[House Report 106-276]
[From the U.S. Government Publishing Office]



106th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    106-276

======================================================================



 
  MULTIDISTRICT, MULTIPARTY, MULTIFORUM TRIAL JURISDICTION ACT OF 1999

                                _______


 July 30, 1999.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

Mr. Coble, from the Committee on the Judiciary, submitted the following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                        [To accompany H.R. 2112]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on the Judiciary, to whom was referred the 
bill (H.R. 2112) 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 to provide for Federal jurisdiction of certain 
multiparty, multiforum civil actions, having considered the 
same, reports favorably thereon with an amendment and 
recommends that the bill as amended do pass.

                           TABLE OF CONTENTS

                                                                  

                                                                 Page
The Amendment..............................................           2
Purpose and Summary........................................           4
Background and Need for the Legislation....................           4
Hearings...................................................           7
Committee Consideration....................................           8
Committee Oversight Findings...............................           8
Committee on Government Reform Findings....................           8
New Budget Authority and Tax Expenditures..................           8
Committee Cost Estimate....................................           8
Constitutional Authority Statement.........................           8
Section-by-Section Analysis and Discussion.................           9
Agency Views...............................................          12
Changes in Existing Law Made by the Bill, as Reported......          13
Minority Views.............................................          20

    The amendment is as follows:
    Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Multidistrict, Multiparty, 
Multiforum Trial Jurisdiction Act of 1999''.

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. MULTIPARTY, MULTIFORUM JURISDICTION OF DISTRICT COURTS.

    (a) Basis of Jurisdiction.--
            (1) In general.--Chapter 85 of title 28, United States 
        Code, is amended by adding at the end the following new 
        section:

``Sec. 1369. Multiparty, multiforum jurisdiction

    ``(a) In General.--The district courts shall have original 
jurisdiction of any civil action involving minimal diversity between 
adverse parties that arises from a single accident, where at least 25 
natural persons have either died or incurred injury in the accident at 
a discrete location and, in the case of injury, the injury has resulted 
in damages which exceed $75,000 per person, exclusive of interest and 
costs, if--
            ``(1) a defendant resides in a State and a substantial part 
        of the accident took place in another State or other location, 
        regardless of whether that defendant is also a resident of the 
        State where a substantial part of the accident took place;
            ``(2) any two defendants reside in different States, 
        regardless of whether such defendants are also residents of the 
        same State or States; or
            ``(3) substantial parts of the accident took place in 
        different States.
    ``(b) Special Rules and Definitions.--For purposes of this 
section--
            ``(1) minimal diversity exists between adverse parties if 
        any party is a citizen of a State and any adverse party is a 
        citizen of another State, a citizen or subject of a foreign 
        state, or a foreign state as defined in section 1603(a) of this 
        title;
            ``(2) a corporation is deemed to be a citizen of any State, 
        and a citizen or subject of any foreign state, in which it is 
        incorporated or has its principal place of business, and is 
        deemed to be a resident of any State in which it is 
        incorporated or licensed to do business or is doing business;
            ``(3) the term `injury' means--
                    ``(A) physical harm to a natural person; and
                    ``(B) physical damage to or destruction of tangible 
                property, but only if physical harm described in 
                subparagraph (A) exists;
            ``(4) the term `accident' means a sudden accident, or a 
        natural event culminating in an accident, that results in death 
        or injury incurred at a discrete location by at least 25 
        natural persons; and
            ``(5) the term `State' includes the District of Columbia, 
        the Commonwealth of Puerto Rico, and any territory or 
        possession of the United States.
    ``(c) Intervening Parties.--In any action in a district court which 
is or could have been brought, in whole or in part, under this section, 
any person with a claim arising from the accident described in 
subsection (a) shall be permitted to intervene as a party plaintiff in 
the action, even if that person could not have brought an action in a 
district court as an original matter.
    ``(d) Notification of Judicial Panel on Multidistrict Litigation.--
A district court in which an action under this section is pending shall 
promptly notify the judicial panel on multidistrict litigation of the 
pendency of the action.''.
            (2) Conforming amendment.--The table of sections at the 
        beginning of chapter 85 of title 28, United States Code, is 
        amended by adding at the end the following new item:

``1369. Multiparty, multiforum jurisdiction.''.

    (d) Removal of Actions.--Section 1441 of title 28, United States 
Code, is amended--
            (1) in subsection (e) by striking ``(e) The court to which 
        such civil action is removed'' and inserting ``(f) The court to 
        which a civil action is removed under this section''; and
            (2) by inserting after subsection (d) the following new 
        subsection:
    ``(e)(1) Notwithstanding the provisions of subsection (b) of this 
section, a defendant in a civil action in a State court may remove the 
action to the district court of the United States for the district and 
division embracing the place where the action is pending if--
            ``(A) the action could have been brought in a United States 
        district court under section 1369 of this title, or
            ``(B) the defendant is a party to an action which is or 
        could have been brought, in whole or in part, under section 
        1369 in a United States district court and arises from the same 
        accident as the action in State court, even if the action to be 
        removed could not have been brought in a district court as an 
        original matter.
The removal of an action under this subsection shall be made in 
accordance with section 1446 of this title, except that a notice of 
removal may also be filed before trial of the action in State court 
within 30 days after the date on which the defendant first becomes a 
party to an action under section 1369 in a United States district court 
that arises from the same accident as the action in State court, or at 
a later time with leave of the district court.
    ``(2) Whenever an action is removed under this subsection and the 
district court to which it is removed or transferred under section 
1407(j) has made a liability determination requiring further 
proceedings as to damages, the district court shall remand the action 
to the State court from which it had been removed for the determination 
of damages, unless the court finds that, for the convenience of parties 
and witnesses and in the interest of justice, the action should be 
retained for the determination of damages.
    ``(3) Any remand under paragraph (2) shall not be effective until 
60 days after the district court has issued an order determining 
liability and has certified its intention to remand the removed action 
for the determination of damages. An appeal with respect to the 
liability determination and the choice of law determination of the 
district court may be taken during that 60-day period to the court of 
appeals with appellate jurisdiction over the district 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.
    ``(4) Any decision under this subsection concerning remand for the 
determination of damages shall not be reviewable by appeal or 
otherwise.
    ``(5) An action removed under this subsection shall be deemed to be 
an action under section 1369 and an action in which jurisdiction is 
based on section 1368 of this title for purposes of this section and 
sections 1407, 1660, 1697, and 1785 of this title.
    ``(6) Nothing in this subsection shall restrict the authority of 
the district court to transfer or dismiss an action on the ground of 
inconvenient forum.''.
    (e) Choice of Law.--
            (1) Determination by the court.--Chapter 111 of title 28, 
        United States Code, is amended by adding at the end the 
        following new section:

