[Congressional Record Volume 150, Number 38 (Wednesday, March 24, 2004)]
[House]
[Pages H1377-H1379]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
{time} 1030
MULTIDISTRICT LITIGATION RESTORATION ACT OF 2004
Mr. SENSENBRENNER. Mr. Speaker, I move to suspend the rules and pass
the bill (H.R. 1768) to amend title 28, United States Code, to allow a
judge to whom a case is transferred to retain jurisdiction over certain
multidistrict litigation cases for trial, and for other purposes, as
amended.
The Clerk read as follows:
H.R. 1768
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Multidistrict Litigation
Restoration Act of 2004''.
SEC. 2. MULTIDISTRICT LITIGATION.
Section 1407 of title 28, United States Code, is amended--
(1) in the third sentence of subsection (a), by inserting
``or ordered transferred to the transferee or other district
under subsection (i)'' after ``terminated''; and
(2) by adding at the end the following new subsection:
``(i)(1) Subject to paragraph (2) and except as provided in
subsection (j), any action transferred under this section by
the panel may be transferred for trial purposes, by the judge
or judges of the transferee district to whom the action was
assigned, to the transferee or other district in the interest
of justice and for the convenience of the parties and
witnesses.
``(2) Any action transferred for trial purposes under
paragraph (1) shall be remanded by the panel for the
determination of compensatory damages to the district court
from which it was transferred, unless the court to which the
action has been transferred for trial purposes also finds,
for the convenience of the parties and witnesses and in the
interests of justice, that the action should be retained for
the determination of compensatory damages.''.
SEC. 3. TECHNICAL AMENDMENT TO MULTIPARTY, MULTIFORM TRIAL
JURISDICTION ACT OF 2002.
Section 1407 of title 28, United States Code, as amended by
section 2 of this Act, is further amended by adding at the
end the following:
``(j)(1) In actions transferred under this section when
jurisdiction is or could have been based, in whole or in
part, on section 1369 of this title, the transferee district
court may, notwithstanding any other provision of this
section, retain actions so transferred for the determination
of liability and punitive damages. An action retained for the
determination of liability shall be remanded to the district
court from which the action was transferred, or to the State
court from which the action was removed, for the
determination of damages, other than punitive damages, unless
the court finds, for the convenience of parties and witnesses
and in the interest of justice, that the action should be
retained for the determination of damages.
``(2) Any remand under paragraph (1) shall not be effective
until 60 days after the transferee court has issued an order
determining liability and has certified its intention to
remand some or all of the transferred actions for the
determination of damages. An appeal with respect to the
liability determination and the choice of law determination
of the transferee court may be taken during that 60-day
period to the court of appeals with appellate jurisdiction
over the transferee court. In the event a party files such an
appeal, the remand shall not be effective until the appeal
has been finally disposed of. Once the remand has become
effective, the liability determination and the choice of law
determination shall not be subject to further review by
appeal or otherwise.
``(3) An appeal with respect to determination of punitive
damages by the transferee court may be taken, during the 60-
day period beginning on the date the order making the
determination is issued, to the court of appeals with
jurisdiction over the transferee court.
``(4) Any decision under this subsection concerning remand
for the determination of damages shall not be reviewable by
appeal or otherwise.
``(5) Nothing in this subsection shall restrict the
authority of the transferee court to transfer or dismiss an
action on the ground of inconvenient forum.''.
SEC. 4. EFFECTIVE DATE.
(a) Section 2.--The amendments made by section 2 shall
apply to any civil action pending on or brought on or after
the date of the enactment of this Act.
(b) Section 3.--The amendment made by section 3 shall be
effective as if enacted in section 11020(b) of the
Multiparty, Multiforum Trial Jurisdiction Act of 2002 (Public
Law 107-273; 116 Stat. 1826 et seq.).
The SPEAKER pro tempore (Mr. LaHood). Pursuant to the rule, the
gentleman from Wisconsin (Mr. Sensenbrenner) and the gentlewoman from
Texas (Ms. Jackson-Lee) each will control 20 minutes.
