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All multi-district litigation (“MDL”) practitioners are aware of (and many rue) the Supreme Court’s decision in Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26 (1998).  That’s the decision interpreting the MDL statute, and which held that MDL judges lack jurisdiction to try themselves (through so-called “self-transfer”) cases that were transferred to them for pre-trial proceedings from other federal district courts.  “Pre-trial” and “trial” meant just what the statute said, spoke the Court in Lexecon, and trials must occur after MDL cases are remanded to their original transferor districts.

Not that MDL courts haven’t tried to get around Lexecon.  One way was through “Lexecon waivers,” by which the parties acquiesced in the MDL judge trying their cases, regardless of what the Supreme Court held that the statute required.  We reviewed the pros and cons of that option here and here.  The chief inherent drawback of a Lexecon waiver, as we saw it, was whether Lexecon involved a matter of jurisdiction, in which case the inability of the MDL court to try the action could not be waived.  That would, of course, render the purported “waiver” useless – since whichever side lost the trial could then nullify that result essentially at will by asserting a subject matter jurisdictional defect.  What little precedent exists on the point (we haven’t researched this thoroughly) suggests that waiver is possible, but that parties must proceed quite warily.  See Armstrong v. LaSalle Bank National Ass’n, 552 F.3d 613, 619 (7th Cir. 2009) (Lexecon waiver possible but ineffective); In re Carbon Dioxide Industry Antitrust Litigation, 229 F.3d 1321, 1326-27 (11th Cir. 2000) (Lexecon waiver held valid); Solis v. Lincoln Electric Co., 2006 WL 266530,  at *3–4 (N.D. Ohio Feb. 1, 2006) (finding Lexecon waivable).

Another possibility was suggested in our first Lexecon waiver post back in 2007:

Third, the Chief Justice [sic] 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.

Well, there’s new law suggesting that, based on subsequent developments, there’s less to this third option than meets the eye.  In In re Motor Fuel Temperature Sales Practices Litigation, ___ F.3d ___, 2013 WL 1189495 (9th Cir. March 19, 2013), Chief Judge Kozinski of the Ninth Circuit (writing only for himself in a rare published single-judge order) refused to approve a designation of exactly the sort we mentioned as being our “third option” for avoiding/evading Lexecon.  Interestingly, the basis the Chief Judge gave was not that the parties were trying to get around the Supreme Court’s decision:

Lexecon dealt with venue, not judicial case assignment.  The Lexecon Court held that a plaintiff is entitled to select the venue where the case will be tried, and this right can’t be undermined by having the case transferred for pre-trial proceedings under the MDL process.  Venue is important for a number of practical reasons, such as ease of access to the forum by plaintiffs and their lawyers and, perhaps most important, selection of the jury pool.  Venue does bear on which judge will be assigned to the case, as one of the judges of that district will normally preside, but there’s no guarantee of that.  As explained, judges from other districts, even other circuits, may be assigned for a variety of administrative reasons.  I therefore don’t see Lexecon as an impediment to assigning a case to the out-of-circuit judge who presided over pre-trial proceedings, if the transfer is otherwise justified. But, I am unable to find such a justification.

Motor Fuel, 2013 WL 1189495, at *3.

No, the reasons for rejecting the “certificate of necessity” (what a request to designate an out-of-district judge to hear a case is formally named) for the special assignment of the MDL judge to the remanded case in the MDL transferor court had entirely to do with the criteria for such assignments – and the failure of the situation to meet any of those criteria.

  • The certificate of necessity originated with the MDL, not with the Ninth Circuit district court to which the MDL case had been remanded.  Id. at *2.
  • The only established criteria for importing a “visiting judge,” that is, one from outside of his/her home district, are “severe” overburdening (as when a sitting judge dies), “a judicial emergency” in the district, or “when all the judges [in the district] are recused.”  Id.
  • Even then, under the 2012 Chief Justice’s Guidelines for the Intercircuit Assignment of Article III Judges (attached as Appendix A to the Motor Fuel opinion – we couldn’t find them separately on the Internet) the first choice for designating a visiting judge is “from another court within the circuit.”  Id.
  • The chief judges of both the borrowing (MDL transferor) and lending (MDL transferee) circuits would have to approve the intercircuit assignment of a visiting judge, and that hadn’t happened.  Id. at *1.
  • The effect of issuing a certificate of necessity would be to divest the judges of the transferor district of cases ordinarily assigned to them.  There is “no authority empowering the chief judge of the circuit to re-assign cases pending before other judges, or to remove cases from the district’s assignment wheel” in the absence of recusal.  Id. at *4.
  • Intercircuit transfers under the Chief Justice’s guidelines can only be used “meeting judicial necessities,” and not for “other purposes” such as “improve[ing] judicial efficiency, preserv[ing] scarce judicial resources and enhance[ing] MDL judges’ control over their proceedings” that, while “worthy,” are not mentioned anywhere in the guidelines.  Id.

Thus, Chief Judge Kozinski denied the request for a certificate.  He acknowledged that his reasons for doing so “disagreed” with the “majority” of those judges sitting on the Committee on Intercircuit Assignments, and stated that he hoped to begin a “productive discussion as to the proper way to handle [this] situation.”  Id.  So now we have yet another source of MDL uncertainty.

Back in 2007 when we mentioned intercircuit transfer as a possible third way for allowing trials of transferred cases to be presided over by MDL judges notwithstanding Lexecon, the 2012 guidelines obviously had not yet been approved, so it looks like the criteria may have changed in the interim.  Thus, this method of avoiding Lexecon appears no longer to be as viable an option as we had then thought.  Nonetheless, as Chief Judge Kozinski pointed out in his opinion, other judges hold divergent views.  Thus, it is too early to tell what route other chief judges of other circuits (who have to approve designations of visiting judges in their circuits) will follow in MDL situations.

All we can do now is point out the issue, and the new precedent.  Since one effect of the MDL process is to increase the stakes of just about every aspect of litigation, we are reasonably certain of one thing – that intercircuit designations of judges will be thoroughly litigated in future MDLs.