``Sec. 1660. Choice of law in multiparty, multiforum actions

    ``(a) Factors.--In an action which is or could have been brought, 
in whole or in part, under section 1369 of this title, the district 
court in which the action is brought or to which it is removed shall 
determine the source of the applicable substantive law, except that if 
an action is transferred to another district court, the transferee 
court shall determine the source of the applicable substantive law. In 
making this determination, a district court shall not be bound by the 
choice of law rules of any State, and the factors that the court may 
consider in choosing the applicable law include--
            ``(1) the place of the injury;
            ``(2) the place of the conduct causing the injury;
            ``(3) the principal places of business or domiciles of the 
        parties;
            ``(4) the danger of creating unnecessary incentives for 
        forum shopping; and
            ``(5) whether the choice of law would be reasonably 
        foreseeable to the parties.
    ``When the jurisdiction of the district court is based in whole or 
in part upon section 1369 of this title, a subpoena for attendance at a 
hearing or trial may, if authorized by the court upon motion for good 
cause shown, and upon such terms and conditions as the court may 
impose, be served at any place within the United States, or anywhere 
outside the United States if otherwise permitted by law.''.
            (B) The table of sections at the beginning of chapter 117 
        of title 28, United States Code, is amended by adding at the 
        end the following new item:

``1785. Subpoenas in multiparty, multiforum actions.''.

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 amendments made by section 3 shall apply to a 
civil action if the accident giving rise to the cause of action 
occurred on or after the 90th day after the date of the enactment of 
this Act.

                          Purpose and Summary

    H.R. 2112 would allow a designated U.S. district court (a 
so-called ``transferee'' court) under the multidistrict 
litigation statute \1\ to retain jurisdiction over referred 
cases arising from the same fact scenario for purposes of 
determining liability and punitive damages, or to send them 
back to the respective courts from which they were transferred. 
In addition, the legislation would streamline the process by 
which multidistrict litigation governing disasters are 
adjudicated. The bill would save litigants time and money, but 
would not interfere with jury verdicts or compensation rates 
for attorneys.
---------------------------------------------------------------------------
    \1\ 28 U.S.C. Sec. 1407.
---------------------------------------------------------------------------

                Background and Need for the Legislation

      Section 2: Multidistrict Litigation/the ``Lexecon'' Decision

    The Administrative Office of the U.S. Courts (the ``AO'') 
is concerned over a recent Supreme Court interpretation of 28 
U.S.C. Sec. 1407, the federal multidistrict litigation statute. 
The case in question is commonly referred to as ``Lexecon.'' 
\2\
---------------------------------------------------------------------------
    \2\ Lexecon v. Milberg Weiss Bershad Hynes & Lerach, et. al., 118 
S. Ct. 956 (1998).
---------------------------------------------------------------------------
    Under Sec. 1407, a Multidistrict Litigation Panel (MDLP)--a 
select group of seven federal judges picked by the Chief 
Justice--helps to consolidate lawsuits which share common 
questions of fact filed in more than one judicial district 
nationwide. Typically, these suits involve mass torts--a plane 
crash, for example--in which the plaintiffs are from many 
different states. All things considered, the panel attempts to 
identify the one U.S. district court nationwide which is best 
adept at adjudicating pretrial matters. The panel then remands 
individual cases back to the districts where they were 
originally filed for trial unless they have been previously 
terminated.
    For approximately 30 years, however, the district court 
selected by the panel to hear pretrial matters (the 
``transferee court'') often invoked Sec. 1404(a) of Title 28 to 
retain jurisdiction for trial over all of the suits. This is a 
general venue statute that allows a district court to transfer 
a civil action to any other district or division where it may 
have been brought; in effect, the court selected by the panel 
simply transferred all of the cases to itself. According to the 
AO and the current Chairman of the MDLP, this process has 
worked well since the transferee court was versed in the facts 
and law of the consolidated litigation. This is also the one 
court which could compel all parties to settle when 
appropriate.
    The Lexecon decision alters the Sec. 1407 landscape. This 
was a 1998 defamation case brought by a consulting entity 
(Lexecon) against a law firm that had represented a plaintiff 
class in the Lincoln Savings and Loan litigation in Arizona. 
Lexecon had been joined as a defendant to the class action, 
which the MDLP transferred to the District of Arizona. Before 
the pretrial proceedings were concluded, Lexecon reached a 
``resolution'' with the plaintiffs, and the claims against the 
consulting entity were dismissed.
    Lexecon then brought a defamation suit against the law firm 
in the Northern District for Illinois. The law firm moved under 
Sec. 1407 that the MDLP empower the Arizona court which 
adjudicated the original S&L litigation to preside over the 
defamation suit. The panel agreed, and the Arizona transferee 
court subsequently invoked its jurisdiction pursuant to 
Sec. 1404 to preside over a trial that the law firm eventually 
won. Lexecon appealed, but the Ninth Circuit affirmed the lower 
court decision.\3\
---------------------------------------------------------------------------
    \3\ 102 F.3rd 1524 (9th Cir. 1996).
---------------------------------------------------------------------------
    The Supreme Court reversed, however, holding that Section 
1407 explicitly requires a transferee court to remand all cases 
for trial back to the respective jurisdictions from which they 
were originally referred. In his opinion, Justice Souter 
observed that ``the floor of Congress'' was the proper venue to 
determine whether the practice of self-assignment under these 
conditions should continue.
    Section 2 of the bill respond's to Justice Souter's 
admonition. In the absence of a Lexecon ``fix,'' the MDLP will 
be forced to remand 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 Sec. 1404. This alternative, to invoke the 
Chairman of the MDLP, would be ``cumbersome, repetitive, 
costly, potentially inconsistent, time consuming, inefficient, 
and a wasteful utilization of judicial and litigant 
resources.'' \4\
---------------------------------------------------------------------------
    \4\ Hearing on H.R. 2112 Before the Subcomm. on Courts and 
Intellectual Property of the House Comm. on the Judiciary, 106th Cong., 
1st Sess. (June 16, 1999) (statement of the Honorable John F. Nangle, 
Chairman, Judicial Panel on Multidistrict Litigation, at 5).
---------------------------------------------------------------------------
    Since Lexecon, significant problems have arisen that have 
hindered the sensible conduct of multidistrict litigation. 
Transferee judges throughout the United States have voiced 
their concern to the MDLP about the urgent need to clarify 
their authority to retain cases for trial. Indeed, transferee 
judges have been unable to order self-transfer for trial, even 
though all parties to constituent cases have agreed on the 
wisdom of self-transfer for trial.\5\ Instead, complex 
multidistrict cases should be streamlined as much as possible 
by providing the transferee judge as many options as possible 
to expedite trial when the transferee judge, with full input 
from the parties, deems appropriate. In other words, there is a 
pressing need to recreate the multidistrict litigation 
environment pre-Lexecon.
---------------------------------------------------------------------------
    \5\ See, e.g., MDL-1125--In re Air Crash Near Cali, Columbia, on 
12/20/95, S.D. Fla. (Judge Highsmith).
---------------------------------------------------------------------------
    The change advocated by the MDLP and other multidistrict 
practitioners makes sense in light of judicial practice under 
the Multidistrict Litigation statute for the past 30 years. It 
promotes judicial administrative efficiency and will encourage 
parties to complex federal litigation to settle.

