[House Report 107-14]
[From the U.S. Government Publishing Office]
107th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 107-14
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MULTIDISTRICT, MULTIPARTY, MULTIFORUM TRIAL JURISDICTION ACT OF 2001
_______
March 12, 2001.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Sensenbrenner, from the Committee on the Judiciary, submitted the
following
R E P O R T
together with
MINORITY AND DISSENTING VIEWS
[To accompany H.R. 860]
[Including cost estimate of the Congressional Budget Office]
The Committee on the Judiciary, to whom was referred the
bill (H.R. 860) 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 without amendment and recommends that the
bill do pass.
CONTENTS
Page
Purpose and Summary.............................................. 2
Background and Need for the Legislation.......................... 2
Hearings......................................................... 5
Committee Consideration.......................................... 5
Vote of the Committee............................................ 5
Committee Oversight Findings..................................... 5
Performance Goals and Objectives................................. 5
New Budget Authority and Tax Expenditures........................ 5
Congressional Budget Office Cost Estimate........................ 5
Constitutional Authority Statement............................... 7
Section-by-Section Analysis and Discussion....................... 7
Changes in Existing Law Made by the Bill, as Reported............ 9
Minority Views................................................... 37
Dissenting Views................................................. 41
Purpose and Summary
H.R. 860 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.
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\1\ 28 U.S.C. Sec. 1407.
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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\
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\2\ Lexecon v. Milberg Weiss Bershad Hynes & Lerach, et. al., 118
S. Ct. 956 (1998).
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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 MDLPtransferred 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\
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\3\ 102 F.3rd 1524 (9th Cir. 1996).
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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 responds 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\
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\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).
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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.
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\5\ See, e.g., MDL-1125 - In re Air Crash Near Cali, Columbia, on
12/20/95, S.D. Fla. (Judge Highsmith).
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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 Sec. 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, the Internet 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\
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\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).
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Legislation on this more specific issue was introduced in
both the 98th and 99th Congresses. The House of Representatives
subsequently approved legislation highly similar to Sec. 3 of
H.R. 860 in the 101st and 102nd Congresses; and the full
Committee on the Judiciary favorably reported this language in
the 103rd Congress as well. Moreover, Sec. 3 of H.R. 860 is
highly similar to that set forth in Sec. 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
Sec. 10 fully intact. In addition, during the 106th Congress
the House of Representatives passed the precursor to H.R. 860,
H.R. 2112, by voice vote under suspension of the rules. The
Judicial Conference and the Department of Justice have also
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 on H.R.
2112.\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.
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\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).
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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 statutesrestrict 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.
The changes set forth in Sec. 3 of H.R. 860 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
H.R. 860 was referred to the Committee on the Judiciary on
March 6, 2001. No hearings on the bill were held, given the
ample legislative history that preceded it from the 95th
Congress through the 106th.
Committee Consideration
On March 8, 2001, the House Committee on the Judiciary met
in open session and ordered reported the bill H.R. 860 by voice
vote, a quorum being present.
Vote of the Committee
The Committee on the Judiciary rejected a motion by
Representative Watt to recommit H.R. 860 to the appropriate
Subcommittee for hearings by a vote of 6-23.
Committee Oversight Findings
In compliance with clause 3(c)(1) of rule XIII 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.
Performance Goals and Objectives
Because H.R. 860 does not authorize funding, clause 3(c) of
House Rule XIII does not apply.
New Budget Authority and Tax Expenditures
Clause 3(c)(2) of rule XIII of the Rules of the House of
Representatives is inapplicable because this legislation does
not provide new budgetary authority or increased tax
expenditures.
Congressional Budget Office Cost Estimate
In compliance with clause 3(c)(3) of rule XIII of the Rules
of the House of Representatives, the Committee sets forth, with
respect to the bill, H.R. 860, the following estimate and
comparison prepared by the Director of the Congressional Budget
Office under section 402 of the Congressional Budget Act of
1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, March 12, 2001.
Hon. F. James Sensenbrenner, Jr.,
Chairman, Committee on the Judiciary, House of Representatives,
Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 860, the
Multidistrict, Multiparty, Multiforum Trial Jurisdiction Act of
2001.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Lanette J.
Walker.
Sincerely,
Dan L. Crippen, Director.
Enclosure.
H.R. 860--Multidistrict, Multiparty, Multiforum Trial Jurisdiction Act
of 2001
CBO estimates that enacting H.R. 860 would result in no
significant impact on the federal budget. Because this bill
would not affect direct spending or receipts, pay-as-you-go
procedures would not apply. H.R. 860 contains no
intergovernmental or private-sector mandates as defined in the
Unfunded Mandates Reform Act and would have no significant
effect on the budgets of state, local, or tribal governments.
