[Congressional Record Volume 152, Number 100 (Wednesday, July 26, 2006)]
[Senate]
[Pages S8272-S8274]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. HATCH (for himself and Mr. Sessions):
  S. 3734. A bill 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; to 
the Committee on the Judiciary.
  Mr. HATCH. Mr. President, I rise today to introduce the Multidistrict 
Litigation Restoration Act of 2006.
  The word ``Lexecon'' is well known in the Federal judiciary. It 
refers to the 1998 Supreme Court decision holding that statutory 
authority does not exist for transferee courts handling cases 
centralized by the Multidistrict Litigation Panel, or the MDL Panel, to 
retain these cases for trial. For approximately 30 years, courts 
receiving cases for pretrial proceedings from the MDL Panel invoked the 
general venue statute to transfer cases to themselves for trial. The 
process worked well because the court that had handled the pretrial 
phase was well-versed in the case's facts and was in the best position 
to encourage all parties to reach a settlement, or--barring 
settlement--make a final determination by adjudicating the dispute. But 
with the Lexecon decision that practice ended, and ever since we have 
been left with a multidistrict, multiparty, multiforum system that is 
costly, time-consuming, repetitive, inefficient, and often 
inconsistent.
  As many of my colleagues know, the MDL Panel is an entity comprising 
seven judges, authorized to transfer civil actions pending in more than 
one district and involving one or more common questions of fact to any 
district court for coordinated pretrial proceedings. The MDL Panel 
authorizes the transfer upon determining that it will be for the 
convenience of the parties and witnesses, and promote the just and 
efficient conduct of such actions. Congress established this 
centralization mechanism in 1968 to avoid duplication of discovery, 
prevent inconsistent rulings, and conserve the resources of the 
parties, their counsel, and the judiciary.
  Typically, cases centralized by the MDL Panel are numerous and 
complex. About 150,000 cases with millions of claims have been resolved 
through the process since its creation. They have included such matters 
as mass torts, antitrust price fixing, securities fraud, and unfair 
employment practices. The transferee judge becomes highly knowledgeable 
about the litigation during his or her consideration of voluminous 
pretrial proceedings. When all of the cases are remanded to the various 
transferor courts following completion of pretrial proceedings, those 
courts know little or nothing about the litigation. Even when all the 
parties agree to keep the matter that has been transferred in the court 
it was transferred to, it cannot be done under the current law. In some 
instances, judges have followed cases to courts outside their judicial 
circuit to conduct trial, at considerable inconvenience and expense, in 
order to spare other judges from the nightmare of having such mammoth 
cases so suddenly thrust upon them.
  Let me give you an example of what this means in real terms. In my 
own State of Utah, there have been nearly 1,000 cases that have been 
transferred

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either in or out of Utah's judicial district by the MDL Panel since 
1968. In fiscal year 2005, there were nearly 50 cases transferred out 
of Utah through the MDL process. That is 50 cases that could be dumped 
back onto our judges in Utah without any warning or preparation. At the 
same time, there were six MDL cases pending in Utah at the end of 2005. 
Under the post-Lexecon system, one or more of our judges could be 
required to follow these cases to other districts throughout the United 
States for trial. Both of these scenarios would prove to be a serious 
burden for a small judicial district like Utah, and could hamper or 
delay justice for the people of my State. This is the same challenge 
our courts face nationwide as a result of the Lexecon decision.
  Congress is the only entity that can solve these problems. Writing 
for the Court in Lexecon, Justice Souter stated that ``the proper venue 
for resolving the issue remains the floor of Congress.'' That is why I 
am introducing the Multidistrict Litigation Restoration Act of 2006 
today, to give the Federal judiciary the necessary statutory authority 
to transfer multidistrict litigation cases for the purposes of trial. 
This legislation will return the law to what was in effect for almost 
three decades prior to the Lexecon decision. It will provide the MDL 
Panel with the most efficient option for resolving complex issues, the 
best means to encourage universal settlements, and the most consistent 
approach for rendering decisions.
  This legislation is supported by the Judicial Conference of the 
United States, the policy arm of the Federal judicial branch, as well 
as the U.S. Department of Justice. The legislation is also supported by 
the U.S. Chamber of Commerce Institute for Legal Reform.
  Moreover, this is not a partisan effort. Proposals to reform 
multidistrict, multiparty litigation were first advanced by the Carter 
administration. I introduced similar legislation in the 106th Congress 
with Senators Leahy, Kohl, and Schumer. That bill passed the Senate by 
unanimous consent.
  This legislation is long overdue. Lexecon was decided 8 years ago. 
The House has passed a Lexecon fix four times since 1999. In a letter 
to the chairman of the MDL Panel, Judge Thomas W. Thrash, a Federal 
district court judge for the Northern District of Georgia, reporting on 
the disposition of a multidistrict litigation case that he was required 
to try in Texas because he could not transfer the case to Georgia, 
summed up the situation well. Judge Thrash wrote, ``Needless to say, 
resolution of this case has been prolonged and involved greater expense 
to the judiciary . . . because of my inability to transfer the Northern 
District of Texas case to myself for trial here in the Northern 
District of Georgia. On the other hand, it would have been almost 
criminal to dump this case on a new Northern District of Texas judge 
for trial. . . . I hope that this problem will be fixed by Congress 
soon.''
  Mr. President, I share that hope. I urge all of my colleagues to 
support the Multidistrict Litigation Restoration Act of 2006 and I ask 
unanimous consent that the text of the bill be printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 3734

