For thirty years, MDL transferee judges engaged in the practice of “self-transfer.” A judge would preside over a coordinated MDL proceeding and then, after concluding the pretrial portion of the proceedings, would transfer the cases pending in the MDL to himself for trial. Voila! Although the MDL statute vested the judge with jurisdiction only over the “pretrial proceedings,” a self-transfer order appeared to be a “pretrial” ruling that kept the case before the MDL transferee judge for trial.

As readers of this blog surely know, the Supreme Court begged to differ. In Lexecon, Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26 (1998), the Supreme Court invalidated the practice of self-transfer. The Court relied on the express language of the MDL statute, 28 U.S.C. Section 1407(a): “Each action so transferred shall be remanded by the panel at or before the conslusion of such pretrial proceedings to the district from which it was transferrred unless it shall have been previously terminated.” According to the Supreme Court, “shall be remanded” means “shall be remanded;” self-transfer was not permitted.

The legal world quickly realized that it’s easy to avoid [we almost typed “evade” there for a minute, but then we caught ourselves] the Lexecon requirement that cases be remanded for trial. As one of us wrote in an article the same year that Lexecon came down, there are at least three versions of the “Lexecon two-step” that permit the MDL transferee court to try cases after pretrial proceedings conclude. First, the plaintiff can dismiss the pending case in which pretrial proceedings have concluded and can re-file that case in the MDL transferee court; the defendant waives all statute of limitations, personal jurisdiction, or venue objections; and there’s now a new case properly pending before the MDL transferee judge.

Second, the MDL Panel can remand the case back to its home court for trial, but the parties can then jointly ask the home court to transfer the case under Section 1404 back to the MDL transferee court. So long as venue would originally have been proper in the MDL transferee court, this transfer would be permissible. Third, the Chief Justice could invoke 28 U.S.C. Section 292(d) to designate the MDL transferee judge as a judge of the home court. The MDL transferee judge could then preside over a trial in the home court. See Mark Herrmann, Self-Transfers Gone After Lexecon?, N.Y.L.J., Nov. 23, 1998, at 58.

All of that is, of course, a little convoluted. If all parties agree that the MDL transferee court should try the case, can’t the parties simply execute “Lexecon waivers” in which they waive the requirement that the MDL Panel remand cases for trial? Judge John Keenan thinks so. And he should know — he served for years on the MDL Panel. In the Fosamax MDL that Judge Keenan is now handling, he entered an order on January 31, 2007, instructing the parties to select test Fosamax cases for trial and to “execute Lexecon waivers as they see fit.” Here’s a link to that order.

Here’s our question: Do Lexecon waivers work? Since all parties would be executing them, it’s unlikely that anyone would object to the MDL transferee judge keeping a case for trial. But parties who consent to a court’s subject matter jurisdiction sometimes nonetheless object after a trial goes poorly. The MDL statute says that the MDL Panel “shall . . . remand[]” cases after the conclusion of pretrial proceedings. Might that duty to remand be essentially jurisdictional in nature, divesting the MDL transferee court of power to try cases after pretrial proceedings have been concluded?

If so, then relying on “Lexecon waivers” is asking for trouble — the waivers wouldn’t work. Either parties and courts must wade through more convoluted forms of the Lexecon two-step — the three variations discussed above that actually cause cases to be “remanded” — or Congress must permit MDL transferee courts not simply to coordinate pretrial proceedings, but also to try cases.

That legislation has been introduced in Congress several times, although it has yet to pass. And reasonable minds can differ over whether that legislation is desirable. But, absent a statutory change, some day, some party will challenge a result after a trial conducted pursuant to a “Lexecon waiver,” and the presiding judge and parties may be surprised by the result.

  • One of the few things I remember from law school is that you can never vest a court with jurisdiction that the court did not otherwise have.