Enacting this bill would remove existing impediments to the
effective consolidation of certain lawsuits within the federal
judicial system. Section 2 of H.R. 860 would permit the federal
judge before whom the cases were consolidated for pretrial
proceedings to consolidate them for trial on the common issues
of liability and punitive damages. Under current law, cases
related by one or more common questions of fact that are
pending in multiple federal judicial districts may be
consolidated before a single federal judge only for pretrial
proceedings. At the end of those proceedings, each case is
required to be remanded for trial to the judicial district from
which it had been transferred.
Under certain conditions, section 3 of H.R. 860 would
confer original jurisdiction on federal district courts over
civil actions involving only minimal diversity that arise out
of a single accident that results in multiple deaths or
injuries. (Minimal diversity exists if adverse parties are
citizens of different states, or if one is a foreign state or a
citizen of a foreign state.) Current statutes make it difficult
to remove certain cases to federal court, resulting in
incomplete consolidation of the cases. Section 3 would make
iteasier for plaintiffs in such cases to file in federal court and for
defendants to remove cases filed in state court to federal court.
CBO expects that enacting this bill would result in a more
efficient use of federal judicial resources. However, CBO
estimates that any savings realized by the federal court system
would be negligible and might be offset by increased court
costs that could arise from additional cases being moved from
state court to federal court under the bill. Thus, CBO
estimates that enacting H.R. 860 would result in no significant
impact on the federal budget.
The CBO staff contact for this estimate is Lanette J.
Walker. This estimate was approved by Robert A. Sunshine,
Assistant Director for Budget Analysis.
Constitutional Authority Statement
Pursuant to rule XIII, clause 3(c)(3) 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 2001.''
Sec. 2. Multidistrict Litigation
Section 2 of H.R. 860 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 of H.R. 2112, staff was instructed to
develop an amendment for consideration at a subsequent full
Committee markup on the issue of compensatory damages.
Representative Berman expressed his concern that, pursuant to
Sec. 3 of the bill, a transferee judge was 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 in the 106th Congress. Accordingly, Representatives
Berman and Sensenbrenner proceeded to offer an amendment during
the full Committee markup on July 27, 1999, which conformed the
compensatory damage remand standard in Sec. 2 with that in
Sec. 3. The amendment passed by voice vote and was incorporated
in H.R. 2112 as amended and favorably reported at the time.
This change has been preserved in Sec. 2 of H.R. 860 as well.
Sec. 3. Multiparty, Multiforum Jurisdiction of District Courts
Section 3 of H.R. 860 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 $150,000 per person. The district
court in which such cases are consolidated would retain those
cases for determination of liability and punitive damages.
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) Linvolving minimal diversity between adverse
parties
(2) Lthat arise from a single accident
(3) Lwhere at least 25 people have either died or
incurred injury in the accident
(4) Land, in the case of injury, the injury has
resulted in damages which exceed $150,000 per person
(exclusive of interest and costs) if
(a) La 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) Lany two defendants reside in different
states (regardless of whether such defendants
are also residents of the same state or
states); or
(c) Lsubstantial parts of the accident occurred
in different states.
Subsection (b) of new Sec. 1369 creates an exception to the
minimum diversity rule. In brief, a U.S. district court may not
hear any case in which a ``substantial majority'' of plaintiffs
and the ``primary'' defendants are all citizens of the same
state; and in which the claims asserted are governed
``primarily'' by the laws of that same state. In other words,
only state courts may hear such cases. (This feature was one of
three changes proffered to the Senate in an effort to develop
greater support for H.R. 2112 in the waning days of the 106th
Congress. The other two revisions--also incorporated in H.R.
860--consisted of an increase in the damages threshold from
$75,000 to $150,000, and the deletion of the old choice-of-law
section in H.R. 2112. The first two changes make it more
difficult to file or remove to Federal court under the terms of
H.R. 860. The choice of law section was thought to confer too
much discretionary authority on district judges to select the
relevant law that would apply in a given case.)
Subsection (c) of new Sec. 1369 sets forth certain
``special rules'' and definitions. They include the following:
(1) LMinimal 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) LCorporation. 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) LInjury. Physical harm to a person, and physical
damage or destruction of tangible property, but only if
physical harm exists.
(4) LAccident. 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) LState. Includes the District of Columbia, the
Commonwealth of Puerto Rico, and any territory or
possession of the United States.
Subsection (d) 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 (e) 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.
Section 3(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.
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\8\ 28 U.S.C. Sec. 1391.
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Section 3(c) of H.R. 860 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 and punitive damages. 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) Lthe action could have been brought under the terms
of H.R. 860, or
(2) Lthe 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. Any decision under Sec. 1441(e) concerning
remand for the determination of damages is not reviewable by
appeal or otherwise under new paragraph (6).
Finally, Sec. 3(e) 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.
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 italic, 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
$150,000 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) Limitation of Jurisdiction of District Courts.--The
district court shall abstain from hearing any civil action
described in subsection (a) in which--
(1) the substantial majority of all plaintiffs are
citizens of a single State of which the primary
defendants are also citizens; and
(2) the claims asserted will be governed primarily
by the laws of that State.
