We love choice of law issues for federal questions in MDLs; it gives us something to think about.

Readers of this blog know the basic issue. A lawsuit is filed in federal court in, say, New York. The New York court enters an order (on a federal question) that is appropriate under Second Circuit law. The MDL Panel then transfers the case to, say, Chicago, and Seventh Circuit law on the relevant point differs from Second Circuit law. Should the Chicago court reconsider the order entered in New York?

Whether or not it does, the Chicago court then rules on other substantive issues that arise under federal law (such as, say, preemption). The Chicago court applies Seventh Circuit precedent. (On that issue, at least, the law has been relatively uniform for the last two decades. Since In re Korean Air Lines Disaster, 829 F.2d 1171 (D.C. Cir. 1987), MDL transferee courts have generally applied local federal precedent on matters of federal law.)

After pretrial proceedings are concluded, the MDL Panel transfers the case away from Chicago and back to New York for trial. Second Circuit law on the substantive issue differs from Seventh Circuit law. Should the New York court reconsider the order entered in Chicago?

These issues are generally resolved under the “law of the case” doctrine, which is a tad amorphous to begin with. And we hate even to type these next words, but consider this: Federal precedent on the law of the case doctrine varies by circuit. Should courts apply Second Circuit or Seventh Circuit precedent on “law of the case” when deciding the issues discussed above? One scholar grappled with this question years ago: Joan Steinman, “Law of the Case: A Judicial Puzzle in Consolidated and Transferred Cases and in Multidistrict Litigation,” 135 U. Pa. L. Rev. 595 (1987).

But here’s what grabbed our eye. In the Enron MDL, Judge Harmon recently refused to certify an interlocutory appeal in part on the ground that certifying an appeal in an MDL wouldn’t do much good, since the constituent cases would ultimately be remanded for trial in different circuits:

“because this is a multidistrict litigation, many of the consolidated member suits arose in other Circuit Courts of Appeals. . . . Thus the Fifth Circuit’s determination of the questions may not be controlling.”

In re Enron Corporation Securities, Derivative & ERISA Litigation, MDL No. 1446, slip op. at 5 (S.D. Tex. Nov. 21, 2006).

Isn’ there a decent argument grounded in law of the case that cuts in favor of certifying an appeal in this situation? The law of the case doctrine instructs courts to defer to some extent to decisions made by coordinate courts. Thus, trial courts defer to decisions made by other trial courts. But appellate courts also defer to decisions made in a single case by other appellate courts. See Wright, Miller & Cooper, Federal Practice and Procedure: Jurisdiction 2d Sec. 4478.4 at 780 (2002). Thus, if Judge Harmon had certified the appeal to the Fifth Circuit, other circuit courts might well have deferred to that decision under the law of the case doctrine, making it more likely that all of the Enron cases would ultimately be controlled by a single set of rules.

In future MDLs, defendants should consider asking MDL transferee courts to certify appeals for the express purpose of obtaining appellate precedents that may apply unusually broadly because of the deference they might deserve under the law of the case doctrine.