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

ADVOCATES:
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.

Question

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?

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–

Sandra Day O’Connor:

Now, maybe–

Michael K. Kellogg:

–no determination had been made.

Sandra Day O’Connor:

–Maybe the district court, pursuant to that original transfer, could go ahead and decide that, could it not?

Michael K. Kellogg:

Not pursuant to the statute, Your Honor.

The statute specifically states that at or before the conclusion of a consolidated pretrial proceeding the case must be remanded, and we made our motion at that–

Sandra Day O’Connor:

So when the consolidated proceedings had ended you say it had to go back.

Michael K. Kellogg:

–That’s correct, Your Honor.

Sandra Day O’Connor:

And, in fact, it did not, and a jury trial was held, and it was… the jury determined that against your client.

Michael K. Kellogg:

That’s correct.

Sandra Day O’Connor:

And at that point, what’s the remedy?

Why shouldn’t we just leave things be?

Even if you read it right, why should we upset that now?

Michael K. Kellogg:

Well, because venue is like subject matter jurisdiction in the sense that if it is not waived the case must be reversed afterwards.

That was the–

William H. Rehnquist:

What is your authority for that?

Michael K. Kellogg:

–That was the holding of this Court in the Olberding case.

It was repeated again in the Schnell case.

Ruth Bader Ginsburg:

But those were cases of wrong venue, Mr. Kellogg, were they not?

This is a case… the District of Arizona, as I understand it, is a place where personal jurisdiction existed as to all defendants, and it was a place of proper venue.

Olberding involved a wrong venue.

Michael K. Kellogg:

This is a case of wrong venue, Justice Ginsburg, even though respondents argued that we could have filed the case in the District of Arizona, but the fact remains, we did not file the case in the District of Arizona.

Exercising a long-held right, we decided to file this case in the Northern District of Chicago.

William H. Rehnquist:

Illinois.

Michael K. Kellogg:

At the time it was transferred to the Northern District… to Arizona, it was transferred only for coordinated and consolidated pretrial proceedings pursuant to 1407(a), and the statute specifies that at the conclusion of those proceedings the case must be remanded.

That means venue was improper in the District of Arizona.

Ruth Bader Ginsburg:

May I go back over your initial answer to Justice O’Connor about summary judgment.

Do I understand you right to say, not in this case but as a general matter, summary judgment is a pretrial thing, so it could be had, where I think your position is that the multidistrict forum has no authority ever to grant 140… to deal with 1404(a), is that right?

Michael K. Kellogg:

That’s correct.

Ruth Bader Ginsburg:

So summary judgment sometimes, 1404(a) never.

Michael K. Kellogg:

Summary judgment in appropriate circumstances could be granted by the transferee court.

Michael K. Kellogg:

In this instance–

David H. Souter:

And what are those circumstances?

Michael K. Kellogg:

–Pardon?

David H. Souter:

And what are the appropriate circumstances?

Michael K. Kellogg:

In the appropriate circumstances where it’s part of coordinated, consolidated pretrial–

David H. Souter:

You mean if every single case involves the same summary judgment motion?

Michael K. Kellogg:

–Right.

For example, if there’s a common issue of law that spans across all the cases, or a common issue of fact, the court might well, pursuant to coordinated and consolidated pretrial proceedings, grant summary judgment.

David H. Souter:

So you’re saying consolidated means that which is common to all, rather than referring to simply a collection of cases which are consolidated for whatever pretrial proceedings there might be involving common issues?

Michael K. Kellogg:

The statute says consolidated and coordinated, so the cases are brought together.

They are consolidated, but the idea is to connect coordinated pretrial proceedings, and the statute’s absolutely explicit that at the conclusion of those proceedings the case has to go back.

David H. Souter:

But I’m sure there are many multidistrict litigation instances where the trial court said, now, there’s three different kinds of cases.

We’re going to have discovery… three different subclasses of cases.

We’re going to have discovery of one sort in one, another in another.

I don’t see that there has to be a determination of commonality before you can make that ruling.

Michael K. Kellogg:

The key point for our case is that there is a durational limitation built into 1407(a).

It says that the transferee court gets the case for a limited period of time to conduct coordinated or consolidated pretrial proceedings.

Now, in my view, that means it’s specific proceedings that cover all those various cases, that span across the cases, but the key point for this case is that there’s a durational limitation.

No one disputes that at the time Lexecon made its motion to remand there was no prospect of any future coordinated or consolidated pretrial proceedings in this case.

The statute therefore is quite explicit that the case has to be remanded.

William H. Rehnquist:

Mr. Kellogg, do you agree that under the rule, 14(b), what the district court did here was proper?

Michael K. Kellogg:

I agree that the JPML rule–

Yes.

Michael K. Kellogg:

–allows for it.

What–

William H. Rehnquist:

But you say, though, the rule is unauthorized.

Michael K. Kellogg:

–The rule is directly contrary to the statute.

What the JPML has done is taken a statute with a single specific exception… it says, the case shall be remanded unless it has been previously terminated, and what the JPML has done is said, well, it has to be remanded unless it’s been terminated or unless the district court has transferred the case to itself pursuant to 1404(a).

So they’ve read a second exception into the statute that completely swallows the rule, because essentially what they’ve done is says, the case has to be remanded unless the district court decides not to remand it.

William H. Rehnquist:

Well, the district court is… does not have total freedom in its options even under the rule, but it can assign it to itself, I guess, because it’s not the transferee court.

Michael K. Kellogg:

The transferee court, in this case the District of Arizona, was not free to assign the case to itself, for two reasons.

William H. Rehnquist:

Even under the rule?

Michael K. Kellogg:

Under the rule it is, but the rule is invalid.

Oh.

Michael K. Kellogg:

And that’s for two reasons.

First it makes nonsense of the shall-be-remanded language, and second, the invocation of 1404 was itself improper, because 1404 specifies that a case may be transferred to any other district court.

William H. Rehnquist:

Yes, but your opponent say other… when they’re referring to other district courts the base of reference is the Northern District of Illinois.

Michael K. Kellogg:

Well, if you read the language closely, and it’s set out at page 2 of our brief, it says specifically, for the convenience of parties and witnesses in the interests of justice a district court may transfer any civil action to any other district or division where it might have been brought.

Now, the only way to make sense of that language is that the district court that does the transferring, the subject of the sentence, is other than the district that receives the case, the other district which is the indirect object of that sentence.

John Paul Stevens:

No, it doesn’t have to be district.

Or division.

Michael K. Kellogg:

It says district or division.

John Paul Stevens:

It could be a different division within the same district.