   Section 3:Multiparty, Multiforum Jurisdiction of District Courts/
                        ``Disaster'' Litigation

    The genesis of Section 3 took place during oversight 
hearings conducted in the 95th Congress by the House 
Subcommittee on Courts, Civil Liberties and the Administration 
of Justice (now Courts and Intellectual Property). These 
efforts were joined by those of the Carter Administration to 
improve judicial machinery by abolishing diversity of 
citizenship jurisdiction and to delineate the jurisdictional 
responsibilities of state and federal courts. These efforts 
fell short, however, based on Senate opposition. Thereafter the 
Subcommittee narrowed its focus and began to concentrate on the 
problem of dispersed complex litigation arising out of a single 
accident resulting in multiple deaths or injuries.\6\
---------------------------------------------------------------------------
    \6\ Letter from Michael J. Remington, former Chief Counsel to the 
Subcommittee on Courts, Civil Liberties and the Administration of 
Justice of the Committee on the Judiciary, U.S. House of 
Representatives, to Representative F. James Sensenbrenner, Jr. (July 
14, 1999).
---------------------------------------------------------------------------
    Legislation on this more specific issue was introduced in 
both the 98th and 99th Congresses. The House of Representatives 
subsequently approved legislation identical to Section 3 of 
H.R. 2112 in the 101st and 102nd Congresses; and the full 
Committee on the Judiciary favorably reported this language in 
the 103rd Congress as well. Moreover, Section 3 of H.R. 2112 is 
identical to that set forth in Section 10 of the Subcommittee 
substitute to H.R. 1252, the ``Judicial Reform Act,'' from the 
105th Congress, which the House passed in amended form with 
Section 10 fully intact. The Judicial Conference and the 
Department of Justice have supported these previous legislative 
initiatives.
    The need for enactment of Sec. 3 of H.R. 2112 was 
articulated by an attorney who testified on behalf of a major 
airline manufacturer at the June 16, 1999, hearing.\7\ It is 
common after a serious accident to have many lawsuits filed in 
several states, in both state and federal courts, with many 
different sets of plaintiffs' lawyers and several different 
defendants. Despite this multiplicity of suits, the principal 
issue that must be resolved first in each lawsuit is virtually 
identical: Is one or more of the defendants liable? Indeed, in 
lawsuits arising out of major aviation disasters, it is common 
for the liability questions to be bifurcated and resolved 
first, in advance of any trial on individual damage issues. The 
waste of judicial resources--and the costs to both plaintiffs 
and defendants--of litigating the same liability question 
several times over in separate lawsuits can be extreme.
---------------------------------------------------------------------------
    \7\ Hearing on H.R. 2112 Before the Subcomm. on Courts and 
Intellectual Property of the House Comm. on the Judiciary, 106th Cong., 
1st Sess. (June 16, 1999) (statement of Thomas J. McLaughlin, Esq., 
Perkins Coie, LLP, Attorneys for the Boeing Company at 4-9).
---------------------------------------------------------------------------
    Different expert consultants and witnesses may be retained 
by the different plaintiffs' lawyers handling each case. The 
court in each lawsuit can issue its own subpoenas for records 
and for depositions of witnesses, potentially conflicting with 
the discovery scheduled in other lawsuits. Critical witnesses 
may be deposed for one suit and then redeposed by a different 
set of lawyers in a separate lawsuit. Identical questions of 
evidence and other points of law can arise in each of the 
separate suits, meaning that the parties in each case may have 
to brief and argue--and each court may have to resolve--the 
same issues that are being briefed, argued, and resolved in 
other cases, sometimes with results that conflict.
    Current efforts to consolidate all state and federal cases 
related to a common disaster are incomplete because current 
federal statutes restrict the ways in which consolidation can 
occur--apparently without any intention to limit consolidation. 
For example, plaintiffs who reside in the same state as any one 
of the defendants cannot file their cases in federal court 
because of a lack of complete diversity of citizenship, even if 
all parties to the lawsuit want the case consolidated. For 
those cases that cannot be brought into the federal system, no 
legal mechanism exists by which they can be consolidated, as 
state courts cannot transfer cases across state lines. In sum, 
full consolidation cannot occur in the absence of federal 
legislative redress.
    Finally, there is a crying need in federal multidistrict 
disaster actions for simplification of choice-of-law rules. 
Currently, the courts must apply those rules of the forum from 
which each case was transferred (i.e., where it was originally 
filed). The court must then apply these various choice-of-law 
rules separately to each major issue in the claims against each 
defendant. With cases originally filed in several different 
fora, each of which may have a unique choice-of-law rule, the 
courts and the parties face a truly daunting task. It is also 
difficult in the current environment for courts to find the 
time to wade through the stacks of briefing and absorb the 
arguments that are typically necessary on this issue. 
Similarly, settlement discussions can be delayed and hindered 
by confusion or uncertainty about which law will control the 
claims, thereby prolonging the entire litigation process.
    The changes set forth in Sec. 3 of H.R. 2112 speak directly 
to these problems. The revisions should reduce litigation costs 
as well as the likelihood of forum-shopping in airline accident 
cases; and an effective one-time determination of punitive 
damages would eliminate multiple or inconsistent awards arising 
from multiforum litigation.

                                Hearings

    The Committee's Subcommittee on Courts and Intellectual 
Property held a hearing on H.R. 2112 on June 16, 1999. 
Testimony was received from three witnesses representing three 
organizations.

