[Congressional Record Volume 151, Number 47 (Tuesday, April 19, 2005)]
[House]
[Pages H2120-H2121]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




            MULTIDISTRICT LITIGATION RESTORATION ACT OF 2005

  Mr. SENSENBRENNER. Mr. Speaker, I move to suspend the rules and pass 
the bill (H.R. 1038) 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.
  The Clerk read as follows:

                               H.R. 1038

       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 2005''.

     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. Pursuant to the rule, the gentleman from 
Wisconsin (Mr. Sensenbrenner) and the gentleman from California (Mr. 
Berman) 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. 1038, 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. SENSENBRENNER asked and was given permission to revise and 
extend his remarks, and include extraneous material.)
  Mr. SENSENBRENNER. Mr. Speaker, H.R. 1038, the Multidistrict 
Litigation Restoration Act of 2005, reverses the effect of a 1998 
Supreme Court case commonly referred to as ``Lexecon,'' which has 
hampered the Federal court system from adjudicating complex, 
multidistrict cases that are related by a common fact situation. Just 
as importantly, the bill functions as a technical correction to a 
related ``disaster litigation'' provision that was incorporated in the 
Department of Justice Authorization Act, which Congress passed in 2002.
  A little background is in order at this point. During the 107th 
Congress, I authored legislation to address the Lexecon and disaster 
litigation problems. As passed under suspension by the House, my bill, 
H.R. 860, accomplished two goals: First, the bill reversed the effect 
of the Lexecon case which dealt with the authority of a specially 
designated U.S. district court to handle complex multidistrict cases 
consolidated for trial. Pursuant to the decision, the court known as 
the ``transferee'' court could retain Federal and State cases only for 
pretrial matters, but not the actual trials themselves.
  H.R. 860 simply codified existing practice of the preceding 30 years 
by allowing the transferee court to retain jurisdiction for the purpose 
of determining liability and punitive damages, or to refer the cases 
back to those courts in which the cases were originally filed. This 
feature streamlines adjudication and enables the transferee court to 
induce the parties to settle.
  Second, H.R. 860 conferred original jurisdiction on U.S. district 
courts to adjudicate any civil action arising out of a single accident 
under prescribed conditions, but would remand the case to the State 
courts for determination of compensatory damages. This portion of H.R. 
860 is commonly referred to as the ``disaster litigation'' part of the 
bill.
  The Committee on the Judiciary in the other body took no action on 
H.R. 860, but the matter was resurrected during House-Senate conference 
deliberations on the Department of Justice authorization bill. Pursuant 
to negotiations, the conferees agreed to take half of H.R. 860, the 
disaster litigation portion, which is currently codified as section 
1369 of title 28 of the U.S. Code.
  Trying to enact a straight Lexecon fix through the bill before us is 
meritorious in its own right, promoting as it does judicial efficiency, 
but there is another problem that the bill solves. The currently 
codified disaster litigation portion of H.R. 860 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 those cases and qualify as a transferee court

[[Page H2121]]

under the multidistrict litigation statute; but the transferee court 
still cannot retain the consolidated cases for determination of 
liability and punitive damages, which compromises the operation of the 
statute.
  In this sense, then, the Lexecon fix, its freestanding merits aside, 
also functions as a technical correction for the recently enacted 
disaster litigation measure. H.R. 1038, in tandem with the now-codified 
disaster litigation provisions, will produce what was originally 
intended when legislation addressing this issue was first proposed, a 
fix to the Lexecon problem and a disaster litigation measure that 
really works.
  I remind Members that H.R. 1038 is identical to H.R. 1768 from the 
108th Congress, which passed the House by a rollcall vote of 418-0. In 
sum, this legislation speaks to process, fairness and judicial 
efficiency. It will not interfere with jury verdicts or compensation 
rates for litigators.
  Mr. Speaker, I include for the Record a letter from the U.S. Judicial 
Conference stating their strong support for enactment of H.R. 1038. I 
urge my colleagues to join me in a bipartisan effort to support this 
bill.