Michael K. Kellogg:

It could be–

Yes.

Michael K. Kellogg:

–to a different division within the same district, that’s correct, Justice Stevens, but in the absence–

Antonin Scalia:

You think Congress might be… might have been willing to allow a court to deny itself jurisdiction over the case but not allow a court to obtain jurisdiction that it otherwise wouldn’t have.

Michael K. Kellogg:

–I believe that’s correct.

I’m not sure I followed the import of that.

Under 1404 a self-transfer is in our view oxymoronic, because no transfer is taking place.

The District of Arizona is simply asserting continued authority over the case.

Antonin Scalia:

The import is that transferring to yourself is grasping jurisdiction.

Transferring to someone else is denying yourself jurisdiction, a much… it’s not as likely to be motivated by bad reasons.

Michael K. Kellogg:

That’s correct, Justice Scalia.

There’s a built-in safeguard there.

William H. Rehnquist:

Well, why… I don’t know that I quite follow that.

Why is a judge who doesn’t transfer necessarily less worthy than a judge who does transfer?

Michael K. Kellogg:

It’s only a question that, under the strict language of 1404 the transfer has to be to some other district.

A court who merely asserts jurisdiction over the course… case and says, I’m going to keep it for all purposes, is not transferring the case within the meaning of 1404, and there’s no reason to distort the language of 1404, which was passed in 1947 at a time when the prospect of self-transferring did not even exist, because the multidistrict litigation statute was not passed until 1968, in which case a court for the first time could get a case for limited purposes, but expressly has to remand that at the conclusion of those purposes and cannot bootstrap that authority by holding onto a case–

Sandra Day O’Connor:

Mr. Kellogg, I want to bring you back to the possible remedy, because even if I were to agree with you on your reading of the statutes, I’m not sure that you’re entitled to have the jury verdict set aside now.

Michael K. Kellogg:

–Well, first of all, let me point out that we sought mandamus before the trial in the Ninth Circuit.

Respondents specifically took the position that we were not entitled to mandamus because we had a complete remedy on appeal, and the Ninth Circuit agreed with that position.

They said specifically this issue can be raised and the problem corrected on direct appeal.

We obviously invoked that right, under the Court’s cases, under Olberding and Schnell, specifically have a right to invoke our venue rights, and then you can–

Sandra Day O’Connor:

Well, Caterpillar points the other way.

There was no subject matter jurisdiction there, and the Court admitted as much, but said we’re not going to upset this verdict.

Michael K. Kellogg:

–Well, I think Caterpillar actually plays very well into our argument, Justice O’Connor.

First of all, of course, Caterpillar had nothing to do with venue.

It had, as you said, to do with subject matter jurisdiction.

Secondly, and more importantly, the flaw in Caterpillar was cured at the time of the trial.

Subject matter jurisdiction did adhere because the nondiverse party had been dismissed.

Here, the venue flaw was not corrected at the time of trial.

It continued throughout the entire case, and continues to affect the case on appeal.

Anthony M. Kennedy:

Is this issue comprised within the question that we granted certiorari?

Couldn’t we just remand to the district court if we agree with… to the court of appeals if we agree with you on this point?

Michael K. Kellogg:

If you agree with us–

Anthony M. Kennedy:

Or is it crucial to deciding whether we have a case or controversy?

Michael K. Kellogg:

–I don’t think you actually need to reach the question of whether the error is harmless or not.

You granted certiorari to determine whether the practice of self-transfer is permitted under 1407(a) and under 1404(a).

All you have to do is vindicate the precise language of those statutes and remand the case to the court of appeals.

Anthony M. Kennedy:

There’s not much of a policy if the district court can assign all of the cases to a second district court.

If the district courts in the country thought it was very, very important for them to continue business almost as usual they could assign it to the second best district court–

Michael K. Kellogg:

Well–

Anthony M. Kennedy:

–and so we’d have the second best district courts trying these cases all over the country.

Michael K. Kellogg:

–Actually, that’s not true.

He could not assign it to a second district court.

Under the language of 1404, sure, it would be a transfer to another district court, but it would still violate the express mandate of 1407(a) that the case shall be remanded to the original court where it was filed.

See, 1404 and 1407 are alternative mechanisms.

They’re strategic choices that a defendant can make at the time that a case is filed.

If they think they can satisfy the requirements for a 1404 transfer for all purposes, then they can make such a motion.

Michael K. Kellogg:

If not, and they think coordinated proceedings would be appropriate, they can make a 1407 motion.

What they can’t do is what happened here, is make a 1407 motion and then bootstrap it into being held for all purposes under 1404(a).

Ruth Bader Ginsburg:

Mr. Kellogg, I think you answered in response to my question earlier that 1404(a) is not available at all to this multidistrict forum, not to itself and not to another forum.

Michael K. Kellogg:

No, but it is available to the original court when the case is filed, so it was available–

Ruth Bader Ginsburg:

To the Northern District of Illinois, but your position is the District of Arizona could not have transferred it to California any more than it could have transferred it to itself.

Michael K. Kellogg:

–That’s correct.

That would be a direct violation.

Ruth Bader Ginsburg:

So 14… and to what extent are you relying on… you said 1404(a) came in in the forties, and this is much later legislation.

1404(a) when it came in envisioned only a transferor that would ship out, so are you saying that because that was the world at the time 1404 came in, that is to allow a forum to send something out, that it can’t be applied in tandem with–

Michael K. Kellogg:

No, I think I’m making a somewhat different point, Justice O’Connor.

First of all, I’m making the point that 1407–

–Justice Ginsburg.

Michael K. Kellogg:

–Justice Ginsburg.

I apologize.

The first point I’m making is that section 1407 specifically says that the case shall be remanded.

That’s a later statute, a specific statute dealing with this instance, and therefore the case has to be remanded.

The second point about 1404 is, this sort of self-transfer doesn’t fit the language of 1404, and my point is that you should not jerry rig these two statutes together, which were never intended to work in tandem, to reach a result that Congress clearly did not intend.

Not only is the language of 1407 clear, the legislative history, if one needs to resort to that, is absolutely clear.

William H. Rehnquist:

So supposing, Mr. Kellogg, that the Arizona District Court had remanded, as you say it had to, to the district of… then could the District of Illinois have granted a motion for change of venue to the District of Arizona?

Michael K. Kellogg:

Yes, it could have.

In this case that never would have happened.

None of the parties to this case were from Arizona.

None of the witnesses were in Arizona.

None of the lead counsel were in Arizona, none of the documents.