       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. FINDINGS AND PURPOSES.

       (a) Findings.--Congress finds that--
       (1) under section 1407 of title 28, United States Code 
     (enacted April 29, 1968), the Judicial Panel on Multidistrict 
     Litigation (in this section referred to as the ``Judicial 
     Panel''), a group of 7 Federal judges selected by the Chief 
     Justice of the United States, assists in the centralization 
     of civil actions which share common questions of fact filed 
     in more than 1 Federal judicial district nationwide;
       (2) civil actions described under paragraph (1)--
       (A) often arise from mass single-action torts that cause 
     death and destruction in which the plaintiffs are from many 
     different States; and
       (B) often involve issues of critical importance to the 
     Nation, including information technology, intellectual 
     property, antitrust, contracts, and products liability cases;
       (3) the Judicial Panel--
       (A) identifies the 1 United States district court (referred 
     to in this section as the ``transferee court'') best equipped 
     at adjudicating pretrial matters; and
       (B) after pretrial, remands individual civil actions back 
     to the district where the civil action was originally filed 
     unless that action has been previously terminated;
       (4)(A) for approximately 3 decades, the transferee court 
     often invoked a general venue statute that authorizes a 
     district court to transfer a civil action in the interest of 
     justice and for the convenience of the parties and witnesses;
       (B) in effect, the transferee court simply transferred all 
     of the civil actions for trial to itself; and
       (C) this process worked well because the transferee court 
     was well-versed in the facts and law of the centralized 
     litigation and the court could assist all parties to settle 
     when appropriate;
       (5) in 1998, the United States Supreme Court held that the 
     plain language of section 1407 of title 28, United States 
     Code, requires the Judicial Panel to remand all civil actions 
     for trial back to the respective districts from which such 
     actions were originally referred;
       (6) the absence of authority to transfer a centralized 
     civil action for trial hampers the Judicial Panel and 
     transferee judges in their ability to achieve the important 
     goals of section 1407 of that title promoting the just and 
     efficient conduct of multidistrict litigation;
       (7) the Judicial Panel has inherent rulemaking authority to 
     promulgate procedural rules pertaining to multidistrict 
     litigation which the Judicial Panel has already exercised to 
     ensure that when a centralization occurs all civil actions of 
     a similar nature then filed and all later civil actions that 
     may be filed are sent to 1 district court;
       (8) Congress has statutorily conferred the Judicial Panel 
     with rulemaking authority for the conduct of its business not 
     inconsistent with the United States Constitution, Acts of 
     Congress, and the Federal Rules of Civil Procedure; and
       (9) in civil actions in which punitive damages are to be 
     imposed, individual courts, including transferee courts, must 
     ensure that the measure of punishment is both reasonable and 
     proportionate to the amount of harm to plaintiffs and to the 
     amount of compensatory damages received.
       (b) Purpose.--The purpose of this Act is to improve the 
     litigation system in the Nation to allow a Federal judge to 
     whom a civil action is transferred under section 1407 of 
     title 28, United States Code, to retain jurisdiction over 
     certain civil actions for trial to determine liability and 
     compensatory and punitive damages, if appropriate, in 
     compliance with due process requirements.

     SEC. 3. 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:
       ``(i)(I) 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. 4. TECHNICAL AMENDMENT TO MULTIPARTY, MULTI FORM TRIAL 
                   JURISDICTION ACT OF 2002.

       Section 1407 of title 28, United States Code, as amended by 
     section 3 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.

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       ``(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, other than punitive 
     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. 5. EFFECTIVE DATE.

       (a) Multidistrict Litigation.--The amendments made by 
     section 3 shall apply to any civil action pending on or 
     brought on or after the date of the enactment of this Act.
       (b) Technical Amendment.--The amendment made by section 4 
     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.).
                                 ______