(c) 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.
(d) 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.
(e) 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.
* * * * * * *
PART IV--JURISDICTION AND 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 theevent 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 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.
* * * * * * *
BUSINESS MEETING
THURSDAY, MARCH 8, 2001
House of Representatives,
Committee on the Judiciary,
Washington, DC.
The committee met, pursuant to notice, at 10 a.m., in Room
2141, Rayburn House Office Building, Hon. F. James
Sensenbrenner (chairman of the committee) presiding.
Now, pursuant to notice, I call up the bill H.R. 860, the
Multidistrict, Multiparty, Multiforum Trial Jurisdiction Act of
2001, for purpose of markup, and move its favorable
recommendation to the House.
[H.R. 860 follows:]
Chairman Sensenbrenner. Without objection, the bill will be
considered as read and open for amendment at any point. I yield
myself 5 minutes.
I am the author of this bill. It has a long legislative
life, having been considered by this committee, in one form or
another, since the 101st Congress. This legislation addresses
two important issues in the world of complex multidistrict
litigation.
Section 2 of the bill would reverse the effects of the 1998
Supreme Court decision in the so-called Lexicon case. It would
simply amend the multidistrict litigation statute by explicitly
allowing a transferee court to retain jurisdiction over
referred cases for trial for purposes of determining liability
and punitive damages or refer them to other districts as it
sees fit. In fact, section 2 only codifies what had constituted
an ongoing judicial practice for nearly 30 years prior to
Lexicon.
Section 3 addresses a particular species of complex
litigation, the so-called disaster cases, such as those
involving airline accidents. The language set forth in my bill
is a revised version of a concept which, beginning in the 101st
Congress, has been supported by the Department of Justice, the
Administrative Office of U.S. Courts, two previous Democratic
Congresses and one previous Republican Congress.
Section 3 will help reduce litigation costs, as well as the
likelihood of forum shopping in single-accident mass tort
cases. All plaintiffs in these cases will ordinarily be
situated identically, making the case for consolidation of
their actions especially compelling. These types of disasters,
with their hundreds or thousands of plaintiffs and numerous
defendants, have the potential to impair the orderly
administration of justice in Federal courts for an extended
period of time.
This committee and the full House unanimously passed the
precursor to H.R. 860 in the last term. During eleventh-hour
negotiations with the other body, I offered to make three
changes, in an effort to show--generate greater support for the
bill. As a show of good faith, I incorporate those changes in
the bill that is before us today. They consist of the
following:
One, the plaintiff must allege at least $150,000 of
damages, which is up from $75,000, to file in U.S. District
Court.
Two, an exception to the minimum diversity rule is created.
A U.S. District Court may not hear any case in which a
substantial majority of plaintiffs and the primary defendants
are citizens of the same State and in which claims asserted are
governed primarily by laws of that same State. In other words,
only State courts may hear those cases.
The Choice of Law section will be stricken. On further
reflection, I believe it confers too much discretionary
authority on a Federal judge to select the relevant law that
will apply in a given case.
In sum, this legislation speaks to process, fairness and
judicial efficiency. It will not interfere with jury verdicts
or compensation rates for litigators. I, therefore, urge my
colleagues to join me in a bipartisan effort to support this
bill and yield back the balance of my time.
The gentleman from Michigan?
Mr. Conyers. I ask--I strike the last word.
Chairman Sensenbrenner. The gentleman is recognized for 5
minutes.
Mr. Conyers. This has given me as much concern as anything
on the agenda today. And I think we've negotiated a bit on it,
and I'm--I have no problems and support the descriptions you've
given in all of the sections.
Section 3 is the one that I would like to draw the members'
attention to because, from trial lawyers' point of view, it may
be the most controversial--the minimum diversity for single
accidents involving 25 people.
Now I've traditionally opposed having Federal courts decide
State tort issues, naturally, and disfavor the expansion of
jurisdiction of the already overloaded district courts. Unlike
the class action bill, though, this bill would only expand
Federal court jurisdiction in a much narrower class of actions,
with the objective of judicial expedience.
So I support the section, with the understanding that it
would only apply to a narrowly defined category of cases and
does not, in any way, serve as a precedent for broader
expansion of diversity jurisdiction. And I'm hoping that the
author and those that support this bill will join with me in
these feelings that I have.
Chairman Sensenbrenner. Will the gentleman yield?
Mr. Conyers. Yes, I will.
Chairman Sensenbrenner. The gentleman has my assurances
that this will not serve as a precedent for other types of
litigation reform legislation which we may consider later on
during this Congress. This is designed for a specific type of
litigation, the airline crash litigation.
And I think it is important to note that the Clinton
administration supported last year's version of the bill, which
was much more broadly drafted, as does the Administrative
Office of the Courts, in that it will provide greater judicial
efficiency and thus save money without diminishing anybody's
right to sue, any compensation that may be given to a plaintiff
that wins their case or any counsel's ability for--to negotiate
out compensation for representing their client.