William H. Rehnquist:

You say it might not have been brought there, or just as a matter of discretion that the District Court in Illinois wouldn’t have done it.

Michael K. Kellogg:

As a matter of discretion a 1404 transfer would never have been granted in this case.

Stephen G. Breyer:

Am I… to go back to remedy for a minute, am I right that there is no authority… I couldn’t find any.

I don’t see any in the briefs, but you might tell me there is some, in which case… on the following two related questions.

Question 1, a district court makes a mistake about venue and holds the trial.

Is that harmless, or isn’t it?

Stephen G. Breyer:

There’s just no authority.

Caterpillar had to do with jurisdiction.

The second related question is, let’s assume that harmless error applies.

A court of appeals makes a mistake about mandamus.

It says you have an adequate remedy, but you don’t because of harmless error.

Then, given that fact, should, later on, you get an appeal, whereas otherwise you wouldn’t?

On those two questions… I would assume the answer to the second is no, you’re just out of luck, but maybe I’m wrong.

Michael K. Kellogg:

Well, let me–

Stephen G. Breyer:

And I assume that the answer to the first question is, I don’t know.

In other words, those seem to be the two cases where I look for authority, the two key matters on your harmless error point.

I couldn’t find any authority.

Michael K. Kellogg:

–We’ve cited, actually, the relevant harmless error cases in our brief.

Stephen G. Breyer:

Which one do you think is the best, closest one?

Michael K. Kellogg:

In the reply brief–

Stephen G. Breyer:

Which one do you want me to specially look at?

[Laughter]

I’ll look at them all, but which one do you think is right on point?

Michael K. Kellogg:

–There are a number of cases holding that venue errors are not harmless error.

There’s the Olberding case, when the Court quite specifically… and I’m quoting here from Olberding.

Unless the defendant has also consented to be sued in that district, he has a right to invoke the protection that Congress has afforded.

In the Schnell case, 8 years later, the Court reiterated that point and said, look, there are some people who thinks that’s exalting form over substance, but it’s not.

Stephen G. Breyer:

Why not?

I mean, he’s had… they’ve had a complete trial.

They had–

Michael K. Kellogg:

We’ve had a trial–

Stephen G. Breyer:

–Nobody says it’s unfair trial.

There’s certainly jurisdiction.

It just happened to be at a place that the statutes don’t provide venue, venue after all being a matter of convenience for the parties, rather than the nature of the fairness of the proceeding, it’s… or jurisdiction or something.

So the reason why it’s important is–

Michael K. Kellogg:

–The reason why it’s important is that the venue was improper.

Michael K. Kellogg:

The defect in the trial, unlike Caterpillar, was never cured.

This trial was held–

Stephen G. Breyer:

–Well, I know, but what were… the reason why that’s such an important defect that, even though there was a totally fair trial, et cetera, nonetheless we should do this all over again.

Michael K. Kellogg:

–It’s an important defect in this case for two reasons, first of all because respondents tried so hard to get this case to the District of Arizona because of popular prejudice and strong feelings about the Lincoln Savings matter and Charles Keating in particular, and were relying on the fact that anyone associated with, or alleged to be associated with Charles Keating was essentially going to get lynched by a jury in Arizona, and as Judge Kozinski said, they peppered their trial arguments with references to Keating’s misdeeds and with references to the Lincoln Savings debacle.

A second reason is that Judge Zagel, to whom this case had been assigned in the Northern District of Illinois, had specifically rejected their argument that Judge Bilby’s orders in the Lincoln Savings case somehow had a preclusive effect on parts of this litigation.

When the case was transferred to Arizona, Judge Bilby’s colleague immediately gave preclusive effect to Judge Zagel’s ruling, so in this case there was substantial prejudice.

William H. Rehnquist:

But are you… is your position that you must show that sort of prejudice, or that–

Michael K. Kellogg:

No.

William H. Rehnquist:

–a venue error is always reversible?

Michael K. Kellogg:

No.

It’s always good to have a fallback–

Yes.

Michael K. Kellogg:

–and as a fallback we can show prejudice, but we do not require to.

Venue is always–

Antonin Scalia:

Mr. Kellogg, I assume that if it’s not reversible, then we would have to allow interlocutory appeals on venue questions.

Do you know whether interlocutory appeals are possible on venue questions?

Michael K. Kellogg:

–My understanding is that they are not, that you only have resort to mandamus–

John Paul Stevens:

Even under 1292(b) they wouldn’t be?

Michael K. Kellogg:

–Sorry.

John Paul Stevens:

Even under 1292(b) they would not be possible?

Why not?

Michael K. Kellogg:

1292 being–

Antonin Scalia:

The interlocutory appeals statute.

Well, they’d be appealable if they were not reviewable on appeal.

I mean–

–You would have to have the certification first from the trial judge.

You’d have to agree–

Michael K. Kellogg:

–You’d have to, and it would have to be not reviewable on appeal, which means that you would end up with a lot of appeals raising this issue on an interlocutory status and therefore delaying–

Antonin Scalia:

–Well, mandamus.

It seems to me we have to allow it to be reviewed at some point, or you may as well throw the statute away.

Antonin Scalia:

It’s either reviewable interlocutorily, or it’s reviewable now.

Michael K. Kellogg:

–That’s exactly the point, and it’s another source of difference from the Caterpillar decision, Justice Ginsburg, where the Court said we’re not concerned that wrongful removals are going to proliferate in that instance because the chances of the defect being cured by the time of trial are so small that nobody’s going to take the chance.

Stephen G. Breyer:

Well, there are many trial errors, aren’t there, where judges… the only way to review them is through mandamus, or you lose them.

This would be one of those, presumably.

Michael K. Kellogg:

Well–

Stephen G. Breyer:

If it’s a close question the judge certifies it.

If it’s not, you’d have to rely on mandamus.

Michael K. Kellogg:

–But the Court has specifically held that this one is reviewable, unless you want to overrule–

The Olberding–

Michael K. Kellogg:

–Olberding and Schnell as well as distorting what I think was the clear import of the opinion in Caterpillar.

Again–

David H. Souter:

–Is it correct that the… I don’t have it in front of me, but there’s a specific provision for review by extraordinary writ on this venue issue?

Michael K. Kellogg:

–No.

There is a specific provision in the JPML statute, the multidistrict statute that says orders of the panel are only reviewable via mandamus.

David H. Souter:

Any order of the panel.

Michael K. Kellogg:

Any order of the panel.

David H. Souter:

So we cannot say, then, on that basis that this is necessarily made in effect a final order for purposes of interlocutory appeal, because certainly the statute would not be construed that broadly.