                        Committee Consideration

    On July 15, 1999, the Subcommittee on Courts and 
Intellectual Property met in open session and ordered reported 
the bill H.R. 2112 by voice vote, a quorum being present. On 
July 27, 1999, the Committee met in open session and ordered 
reported favorably the bill H.R. 2112 with amendment by voice 
vote, a quorum being present.

                      Committee Oversight Findings

    In compliance with clause 2(1)(3)(A) of rule XI of the 
Rules of the House of Representatives, the Committee reports 
that the findings and recommendations of the Committee, based 
on oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

                Committee on Government Reform Findings

    No findings or recommendations of the Committee on 
Government Reform and Oversight were received as referred to in 
clause 2(1)(3)(D) of rule XI of the Rules of the House of 
Representatives.

               New Budget Authority and Tax Expenditures

    Clause 2(1)(3)(B) of rule XI of the Rules of the House of 
Representatives is inapplicable because this legislation does 
not provide new budgetary authority or increased tax 
expenditures.

                        Committee Cost Estimate

    In compliance with clause 3(d)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee believes that 
the costs incurred in carrying out the bill H.R. 2112 would be 
as follows: Section 3 of H.R. 2112 was incorporated in Section 
10 of H.R. 1252 from the 105th Congress. There was no specific 
reference to Section 10 in the score, but CBO noted that 
``various other [i.e., non-judicial pay raise] provisions could 
affect direct spending by increasing the workload for judges, 
but CBO expects that any such effects would not be 
significant.'' In addition, the Committee maintains that both 
Sections 2 and 3 of H.R. 2112 would actually conserve judicial 
resources by increasing the likelihood that a transferee court 
in a given consolidated action will settle most, if not all, of 
the trial issues adjudicated under the multidistrict litigation 
process. These issues would otherwise be resolved by multiple 
U.S. district courts from which the consolidated cases were 
originally transferred. In other words, H.R. 2112 should 
generate savings.

                   Constitutional Authority Statement

    Pursuant to rule XI, clause 2(1)(4) of the Rules of the 
House of Representatives, the Committee finds the authority for 
this legislation in Article III, section 1 of the Constitution.

               Section-by-Section Analysis and Discussion

    Sec. 1. Short Title. The Act may be cited as the 
``Multidistrict, Multiparty, Multiforum Trial Jurisdiction Act 
of 1999.''
    Sec. 2. Multidistrict Litigation. Section 2 of H.R. 2112 is 
based upon the contents of H.R. 1852, the ``Multidistrict Trial 
Jurisdiction Act of 1999,'' which Representative Sensenbrenner 
introduced on May 18, 1999. It would simply amend Sec. 1407 by 
explicitly allowing a transferee court to retain jurisdiction 
over referred cases of a consolidated action for trial, or 
refer the cases to the respective transferor districts, as it 
sees fit, unless the terms of Sec. 3 of the bill would apply to 
the action.
    In addition, based on a colloquy between Representative 
Sensenbrenner and Representative Berman during the July 15, 
1999, Subcommittee markup, staff was instructed to develop an 
amendment for consideration at full Committee markup on the 
issue of compensatory damages. Representative Berman expressed 
his concern that, pursuant to Sec. 3 of the bill, infra, a 
transferee judge is not permitted to retain referred cases for 
the adjudication of compensatory damages, unless done so ``in 
the interest of justice and for the convenience of the parties 
and witnesses.'' There was no comparable presumption of remand 
on the matter of compensatory damages for actions litigated 
under Sec. 2 as originally drafted. Accordingly, 
Representatives Berman and Sensenbrenner subsequently offered 
an amendment during the full Committee markup which conforms 
the compensatory damage remand standard in Sec. 2 with that in 
Sec. 3. The amendment passed by voice vote and is now 
incorporated in the bill as amended and favorably reported.
    Sec. 3. Multiparty, Multiforum Jurisdiction of District 
Courts. Section 3 of H.R. 2112 consists of the contents of H.R. 
967, which Representative Sensenbrenner introduced on March 3, 
1999. Briefly, Sec. 3 would bestow original jurisdiction on 
federal district courts in civil actions involving minimal 
diversity jurisdiction among adverse parties based on a single 
accident where at least 25 persons have either died or 
sustained injuries exceeding $50,000 per person. The district 
court in which such cases are consolidated would retain those 
cases for determination of liability and punitive damages, and 
would also determine the substantive law that would apply for 
findings of liability and damage.
    More specifically, subsection (a) creates a new Sec. 1369 
of Title 28 of the U.S. Code which confers original 
jurisdiction upon the federal district courts of any civil 
action

        (1) involving minimal diversity between adverse 
        parties

        (2) that arise from a single accident

        (3) where at least 25 people have either died or 
        incurred injury in the accident

        (4) and, in the case of injury, the injury has 
        resulted in damages which exceed $50,000 per person 
        (exclusive of interest and costs) if

                (a) a defendant resides in a state and a 
                substantial part of the accident occurred in 
                another state or other location (regardless of 
                whether the defendant is also a resident of the 
                state where a substantial part of the accident 
                occurred);

                (b) any two defendants reside in different 
                states (regardless of whether such defendants 
                are also residents of the same state or 
                states); or

                (c) substantial parts of the accident occurred 
                in different states.

    Subsection (b) of new Sec. 1369 sets forth certain 
``special rules'' and definitions. They include the following:

        (1) Minimal Diversity. Exists between adverse parties 
        if any party is a citizen of a state and any adverse 
        party is a citizen of another state, a citizen/subject 
        of a foreign state, or a foreign state.

        (2) Corporation. Deemed to be a citizen of any state, 
        and a citizen or subject of any foreign state, in which 
        it is incorporated or has its principal place of 
        business; and is deemed to be a resident of any state 
        in which it is incorporated or licensed to do business.

        (3) Injury. Physical harm to a person, and physical 
        damage or destruction of tangible property, but only if 
        physical harm exists.

        (4) Accident. A sudden accident, or a natural event 
        culminating in an accident, that results in death or 
        injury incurred at a discrete location by at least 25 
        natural persons.

        (5) State. Includes the District of Columbia, the 
        Commonwealth of Puerto Rico, and any territory or 
        possession of the United States.

