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Washington-Three years ago, U.S. District Judge Thomas W. Thrash Jr. of Atlanta had what he calls a “bad case of lexeconitis” caused by Dippin Dots and Frosty Bites. What sounds like a stomach ache from too much of a summer delight was actually a headache from complex litigation that ultimately would take him hundreds of miles from home to resolve. Thrash recently recounted the saga of the multidistrict Dippin Dots Patent Litigation during a hearing by the Senate Judiciary Subcommittee on Administrative Oversight and the Courts. The subcommittee, chaired by Senator Jeff Sessions, R-Ala., is looking into whether a legislative “fix” is needed to restore to transferee judges-those handling pretrial proceedings in multidistrict litigations (MDL)-the power to try those cases, a power lost because of a 1998 U.S. Supreme Court decision. The federal judiciary has been nothing if not patient and persistent in its pursuit of a legislative fix for Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26. In the fall of 1998, the Judicial Conference of the United States, the policymaking arm of the federal judiciary, asked Congress to amend the MDL statute to permit transferee judges to retain certain cases for trial rather than remand them to the courts where they were first filed. The House passed legislation to address the Lexecon decision in the 106th, 107th and 108th congresses. The Senate passed its own bill in the 106th Congress. But none of those bills became law. Last year the House again passed Lexecon legislation-H.R. 1038-and that bill is now in the Senate Judiciary Committee. Sessions’ hearing was the first on the issue since 1999. “So we wanted to hold this hearing to learn about the Lexecon issue and to understand if the ‘ Lexecon fix’ is still needed,” Sessions said. “MDL cases are some of the largest, most complex, most time consuming and most economically significant cases handled by the federal judiciary.” Congress, he added, must “look before we leap when it comes to amending the MDL statute.” But after nearly 10 years, there seems to be little chance of Congress “leaping” in any direction. The biggest issue for the lawmakers may well be, “What the hell is Lexecon?” said procedural scholar Georgene M. Vairo of Loyola Law School, Los Angeles. “It’s not exactly sexy,” she explained. “It’s not like you can rant about judicial hellholes. It’s really tinkering, tinkering with procedure. On the one hand, that may slip below their radar, and on the other hand, it could raise some hackles.” Backdoor fixes Under the MDL statute, when civil cases involving common questions of fact are pending in multiple judicial districts, the Judicial Panel on Multidistrict Litigation may transfer those cases to a single transferee judge for coordinated or consolidated pretrial proceedings. More than 228,000 cases involving millions of claims, ranging from antitrust to products liability, have been centralized through the MDL process to date, according to the Administrative Office of the U.S. Courts, the management arm of the federal judiciary. For nearly 30 years following the creation of the MDL process, transferee judges used the federal venue statute to transfer the cases to their own courts or to another district for trial when appropriate. But that changed in 1998 with the Lexecon decision. The Supreme Court in Lexecon held that the plain language of Section 1407 of the statute establishing the MDL process required remand of the transferred cases after pretrial proceedings were completed. The justices said it was up to Congress change the statute. For Thrash and the Dippin Dots litigation, Lexecon meant that after two years and hundreds of pretrial dispositions in a case fought like King Kong v. Godzilla, the remaining unresolved patent infringement, antitrust, unfair trade and trade secrets claims had to be tried not by him but by a judge in Texas, where the original claims were filed. The original Texas judge had quit, he recalled. The case file was 20 feet long stacked end to end. There were 746 MDL docket entries. Thrash had made dozens of rulings that would affect the trial. The unsuspecting Texas judge who would inherit the case, said Thrash, would be hit like a “tsunami” that would obliterate his entire docket.” Thrash told the Senate subcommittee on June 29 that he believed he should try the case out of fairness and efficiency. He asked the lawyers in the case to seek consent from their clients for him to try the case. The Georgia, Kentucky and Florida clients agreed, but the Frosty Bites manufacturer in Texas insisted on trial in Dallas. So the case was headed to Dallas. Thrash then successfully engaged in what lawyers call Lexecon‘s “backdoor fix.” After going through multiple channels, he received an intercircuit assignment to the Dallas court. He took his deputy clerk and court reporter, checked into a Dallas hotel and tried the case. Not a single significant witness was from Dallas, he noted. “In my opinion, this litigation was unnecessarily prolonged and expensive to