Not every issue that the panel makes would be–

Michael K. Kellogg:

Well–

David H. Souter:

–presumably was intended by Congress to be a final order.

Michael K. Kellogg:

–In this instance, of course, we’re not challenging an order of the panel.

David H. Souter:

And you don’t claim it’s a final order, do you?

I take it you claim that it would be reviewable only if it in fact, it is certified, is that right–

Michael K. Kellogg:

If it is–

David H. Souter:

–Reviewable on an interlocutory basis, that’s your claim.

Michael K. Kellogg:

–That’s correct.

As Professor Wright explained in his amicus brief, this is like subject matters jurisdiction except that it’s waivable, but where it’s not waived the decision has to be reversed on appeal.

Let me–

William H. Rehnquist:

A rule couldn’t change the statutes governing appealability anyway, could it?

Michael K. Kellogg:

–That’s correct.

David H. Souter:

If you had gotten your certification and it had been reviewed on the merits on an interlocutory basis and you had lost, you then at the conclusion of the case, I presume, would not claim that you had a right to a second crack at review on that issue, would you?

Michael K. Kellogg:

If we had had an interlocutory appeal and lost?

Yeah.

Michael K. Kellogg:

I guess that’s… I’m not quite sure what the general rule is on interlocutory appeals and review afterwards.

Antonin Scalia:

There’s such a thing as law of the case, isn’t there?

I mean, if you’ve gotten the issue decided on the way up, they–

Michael K. Kellogg:

But in any event, in this case we were specifically told by the court of appeals to raise it on direct appeal.

We did so.

I just want to take 30 seconds to give one more reason why a Caterpillar result does not hold here.

In Caterpillar the court specifically stressed that the result was in harmony, ultimately, with the subject matter jurisdiction statutes.

Here, by contrast, the result is directly contrary to Congress’ judgment that even if some efficiency is sacrificed by sending the case back to the original district it still has to be remanded.

That was the direct command of Congress, and to set aside that, to say it’s harmless error because it would be more efficient to have the case heard just once would be to completely undermine that principle.

I’d like to remain… reserve the remainder of my time for rebuttal.

William H. Rehnquist:

–Very well, Mr. Kellogg.

Mr. Solovy.

Jerold S. Solovy:

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

The position of the respondents that 30 years of multidistrict panel litigation has served the country well, as has… was intended by the Murrah Committee, and was intended by the judicial conference, and was intended by Congress in enacting this act.

I want to dispel one false issue, and that is the issue of prejudice of trying this case in Arizona.

This case, of course, did reek of Arizona because it was all about the Lincoln Savings case, which was tried in Arizona, services performed by Lexecon in Arizona, but this prejudice issue that somehow they could not get a fair trial in Arizona is only a concept by Judge Kozinski, because it was never raised by petitioners before Judge Roll in the district court before the trial.

Indeed, the–

Antonin Scalia:

I don’t know that they said he couldn’t get a fair trial.

They just didn’t think that was as advantageous a forum for them, and was a much more advantageous forum for you.

Do you contest that?

Jerold S. Solovy:

–I do contest that, but that’s–

Really.

Jerold S. Solovy:

–That’s a different issue, Your Honor.

Antonin Scalia:

You think the jury there was no more likely to be favorable to your client than it would have been in Chicago, where Lexecon is?

Jerold S. Solovy:

No more favorable, Your Honor, but that issue, Justice Scalia, was never raised.

Indeed, they didn’t even have the voir dire transcribed, so–

Antonin Scalia:

The issue of transferring it because there was excess… so much prejudice that the verdict would be set aside for prejudice is one thing, but whether there was a substantial motive to move it to another forum that was more advantageous, although you couldn’t say it would be an unfair trial, is quite a different issue–

Jerold S. Solovy:

–Well–

Antonin Scalia:

–and it seems to me it’s the latter issue that he’s raising.

Jerold S. Solovy:

–That’s what section… this case, number 1, is supposed to involve 1407 and not 1404.

1404, plaintiff’s choice of forum, they tried to elevate the plaintiff’s choice of forum as sacrosanct, and they cite Gulf Oil.

The trouble with Gulf Oil is that’s a forum non conveniens case which was overruled by 1404.

William H. Rehnquist:

What about the Olberding case?

Jerold S. Solovy:

Well, the Olberding case, Your Honor, is a improper venue statute where the improper venue person was the defendant, not the plaintiff.

The whole purpose… this is a case which always could have been brought in Arizona, and there was jurisdiction there.

Arizona said this is not an improper venue case.

William H. Rehnquist:

Well, but certainly it could have… perhaps it could have been brought in Arizona, but several of our cases talk about the plaintiff’s choice of forum.

The plaintiffs did not choose to bring it in Arizona.

Jerold S. Solovy:

But that’s what 1404, Mr. Chief Justice, does.

1404 makes the plaintiff’s choice of forum a factor to be considered in the discretion of the trial court.

Ruth Bader Ginsburg:

By the transferor forum, and you quickly went by Gulf Oil, but 1404(a) wasn’t rejecting that decision.

It was saying the terrible consequence that the forum would dismiss and then you’d be caught up on the statute of limitations, so Congress provided for transfer to another district.

But it envisioned the transferor, which in this case would be the Northern District of Illinois, or plaintiff’s choice, that forum deciding to send it some place else, so I think you have to stay a little longer with what 1404(a) was meant to do.

It was definitely a shipping out provision when Congress enacted it, not a shipping… not a retention.

Jerold S. Solovy:

Well, Justice Ginsburg, section 1404 involves an Article III judge making a determination of where the case can best be tried.

In this case, that determination was made by the Article III judge, Judge Roll in Arizona, and he transferred the case to where it had been filed and otherwise would have been tried from Illinois to Arizona, and I don’t–

Ruth Bader Ginsburg:

What forum was the transferor forum?

We have… the transferee forum ends up being the district court in Arizona, but who is the transferor?

Jerold S. Solovy:

–The transferor… the case was transferred from the District of Illinois where it would otherwise have been trialed to the District of Arizona.

Ruth Bader Ginsburg:

But in the 1404 transfer, the self transfer, do we have a transferor and a transferee?

Or do we have only a transferee?

Jerold S. Solovy:

Well, I think, you know, it depends whether you’re looking at this in some metaphysical sense.

I think within the language of section 1404 you have the case being transferred from the District of… Northern District of Illinois to the District of Arizona, and it so happens that the person issuing that order is the transferee judge, and I would like to step back–

Ruth Bader Ginsburg:

Well, before you get off that–

Jerold S. Solovy:

–Yes.

