select the law that will govern the case.' ... [T]here is no compelling reason to allow [a] plaintiff to capture the most favorable interpretation of that law simply and solely by virtue of his or her right to choose the place to open the fray.").

(93) Courtney E. Silver, Comment, Procedural Hassles in Multidistrict Litigation: A Call for Reform of 28 U.S.C. [section] 1407 and the Lexecon Result, 70 Ohio St. L. J. 455, 484 (2009).

(94) See id.

(95) See id. at 485.

(96) See id. ("After months or years of coordinated or consolidated pretrial proceedings, the plaintiff may come to realize that trial in the transferee district is best. The plaintiff may become more comfortable in that district or develop a rapport with the MDL judge, or perhaps the plaintiff may decide that district is more convenient than originally thought. Choice of law may not be a major issue in a particular case, and thus a plaintiff may likely choose to remain in that forum.").

(97) See id.

(98) Galligan & Arsenault, supra note 3, at 332.

(99) Id.

(100) See Silver, supra note 93, at 468 ("While these procedures do enable litigants to have their case heard in the district they choose, these options may be appropriate only in limited circumstances. Therefore, these alternatives are insufficient for alleviating the burdens established by Lexecon and [section] 1407, and greater reform is necessary so that litigants do not need to undergo these procedural hassles.").

(101) Id. at 468.

(102) See id.

(103) 28. U.S.C. [section] 1404(a) (2008).

(104) Id. (Section 1404 transfer is valid only to "any other district or division where it might have been brought" or "any district or division to which all parties have consented.").

(105) See Silver, supra note 93, at 468.

(106) See id.

(107) Id.

(108) Id. at 469 (internal quotations omitted).

(109) Id. at 473.

(110) See id.

(111) 28 U.S.C. [section] 1404(a) (2008).

(112) Silver, supra note 93, at 473-74.

(113) Id. at 474; see also Chairman of the Judicial Panel on Multidistrict Litig.: Hearing on H.R. 2112 Before the Subcomm. on Courts and Intellectual Prop, of the H. Comm, on the Judiciary, 106th Cong. 2 (1999) (testimony of J. John F. Nangle), available at Testimony/H_JudiciaryCourts_071699_2.htm ("The alternative recognized in Lexecon is for the Panel to remand the cases to their transferor districts, and then have each original district court decide whether to transfer each case back to the transferee district for trial purposes under 1404. Clearly this alternative is a cumbersome, repetitive, costly, potentially inconsistent, time consuming, inefficient and wasteful utilization of judicial and litigants' resources.").

(114) Silver, supra note 93, at 470.

(115) Id.

(116) Id. at 471; see Reducing Delays in Hatch-Waxman Multidistrict Litigation. 71 U. Chi. L. Rev. 1173 (2004) (statement of William J. Martin) ("[T]he scarcity of jurisdictions to condone this tactic suggests that it has not yet entered the judicial mainstream"); see also Florida v. Liquid Air Corp., 229 F.3d 1321, 1326 (11th Cir. 2000) (ruling that Lexecon does not prohibit parties from waiving venue objections in centralized actions where transferee court otherwise had subject-matter jurisdiction).

(117) Silver, supra note 93, at 471.

(118) Id. at 472.

(119) Id.

(120) Id.

(121) Id. at 472-73.

(122) Id. at 474.

(123) Silver, supra note 93, at 474.

(124) Id.; see The Multidistrict Litigation Restoration Act: Hearing Before the Subcomm. on Admin. Oversight and the Courts of the Comm, on the Judiciary, 109th Cong. 8 (2006) (Statement of J. Thrash, U.S. Dist. Judge), available at (concluding testimony of his ordeal of getting an intracircuit assignment in an MDL concerning ice cream product patent infringement claims, by stating that: "in my opinion, this litigation was unnecessary prolonged and expensive to the courts and the parties because of Lexecon. I hope that a legislative solution comes soon so that no District Judge has to do what 1 did in the Dippin' Dots case.").

(125) See United States Judicial Panel on Multidistrict Litigation, Statistical Analysis of Multidistrict Litigation (Fiscal Year 2013), supra note 46 (Finding that historically, 96.3% of all MDL cases were terminated in the transferee court).

(126) id.

(127) See generally, Galligan & Arsenault, supra note 3.

