Multidistrict Litigation Restoration Act of 2005

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 1038) to amend title 28, United States Code, to allow a judge to whom a case is transferred to retain jurisdiction over certain multidistrict litigation cases for trial, and for other purposes.

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks and include extraneous material on H.R. 1038, the bill currently under consideration.

Mr. Speaker, I yield myself such time as I may consume.

(Mr. SENSENBRENNER asked and was given permission to revise and extend his remarks, and include extraneous material.)

Mr. Speaker, H.R. 1038, the Multidistrict Litigation Restoration Act of 2005, reverses the effect of a 1998 Supreme Court case commonly referred to as ``Lexecon,'' which has hampered the Federal court system from adjudicating complex, multidistrict cases that are related by a common fact situation. Just as importantly, the bill functions as a technical correction to a related ``disaster litigation'' provision that was incorporated in the Department of Justice Authorization Act, which Congress passed in 2002.

A little background is in order at this point. During the 107th Congress, I authored legislation to address the Lexecon and disaster litigation problems. As passed under suspension by the House, my bill, H.R. 860, accomplished two goals: First, the bill reversed the effect of the Lexecon case which dealt with the authority of a specially designated U.S. district court to handle complex multidistrict cases consolidated for trial. Pursuant to the decision, the court known as the ``transferee'' court could retain Federal and State cases only for pretrial matters, but not the actual trials themselves.

H.R. 860 simply codified existing practice of the preceding 30 years by allowing the transferee court to retain jurisdiction for the purpose of determining liability and punitive damages, or to refer the cases back to those courts in which the cases were originally filed. This feature streamlines adjudication and enables the transferee court to induce the parties to settle.

Second, H.R. 860 conferred original jurisdiction on U.S. district courts to adjudicate any civil action arising out of a single accident under prescribed conditions, but would remand the case to the State courts for determination of compensatory damages. This portion of H.R. 860 is commonly referred to as the ``disaster litigation'' part of the bill.

The Committee on the Judiciary in the other body took no action on H.R. 860, but the matter was resurrected during House-Senate conference deliberations on the Department of Justice authorization bill. Pursuant to negotiations, the conferees agreed to take half of H.R. 860, the disaster litigation portion, which is currently codified as section 1369 of title 28 of the U.S. Code.

Trying to enact a straight Lexecon fix through the bill before us is meritorious in its own right, promoting as it does judicial efficiency, but there is another problem that the bill solves. The currently codified disaster litigation portion of H.R. 860 contemplates that the Lexecon problem is solved. In other words, the new disaster litigation law only creates original jurisdiction for a U.S. district court to accept those cases and qualify as a transferee court

under the multidistrict litigation statute; but the transferee court still cannot retain the consolidated cases for determination of liability and punitive damages, which compromises the operation of the statute.

In this sense, then, the Lexecon fix, its freestanding merits aside, also functions as a technical correction for the recently enacted disaster litigation measure. H.R. 1038, in tandem with the now-codified disaster litigation provisions, will produce what was originally intended when legislation addressing this issue was first proposed, a fix to the Lexecon problem and a disaster litigation measure that really works.

I remind Members that H.R. 1038 is identical to H.R. 1768 from the 108th Congress, which passed the House by a rollcall vote of 418-0. In sum, this legislation speaks to process, fairness and judicial efficiency. It will not interfere with jury verdicts or compensation rates for litigators.

Mr. Speaker, I include for the Record a letter from the U.S. Judicial Conference stating their strong support for enactment of H.R. 1038. I urge my colleagues to join me in a bipartisan effort to support this bill.

Judicial Conference

of the United States,

Washington, DC, April 18, 2005.

Hon. F. James Sensenbrenner, Jr.,

Chairman, Committee on the Judiciary, House of

Representatives, Washington, DC.

Dear Mr. Chairman: The Judicial Conference of the United

States strongly supports enactment of H.R. 1038, the

``Multidistrict Litigation Restoration Act of 2005,'' which

you introduced on March 2, 2005 and which was reported

favorably by the House Judiciary Committee on March 17, 2005.

H.R. 1038 will facilitate the resolution of claims by

citizens and improve the administration of justice.

Currently, section 1407(a) of title 28, United State Code,

the multidistrict litigation statute, authorizes the Judicial

Panel on Multidistrict Litigation (the Judicial Panel) to

transfer civil actions with common questions of fact that are

pending in multiple federal judicial districts ``to any

district for coordinated or consolidated pretrial

proceedings.'' It also requires the Judicial Panel to remand

any such action to the district court in which the action was

filed at or before the conclusion of such pretrial

proceedings, unless the action is terminated before then in

the transferee court.