    Subsection (c) of new Sec. 1369 permits any person with a 
claim arising from an accident as defined by the terms of the 
bill to intervene as a party plaintiff, even if that person 
could not have brought an action in district court as an 
original matter.
    Pursuant to subsection (d) of new Sec. 1369, a federal 
district court in which an action is pending under the terms of 
the bill must promptly notify the MDLP of the pendency.
    Subsection (b) of the Act amends the general federal venue 
statute \8\ by permitting any action under the bill to be 
brought in any district court in which any defendant resides or 
in which a substantial part of the accident giving rise to the 
action took place.
---------------------------------------------------------------------------
    \8\ 28 U.S.C. Sec. 1391.
---------------------------------------------------------------------------
    Section 3(c) of H.R. 2112 creates a new subsection (j)(1) 
to Sec. 1407. This change allows a transferee court, which 
acquires jurisdiction over an action under the terms of the 
bill, to retain the action for determination of liability and 
punitive damages. The transferee court must remand the action, 
however, to the district court from which it was transferred 
for determination of damages (other than punitive damages), 
unless the transferee 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.
    New Sec. 1407(j)(2)-(3) sets forth the terms by which an 
action is remanded, as well as the criteria for an appeal of 
decisions governing liability, punitive damages, and choice of 
law. Any decision concerning remand for the determination of 
damages is not reviewable under new Sec. 1407(j)(4). The 
transferee court is also empowered to transfer or dismiss an 
action on the ground of inconvenient forum pursuant to new 
Sec. 1407(j)(5).
    Section 3(d) permits a defendant in a civil action in state 
court to remove to the appropriate federal district court under 
28 U.S.C. Sec. 1441 if

        (1) the action could have been brought under the terms 
        of H.R. 2112, or

        (2) the defendant is a party to an action which is or 
        could have been brought pursuant to the terms of the 
        bill in a federal district court and arises from the 
        same accident as the state court action.

    New Sec. 1441(e)(2)-(5), as created by Sec. 3(d) of the 
Act, also sets forth the procedure for removal, along with the 
terms by which an action is remanded back to state court for 
determination of damages, including appellate procedures 
governing liability and choice of law. Any decision under 
Sec. 1441(e) concerning remand for the determination of damages 
is not reviewable by appeal or otherwise under new paragraph 
(6).
    Section 3(e) of H.R. 2112 creates a new Sec. 1660 of title 
28 governing choice of law in multiparty, multiforum actions. 
New Sec. 1660(a) authorizes the district court to which a state 
action has been brought or removed under its terms, or a 
transferee court under Sec. 1407, to determine the source of 
the applicable substantive law. The relevant district court is 
not bound by the choice-of- law rules of any state; instead, it 
may consider the following criteria in making a determination:

    (1) the place of the injury;

    (2) the place of the conduct causing the injury;

    (3) the principal place of business or domiciles of the 
parties;

    (4) the danger of creating unnecessary incentives for 
forum shopping; and

    (5) whether the choice of law would be reasonably 
foreseeable to the parties.

    These factors shall be evaluated according to their 
relative importance with respect to the particular action. If 
good cause is shown in exceptional cases, including 
constitutional reasons, the court may allow the law of more 
than one state to be applied with respect to a party, claim, or 
other element of an action.
    New Sec. 1660(b) further states that the district court 
shall enter an order designating the single jurisdiction whose 
substantive law is to be applied in all other actions under the 
bill and arising from the same accident. The substantive law of 
the designated jurisdiction shall be applied to the parties and 
claims in all such action before the district court, and to all 
other elements of each actions, except where federal law 
applies or the order specifically provides for the application 
of the law of another jurisdiction with respect to a party, 
claim, or other element of an action. In addition, new 
subsection (c) specifies that in any action remanded to another 
U.S. district court or a state court pursuant to the terms of 
Sec. 3 of H.R. 2112, the transferee court's choice of law under 
new Sec. 1660(b) shall continue to apply.
    Finally, Sec. 3(f) of the bill establishes service-of-
process authority for actions brought under its terms.
    Sec. 4. Effective Date. The amendments made by Sec. 2 of 
the bill shall apply to any civil action pending on or brought 
on or after the date of enactment of the Act. The amendments 
made by Sec. 3 shall apply to a civil action if the accident 
giving rise to the cause of action occurred on or after the 
90th day after the date of enactment of the Act.

                              Agency Views

                        U.S. Department of Justice,
                             Office of Legislative Affairs,
                                     Washington, DC, June 14, 1999.
Hon. Henry J. Hyde,
Chairman, Committee on the Judiciary,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: This letter sets forth the views of the 
Department of Justice regarding H.R. 967, the ``Multiparty, 
Multiforum Jurisdiction Act of 1999'' and H.R. 1852, the 
``Multidistrict Trial Jurisdiction Act of 1999.'' We support 
these bills.
    H.R. 967 would amend 28 U.S.C. to give district courts 
original jurisdiction over civil actions arising out of a 
single accident that results in the death or injury of 25 or 
more persons, if the damages exceed $50,000 per person and 
minimal diversity of citizenship exists. It also would 
authorize venue in any district in which a defendant resides or 
in which a substantial part of the accident occurred. The 
district court would be required to notify the Multidistrict 
Litigation Panel of the pendency of the action. The panel then 
would assist in consolidating the lawsuits in a single district 
court. The bill would expand district court jurisdiction over 
the transferred actions to permit trial of liability and 
punitive damage issues. Previously this authority covered only 
pretrial proceedings. The bill would require the remand of non-
punitive damage determinations, including remand to State 
court, but would give the Federal court the option of retaining 
all damages phases of the action.
    Removal of actions from State to Federal court would be 
permitted within 30 days of a defendant becoming a party to a 
suit or at a later time with leave of the court. The bill would 
establish a presumption in favor of discretionary remand to 
State courts for damages determinations after rulings on 
liability.
    The court would make choice of law determinations without 
being bound by State court choice of law rules. The bill 
identifies five factors that the court ``may consider'' in 
making the choice of law determination. The court would be 
required to issue an order designating the State law to be 
applied in all actions arising from the accident. Finally, the 
bill would authorize nationwide service of process and, upon a 
showing of good cause, nationwide service of subpoenas with 
regard to actions under this Act.
    H.R. 1852 would amend the current multidistrict litigation 
provisions, set forth at 28 U.S.C. section 1407, to allow a 
judge to whom a case is transferred under the new multiparty 
bill to retain jurisdiction over the case for purposes of 
trial. The bill thus responds to the Supreme Court's decision 
in Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 
U.S. 26 (1998) which held that transferee courts were 
prohibited form exercising jurisdiction over multidistrict 
litigation cases for purposes of trial.
    Together, H.R. 967 and H.R. 1852 would expand Federal 
jurisdiction in a very narrowly defined category of cases, 
i.e., mass tort litigation arising from a ``single accident.'' 
Ordinarily, the Department of Justice disfavors the expansion 
of the jurisdiction of the already-overloaded district courts. 
We remain concerned about the burdens that diversity cases 
impose on the Federal courts, diverting their attention from 
criminal cases and other Federal matters. However, these bills 
would delineate a unique category of litigation where the 
exercise of Federal jurisdiction in the manner specified would 
increase markedly the fair, speedy, and efficient resolution of 
mass tort cases and would avoid time-consuming, expensive, and 
repetitive liability proceedings before duplicative State and 
Federal courts. These bills would resolve the problems 
presented by suits arising from the same incident in more than 
one jurisdiction, indeed, often in many jurisdictions, both 
State and Federal. Moreover, they would assure litigants that 
liability would be determined once and for all in an 
expeditious manner before a court specifically designated to 
consider the litigation. Accordingly, we support these 
provisions.
    Although we note that the proposed 28 U.S.C. section 1660 
(``Choice of law in multiparty, multiform actions'') includes a 
list of factors that the court ``may consider'' when it 
determines the applicable law for the proceedings, it is our 
understanding that these factors would not be exhaustive and 
are included in the bill merely to provide a measure of 
guidance to the district courts in the exercise of their 
discretion (which is to be informed through consideration of 
all relevant legal principles and facts bearing on the choice 
of applicable law). We urge that this consideration be 
reflected in the committee report.
    Thank you for the opportunity to present our views on this 
legislation. Please let us know if we may be of additional 
assistance in connection with this or any other matter. The 
Office of Management and Budget has advised this Department 
that there is no objection to the submission of this report 
from the standpoint of the Administration's program.
            Sincerely,