(128) See Hearing on H.R. 2112, supra note 113, at 2 ("As a practical matter, multidistrict cases, like other cases, usually settle before any individual trials become necessary. The anticipation of trial in the transferee judge's court historically has provided powerful inducement to spawn global or individual settlements, either during pretrial, on the eve of trial, during trial, after a consolidated liability trial, or, if necessary, after some bellwether trials on damages. Even if the transferee judge does not exercise the self-transfer authority, simply the parties' perception that the transferee judge might order self-transfer has contributed significantly to the disposition of many multidistrict dockets in advance of trial.").

(129) See Charles Silver & Geoffrey P. Miller, The Quasi-Class Action Method of Managing Multi-District Litigations: Problems and a Proposal, 63 Vand. L. Rev. 107, 123 (2010) (stating that MDL court's inability to retain cases for trial "declaws plaintiffs in transferred cases by depriving them of the weapon that pressures a defendant to pay a reasonable amount in settlement: the threat of forcing an exchange at a price set by a jury. The standard economic model of settlement implies this result directly. Under this model, parties settle for the plaintiffs expected gain at trial because the plaintiff can credibly threaten the defendant with an equivalent loss. A plaintiff who cannot get to trial can threaten a defendant only with additional litigation costs or other secondary costs. As Judge Young wrote: Once trial is no longer a realistic alternative, bargaining shifts in ways that inevitably favor the defense. After all, a major goal of nearly every defendant is to avoid a public jury trial of the plaintiffs claims. Fact-finding is relegated to a subsidiary role, and bargaining focuses instead on ability to pay, the economic consequences of the litigation, and the terms of the minimum payout necessary to extinguish the plaintiffs claims.") (internal quotations omitted).

(130) Id. at 122 (internal quotations omitted).

(131) Galligan & Arsenault, supra note 3, at 328.

(132) See Chamblee E. Burch, Financiers as Monitors in Aggregate Litigation, 87 N.Y.U. L. Rev. 1273, 1281-82 (2012) ("Over the last fifteen years, the class-action landscape has shifted steadily. Since the mid-1990s, both Congress and the judiciary have curtailed class actions by providing federal courts with jurisdiction, requiring plaintiffs to prove Rule 23's prerequisites by a preponderance of the evidence, and making class certification more rigorous through a willingness to delve into the merits when they overlap with the certification requirements. Most recently, Wal-Mart Stores, Inc. v. Dukes strengthened the commonality standard under Rule 23(a) and ensured that defendants can raise individual defenses, which could inject individual issues into a class that might otherwise meet Rule 23(b)(3)'s predominance requirement. These changes have made certifying a class increasingly difficult. Consequently, an increasing number of would-be classes now proceed en masse through multidistrict litigation and liberal joinder devices, such as Rules 20 and 42.").

(133) Id. at 1282.

(134) Id. at 1289 ("Even though clients involved in multidistrict litigation have individually retained their attorneys and thus have agreed to set contingent fees, some judges reduce and reallocate those fees to compensate attorneys performing common-benefit work and to minimize plaintiffs' litigation costs.").

(135) See Silver & Miller, supra note 129, at 122 ("[E]very claimant caught up in an MDL has a claim large enough to warrant a conventional lawsuit. In fact, every claimant has already sued. Every claimant also has an attorney who is aggressively pushing his or her case toward resolution in a favorable court. If the primary purpose of the class action is to remedy a litigation drought, the purpose of an MDL is to deal with a litigation flood. When a torrent of lawsuits threatens to overwhelm the courts, judges protect their limited resources by diverting the flow into an MDL. After all, the MDL's core purpose is 'administrative convenience,' as the Restatement rightly observes. But the predictable effect of such 'convenience' is to make plaintiffs worse off by denying them the advantages of decentralized litigation under the control of their own attorneys.").

(136) Galligan & Arsenault, supra note 3, at 319.

(137) Howard M. Erichson, Beyond the Class Action: Lawyer Loyalty and Client Autonomy in Non-Class Collective Representation, 2003 U. Chi. Legal F. 519, 530, 541 (2003).