The Chair recognizes the gentleman from Wisconsin (Mr.
Sensenbrenner).
General Leave
Mr. SENSENBRENNER. Mr. Speaker, I ask unanimous consent that all
Members may have 5 legislative days within which to revise and extend
their remarks and include extraneous material on H.R. 1768, the bill,
currently under consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Wisconsin?
There was no objection.
Mr. SENSENBRENNER. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, this legislation addresses two important issues in the
world of complex multidistrict litigation. First, the bill reverses the
effect of the 1998 Supreme Court decision in the so-called ``Lexecon''
case. For 30 years prior to the Lexecon decision, a Federal judicial
entity, the Multidistrict Litigation Panel, selected the one U.S.
district court that was best suited to handle pretrial matters in
complex multidistrict cases filed in State and Federal district courts
around the country. The district courts selected, called the
``transferee'' court, would then invoke a separate general venue
statute to retain all the cases for trial matters. This situation
promoted judicial administrative efficiency, then produced results that
were more uniformly fair to the litigants.
In the 1998 Lexecon decision, the Supreme Court ruled that the
statute empowering the MDLP to operate did not authorize a transferee
court to retain cases after the pretrial matters were concluded. The
bill amends the Federal multidistrict litigation statute by explicitly
allowing a transferee court to retain jurisdiction over referred cases
for trial, for the purposes of determining liability and punitive
damages, or to refer them to other districts as it sees fit. It simply
responds to the Court's admonition that Congress amend the statute to
allow the MDLP and the affected transferee courts to act as they had
done without incident for 30 years prior to Lexecon.
Second, the passage of H.R. 1768 ensures that a special ``disaster''
litigation statute enacted last term will operate as Congress intended.
Among other prescribed conditions, this new law creates original
jurisdiction for U.S. district courts to adjudicate cases in which the
accident has led to 75 deaths. This provision, now codified as a part
of the Department of Justice authorization act from the 107th Congress,
contemplates that the Lexecon problem is solved.
In other words, the new disaster litigation law only creates original
jurisdiction for a U.S. district court to accept these cases and
qualify as a transferee court under the multidistrict litigation
statute. But the transferee court still cannot retain consolidated
cases for the determination of liability and punitive damages which
effectively guts the statute. In this sense, the Lexecon fix set forth
in H.R. 1768, its freestanding merits aside, also functions as a
technical correction to the recently enacted disaster litigation
statute.
In sum, this legislation speaks to process, fairness, and judicial
efficiency. It will not interfere with jury verdicts or compensation
rates for litigators.
I urge my colleagues to join me in a bipartisan effort to support
this bill.
Mr. Speaker, I reserve the balance of my time.
Ms. JACKSON-LEE of Texas. Mr. Speaker, I yield myself such time as I
may consume.
Let me first of all, Mr. Speaker, say that there is good news for
those victims who had been victimized by catastrophic injuries and
catastrophic accidents such as airplane crashes, terrorist actions, and
others because we have been able to provide for an opportunity for
those cases to remain in their jurisdiction of the incident or the
jurisdiction that is accommodating to those plaintiffs; and I applaud
that relief that was given by the exclusion
[[Page H1378]]
from this language to require cases to be moved at random, if you will,
out of the State court system.
So I rise in support of H.R. 1768, and I ask my colleagues to support
it. The House of Representatives has approved legislation containing
the provisions of H.R. 1768 in each of the past two Congresses. In the
107th Congress, the House passed such legislation by unanimous consent
and in the 106th Congress, the House passed by voice vote on
suspension. Thus I believe it is fair to say that the House has several
times found this legislation to be unobjectionable and
noncontroversial.
As to its substance, H.R. 1768 has a very narrow purpose and effect.
It is to overturn the 1998 decision of the Supreme Court in Lexecon v.