the courts and the parties because of Lexecon,” Thrash said. As soon as Lexecon came down, lawyers and others started to think about how to avoid it, said Mark Herrmann, multidistrict and class action litigator and partner in the Cleveland office of Jones Day. For example, the parties can stipulate to keeping the cases in the transferee district for trial purposes-what Thrash first tried in his MDL case. If the cases have been remanded, the parties also may stipulate to a transfer back to the transferee court. And, as Thrash ultimately did, the transferee judge can seek an intercircuit or intracircuit assignment to preside over a trial after the remand. Passing a legislative fix, according to Herrmann, would simply avoid what he calls the “ Lexecon two-step,” ways around the decision. “Among lawyers who practice in the field, some feel very strongly that the MDL transferee judge is the most educated person in the world on that case and should try the case as the logical choice,” said Herrmann. “Other lawyers feel just the opposite. Because the transferee judge had all these cases and views them as a mass tort issue that must be resolved, it’s harder to get dispositive motion rulings. They think it helps to go back to the original judge who will make decisions on each case. And some like the fact that the MDL judge doesn’t have all the power.” Herrmann said he can’t figure out why Congress would or would not pass a legislative fix, but he added, “It doesn’t make much difference to me because everybody has found a way around it.” But U.S. District Judge Wm. Terrell Hodges of Ocala, Fla., chairman of the Judicial Panel on Multidistrict Litigation, said the legislation is “vital” for three reasons. First, he told the subcommittee, it will facilitate settlements. “The anticipation and possible use of a trial transfer has historically proven to be a strong inducement to spawn global or individual settlements at all stages of the proceedings.” Second, he said, it will reduce waste that stems from litigating these cases in multiple jurisdictions. And, third, the legislation will directly benefit litigants. “Parties should not be subjected to the uncertainties, delays and expense created by unnecessary duplication of litigation or subjected to possible inconsistent adjudications.” Hodges presented to the subcommittee statements by 27 transferee judges on the effect of Lexecon on their MDL cases. For example, U.S. District Judge Thomas Hogan of Washington, handling the Vitamins Antitrust Litigation, said: “The court has to refer many cases back for further litigation which will substantially delay resolution of the cases where circuit law may be different and as parties have to educate new judges about the largest price-fixing case in history. This is a tremendous waste of resources. Further, it seems that some cases have not settled because certain parties wish to proceed in different jurisdictions.” H.R. 1038 would authorize transferee judges to retain their MDL cases for determinations of liability and punitive damages. Their cases would go back to the transferor court-federal or state, if removed-for determination of any compensatory damages unless they should be retained for convenience of the parties and witnesses or in the interests of justice. The bill provides similar trial-transfer authority in single-accident litigation under the Multiparty, Multiforum Trial Jurisdiction Act of 2002. The damages question has been an issue in prior Lexecon legislation, according to Capitol Hill staffers and others. Some lawmakers worried about injured plaintiffs and witnesses having to go out of state to prove injuries and damages. Others worried the bill was expanding federal jurisdiction at the expense of states’ rights. Last year, U.S. Representative Mel Watt, D-N.C., voiced some of those concerns when H.R. 1038 was in the House. He said it compounds the problem of federal courts infringing on traditional state court jurisdiction by ensuring that the transferee court can retain the consolidated case for determination of liability and punitive damages. He also said it would further burden the federal courts, especially in light of the Class Action Fairness Act of 2005, which steers most class actions and mass tort cases into them. Loyola’s Vairo said the political cross-currents are odd here. “I, as a knee-jerk liberal, would think this is a no-brainer. The legislation makes sense. But a strict federalism person would say, ‘Wait a minute, these people have a right to have their cases tried where they filed them.’ “ Although seemingly noncontroversial, Lexecon legislation is part of a very politicized debate in Congress, one where even tinkering with procedural rules, like Rule 11 sanctions on attorneys for frivolous litigation, become part of so-called “tort reform,” said Vairo. Plaintiffs’ attorneys, she said, worry about tort reform through the procedural backdoor. “I don’t think fixing Lexecon has to be or should be political,” she said. “But [legislation] is probably going to die.”

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