                                           Jon P. Jennings,
                                 Acting Assistant Attorney General.

H.L.C.

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italics, existing law in which no change 
is proposed is shown in roman):

                      TITLE 28, UNITED STATES CODE



           *       *       *       *       *       *       *
                    PART IV--JURISDICTION AND VENUE

           *       *       *       *       *       *       *


               CHAPTER 85--DISTRICT COURTS; JURISDICTION

Sec.
1330. Actions against foreign states.
     * * * * * * *
1369. Multiparty, multiforum jurisdiction.

           *       *       *       *       *       *       *


Sec. 1369. Multiparty, multiforum jurisdiction

    (a) In General.--The district courts shall have original 
jurisdiction of any civil action involving minimal diversity 
between adverse parties that arises from a single accident, 
where at least 25 natural persons have either died or incurred 
injury in the accident at a discrete location and, in the case 
of injury, the injury has resulted in damages which exceed 
$75,000 per person, exclusive of interest and costs, if--
            (1) a defendant resides in a State and a 
        substantial part of the accident took place in another 
        State or other location, regardless of whether that 
        defendant is also a resident of the State where a 
        substantial part of the accident took place;
            (2) any two defendants reside in different States, 
        regardless of whether such defendants are also 
        residents of the same State or States; or
            (3) substantial parts of the accident took place in 
        different States.
    (b) Special Rules and Definitions.--For purposes of this 
section--
            (1) minimal diversity exists between adverse 
        parties if any party is a citizen of a State and any 
        adverse party is a citizen of another State, a citizen 
        or subject of a foreign state, or a foreign state as 
        defined in section 1603(a) of this title;
            (2) a corporation is deemed to be a citizen of any 
        State, and a citizen or subject of any foreign state, 
        in which it is incorporated or has its principal place 
        of business, and is deemed to be a resident of any 
        State in which it is incorporated or licensed to do 
        business or is doing business;
            (3) the term ``injury'' means--
                    (A) physical harm to a natural person; and
                    (B) physical damage to or destruction of 
                tangible property, but only if physical harm 
                described in subparagraph (A) exists;
            (4) the term ``accident'' means a sudden accident, 
        or a natural event culminating in an accident, that 
        results in death or injury incurred at a discrete 
        location by at least 25 natural persons; and
            (5) the term ``State'' includes the District of 
        Columbia, the Commonwealth of Puerto Rico, and any 
        territory or possession of the United States.
    (c) Intervening Parties.--In any action in a district court 
which is or could have been brought, in whole or in part, under 
this section, any person with a claim arising from the accident 
described in subsection (a) shall be permitted to intervene as 
a party plaintiff in the action, even if that person could not 
have brought an action in a district court as an original 
matter.
    (d) Notification of Judicial Panel on Multidistrict 
Litigation.--A district court in which an action under this 
section is pending shall promptly notify the judicial panel on 
multidistrict litigation of the pendency of the action.

                  CHAPTER 87--DISTRICT COURTS; VENUE

           *       *       *       *       *       *       *


Sec. 1391. Venue generally

    (a) * * *

           *       *       *       *       *       *       *

    (g) A civil action in which jurisdiction of the district 
court is based upon section 1369 of this title may be brought 
in any district in which any defendant resides or in which a 
substantial part of the accident giving rise to the action took 
place.

           *       *       *       *       *       *       *


Sec. 1407. Multidistrict litigation

    (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 or ordered 
transferred to the transferee or other district under 
subsection (i): 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.

           *       *       *       *       *       *       *

    (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.''.
    (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.