Mr. Conyers. I'm glad to hear the chairman say that because
we don't--I don't want this to serve as the legislative foot in
the door or nose under the camel's tent.
It's also my understanding here that mass tort injuries
that involve the same injury over and over again, such as
asbestos, and breast implants, and the like, would be excluded,
and that----
Chairman Sensenbrenner. Would the gentleman yield?
Mr. Conyers. Of course.
Chairman Sensenbrenner. This does not deal with cases like
the asbestos case. This is a single-accident case, again, such
as a plane crash or a train wreck.
Mr. Conyers. Right. And so the types of cases that would be
included would be plane, trains, bus, boat accidents,
environmental spills, which many of which at least can already
be brought in the Federal court.
So, with that distinction being made and the chairman's
additional comments, I--I feel that I can urge my colleagues on
the committee to support this measure.
Chairman Sensenbrenner. Are there amendments?
The gentleman from California, Mr. Berman?
Mr. Berman. I move to strike the last word.
Chairman Sensenbrenner. The gentleman is recognized for 5
minutes.
Mr. Berman. Just a couple of points.
As you had indicated, section 2 is totally
noncontroversial.
Section 3 has some concerns. I do want to point out that
the chairman agreed, in the last Congress, as the sponsor of
the legislation, to include a presumption that cases which are
combined in a single district for purposes of judicial
efficiency to decide liability and punitive damage issues and
pretrial motions, will be--or there will be a presumption that
allows those cases to go back to the district in which the
action which was originally filed, for the purposes of
determining compensatory damages, so that----
Chairman Sensenbrenner. Will the gentleman yield?
Mr. Berman. Yes.
Chairman Sensenbrenner. That's correct, as well.
Mr. Berman. And I support this bill, and agree both with
the chairman, and particularly with the comments of my ranking
member of the full committee, that no one should construe my
support for this as support for an effort to limit or eliminate
the ability of State courts to consider class action cases.
Chairman Sensenbrenner. The gentleman from North Carolina?
Mr. Watt. I move to strike the last word.
Chairman Sensenbrenner. The gentleman from North Carolina
is recognized for 5 minutes.
Mr. Watt. Thank you, Mr. Chairman.
If this is a good idea, and I, on balance, don't think it
is at this point, this is the exact point I was trying to raise
before. I think this is a bill that should have gone to the
subcommittee, particularly if you are making substantial
changes to it.
Mr. Berman. Would the gentleman yield?
Mr. Watt. I'd be happy to yield to the gentleman.
Mr. Berman. This bill has been through the court----
Mr. Watt. This bill has been substantially revised since
any subcommittee dealt with it, but clearly this bill should
have gone through the subcommittee. And I can understand the
chairman, it's his bill. He wants to move the bill along. He
thinks it's not controversial. I think it's a lot more
controversial than anybody is making it out to be.
For those of us who have been strong advocates for States'
rights, I think this is a radical departure. When you start
telling to a plaintiff who lives in a State, who is suing a
defendant who lives in the same State, and you are going to
apply that State's laws that that case has to be liti--for that
plaintiff, he has to go into the U.S. District Court, the
Federal court, to litigate his claim, I think that is a radical
departure from where we are at this point.
And all of us who claim to be advocates of States' rights,
ought to be concerned about that. And that's what this bill
does. Don't underestimate what it does. It says, if there are
25 defendants, one of those defendants lives inside the State
the--25 people injured, one of the plaintiffs lives in the
State the defendant lives--is resident of that State, you've
still got to go into Federal court--that's what the bill says--
and even if you're applying State law. That is a radical
departure from anything that our law has ever said. And that's
way, way removed. There's no diversity there at all between
those parties.
Now let me just tell you that every small-town person on
this committee ought to be alarmed by this, because in small
towns there are not U.S. District Courts. There are, in every
county, State courts where individual plaintiffs can walk right
down the street, file a lawsuit, and get their claim litigated.
You all make it sound like the whole purpose for the court
system is for the convenience of the courts. That is not the
purpose of the court system. The purpose of the court system is
for the convenience of litigants, and that's the way it's
always been in this country.
So don't tell me that this is some kind of minor bill that
is, you know, business as usual. Yes, you all have gotten
together and decided that this is a good idea----
Mr. Issa. Mr. Chairman, point of order.
Mr. Watt. But this is a major piece of litigation, should
have gone through the--I mean of legislation, should have gone
through the subcommittee, should have been subjected to the
scrutiny of the full process.
Mr. Issa. Will the gentleman yield?
Mr. Watt. I'd be happy to yield to the gentleman.
Mr. Issa. Thank you.
Mr. Watt. Whoever is asking me to yield.
Mr. Issa. Thank you.
Mr. Watt. And I would, just before I yield to you, I would
say----
Mr. Issa. My yield is very short. Could we have the audio
turned down to where it is a normal level.
