Lexecon, Inc. v. Milberg Weiss Bershad Hynes and Lerach

PETITIONER: Lexecon, Inc.
RESPONDENT: Milberg Weiss Bershad Hynes and Lerach
LOCATION: Sacramento County Police Department

DOCKET NO.: 96-1482
DECIDED BY: Rehnquist Court (1986-2005)
LOWER COURT: United States Court of Appeals for the Ninth Circuit

CITATION: 523 US 26 (1998)
ARGUED: Nov 10, 1997
DECIDED: Mar 03, 1998

Jerold S. Solovy - Argued the cause for the respondent
Michael K. Kellogg - Argued the cause for the petitioner

Facts of the case

Lexecon Inc. was a defendant in a class action lawsuit. Under 28 USC section 1407(a), the lawsuit was transferred for pretrial proceedings to the District of Arizona. Section 1407(a) authorizes the Judicial Panel on Multidistrict Litigation to transfer civil actions with common issues of fact "to any district for coordinated or consolidated pretrial proceedings," but provides that the Panel "shall" remand any such action to the original district "at or before the conclusion of such pretrial proceedings." After claims against it were dismissed, Lexecon brought suit against Milberg Weiss Bershad Hynes & Lerach and others (Milberg) in the class action lawsuit in the Northern District of Illinois. Ultimately, the Panel, under section 1407(a), ordered the case transferred to the District of Arizona. Afterwards, Lexecon moved for the Arizona District Court to remand the case to Illinois. Milberg filed a countermotion requesting the Arizona District Court to invoke section 1404(a) to "transfer" the case to itself for trial.Ultimately, the court assigned the case to itself and the Court of Appeals affirmed its judgment.


May a federal district court conducting "pretrial proceedings" under 28 USC section 1407(a) invoke section 1404(a) to assign a transferred case to itself for trial?

Media for Lexecon, Inc. v. Milberg Weiss Bershad Hynes and Lerach

Audio Transcription for Oral Argument - November 10, 1997 in Lexecon, Inc. v. Milberg Weiss Bershad Hynes and Lerach

William H. Rehnquist:

We'll hear argument first this morning in Number 96-1482, Lexicon, Inc. v. Milberg, Weiss, Bershad, Hynes & Lerach.

Mr. Kellogg.

Michael K. Kellogg:

Mr. Chief Justice, and may it please the Court:

Congress passed the multidistrict litigation statute in 1968 as an experiment for a limited purpose.

It wanted to allow cases with common facts filed around the country to be consolidated in a single district for coordinated pretrial proceedings.

Such coordinated pretrial proceedings promote judicial efficiency as well as the efficiency of the parties by allowing for single rounds of discovery and single rounds of document requests.

But Congress was quite specific that at the conclusion of those coordinated pretrial proceedings the case must be remanded to the original district.

I quote here from section 1407(a), which is set forth at page 2 of our brief.

Each action so transferred shall be remanded by the panel at or before the conclusion of such pretrial proceedings, unless it shall have been previously terminated.

William H. Rehnquist:

Well, there is a line you omitted, is there... it doesn't say by the... from the district to which it was transferred, or--

Michael K. Kellogg:

That is section 1404(a), which is the general transfer statute, pursuant to which the District of Arizona transferred this case to itself.

This case originated in the Northern District of Illinois.

It was transferred pursuant to 1407(a) for coordinated pretrial proceedings in the District of Arizona.

Sandra Day O'Connor:

--Now, Mr. Kellogg, under your theory when should this... your suit have been remanded?

Michael K. Kellogg:

It should have been remanded at the time specified in the statute, which is at or before the conclusion of such pretrial proceedings.

Sandra Day O'Connor:

Well, was that when the Lincoln Savings litigation ended, when the consolidated proceedings ended, after summary judgment was entered, when?

I don't know--

Michael K. Kellogg:

The appropriate time--

Sandra Day O'Connor:

--when under your theory--

Michael K. Kellogg:

--The appropriate time in this case is at the time that Lexicon made its motion to remand, because the various factors cited--

Sandra Day O'Connor:

--And what had happened at that time?

I mean, which of these events had already occurred?

Michael K. Kellogg:

--Well, the multidistrict panel cited three factors as reasons for sending this case to Arizona.

One was the pendency of the potentially related appeal.

The second was the existence of a document depository in Arizona, and the third was the fact that there was an unfinished settlement in the Lincoln Savings litigation.

Each of those three factors had been eliminated.

The appeal had been dismissed, the document depository had been shut down, and Lincoln Savings had final judgment--

Sandra Day O'Connor:

But no determination had been made on summary judgment in your case.

Michael K. Kellogg:

--That is correct.

At the time we made our motion--