Ruth Bader Ginsburg:

–If you’re relying on the Northern District of Illinois as the starting place, that is the transferor, and now we’re in the District of Arizona under the multidistrict panel order.

If the District of Alabama is at that moment asking the–

Ruth Bader Ginsburg:

–Arizona.

–for the Northern District of Illinois, the only transferor in the picture, mustn’t it do, in… consistent with Van Dusen v. Barrett say, we’re going to make this decision as though we were the Northern District of Illinois, because that’s the only transferor that Congress has given power in this setting.

Jerold S. Solovy:

Well, I think, Justice Ginsburg, your decision in Korean Air Lines is quite to the contrary, because I don’t think the transferee court has a duty to put his or her mind into the mind of the transferor court.

Ruth Bader Ginsburg:

Mr. Solovy, in… the KAL case involved a question of what was the substance of the Federal law, what was–

Jerold S. Solovy:

Correct.

Ruth Bader Ginsburg:

–that governed.

This is a question of an exercise of discretion.

Jerold S. Solovy:

Correct.

Ruth Bader Ginsburg:

So it’s quite different in that regard.

There is only one Federal law, but in exercises of discretion, reasonable minds can differ.

Jerold S. Solovy:

Well–

Ruth Bader Ginsburg:

We were… Mr. Kellogg told us likely the Northern District of Illinois would have kept it.

Jerold S. Solovy:

–Well, we don’t know what Judge Zagel would have done.

He might have been happy to get rid of this case.

I don’t know.

I mean, I can’t read his mind.

But let’s step back for a moment and look at the purpose of 1407, this statute that has worked so well for the last 29 years, handling over 100,000 cases.

Sandra Day O’Connor:

Well, Mr. Solovy–

Jerold S. Solovy:

Yes.

Sandra Day O’Connor:

–I’d like to look at how well it’s worked, too.

Jerold S. Solovy:

Yes.

Sandra Day O’Connor:

But I think we have to also look at the language of the statute, and I don’t think it supports your position very well.

Jerold S. Solovy:

I think, Justice–

Sandra Day O’Connor:

It does say it’s supposed to be transferred back to the original court for trial.

Jerold S. Solovy:

–Well–

Now, it does say that.

Jerold S. Solovy:

–Justice O’Connor–

William H. Rehnquist:

What’s your answer to that?

Jerold S. Solovy:

–Yes.

It says that–

Jerold S. Solovy:

[Laughter]

–unless the case is otherwise terminated, and I was surprised Mr. Kellogg–

Sandra Day O’Connor:

Well, but you take the position that the transfer is a termination.

Jerold S. Solovy:

–We say–

Sandra Day O’Connor:

It’s not a termination.

Jerold S. Solovy:

–Well, but this Court… you know, termination is… has to be used in a practical, common sense–

William H. Rehnquist:

Well, it means ended.

Jerold S. Solovy:

–It means ended–

[Laughter]

No, it means ended temporally and I’m looking for–

William H. Rehnquist:

Ended temporarily?

Jerold S. Solovy:

–Temporally.

Temporally.

It was suspended–

William H. Rehnquist:

How else is a case ended, other than temporally?

Jerold S. Solovy:

–Well, it’s ended as a multidistrict litigation.

For example, this Court in EEOC v. Commercial Office Products, 48… 486 U.S. 107, had to deal with the word terminated in the EEOC case.

In order to have… meet the statute of limitations the question is whether a State, quote, terminated its proceeding when it gave the case back to the EEOC, but it really only suspended, and this Court in that case says you have to use it, that word terminated in a common sense way and give effect to the statute.

And by interpreting terminated to mean terminated as an MDL proceeding, we give effect not only to 1407(a), but to 1407(b), because 1407(b) also says in mandatory language that the transferee judge shall conduct pretrial proceedings… shall conduct pretrial proceedings… and if we want to know what Congress meant we only have to look at what the Murrah Committee meant, because as Professor Wright says in his amicus brief it’s fiction here to say what Congress meant, because this was all engineered by the Murrah Committee in the judicial conference.

Congress passed this statute with only two changes suggested by the Department of Justice, one to exempt Government antitrust cases from the statute, and two, originally the Murrah Committee suggested that the transferor court would have to consent to the transfer.

They took that out, so any proprietary interest of the transferor court disappears.

Now, we have within 8 months after the passage of this act a case called In re Plumbing Fixtures, which we cite at pages 19 and 26 of our brief, and there, Judge Becker, talking for the entire panel, which was a panel, you know, of distinguished jurors, Judge Wisdom, Murrah, Becker, et cetera, in that case the petitioner, like the petitioner here, said that the transferee court could not pass upon class action issues.

That had to be passed upon only by the transferor court.

And the panel said, well, number 1, let’s look at the legislative history.

The legislative history rejected the suggestion that only discovery matters be handled by the transferee court.

All pretrial proceedings must be handled by the transferee judge.

The court said, number 2, look at the House and Senate report.

It says that pretrial proceedings means everything a judge does up to a trial.

It said, also–

Antonin Scalia:

What does that have to do with this?

Antonin Scalia:

I mean–

Jerold S. Solovy:

–Well, because, Justice Scalia–

Antonin Scalia:

–The issue is not that the Arizona court terminated the proceeding by granting summary judgment.

They didn’t do that.

Jerold S. Solovy:

–Well–

Antonin Scalia:

They transferred the proceeding to themselves.

Jerold S. Solovy:

–Because In re Plumbing Fixtures says that what this pretrial proceedings means, and it says the plain language of pretrial proceedings means everything up to a trial, which includes a motion to dismiss, a motion for summary judgment, class certification, and it also inexorably means a motion to transfer.

Antonin Scalia:

Oh, of course it means that.

I have no doubt that the court can rule on a motion to transfer.

The question is whether it can grant it.

Jerold S. Solovy:

Justice Scalia–

Antonin Scalia:

You don’t get where you want to go by saying that the transfer, that the court to which the panel has given the case may pass upon that question.

Of course it may.

That’s a pretrial question like a lot of other things.

Jerold S. Solovy:

–Well–

Antonin Scalia:

The issue is whether it may grant the motion.

Jerold S. Solovy:

–Well, if it can pass upon it, inexorably it has to grant it or deny it.

I mean, what’s the purpose–

Anthony M. Kennedy:

Under your view of the case, termination occurs when the district judge makes the order transferring the case to itself?

Jerold S. Solovy:

–That’s correct, Justice Kennedy.

