Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach
Headline: Multidistrict litigation rules limited as Court blocks transferee courts from keeping transferred cases for trial, invalidates a Panel rule and protects plaintiffs’ original trial forum.
Holding: The Court held that a judge conducting coordinated pretrial proceedings under the multidistrict litigation statute may not use § 1404(a) to assign a transferred case to itself for trial.
- Stops transferee judges from keeping transferred multidistrict cases for trial using change-of-venue motions.
- Invalidates the Judicial Panel’s Rule 14(b) to the extent it conflicts with the statute.
- Preserves plaintiffs’ choice of trial forum when pretrial coordination ends.
Summary
Background
In 1992 Lexecon, a law and economics consulting firm, sued two law firms in Illinois for claims including malicious prosecution and defamation. That case was transferred with other related suits to coordinated multidistrict proceedings in Arizona under the statute governing multidistrict litigation. The transferee judge handled discovery and other pretrial matters. The law firms asked the Arizona court to keep the case for trial by invoking the general venue-transfer law; Lexecon asked to be remanded back to Illinois and objected. The case was tried in Arizona, resulting in a judgment for one law firm, and Lexecon appealed.
Reasoning
The Court addressed whether a judge conducting coordinated pretrial work may, under the general transfer law, assign a transferred case to itself for trial. It held no. The Court explained that the multidistrict statute requires the Judicial Panel on Multidistrict Litigation to remand transferred actions to their original courts at or before the conclusion of pretrial proceedings. Allowing a transferee judge to keep a case for trial would frustrate that mandatory remand duty and conflict with the statute. The Court therefore rejected the practice recognized in the Panel’s Rule 14(b) and reversed the Ninth Circuit.
Real world impact
The decision means transferee judges handling multidistrict cases generally cannot use venue-transfer motions to retain individual cases for trial. The Judicial Panel’s Rule 14(b) is invalid to the extent it conflicts with the statute. Cases tried under the disallowed practice may be open to correction on appeal, and Congress could change these rules if it chooses.
Dissents or concurrances
Justice Scalia joined the opinion except for a portion identified as Part II-C, reflecting a narrow, technical difference among the Justices.
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