    CHAPTER 89--DISTRICT COURTS; REMOVAL OF CASES FROM STATE COURTS

Sec. 1441. Actions removable generally

    (a) * * *

           *       *       *       *       *       *       *

    (e)(1) Notwithstanding the provisions of subsection (b) of 
this section, a defendant in a civil action in a State court 
may remove the action to the district court of the United 
States for the district and division embracing the place where 
the action is pending if--
            (A) the action could have been brought in a United 
        States district court under section 1369 of this title, 
        or
            (B) the defendant is a party to an action which is 
        or could have been brought, in whole or in part, under 
        section 1369 in a United States district court and 
        arises from the same accident as the action in State 
        court, even if the action to be removed could not have 
        been brought in a district court as an original matter.
The removal of an action under this subsection shall be made in 
accordance with section 1446 of this title, except that a 
notice of removal may also be filed before trial of the action 
in State court within 30 days after the date on which the 
defendant first becomes a party to an action under section 1369 
in a United States district court that arises from the same 
accident as the action in State court, or at a later time with 
leave of the district court.
    (2) Whenever an action is removed under this subsection and 
the district court to which it is removed or transferred under 
section 1407(j) has made a liability determination requiring 
further proceedings as to damages, the district court shall 
remand the action to the State court from which it had been 
removed for the determination of damages, unless the court 
finds that, for the convenience of parties and witnesses and in 
the interest of justice, the action should be retained for the 
determination of damages.
    (3) Any remand under paragraph (2) shall not be effective 
until 60 days after the district court has issued an order 
determining liability and has certified its intention to remand 
the removed action for the determination of damages. An appeal 
with respect to the liability determination and the choice of 
law determination of the district court may be taken during 
that 60-day period to the court of appeals with appellate 
jurisdiction over the district 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.
    (4) Any decision under this subsection concerning remand 
for the determination of damages shall not be reviewable by 
appeal or otherwise.
    (5) An action removed under this subsection shall be deemed 
to be an action under section 1369 and an action in which 
jurisdiction is based on section 1368 of this title for 
purposes of this section and sections 1407, 1660, 1697, and 
1785 of this title.
    (6) Nothing in this subsection shall restrict the authority 
of the district court to transfer or dismiss an action on the 
ground of inconvenient forum.
    [(e) The court to which such civil action is removed] (f) 
The court to which a civil action is removed under this section 
is not precluded from hearing and determining any claim in such 
civil action because the State court from which such civil 
action is removed did not have jurisdiction over that claim.

                           PART V--PROCEDURE

           *       *       *       *       *       *       *


                    CHAPTER 111--GENERAL PROVISIONS

Sec.
1651. Writs
     * * * * * * *
1660. Choice of law in multiparty, multiforum actions.

           *       *       *       *       *       *       *


Sec. 1660. Choice of law in multiparty, multiforum actions

    (a) Factors.--In an action which is or could have been 
brought, in whole or in part, under section 1369 of this title, 
the district court in which the action is brought or to which 
it is removed shall determine the source of the applicable 
substantive law, except that if an action is transferred to 
another district court, the transferee court shall determine 
the source of the applicable substantive law. In making this 
determination, a district court shall not be bound by the 
choice of law rules of any State, and the factors that the 
court may consider in choosing the applicable law include--
            (1) the place of the injury;
            (2) the place of the conduct causing the injury;
            (3) the principal places of business or domiciles 
        of the parties;
            (4) the danger of creating unnecessary incentives 
        for forum shopping; and
            (5) whether the choice of law would be reasonably 
        foreseeable to the parties.
The factors set forth in paragraphs (1) through (5) shall be 
evaluated according to their relative importance with respect 
to the particular action. If good cause is shown in exceptional 
cases, including constitutional reasons, the court may allow 
the law of more than one State to be applied with respect to a 
party, claim, or other element of an action.
    (b) Order Designating Choice of Law.--The district court 
making the determination under subsection (a) shall enter an 
order designating the single jurisdiction whose substantive law 
is to be applied in all other actions under section 1369 
arising from the same accident as that giving rise to the 
action in which the determination is made. The substantive law 
of the designated jurisdiction shall be applied to the parties 
and claims in all such actions before the court, and to all 
other elements of each action, except where Federal law applies 
or the order specifically provides for the application of the 
law of another jurisdiction with respect to a party, claim, or 
other element of an action.
    (c) Continuation of Choice of Law After Remand.--In an 
action remanded to another district court or a State court 
under section 1407(j)(1) or 1441(e)(2) of this title, the 
district court's choice of law under subsection (b) shall 
continue to apply.

                          CHAPTER 113--PROCESS

Sec.
1691. Seal and teste of process.
     * * * * * * *
1697. Service in multiparty, multiforum actions.

           *       *       *       *       *       *       *


Sec. 1697. Service in multiparty, multiforum actions

    When the jurisdiction of the district court is based in 
whole or in part upon section 1369 of this title, process, 
other than subpoenas, may be served at any place within the 
United States, or anywhere outside the United States if 
otherwise permitted by law.

           *       *       *       *       *       *       *


                   CHAPTER 117--EVIDENCE; DEPOSITIONS

Sec.
1781. Transmittal of letter rogatory or request.
     * * * * * * *
1785. Subpoenas in multiparty, multiforum actions.

           *       *       *       *       *       *       *


Sec. 1785. Subpoenas in multiparty, multiforum actions

    When the jurisdiction of the district court is based in 
whole or in part upon section 1369 of this title, a subpoena 
for attendance at a hearing or trial may, if authorized by the 
court upon motion for good cause shown, and upon such terms and 
conditions as the court may impose, be served at any place 
within the United States, or anywhere outside the United States 
if otherwise permitted by law.

