[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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