Although the federal courts had for nearly 30 years

followed the practice of allowing a transferee court to

invoke the venue transfer provision (28 U.S.C. Sec. 1404(a))

and transfer the case to itself for trial purposes, the

Supreme Court in Lexecon, Inc. v. Milberg Weiss Bershad Hynes

& Lerach, 523 U.S. 26 (1998), held that such statutory

authority did not exist. The Court noted that the proper

venue for resolving the desirability of such self-transfer

authority is the ``the floor of Congress.'' 523 U.S. at 40.

Section 2 of H.R. 1038 responds to the Lexecon decision by

amending 28 U.S.C. Sec. 1407 to allow a judge with a

transferred case to retain it for trial or to transfer it to

another district in the interest of justice and for the

convenience of the parties and witnesses. This section also

provides that any action transferred for trial must be

remanded by the Judicial Panel to the district court from

which it was transferred for the determination of

compensatory damages, unless the transferee court finds for

the convenience of the parties and witnesses and in the

interests of justice that the action should be retained for

the determined of compensatory damages. As experience has

shown, there is wisdom in permitting the judge who is

familiar with the facts and parties and pretrial proceedings

of a transferred case to retain the case for trial. Also, as

with most federal civil actions, multidistrict litigation

cases are typically resolved through settlement. Allowing the

transferee judge to set a firm trial date promotes the

resolution of these cases.

H.R. 1038 also seeks to make corrections to the Multiparty,

Multiforum Trial Jurisdiction Act of 2002, which was enacted

as section 11020 of the ``21st Century Department of Justice

Appropriations Authorization Act'' (Pub. L. No. 107-273, 116

Stat. 1758; now codified in various sections in title 28,

United States Code. See 2 U.S.C. Sec. Sec. 1369, 1391, 1441,

1697, and 1785.)

The Judicial Conference appreciates your support of H.R.

1038. If you or your staff have any questions, please contact

Mark W. Braswell or Karen Kremer, Counsel, Office of

Legislative Affairs (202-502-1700).

Sincerely,

Leonidas Ralph Mecham,

Secretary.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield 1 minute to the gentleman from Texas (Mr. Smith).

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I rise to support House passage of H.R. 1038. At least five times over the past 6 or 7 years I have risen to support legislation virtually identical to H.R. 1038. Each time the legislation has stalled in the Senate.

This bill has a very narrow purpose and effect. It overturns the 1998 Lexecon decision of the Supreme Court. That decision held that a multidistrct litigation transferred to a Federal court for pretrial proceedings cannot be retained by that court for trial purpose. In so holding, the Lexecon decision upset decades of practice by the multidistrict litigation panel and Federal district courts. The Lexecon decision also increases the cost and complexity of such multidistrict litigations by requiring courts other than the transferee court which has overseen the discovery and other pretrial proceedings to conduct a trial.

The provisions of this bill overturn Lexecon in a carefully calibrated manner. While the bill allows a transferee court to retain a case for a trial on liability issues and, when appropriate, on punitive damages, it creates a presumption that the trial of compensatory damages will be remanded to the transferor court. In so doing, the bill is careful to overturn the Lexecon decision without expanding the power previously exercised by transferee courts. More importantly, the presumption regarding the trial of compensatory damages ensures that plaintiffs will not be unduly burdened in pursuit of their claims.

In addition, this bill makes technical and conforming corrections to the provisions in the 2002 Department of Justice authorization measure relating to the consolidation of mass tort cases. While not universally endorsed, most Democratic members of the Committee on the Judiciary have supported this piece of legislation each time it is submitted for consideration, and I ask my colleagues to once again vote for H.R. 1038.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I have no further requests for time, and I yield back the balance of my time.

Mr. Speaker, I have supported this legislation in the past because I am told it will improve the ability of Federal courts to handle complex multidistrict litigation arising from a common set of facts.

But I do have some reservations about this bill. When Congress enacted the Multidistrict Litigation, MDL, statute 35 years ago, its purpose was not to impose an unfair burden on plaintiffs and their families. Congress made plain its insistence on preserving the ability of individual plaintiffs to have their eventual day in court in a Federal district courthouse reasonably close to their home.

I want to make sure we continue to strike the right balance between emphasizing judicial economy and efficiency and preserving fundamental fairness during the critical trial phase. With this underlying goal in mind, I support this legislation. However, I hope the bill will continue to improve as it moves through the Senate and into Conference.

Mr. Speaker, I will not repeat the chairman's description of the bill's contents, but I would note that his bill is identical to the text of the legislation we passed in the last Congress by a vote of 418-0.

H.R. 1038 helps the Multidistrict Litigation Panel discharge its responsibilities by streamlining the adjudication of complex, multidistrict cases in a manner that is fair to all litigants.