Anthony M. Kennedy:

So if that’s the first order that it makes, everything after that is not a pretrial order?

Jerold S. Solovy:

It’s no longer an MDL proceeding.

You see, Rule 14(b) of the MDL panel, the expert body that administers this act, says if a motion to transfer is granted either to some other court or to the transferee court, then no further order of the panel is needed and the case is concluded as an MDL case.

Anthony M. Kennedy:

But then you give no effect to the statutory language at or before the conclusion of the pretrial proceeding.

You say the pretrial proceedings are concluded the second the district court gets the case if that’s its first order.

Jerold S. Solovy:

That would be correct, but that would be highly unusual.

Let’s take the normal case.

Let’s take an airplane crash case, because that’s a normal MDL case.

The plane crashes in Iowa.

The MDL panel gives it to a judge in Chicago, and they’re… you’re going to get all sorts of motions.

Jerold S. Solovy:

You’re going to get discovery motions, you’re going to get statute of limitations issues, you’re going to get Hague Convention issues, you’re going to get all sorts of issues passed, and somewhere along these proceedings somebody’s going to file, say in the 2-year mark, a motion to transfer, and that transferee judge is going to say, okay, number 1, could I transfer this case to myself?

Are the provisions of 1404 complied with?

In many instances they won’t be, because the case could not… that case could not have been brought in the District of Chicago, so that transferee judge could transfer some of those cases to himself, or he could transfer it to other places.

The Pfizer, on which retired Justice Clark sat, said you have to have the transferee judge rule upon motions to transfer, otherwise the transfer issue is going to be in limbo during the entire existence of these MDL proceedings, because–

Ruth Bader Ginsburg:

Mr. Solovy, the main problem that I have with using the motion to transfer as a lever to get trial under a statute, 1407, that has pretrial written all over it, the multidistrict panel transfers it to a district for consolidated pretrial proceedings.

1407(b) begins such consolidated pretrial proceedings.

Pretrial, pretrial is all over this, and then you’re saying, ah, but transfer is a pretrial motion.

Therefore, we can use it as a lever to have a trial under a statute that had in mind pretrial.

Jerold S. Solovy:

–The debate in Congress, if there was a debate, was not whether a district court could exercise… a transferee court could exercise traditional 1404 powers, because in the electrical equipment cases they issued 1404 orders.

The question was whether the panel could have the supertransfer power not only for pretrial but for trial, because remember, the panel can ship the case to a court without jurisdiction and a court without venue.

That’s entirely different than a 1404 motion, and the debate was never, could the transferee court transfer cases, because the Murrah Committee knew they had done so in the electrical equipment cases.

This system can’t work–

Stephen G. Breyer:

On… my… the question for me–

Jerold S. Solovy:

–Yes.

Stephen G. Breyer:

–For me.

I’m not speaking for anyone else, is I thought the question that was bothering me is where does the district court get the legal power to transfer a case to himself for trial?

It doesn’t seem to come out of 1407 for the reason… in addition to what you say to me it’s very important… that the judicial conference drafted the bill and wrote to conference, wrote to Congress, right in the report the letter from the judges, at or before the completion of the pretrial proceedings the panel would remand each case to the district from which it has originally come.

Jerold S. Solovy:

That’s correct.

Stephen G. Breyer:

It hasn’t finished.

And then they have attached a little report from the coordinating committee of judges who said the major innovation proposed is transferred solely for pretrial purposes.

Now, if the judges say that to Congress and the language supports it, don’t they have to stick to it?

Jerold S. Solovy:

Well, if that’s–

Stephen G. Breyer:

And the part… the other place where you try to get your authority from is 1404(a) in the absence of 1407.

Well, in the absence of 1407 I become concerned about the language, which does say, other court… it says a district court may transfer a civil action to any other district, and I don’t know how that language in the absence of 1407 can be avoided, and I don’t see how 1407, given its language, purposes, and representations by the judges to Congress, can help.

That’s the problem I’m having with the merits of your argument.

Jerold S. Solovy:

–All right.

Let’s attack it step by step, okay.

The first step is on what did the Murrah Committee intend?

Well, number 1, you know, we do have the little experiment that you normally wouldn’t have.

You wouldn’t have Congress talking right away, but you have Congress talking through the Murrah Committee almost immediately in the Plumbing Fixtures case.

Jerold S. Solovy:

That’s 8 months after Congress adopted this act, and they say what they mean.

Number 2, Justice Breyer, we cite at page–

Ruth Bader Ginsburg:

–I’m sorry, I wasn’t following you.

What are you–

–How does a court decision 8 months later convey Congress’ understanding?

Jerold S. Solovy:

–Well, because, Justice Ginsburg, as even Professor Wright says, the fact… what Congress intended here is fiction.

Congress took what the Murrah Committee submitted to them and crafted and adopted it, and so if you want to get at least in the minds of the people who drafted the statute, namely the Murrah Committee, you but have to look at the Plumbing Fixtures case.

Ruth Bader Ginsburg:

But Congress passed words in a statute, not… the Murrah Committee didn’t pass anything, and what–

Jerold S. Solovy:

But–

Ruth Bader Ginsburg:

–is troubling me about this, as bright an idea, and as efficient as it is, isn’t it the kind of thing that the judges, if they want it, should tell Congress this is it, transfer for trial includes trial, rather than go about it in this rather complicated way?

Jerold S. Solovy:

–Justice Breyer, if you’ll allow me to defer for a second to Justice Ginsburg’s question, what they said was, not only 1407(a) but 1407(b), which mandates that the transferee judge shall conduct pretrial proceedings, in the Plumbing Fixture case there’s a sort of a ironic heading which says that construction of the plain meaning of section 1407, which they thought was plain then, and they said that the language of 1407(b) is mandatory, and number 2, it says that in transfer statutes, whether it’s 1404(a) or 1407, the transferee judge can issue any order, make any judgment, do anything that the transferor judge could do.

You have sort of, in property sense, a livery of Caesar.

William H. Rehnquist:

Well, but I wonder how much that Plumbing Fixtures case should influence us.

If you take a cognate situation, we give great weight to things that were enacted by the First Congress, the Judiciary Act of 1789, because Members of that Congress sat in the Constitutional Convention, but it’s not as if these judges sat in Congress at the time Congress enacted it.

Jerold S. Solovy:

Well, they… Judge Becker, Judge–

William H. Rehnquist:

Are you telling me that Judge Becker was in Congress?

Jerold S. Solovy:

–He was.

He wasn’t in Congress, but he testified before the–

William H. Rehnquist:

Well, that’s quite different.