Mr. Watt. Just before I yield to you, perhaps----
Mr. Issa. Would the gentleman, please, could we just have
the audio turned down to a level that is more pleasant for all
of us available? I think it is--I want to listen to the
gentleman, but it is so loud it is difficult to do so.
Mr. Watt. Do you want to turn down the audio, Mr. Chairman?
I don't have any control over the audio.
Chairman Sensenbrenner. The only button I have up here is
one that would turn you off. You don't want me to push that, do
you?
[Laughter.]
Mr. Watt. Well, Mr. Chairman, I move that this bill be sent
to the subcommittee that has jurisdiction over it.
Mr. Berman. Is that a debatable motion, Mr. Chairman?
Chairman Sensenbrenner. Is the gentleman's motion in
writing?
Mr. Watt. It is not, but I will put it in writing. I ask
unanimous consent that the bill be recommitted to the
subcommittee on Commercial and Administrative----
Mr. Gallegly. Objection.
Chairman Sensenbrenner. An objection is heard.
The gentleman from California? His hand was up first.
Mr. Berman. Oh, well, we don't have a motion before us or--
it's being written, so I just--my point of parliamentary
inquiry was is this a debatable motion?
Chairman Sensenbrenner. The answer is, yes, it is
debatable.
Mr. Berman. When the motion is made, I'd like to be
recognized to speak against the motion.
Chairman Sensenbrenner. For what purpose does the gentleman
from New York seek recognition?
Mr. Nadler. Parliamentary inquiry. Was that necessary to
have unanimous consent or can we do that by motion?
Chairman Sensenbrenner. Unanimous consent was objected to.
Mr. Nadler. It has to be in writing?
Chairman Sensenbrenner. Yeah.
Mr. Nadler. Thank you.
Chairman Sensenbrenner. Would the gentleman----
Mr. Watt. Mr. Chairman, I ask unanimous consent for 30
additional seconds just to finish my statement. I'll try to
modulate down.
Chairman Sensenbrenner. Without objection, the gentleman is
recognized for 30 modulated seconds.
Mr. Watt. I wanted to point out to the freshmen on this
committee, further, that when you all don't--when we just rush
bills through here, basically, you all are deprived of what you
were sent here to do. And if you want to be deprived of it, I
mean, you go ahead, but basically you are missing the
opportunity to do what your responsibilities are on this
committee.
So, having said that, I've given you my arguments. I think
you're making a mistake, but I'm not going to prolong this.
I'll yield back.
Chairman Sensenbrenner. The question occurs on the motion
to report the bill H.R. 860 favorably.
The gentleman from California?
Mr. Berman. I think one point needs to be made, if I might
be recognized.
Chairman Sensenbrenner. The gentleman, without objection,
the gentleman is recognized a second time.
Mr. Berman. Thank you.
There were three changes made to this bill between the time
it went through subcommittee and passed in the last Congress
and now. The three changes all made it a better bill, from my
point of view. And in the context of the gentleman from North
Carolina's comments, while he still may not like the bill, it
would be better from his point of view.
The three changes were to raise the damage level from
$75,000 to $150,000. Each plaintiff must allege at least
$150,000 of damage; secondly, there's an exception created to
the minimum diversity rule. A U.S. District Court may not hear
any case in which a substantial majority of the plaintiffs and
the primary defendants are all citizens of the same State and
in which the claims asserted are governed primarily by the laws
of that same State. Only State courts may hear those kinds of
cases. This is a change from the bill that passed the
subcommittee unanimously last year and the House, and was sent
to the Senate; and the third change--I will yield in 1 second--
and the third change is the Choice of Law section will be--is
stricken. This allows the transferor court, not the transferee
court, to make the Choice of Law decision.
So I just wanted to put that those are the only changes in
the bill. All of them from people who have--the concerns
expressed by the gentleman from North Carolina may still be
there, but to that degree, they are lessened by these changes.
Mr. Watt. Will the gentleman yield?
Mr. Berman. I'd be happy to.
Mr. Watt. I just want to point out that you may be right
that this is better than it was, but this could be a much, much
better and could really honor the rights of States and
individuals who we're supposed to be honoring if we took some
time to address the issues that I'm talking about. The issues
that you have just described still don't address what I said
was the case. An individual in my county who gets injured by a
defendant in my county, whose case is governed by the laws of
my State, still must find his way to Federal court if there
were 25 or more people injured, and I'm telling you that that
is unfair to that individual claimant. That is unfair, and it
is unprecedented.
And I understand the expediency of the court, but the
courts were not built for the expediency of the court, the
courts were built for the expediency of the people for whom
they are designed to serve.
So what you have said, you are absolutely right. It was
better than it was. The question is will we take the time to
make it to address the real issues that this bill still
presents to us, and particularly those of us who profess to be
strong advocates of States' rights.
Ms. Jackson Lee. Would the gentleman yield?