Milberg, Weiss. The Lexecon decision held that a multidistrict
litigation transferred to a Federal court for pretrial proceedings
cannot be retained by that court for trial purposes. In so holding, the
Lexecon decision upsets decades of practice by the Multidistrict
Litigation Panel and Federal district courts. The Lexecon decision also
increases the cost and complexity of such multidistrict litigation by
requiring courts other than the transferee court, which has overseen
discovery and other pretrial proceedings, to conduct the trial. Again,
major burdens on our petitioners or plaintiffs.
H.R. 1768 overturns the Lexecon decision. Its enactment will once
again allow a transferee court to retain the trial on liability issues
and when appropriate on punitive damages, and it protects those
jurisdictional cases that can rightly belong in the State courts that
happen to be class actions. H.R. 1768 is carefully crafted to overturn
the Lexecon decision without expanding the power previously exercised
by transferee courts. It creates a presumption for trial that
compensatory damages will be remanded to the transferor court. This
presumption is important because it ensures that plaintiffs will not be
unduly burdened in pursuit of their claims.
I also note that H.R. 1768 as reported by the Committee on the
Judiciary is substantially different than the introduced version. These
differences represent a significant improvement.
Explaining those relevant differences requires a brief recount of
recent history. As part of the DOJ reauthorization legislation enacted
in 2002, Congress created minimal diversity jurisdiction in Federal
court for certain actions involving large-scale, single accidents.
Among other things that legislation, which had been a part of the
predecessor to H.R. 1768, created Federal diversity jurisdiction for
such accidents only where at least 75 people had been killed or
injured. The agreement between House and Senate conferees to set the
bar at 75 people represented a significant departure from the House-
passed legislation which had only required a 25-person threshold.
Again, a negative impact on plaintiffs.
As introduced, H.R. 1768 would have, among other things, upset this
agreement by instituting a 25-person threshold. Upsetting this
agreement would have also upset many members of the Committee on the
Judiciary, as well as those Senators who had insisted on a 75-people
threshold as the price for supporting enactment of a single accident
provision and also, might I say, providing equity in the courts of
justice and allowing those individuals to have access to the courts of
their choice. Thus, during the Committee on the Judiciary markup, the
chairman wisely decided to offer an amendment that leaves the current
75-person threshold in place. By doing so, he has rendered the bill
unobjectionable.
This bill's narrow breadth should be contrasted with broader and more
troubling legislation to expand Federal court jurisdiction, such as
supposed class action reform. Support for H.R. 1768 in no way implies
support for any of the various class action bills. Unlike H.R. 1768,
the class action bills represent a radical rewrite of class action
rules, would ban most forms of State class actions, would burden the
Federal courts and unreasonably limit plaintiffs' access to the courts,
and require in-depth, thorough analysis and long, long study of that
matter.
In sum, because the bills are so vastly different in scope and
effect, support for H.R. 1768 should in no way be read as support for
class action legislation. I ask my colleagues to support this bill,
H.R. 1768.
Mr. Speaker, I rise in support of this legislation only insofar as it
does not preclude classes of individuals from bringing most actions
into State Court to obtain relief in the form of a class action. On
January 21, 2004, my colleagues and I of the Judiciary Committee marked
this bill up, and I supported it with caveat. The Multidistrict
Litigation Restoration act of 2003 was introduced on April 11, 2003.
This bill was introduced, largely, in order to improve the ability of
federal courts to handle complex multidistrict litigation arising from
a common set of facts.
H.R. 1768 contains two operative sections. Section 2 allows a
transferee court in multidistrict litigation to retain jurisdiction
over all of the consolidated cases with the presumption that
compensatory damages will be remanded to the transferor court. Section
2 seeks to overturn the decision of the United States Supreme Court in
Lexecon v. Milberg Weiss Bershad Hynes & Lerach, interpreting 28 U.S.C.
Section 1407, the federal multidistrict litigation statute. In Lexecon,
the Supreme Court held that a transferee court (a district court
assigned to hear pretrial matters by a multidistrict litigation panel
in multidistrict litigation cases) must remand all cases back for trial
to the districts in which they were originally filed, regardless of the
views of the parties.