           *       *       *       *       *       *       *

                             Minority Views

    H.R. 2112 is intended to improve the ability of federal 
courts to handle complex multidistrict litigation arising from 
a common set of facts. This bill represents an effective means 
by which to improve the manageability of complex litigation. In 
this narrow circumstance, we feel that there is sufficient 
justification to expand federal court jurisdiction.
    There are two operative sections of this legislation. 
Section 2 of the bill 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. We strongly 
support this provision, which we believe works well as a matter 
of judicial expedience when cases are transferred to one 
federal district court by a Multidistrict Litigation Panel.
    Section 3 expands federal court jurisdiction by requiring 
only minimal diversity (as opposed to complete diversity) for 
mass torts arising from a single incident; provides for the 
consolidation of these cases into a single district; and 
establishes new federal procedures in these narrowly defined 
cases for the selection of venue, service of process, issuance 
of subpoenas and choice of law. We also support Section 3 as a 
matter of judicial efficiency, but with the understanding that 
it does not in any way serve as a precedent for the broader 
expansion of diversity jurisdiction.
    The following views clarify the reasoning behind our 
support of both sections of H.R. 2112:
Section 2--Overturns Lexecon v. Milberg
    Section 2 of H.R. 2112 reflects an intention to overturn 
the decision of the United States Supreme Court in Lexecon v. 
Milberg Weiss Bershad Hynes & Lerach,\1\ 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.
---------------------------------------------------------------------------
    \1\ 118 S.Ct. 956 (1998).
---------------------------------------------------------------------------
    The Courts and Intellectual Property Subcommittee held a 
hearing on this issue.\2\ Experts testified that for some 30 
years the transferee court often retained jurisdiction over all 
of the suits by invoking a venue provision of Title 28, 
allowing a district court to transfer a civil action to any 
other district where it may have been brought. In effect, the 
transferee court simply transferred all of the cases to itself. 
The Judicial Conference testified that this process has worked 
well because the transferee judge becomes the expert on the 
case as a result of supervising the day-to-day pretrial 
proceedings.
---------------------------------------------------------------------------
    \2\ The Multiparty, Multiforum Jurisdiction Act of 1999 and the 
Federal Courts Improvement Act of 1999: Hearing on H.R. 2112 and H.R. 
1752 Before the Subcomm. on Courts and Intellectual Property of the 
House Comm. on the Judiciary, 106th Cong. (1999).
---------------------------------------------------------------------------
    Criticism had been heard at the Subcommittee hearing, 
however, that the text was arguably more expansive than what 
was necessary to overturn Lexecon. It was argued that Section 2 
went far beyond simply permitting a multidistrict litigation 
transferee court to conduct a liability trial, and instead, 
allowed the court to also determine compensatory and punitive 
damages. The absence of the presumption that compensatory 
damages would be remanded to the transferor court, it was 
asserted, would work an unfairness on victims in personal 
injury cases by making it more difficult for them to prove the 
damages for which they are seeking to be compensated. Many 
contended that the difficulty and added expense incurred by 
plaintiffs and their witnesses by having to testify in the 
transferee as opposed to the original local court posed an 
unfair burden.
    As a result of discussions between the minority and 
majority, Rep. Berman successfully offered a bipartisan 
amendment addressing this concern at the Full Committee markup. 
The amendment to Section 2 provided that to the extent a case 
is tried outside of the transferor forum, it would be solely 
for the purpose of a consolidated trial on liability, and if 
appropriate, punitive damages, and that the case must be 
remanded to the transferor court for the purposes of trial on 
compensatory damages, 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.
    We support this Section, as it was amended in the Full 
Committee, to achieve the worthwhile objective of overturning 
the Lexecon decision for reasons of judicial efficiency.
Section 3--Minimal Diversity for Single Accidents Involving 25 People
    Section 3 of H.R. 2112: (1) expands federal court 
jurisdiction over civil actions arising out of a single 
accident that results in the death or injury of 25 or more 
persons, if the damages exceed $75,000 per claim and minimal 
diversity of citizenship exists;\3\ (2) requires the district 
court to notify the Multidistrict Litigation Panel of the 
pendency of the action so that the Panel may assist in 
consolidating the lawsuits in a single district court; and (3) 
establishes new federal procedures in this narrowly defined 
category of cases for the selection of venue, service of 
process, issuance of subpoenas and choice of law. It is our 
understanding that, in effect, Section 3 would only apply to a 
very narrowly defined category of cases, such as, plane, train, 
bus, boat accidents and environmental spills, many of which may 
already be brought in federal court. However, it would not 
apply to mass tort injuries that involve the same injury over 
and over again such as asbestos and breast implants.
---------------------------------------------------------------------------
    \3\ Under the bill, minimal diversity exists between adverse 
parties if any party is a citizen of a state and any adverse party is 
(1) a citizen of another state, (2) a citizen/subject of a foreign 
state, or (3) a foreign state.
---------------------------------------------------------------------------
    During the Subcommittee hearing, two broad concerns were 
raised regarding Section 3 of the bill: (1) that Section 3 is 
an incursion on the state courts' traditional jurisdiction--
state courts are more than competent to handle personal-injury 
and wrongful death cases and (2) that Section 3 expands the 
jurisdiction of the already overloaded district courts which 
will result in victims having far slower access to justice.
    We share these concerns. We generally oppose having federal 
courts decide state tort issues where complete diversity is not 
present, and disfavor the expansion of the jurisdiction of the 
already-overloaded federal district courts. But we also believe 
that in the narrow circumstance of single accident injuries 
with multiple parties from different states, there may be 
legitimate reasons to consolidate cases concerning the same 
accident in one federal forum. Litigating the same liability 
question several times over in separate lawsuits may waste 
judicial resources and may be costly to both plaintiffs and 
defendants. We believe the consolidation of these cases in one 
federal forum could prove to be beneficial in reducing delays, 
litigation costs, and drains on court resources. Section 3 
would only expand federal court jurisdiction in a narrow class 
of actions with the objective of judicial efficiency. It is for 
this reasonable purpose, and in this narrow category of cases, 
that we are willing to support this legislation.
    In this respect, H.R. 2112 can very easily be distinguished 
from the broader class action bill, the ``Interstate Class 
Action Jurisdiction Act of 1999,'' \4\ which we unequivocally 
oppose. Unlike H.R. 2112, the class action bill requires only 
minimal diversity for all civil actions brought as class 
actions in federal court, regardless of the individual amounts 
in controversy or the number of separate incidents or injuries 
that may give rise to a class action. Rather than providing a 
reasonable, limited modification to diversity jurisdiction, the 
class action bill represents a radical rewrite of the class 
action rules and would ban most forms of state class actions. 
Thus, it would have a far more damaging impact on the federal 
courts than H.R. 2112. It is imperative for us to note here 
that while the Judicial Conference \5\ and the Department of 
Justice \6\ support H.R. 2112, they too oppose the broader 
class action bill, recognizing, among other things, its 
detrimental impact on the workload of the federal judiciary and 
traditional state court prerogatives.\7\
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    \4\ H.R. 1875, 106th Cong. (1999).
    \5\ See The Interstate Class Action Jurisdiction Act: Hearing on 
H.R. 1875 Before the House Comm. on the Judiciary, 106th Cong. (1999) 
(Statement of Assistant Attorney General, United States Department of 
Justice, Eleanor D. Acheson) [hereinafter Department of Justice Class 
Action Testimony].
    \6\ See Letter from Jon P. Jennings, Acting Assistant Attorney 
General, Office of Legislative Affairs, United States Department of 
Justice to Henry J. Hyde, Chairman, U.S. House Judiciary Committee 1 
(June 14, 1999) (on file with the Judiciary Committee Minority Staff).
    \7\ See Letter from Secretary Leonidas Ralph Mecham, Judicial 
Conference of the United States to Henry J. Hyde, Chairman, U.S. House 
Judiciary Committee (July 26, 1999) (on file with the Judiciary 
Committee Minority Staff) [hereinafter Judicial Conference Letter] and 
Department of Justice Class Action Testimony. The class action bill is 
also opposed by the Conference of State Chief Justices. See Letter from 
President David A. Brock, Conference of Chief Justices to Henry J. 
Hyde, Chairman, U.S. House Judiciary Committee (July 19, 1999) (on file 
with the Judiciary Committee Minority Staff).

                                   John Conyers, Jr.
                                   Howard L. Berman.
                                   Sheila Jackson Lee.
                                   Martin T. Meehan.
                                   Robert C. Scott.
                                   Maxine Waters.
                                   William D. Delahunt.
                                   Anthony D. Weiner.

                                  
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