Chairman Sensenbrenner. The time belongs to the gentleman
from California.
Ms. Jackson Lee. Mr. Berman, would you yield? Your light is
still on.
Mr. Berman. Yes, I would be happy to yield.
Ms. Jackson Lee. Let me I just simply want to add a
statement that I have to the record, and I guess I come down on
the issue in two manners: One, I want to open the courts to as
many people as possible who have been aggrieved and certainly
support the gentleman from North Carolina's motion. I do think
this legislation is good legislation and answers many of the
concerns that I have, and I submit my total statement into the
record.
Thank you very much for yielding.
Chairman Sensenbrenner. Without objection.
[The prepared statement of Ms. Jackson Lee follows:]
Prepared Statement of Hon. Sheila Jackson Lee, a Representative in
Congress from the State of Texas
I want to thank Chairman Sensenbrenner and Ranking Member Conyers
for convening this markup regarding H.R. 860, the ``Multidistrict,
Multiparty, Multiforum Jurisdiction Act of 1999.''
Clearly, consideration of H.R. 860 comes at a time where court
dockets continue to rise yet pay salaries for federal judges appear
inadequate to deal with the important questions that confront
Americans. H.R. 860 is intended to improve the ability of federal
courts to handle complex multidistrict litigation arising from a common
set of facts. Last Congress the House passed a virtually identical
bill, H.R. 2112, by voice vote under suspension of the rules; however,
it stalled in the Senate.
There are a few parts of the legislation which merit attention. One
provision of the bill allows a transferee court in multidistrict
litigation to retain jurisdiction over all of the consolidated cases
which the presumption that compensatory damages will be remanded to the
transferor court. It also expands federal court jurisdiction by
requiring only minimal diversity (as opposed to complete diversity) for
mass torts arising from a single incident. Lastly, the bill establishes
new federal procedures in these narrowly defined cases for the
selection of venue, service of process and issuance of subpoenas.
Under the bill, I am supportive of the expansion of jurisdiction
over civil actions arising out of a single accident that result in the
death or injury of 25 or more persons, if the damages exceed $150,000
per claim and minimal diversity exists. While the bill contains a
number of details, I am reassured that this bill would not apply to
mass tort injuries that involve the same injury over and over again,
such as, asbestos or breast implants.
In this sense, H.R. 860 is a sharp distinction from the
``Interstate Class Action Jurisdiction Act of 1999.'' Unlike H.R. 860,
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, the number of separate incidents or
injuries that may give rise to a class action, or the state-based
nature of the claim. Rather than providing a reasonable, limited
modification to diversity jurisdiction, the class action bill--which I
strongly oppose--represents a radical rewrite of the class action rules
and would ban most forms of state class actions.
Mr. Chairman, I hope that whatever form of H.R. 860 is reported by
the Committee today reflects a genuine commitment to providing
meaningful access to our courts. Access to our courts is simply
essential.
Thank you.
__________
Motion of Mr. Watt
I move that the bill, H.R. 860, be referred to its subcommittee of
jurisdiction for consideration.
Mr. Watt. Mr. Chairman, I have a motion at the desk.
Chairman Sensenbrenner. The clerk will report the motion.
The Clerk. Mr. Watt moves that H.R. 860 be referred to the
appropriate Subcommittee.
Chairman Sensenbrenner. The question is on the motion.
Those in favor will signify by saying aye.
Opposed, no.
The noes appear to have it. The noes----
Mr. Watt. Mr. Chairman, I ask for a recorded vote.
Chairman Sensenbrenner. The question is on the motion to
refer the bill to subcommittee.
Those in favor will, as your names are called, answer aye;
those opposed, no, and the clerk will call the roll.
The Clerk. Mr. Hyde?
[No response.]
The Clerk. Mr. Gekas?
Mr. Gekas. No.
The Clerk. Mr. Gekas, no. Mr. Coble?
Mr. Coble. No.
The Clerk. Mr. Coble, no. Mr. Smith?
Mr. Smith. No.
The Clerk. Mr. Smith, no. Mr. Gallegly?
[No response.]
The Clerk. Mr. Goodlatte?
[No response.]
The Clerk. Mr. Chabot?
[No response.]
The Clerk. Mr. Barr?
Mr. Barr. No.
The Clerk. Mr. Barr, no. Mr. Jenkins?
Mr. Jenkins. No.
The Clerk. Mr. Jenkins, no. Mr. Hutchinson?
[No response.]
The Clerk. Mr. Cannon?
Mr. Cannon. No.
The Clerk. Mr. Cannon, no. Mr. Graham?
[No response.]
The Clerk. Mr. Bachus?
Mr. Bachus. No.
The Clerk. Mr. Bachus, no. Mr. Scarborough?
[No response.]
The Clerk. Mr. Hostettler?
Mr. Hostettler. No.
The Clerk. Mr. Hostettler, no. Mr. Green?