Jerold S. Solovy:

–Well, of course, Chief Justice, it’s quite different, but they are the persons that crafted the statute.

They are the persons who Congress gave the authority to administer the statute, so I think their views are quite influential and you know, we’re dealing with 30 years of precedent where no one ever dreamed up this argument before.

Antonin Scalia:

Well, it’s about as influential as testimony by the Justice Department on a bill that’s later adopted and administered by the Justice Department.

There are some opinions that refer to that testimony, but it’s not overwhelmingly persuasive, is it, even to those who believe that Congress does not act in its statutes but in its committees.

Jerold S. Solovy:

Well, Justice Scalia, I’m a believer here that the Murrah Committee crafted this, that this is quite influential, but you draw from it what you wish, but here is a contemporaneous decision.

But let me go–

Antonin Scalia:

Mr. Solovy, are you going back to Justice Breyer’s–

Jerold S. Solovy:

–Yes.

David H. Souter:

–I have one, but I want to hear your answer to him first.

Jerold S. Solovy:

All right.

Justice Breyer, if I can remember your question, it’s twofold: a) Is, Mr. Solovy, the Murrah Committee promised it would go back.

Jerold S. Solovy:

That is not correct.

The Murrah Committee repeatedly said it will go back unless 1404 is utilized, okay, so that’s… I mean, at page 25 of our brief it says 1407 would not affect the place of the trial in any case or exclude the possibility of transfer under other Federal statutes.

At page 27 of our brief–

David H. Souter:

Transfer by whom?

By whom?

Jerold S. Solovy:

–Well, obviously–

David H. Souter:

Isn’t that the tough issue?

Jerold S. Solovy:

–I don’t think it’s a tough issue, because it’s the transferee judge, 1407(b) says that a transferee judge must conduct pretrial proceedings.

David H. Souter:

But there’s nothing either in the report that you were reading or in the text of the statute that affirmatively supports that position.

Jerold S. Solovy:

Well, I don’t believe that’s correct, Justice Souter, because in the electrical equipment cases which spawned this litigation, section 1404 motions were used to expedite these cases, and as Pfizer says, if you don’t have the transferee judge have the ability to transfer the case, then you’re going to throw this whole statute up in havoc, because now the case inheres… my air crash case, it inheres in Chicago for 4 years.

You’ve got 40 different cases, and the transferee judge says it makes sense to have this case tried in the Northern District of Iowa.

David H. Souter:

And all he’s got to do, if that is his conclusion, is follow 1407 prior to the conclusion of his consolidated pretrial proceedings, transfer it back to the original transferor judge, and say, these people want to transfer to some other district.

I think it makes sense.

I don’t have the authority to do it.

You do.

That’s the way out of that conundrum.

Jerold S. Solovy:

Well, but–

David H. Souter:

That’s the way out of what Justice Clark referred to as the limbo, isn’t it?

Jerold S. Solovy:

–No, because in most MDL cases you’re going to have to–

David H. Souter:

Well, that can be done, can’t it?

Jerold S. Solovy:

–Well, you have to ship it back–

David H. Souter:

Excuse me.

It can be done, can’t it?

Jerold S. Solovy:

–Not practically, because in my air crash case, Justice Souter, you’ve got 24 different cases in different parts of the country, and that’s exactly what they are trying to overcome in the electrical equipment cases, because you couldn’t get these judges to coordinate.

Stephen G. Breyer:

I took it that your argument was basically something like this, that the… an Illinois judge under 1404(a) could always transfer to Arizona.

Jerold S. Solovy:

Correct.

Stephen G. Breyer:

All right.

Now, what 1407 does is, it says for purposes of the pretrial proceedings, Arizona judge, you stand in the shoes of the Illinois judge.

Jerold S. Solovy:

Justice Breyer–

Stephen G. Breyer:

All right.

Stephen G. Breyer:

And since you’re standing in the shoes of the Illinois judge you are in effect the transfer court.

Therefore, transfer it to yourself.

Jerold S. Solovy:

–Correct.

Stephen G. Breyer:

All right.

Now, what I was looking for in support for that argument is, is there something in the history, or is there something in the law that says… because it’s a kind of fiction in an effort to squeeze what’s practical into the language of 1404.

Jerold S. Solovy:

Well–

Stephen G. Breyer:

Now, is there something that supports that kind of fiction in the legislative history or elsewhere that would be helpful to you?

Jerold S. Solovy:

–Yes.

Let’s talk about that before my time here on Earth elapses, okay.

Number 1, we say the 1404 issue is not encompassed in the question presented, because the question presented deals with 1407 and not 14… (a), 1404(a).

But assuming it does, this Court has held in Continental Grain that 1404 is a common sense–

William H. Rehnquist:

Held in what case?

Jerold S. Solovy:

–Continental Grain, Your Honor.

William H. Rehnquist:

Continental Grain?

Jerold S. Solovy:

Yes.

It’s cited in our brief, I hope… that it’s a common sense statute, and number 2, in the Piper Aircraft case, 454 U.S. 235, at 253, 254, this Court said of 1404, Justice Breyer, that it is a Federal housekeeping measure allowing easy change of venue in a unified Federal system, and what we have is a unified Federal system and you want to make changes of venue, if it’s in the interest of justice, work well.

And to show that this Court was common sense, in the Koehring case, which we also cite in our brief, this Court interpreted the power of the district court to issue a 1404 transfer into the power of an appellate court to issue a 1404 transfer.

Now, that’s surely not within the literal language of 1404, but it made good common sense.

Stephen G. Breyer:

All right.

Can I ask you one other quick question?

You… did I hear you correctly that you thought Olberding and Schnell, the cases involving the harmless error, involved venue?

This does not involve venue.

Jerold S. Solovy:

This does not involve venue–

Stephen G. Breyer:

So in this case jurisdiction and venue are proper in either court.

Jerold S. Solovy:

–Absolutely correct, and in either court, and bear in mind, section 1406, let’s not forget 1406.

Even a judge without venue could issue a transfer order, so this–

Antonin Scalia:

Let’s assume that the plaintiff brings an action with proper venue in district A, and the defendant doesn’t like district A, so he simply seeks to bring the court in district Z.

Now, is it your contention that venue is not involved when he runs to district Z and the court in district Z can take the case if the court in district Z takes the case?

So long as venue could have lain there it doesn’t matter whether district A transferred it or not, venue is proper, just because the defendant runs over there and says, please take this case.

Jerold S. Solovy:

–Well, you have to go through… you know, you have to go through the hoops.