Section 3 amends the Multiparty, Multiforum Trial Jurisdiction Act
(MMTJA) of 2002 (Section 11020 of H.R. 2215, the Department of Justice
appropriations authorization), which expanded federal court
jurisdiction by requiring only minimal diversity (as opposed to
complete diversity) for mass torts arising from a single incident, and
established new federal procedures in these narrowly defined cases for
the selection of venue, service of process and issuance of subpoenas.
Section 3 would provide for the consolidation of these mass tort cases
into a single district, and would reduce from 75 to 25 the number of
individuals that must have suffered injury in such cases.
In the past, I have voted for legislation containing substance nearly
identical to the bill we have before us today, and I will continue to
support it so long as its provisions maintain a narrowly-tailored
expansion of federal jurisdiction to hear consolidated cases with
carefully placed caveats to allow for remand to the district of
original jurisdiction. One of the most important concerns with this
type of legislation is the answer to the questions of whether it will
truly serve the interest of justice and whether it will not preclude
parties from receiving a fair opportunity to present their case and
have it considered.
On a related matter, class actions are an important and efficient
legal tool for minority consumers to use in order to obtain redress and
to deter wrongful conduct--which is critical given the portion of the
domestic market that is occupied by minorities.
Class actions lawsuits are the only effective remedy when a large
number of people are harmed but sustain small amounts of damages for
which individual litigation would be inefficient. Class actions have
resulted in refunds to consumers for fraudulent HMO, credit card, and
telecommunications billing methods; free medical check-ups for persons
exposed to toxic substances; and most importantly, changes to business
practices that have in some way cheated or threatened the health of
consumers.
The Class Action Fairness Act would move most state court class
actions into federal courts, posing a threat to basic civil rights and
unfairly blocking the disadvantaged members of society, including women
and racial minorities, from obtaining relief from discrimination and
unlawful practices. Class action litigation is one of the most
important tools that women and other minorities can use to bring about
equality. Therefore, I support H.R. 1768 with the understanding that I
do not in the same vein support the Class Action Fairness Act.
Mr. Speaker, for the above reasons and with the limitations set
forth, I support this legislation.
Mr. SMITH of Texas. Mr. Speaker, this legislation makes it easier for
federal judges to retain jurisdiction of a lawsuit when questions
regarding the facts are not in dispute, such as the facts in lawsuits
stemming from a plane crash.
For example, a plane crash with 100 fatalities from 25 states can
result in 25 different plaintiffs. This legislation allows those 25
cases to be transferred to one court, which reduces the burden on our
federal courts.
Thirty years ago federal judges were authorized by circuit and
district court case law to transfer cases to their own district or
another district for trial. This provided them the ability to
consolidate cases in their jurisdiction or refer cases to the
appropriated jurisdiction as they saw fit.
Unfortunately, in 1998, the Supreme Court reversed that practice in
the Lexecon case because of the language in the statute. The opinion
said that Congress could resolve the issue. Mr. Speaker, that is why we
are here today.
[[Page H1379]]
The Lexecon decision has prevented the federal court system from
adjudicating complex cases even when all parties to a case have agreed
on the wisdom of a transfer. That is not the most efficient and
effective way for the management of our federal courts.
Our transferee judges are federal judicial experts. We must provide
them with the freedom they need so they can supervise day-to-day
pretrial proceedings, which include the underlying facts, laws and the
possibility of a settlement.
Mr. Speaker, I urge my colleagues to support this legislation.
Ms. JACKSON-LEE of Texas. Mr. Speaker, I yield back the balance of my
time.
Mr. SENSENBRENNER. Mr. Speaker, I have no further requests for time,
and I yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Wisconsin (Mr. Sensenbrenner) that the House suspend the
rules and pass the bill, H.R. 1768, as amended.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds of
those present have voted in the affirmative.
Mr. SENSENBRENNER. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the
Chair's prior announcement, further proceedings on this motion will be
postponed.
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