Mr. Green. No.
The Clerk. Mr. Green, no. Mr. Keller?
[No response.]
The Clerk. Mr. Issa?
Mr. Issa. No.
The Clerk. Mr. Issa, no. Ms. Hart?
Ms. Hart. No.
The Clerk. Ms. Hart, no. Mr. Flake?
Mr. Flake. No.
The Clerk. Mr. Flake, no. Mr. Conyers?
Mr. Conyers. No.
The Clerk. Mr. Conyers, no. Mr. Frank?
[No response.]
The Clerk. Mr. Berman?
Mr. Berman. No.
The Clerk. Mr. Berman, no. Mr. Boucher?
[No response.]
The Clerk. Mr. Nadler?
Mr. Nadler. Aye.
The Clerk. Mr. Nadler, aye. Mr. Scott?
Mr. Scott. Aye.
The Clerk. Mr. Scott, aye. Mr. Watt?
Mr. Watt. Aye.
The Clerk. Mr. Watt, aye. Ms. Lofgren?
Ms. Lofgren. No.
The Clerk. Ms. Lofgren, no. Ms. Jackson Lee?
Ms. Jackson Lee. Aye.
The Clerk. Ms. Jackson Lee, aye. Ms. Waters?
[No response.]
The Clerk. Mr. Meehan?
[No response.]
The Clerk. Mr. Delahunt?
[No response.]
The Clerk. Mr. Wexler?
[No response.]
The Clerk. Ms. Baldwin?
Ms. Baldwin. No.
The Clerk. Ms. Baldwin, no. Mr. Weiner?
Mr. Weiner. Yes.
The Clerk. Mr. Weiner, aye. Mr. Schiff?
Mr. Schiff. No.
The Clerk. Mr. Schiff, no. Mr. Chairman?
Chairman Sensenbrenner. No.
The Clerk. Mr. Chairman, no.
Chairman Sensenbrenner. Are there additional members in the
chamber who wish to cast their votes or change their votes?
The gentleman from Virginia?
Mr. Goodlatte. No.
The Clerk. Mr. Goodlatte, no.
Chairman Sensenbrenner. The gentleman from South Carolina?
Mr. Graham. No.
Chairman Sensenbrenner. The gentleman from Arkansas?
Mr. Hutchinson. No.
Chairman Sensenbrenner. The gentleman from Ohio?
Mr. Chabot. No.
Chairman Sensenbrenner. Anybody else wish to--the gentleman
from Massachusetts?
Mr. Delahunt. May I have a moment?
[Laughter.]
Chairman Sensenbrenner. Of course.
The Clerk. Mr. Delahunt?
Mr. Delahunt. Yes.
The Clerk. Mr. Delahunt, aye.
Chairman Sensenbrenner. The clerk will--the gentleman from
California, Mr. Gallegly.
Mr. Gallegly. Votes no.
The Clerk. Mr. Gallegly, no.
Chairman Sensenbrenner. The clerk will try again to report.
The Clerk. Mr. Chairman, there are six ayes and 23 nays.
Chairman Sensenbrenner. And the motion is not agreed to.
The question now occurs on the motion to report the bill,
H.R. 860 favorably. All those in favor will signify by saying
aye.
Opposed no.
The ayes appear to have it. The ayes have it, and the
motion is agreed to.
Without objection, the Chairman is authorized to move to go
to conference pursuant to House rules.
Without objection, the staff is directed to make any
technical and confirming changes, and all members will be given
2 days, as provided by House rules, in which to submit
additional dissenting, supplemental or minority views.
Minority Views
H.R. 860 is intended to improve the ability of federal
courts to handle complex multidistrict litigation arising from
a common set of facts. This bill represents a means by which to
improve the manageability of complex litigation. In this narrow
circumstance, we are willing to support this expansion of
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 and
issuance of subpoenas. We can 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.
It is important to note that three positive changes were
made to the disaster litigation section of the bill as
introduced this Congress: the amount in controversy requirement
for a plaintiff to file in U.S. District Court is raised from
$75,000 to $150,000; an exception to the minimum diversity rule
is created providing that a U.S. District Court may not hear
any case in which a ``substantial majority'' of plaintiffs and
the ``primary'' defendants are all citizens of the same state
and in which the claims asserted are governed ``primarily'' by
the laws of that same state; and the choice-of-law section is
stricken as it is believed to confer too much discretionary
authority to a U.S. District Court judge to select the relevant
law that applies in a given case. We consider these changes to
be improvements in that they provide additional safeguards to
the limited expansion of federal court jurisdiction allowed
under the bill.
The following views clarify the reasoning behind our
support of both sections of H.R. 860:
Section 2--Overturns Lexecon v. Milberg
Section 2 of H.R. 860 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.
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\1\ 118 S.Ct. 956 (1998).
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While a hearing was not held on the bill this Congress,
during the 106th Congress, the Courts and Intellectual Property
Subcommittee did hold 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.