Jerold S. Solovy:

You have to file–

Antonin Scalia:

And if you don’t go through the hoops, venue is improper.

Jerold S. Solovy:

–You have to file the motion, but here–

Antonin Scalia:

Isn’t venue improper in district Z so long as it was not properly transferred to district Z, even though it could have been brought there?

Jerold S. Solovy:

–Well–

Antonin Scalia:

Wouldn’t you say venue is improper?

Jerold S. Solovy:

–Let me answer the question this way, Justice Scalia.

I know of no case where they have an error-free trial, as this one, where the court who tried the case had venue and jurisdiction, and the case gets reversed for a new trial–

Antonin Scalia:

Do you know of any case in which an interlocutory appeal has been allowed where venue is challenged?

Jerold S. Solovy:

–Very seldom, Justice Scalia, and for good reason, because you know, venue will seldom be an error… if it be an error in a 1404 motion it’s going to seldom be overturned because it’s not substantial.

Antonin Scalia:

You say very seldom.

Do you know any case?

Jerold S. Solovy:

No.

I don’t, either.

Jerold S. Solovy:

I don’t, either, and for good reason, and that’s why we get into section 2111, which is also mandatory in terms.

This court is directed to give effect to judgment where there has not been any substantial prejudice to the petitioner, and–

William H. Rehnquist:

Well, is it your view that improper venue could never prejudice the petitioner?

Jerold S. Solovy:

–It might be, Mr. Chief Justice, but this isn’t a case of improper venue.

Venue lied in the District of Arizona.

Laid.

Jerold S. Solovy:

Laid.

Thank you very much, and–

John Paul Stevens:

Mr. Solovy, can I ask one… may I ask just one question?

In Pfizer was… did the… was the transfer to the court itself or to another district?

Jerold S. Solovy:

–It was to another district.

John Paul Stevens:

Yes.

Jerold S. Solovy:

Because Judge Lord was sitting by designation.

Yes.

Jerold S. Solovy:

In New York, and that’s the other beauty of the statute.

The judges can be, you know, shipped around through the country, and in Woops, for example, Judge Browning was designated to sit in Seattle.

Jerold S. Solovy:

He transferred the case for trial to himself in Tucson.

It made a lot of sense to try that case there.

So in Pfizer, it was a transfer to another district because Judge Lord… but he really transferred it to himself, because he transferred it to himself for trial in Minnesota.

Now–

Anthony M. Kennedy:

In 1406(b), which you… 1406, subsection (b) that you cited to us, it says, nothing in this chapter shall impair the jurisdiction of a district court of any matter involving a party who does not interpose timely and sufficient objection to venue.

That indicates to me a statutory command that improper venue can be jurisdictional just as the petitioners say it is in this case.

Jerold S. Solovy:

–Well, but they did not… they didn’t ever do the correct thing, because it’s ironic again here, they lay upon the mandatory language of shall remand, but they never went back to the panel and said, please remand the case to Illinois.

My time has expired.

Thank you very much.

William H. Rehnquist:

Thank you, Mr. Solovy.

Mr. Kellogg, you have 4 minutes remaining.

Michael K. Kellogg:

Are you going to respond to Mr. Solovy’s last point, that you never went back to the panel?

Yes.

I’ll respond to that directly.

We did exactly what the panel’s rules require, which is to go in the first instance to the district court, the transferee court, and ask for a suggestion of remand.

When the district court denied that motion, it simultaneously transferred the case to itself, which under the JPML rules deprived the panel of any further jurisdiction over the case, so we had no choice at that point but to seek mandamus in the Ninth Circuit, which we did.

Respondents of course at that point argued to the Ninth Circuit mandamus is inappropriate because they have a complete remedy on appeal.

The Ninth Circuit accepted that argument and that’s why we’re here today.

Stephen G. Breyer:

Can I ask you this, on that particular point: what’s worrying me about… venue and jurisdiction are proper in both places, not proper, but they lie in both places, so we’re really asking the question of whether a 1404 error, a 1404(a) error is reviewable despite the fact that there was a trial.

If you’re right on that, and it is reviewable after trial, does that mean there’d always be the argument after a fair trial this was not a jurisdiction where it was convenient for the witnesses?

This was not a jurisdiction… there was abuse of discretion on that, and therefore we will have review in the courts of appeals and set aside trials because of a 1404(a) violation on the ground, abuse of discretion in respect to.

Do you see what’s bothering me?

Michael K. Kellogg:

Yes, exactly, but we’re not dealing here with an abuse of discretion action.

Stephen G. Breyer:

No, but if you win, don’t we also have to say that the trial doesn’t cure an abuse of discretion in a transfer in respect to convenience of witnesses?

Michael K. Kellogg:

I don’t think you do.

First of all, we’re asking you to vindicate the mandate of 1407 in the first instance, which is absolutely clear, and says the case shall be remanded.

Second, even under 1404 we’re not talking about a discretionary balancing of factors.

We’re talking about a direct violation of the statute.

I mean, you had mentioned the polite fiction that somehow the Arizona court stands in the shoes of the Illinois court, but it’s really a distortion of the statutory language to say that the court is both the self and the other within the scope of that single sentence, and there’s no reason to distort that language in order to reach a result that Congress clearly did not intend–

John Paul Stevens:

May I ask if you would take the same position if the transfer had been to a different district?

Michael K. Kellogg:

–Well, then we would not rely on 1404, but our position would be exactly the same under 1407.

Their position has rendered the language, shall be remanded, into a nullity.

It has also turned the unless previously translated language into utter surplusage.

John Paul Stevens:

So your basic position, and it’s consistent with the question presented in the cert petition, doesn’t really rely on 1404.

Your primary submission is the 1407 submission.

Michael K. Kellogg:

In the first instance, but we also in our cert position said can he transfer it to himself, and that’s an independent violation which we were allowed to, and did, raise.

Now, I’d like to go back to the issue of remedy, Justice O’Connor, because I think it’s quite critical.

There are potential cases in which it’s going to be difficult for the transferee court to decide when pretrial proceedings have or have not ended, and the JPML’s rules, that’s why they require you to go to him in the first instance, because he’s the one who’s going to know.

But this case is an easy one, because there’s no dispute that any prospect of coordinated and consolidated pretrial proceedings had ended at that point, so the case had to be remanded as of the date that Lexecon made its motion, because that is the triggering event.

Venue, unlike subject matter jurisdiction, can be waived, but where it’s not waived the statute is absolutely clear, and that’s the relevant cut-off date.

William H. Rehnquist:

Thank you, Mr. Kellogg.

The case is submitted.