                                               Judicial Conference


                                         of the United States,

                                   Washington, DC, April 18, 2005.
     Hon. F. James Sensenbrenner, Jr.,
     Chairman, Committee on the Judiciary, House of 
         Representatives, Washington, DC.
       Dear Mr. Chairman: The Judicial Conference of the United 
     States strongly supports enactment of H.R. 1038, the 
     ``Multidistrict Litigation Restoration Act of 2005,'' which 
     you introduced on March 2, 2005 and which was reported 
     favorably by the House Judiciary Committee on March 17, 2005. 
     H.R. 1038 will facilitate the resolution of claims by 
     citizens and improve the administration of justice.
       Currently, section 1407(a) of title 28, United State Code, 
     the multidistrict litigation statute, authorizes the Judicial 
     Panel on Multidistrict Litigation (the Judicial Panel) to 
     transfer civil actions with common questions of fact that are 
     pending in multiple federal judicial districts ``to any 
     district for coordinated or consolidated pretrial 
     proceedings.'' It also requires the Judicial Panel to remand 
     any such action to the district court in which the action was 
     filed at or before the conclusion of such pretrial 
     proceedings, unless the action is terminated before then in 
     the transferee court.
       Although the federal courts had for nearly 30 years 
     followed the practice of allowing a transferee court to 
     invoke the venue transfer provision (28 U.S.C. Sec. 1404(a)) 
     and transfer the case to itself for trial purposes, the 
     Supreme Court in Lexecon, Inc. v. Milberg Weiss Bershad Hynes 
     & Lerach, 523 U.S. 26 (1998), held that such statutory 
     authority did not exist. The Court noted that the proper 
     venue for resolving the desirability of such self-transfer 
     authority is the ``the floor of Congress.'' 523 U.S. at 40.
       Section 2 of H.R. 1038 responds to the Lexecon decision by 
     amending 28 U.S.C. Sec. 1407 to allow a judge with a 
     transferred case to retain it for trial or to transfer it to 
     another district in the interest of justice and for the 
     convenience of the parties and witnesses. This section also 
     provides that any action transferred for trial must be 
     remanded by the Judicial Panel to the district court from 
     which it was transferred for the determination of 
     compensatory damages, unless the transferee court finds for 
     the convenience of the parties and witnesses and in the 
     interests of justice that the action should be retained for 
     the determined of compensatory damages. As experience has 
     shown, there is wisdom in permitting the judge who is 
     familiar with the facts and parties and pretrial proceedings 
     of a transferred case to retain the case for trial. Also, as 
     with most federal civil actions, multidistrict litigation 
     cases are typically resolved through settlement. Allowing the 
     transferee judge to set a firm trial date promotes the 
     resolution of these cases.
       H.R. 1038 also seeks to make corrections to the Multiparty, 
     Multiforum Trial Jurisdiction Act of 2002, which was enacted 
     as section 11020 of the ``21st Century Department of Justice 
     Appropriations Authorization Act'' (Pub. L. No. 107-273, 116 
     Stat. 1758; now codified in various sections in title 28, 
     United States Code. See 2 U.S.C. Sec. Sec. 1369, 1391, 1441, 
     1697, and 1785.)
       The Judicial Conference appreciates your support of H.R. 
     1038. If you or your staff have any questions, please contact 
     Mark W. Braswell or Karen Kremer, Counsel, Office of 
     Legislative Affairs (202-502-1700).
           Sincerely,
                                            Leonidas Ralph Mecham,
                                                        Secretary.

  Mr. SENSENBRENNER. Mr. Speaker, I reserve the balance of my time.
  Mr. BERMAN. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I rise to support House passage of H.R. 1038. At least 
five times over the past 6 or 7 years I have risen to support 
legislation virtually identical to H.R. 1038. Each time the legislation 
has stalled in the Senate.
  This bill has a very narrow purpose and effect. It overturns the 1998 
Lexecon decision of the Supreme Court. That decision held that a 
multidistrct litigation transferred to a Federal court for pretrial 
proceedings cannot be retained by that court for trial purpose. In so 
holding, the Lexecon decision upset decades of practice by the 
multidistrict litigation panel and Federal district courts. The Lexecon 
decision also increases the cost and complexity of such multidistrict 
litigations by requiring courts other than the transferee court which 
has overseen the discovery and other pretrial proceedings to conduct a 
trial.
  The provisions of this bill overturn Lexecon in a carefully 
calibrated manner. While the bill allows a transferee court to retain a 
case for a trial on liability issues and, when appropriate, on punitive 
damages, it creates a presumption that the trial of compensatory 
damages will be remanded to the transferor court. In so doing, the bill 
is careful to overturn the Lexecon decision without expanding the power 
previously exercised by transferee courts. More importantly, the 
presumption regarding the trial of compensatory damages ensures that 
plaintiffs will not be unduly burdened in pursuit of their claims.
  In addition, this bill makes technical and conforming corrections to 
the provisions in the 2002 Department of Justice authorization measure 
relating to the consolidation of mass tort cases. While not universally 
endorsed, most Democratic members of the Committee on the Judiciary 
have supported this piece of legislation each time it is submitted for 
consideration, and I ask my colleagues to once again vote for H.R. 
1038.
  Mr. Speaker, I reserve the balance of my time.
  Mr. SENSENBRENNER. Mr. Speaker, I yield 1 minute to the gentleman 
from Texas (Mr. Smith).
  Mr. SMITH of Texas. Mr. Speaker, I will not repeat the chairman's 
description of the bill's contents, but I would note that his bill is 
identical to the text of the legislation we passed in the last Congress 
by a vote of 418-0.
  H.R. 1038 helps the Multidistrict Litigation Panel discharge its 
responsibilities by streamlining the adjudication of complex, 
multidistrict cases in a manner that is fair to all litigants.
  Mr. CONYERS. Mr. Speaker, I have supported this legislation in the 
past because I am told it will improve the ability of Federal courts to 
handle complex multidistrict litigation arising from a common set of 
facts.
  But I do have some reservations about this bill. When Congress 
enacted the Multidistrict Litigation, MDL, statute 35 years ago, its 
purpose was not to impose an unfair burden on plaintiffs and their 
families. Congress made plain its insistence on preserving the ability 
of individual plaintiffs to have their eventual day in court in a 
Federal district courthouse reasonably close to their home.
  I want to make sure we continue to strike the right balance between 
emphasizing judicial economy and efficiency and preserving fundamental 
fairness during the critical trial phase. With this underlying goal in 
mind, I support this legislation. However, I hope the bill will 
continue to improve as it moves through the Senate and into Conference.
  Mr. BERMAN. Mr. Speaker, I have no further requests for time, and I 
yield back the balance of my time.
  Mr. SENSENBRENNER. Mr. Speaker, 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. 1038.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the bill was passed.
  A motion to reconsider was laid on the table.

                          ____________________