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\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).
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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 to section 2 of the bill addressing this concern at
the Full Committee markup, which was included this year in the
original language of the bill. The provision provides 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 in order 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. 860 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 $150,000 perclaim and minimal diversity of
citizenship exists.\3\ A U.S. District Court, however, may not hear any
case in which a ``substantial majority'' of plaintiffs and the
``primary'' defendants are all citizens of the same state and in which
the claims asserted are governed ``primarily'' by the laws of that same
state. Section 3 also 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. Additionally, section 3 establishes new federal procedures in
this narrowly defined category of cases for the selection of venue,
service of process and issuance of subpoenas. 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.
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\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.
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During the Subcommittee hearing last Congress, 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. 860 can very easily be distinguished
from the broader class action reform proposal which we
unequivocally opposed during the 106th Congress.\4\ Unlike H.R.
860, 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, the number
of separate incidents or injuries that may give rise to a class
action, or the state-based nature of the claim. 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. 860. It is imperative
for us to note here that while the Judicial Conference
supported the bill last year, they too opposed the broader
class action bill, recognizing, among other things, its
detrimental impact on the workload of the federal judiciary and
traditional state court prerogatives.\5\
\4\ See H.R. 1875, ``The Interstate Class Action Jurisdiction Act
of 1999,'' 106th Cong. (1999).
\5\ 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.
Zoe Lofgren.
Sheila Jackson Lee.
William D. Delahunt.
Anthony D. Weiner.
Dissenting Views
I opposed reporting H.R. 860, the ``Multidistrict,
Multiparty, Multiforum Trial Jurisdiction Act,'' to the full
House at the March 8, 2001 Judiciary Committee markup because I
objected to the process under which the bill was considered and
because I objected to certain substantive provisions of the
bill.
I objected to the process because this bill was marked up
by the full Committee only 2 days after it was introduced and
received no consideration at the Subcommittee level. Those who
support the bill contend that the bill did not warrant hearings
or a Subcommittee markup because the bill was the subject of a
hearing by the Subcommittee on Courts and Intellectual Property
in the 106th Congress. However, the version of the bill
introduced in the 107th Congress has undergone substantial
changes from its predecessor. At the hearing on this
legislation during the 106th Congress the Subcommittee heard
testimony from a witness who expressed serious concerns about
the bill's expansion of Federal jurisdiction.\1\ I believe a
hearing should have been held in this Congress to evaluate the
revised bill and to determine whether the revisions addressed
the serious federalism issues raised by this bill or made them
worse. For this reason, I offered a motion at the Committee
markup to refer this bill back to the Subcommittee for further
consideration. Unfortunately, the motion was defeated and the
bill was rushed through Committee.
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\1\ See Hearing on H.R. 2112 Before the House Subcommittee on
Courts and Intellectual Property, 106th Cong. (1999) (statement of
Brian Wolfman, Staff Attorney, Public Citizen).
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I also objected to certain substantive provisions of H.R.
860 which would expand Federal court jurisdiction for civil
actions arising out of a single accident \2\ because I believe
this proposed expansion of Federal jurisdiction is
inappropriate. The bill's expansion of Federal jurisdiction
would infringe on the traditional jurisdiction of state courts
which are better equipped to handle personal-injury and
wrongful death cases. Expanding Federal jurisdiction would also
add an additional burden to the Federal courts at a time when
our Federal courts are already overcrowded and backlogged.\3\
The bill's impact on plaintiffs would also be substantial.
Under the bill an injured victim who chose to file suit in a
state court could have his case involuntarily removed to a
Federal court that may be hundreds of miles from his home.
While this may be justified where diversity jurisdiction
currently provides access to the Federal court, I see
absolutely no reason to force a victim into Federal court where
the defendant resides or has a place of business in the state
and where the applicable law is state law. While the bill may
result in increased judicial efficiency for the Federal courts,
it would do so by encroaching on the jurisdiction of state
courts and states' rights and would do so at the expense of
accident victims. I think we have lost sight of the fact that
the courts are for the convenience of litigants, not judges and
administrators.
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\2\ Section 3 of the bill would create Federal jurisdiction for
civil actions arising out of a single accident that results in the
death or injury of 25 or more persons, if the damages exceed $150,000
per claim and minimal diversity exists. 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.
\3\ See Chief Justice William Rhenquist, An Address to the American
Law Institute, Rehnquist: Is Federalism Dead? (May 11, 1998), in Legal
Times (May 18, 1998)(criticizing Congress for enacting legislation
which brings more and more cases into the Federal court system).
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While some may characterize this bill as a ``non-
controversial'' piece of legislation that should be quickly
moved through the legislative process, I believe we failed to
properly exercise our responsibility as members of the
Judiciary Committee by not conducting a more extensive review
of this bill. Consequently, while I favor some of the
provisions of the bill I opposed reporting H.R. 860 to the full
House.
Melvin L. Watt.