(138) See Silver & Miller, supra note 129, at 119-20 ("By putting particular attorneys in charge of these matters, Judge Frank [a transferee judge in a major product liability MDL] relegated other attorneys to more passive roles. He also created relationships of dependency. A group of disabled attorneys had to rely on a coterie of litigation managers to develop their clients' cases. The disabled lawyers' clients also lost control. They were at the mercy of lawyers they never hired and could not discharge. The Manual for Complex Litigation recognizes the vulnerable position of disabled lawyers and their clients. To protect them, it subjects lead attorneys to a fiduciary duty, requiring them to 'act fairly, efficiently, and economically in the interests of all parties and parties' counsel.' The injunction would be unnecessary if the interests of managerial lawyers, non-lead lawyers, and claimants were always the same. But their interests may conflict, and often do.").

(139) Manual for Complex Litigation (Fourth) [section] 20.132 at 2.

(140) Galligan & Arsenault, supra note 3, at 324 ("The Manual encourages the trial judge 'at each conference' of the parties to 'explore the settlement posture of the parties and the techniques, methods, and mechanisms that may help resolve the litigation short of trial.'").

(141) Id.

(142) Id.

(143) 17-112 Moore's Federal Practice--Civil [section] 112.07 ("Although the Lexecon opinion makes clear that the transferee court lacks the power to retain actions for trial purposes, it has the power to retain actions while it continues efforts to settle the actions. A case need not be remanded to the original court as long as "coordinated or consolidated pretrial proceedings" are continuing, and this term is interpreted broadly.").

(144) See Andrew S. Pollis, The Need for Non-Discretionary Interlocutory Appellate Review in Multidistrict Litigation, 79 Fordham L. Rev. 1643, 1669-70 (2011) ("Many [MDL] judges view their role as getting the parties to a claims process--a settlement--as quickly as possible.... There is an obvious additional allure in the prospect of resolving multiple cases simultaneously and avoiding an unmanageable number of trials. An MDL judge also knows that if the cases do not settle, they must return to the transferor courts for trial. The potential remand creates a further incentive to be perceived as the hero who resolved the disputes rather than the ineffectual colleague whose inability to achieve a settlement left her fellow trial judges with the task of trying each case individually. This pressure to compel a settlement ... exists independently of the value of the claims at issue. And the numbers bear out the dynamic: of the 235,258 cases that have exited the MDL system since 1968, 223,126 were terminated by the transferee court and only 12,132, or about five percent, were remanded to the transferor court for trial.") (internal quotations omitted).

(145) See Silver & Miller, supra note 129, at 123 (noting that "it is almost a point of honor among transferee judges ... that [MDL] cases ... shall be settled rather than sent back to their home courts for trial.") (internal quotations omitted).

(146) See Lori Andrus, The Lexecon Puzzle and the Issue of Remand, 45 Trial 20 (July 2009) ("If a plaintiff insists on remand, there is little a defendant can do about it. Thus, holding firm on remand can be a powerful tactical weapon in an MDL. Litigation concentrated in a single forum--even complex litigation--is generally more manageable for the defendant. Remand all those individual cases back to the districts from whence they came, and a defendant faces a death by a thousand cuts.").

(147) Galligan & Arsenault, supra note 3, at 329-30 ("[T]he incentives to avoid the risk of trial increase exponentially as the stakes increase with large numbers of claimants.... Defendants understand the advantage of eliminating large pools of liability quickly and permanently.... The media attention that high-profile MDL litigation receives also provides an incentive to conclude litigation without any potentially problematic conduct being placed under a public microscope. Furthermore, the enormous cost associated with pretrial activity places a premium on early resolution.").

(148) See Longer, supra note 15, at 21.

(149) Id. at 22.

(150) See L. Elizabeth Chamblee, Unsettling Efficiency: When Non-Class Aggregation of Mass Torts Creates Second-Class Settlements, 65 La. L. Rev. 157,195-96 (2004) ("[T]he practical consequence of [the [section] 1407] transfer translates into a non-opt out class action for pretrial purposes and produces settlement as would class certification. Yet, neither the Panel nor the transferee courts have the authority to ensure fair and adequate settlement outcomes, as would a court in a real class action. Without this oversight and assurance, the defendants could settle the plaintiffs' attorney's inventory of cases with nominal compensation to each claimant but with what would amount to a large contingency fee for the attorney. Plaintiffs' counsel could also blackmail a defendant into settling cases with weak evidence of causation just by bringing a large number of claims against it.").
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Author:Cutler, Michael
Publication:Faulkner Law Review
Date:Mar 22, 2014
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