39–006 

109TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 1st Session 109–24 

MULTIDISTRICT LITIGATION RESTORATION ACT OF 2005 

MARCH 17, 2005.—Committed to the Committee of the Whole House on the State 

of the Union and ordered to be printed 

Mr. SENSENBRENNER, from the Committee on the Judiciary, 

submitted the following 

R E P O R T 

together with 

DISSENTING VIEWS 

[To accompany H.R. 1038] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on the Judiciary, to whom was referred the bill 

(H.R. 1038) to amend title 28, United States Code, to allow a judge 

to whom a case is transferred to retain jurisdiction over certain 

multidistrict litigation cases for trial, and for other purposes, having considered the same, report favorably thereon without amendment and recommend that the bill do pass. 

CONTENTS 

Page 

Purpose and Summary ............................................................................................ 2 

Background and Need for the Legislation ............................................................. 2 

Hearings ................................................................................................................... 4 

Committee Consideration ........................................................................................ 4 

Vote of the Committee ............................................................................................. 5 

Committee Oversight Findings ............................................................................... 5 

New Budget Authority and Tax Expenditures ...................................................... 5 

Congressional Budget Office Cost Estimate .......................................................... 5 

Performance Goals and Objectives ......................................................................... 6 

Constitutional Authority Statement ...................................................................... 6 

Section-by-Section Analysis and Discussion .......................................................... 6 

Changes in Existing Law Made by the Bill, as Reported ..................................... 7 

Markup Transcript .................................................................................................. 8 

Dissenting Views ..................................................................................................... 17 

2 

1 28 U.S.C. § 1407. 

2Lexecon v. Milberg Weiss Bershad Hynes & Lerach, et. al., 118 S. Ct. 956 (1998). 

PURPOSE AND SUMMARY

H.R. 1038 would allow a designated U.S. district court (a socalled ‘‘transferee’’ court) under the multidistrict litigation statute 1

to retain jurisdiction over referred cases arising from the same fact 

scenario for purposes of determining liability and punitive damages, or to send them back to the respective courts from which they 

were transferred. The legislation also provides a technical fix to a 

‘‘disaster’’ litigation statute enacted during the 107th Congress. 

The bill will save litigants time and money, but does not interfere 

with jury verdicts or compensation rates for attorneys. 

BACKGROUND AND NEED FOR THE LEGISLATION

SECTION 2: MULTIDISTRICT LITIGATION/THE LEXECON DECISION

H.R. 1038 would reverse the effects of a Supreme Court interpretation of 28 U.S.C. § 1407, the Federal multidistrict litigation statute. The case in question is commonly referred to as ‘‘Lexecon.’’ 2

Under § 1407, a Multidistrict Litigation Panel (MDLP)—a select 

group of seven Federal judges selected by the Chief Justice of the 

United States—helps to consolidate lawsuits which share common 

questions of fact filed in more than one judicial district nationwide. 

Typically, these suits involve mass torts—a plane crash, for example—in which the plaintiffs are from many different States. After 

weighing relevant circumstance, the panel attempts to identify the 

one U.S. district court nationwide which is best suited to adjudicate 

pretrial matters. The panel then remands individual cases back to 

the districts where they were originally filed for trial unless they 

have been previously terminated. 

For approximately 30 years, however, the district court selected 

by the panel to hear pretrial matters (the ‘‘transferee court’’) often 

invoked § 1404(a) of Title 28 to retain jurisdiction for trial over all 

of the suits. This provision is a general venue statute that allows 

a district court to transfer a civil action to any other district or division where it may have been brought; in effect, the court selected 

by the panel simply transferred all of the cases to itself. According 

to the Administrative Office of the U.S. Courts and the MDLP, this 

process has worked well since the transferee court was versed in 

the facts and law of the consolidated litigation. This is also the one 

court that could compel all parties to settle when appropriate. 

The Lexecon decision altered the § 1407 landscape. The case pertained to a 1998 defamation case brought by a consulting entity 

(Lexecon) against a law firm that had represented a plaintiff class 

in the Lincoln Savings and Loan (S&L) litigation in Arizona. 

Lexecon had been joined as a defendant to the class action, which 

the MDLP transferred to the District of Arizona. Before the pretrial proceedings were concluded, Lexecon reached a ‘‘resolution’’ 

with the plaintiffs, and the claims against the consulting entity 

were dismissed. 

Lexecon then brought a defamation suit against the law firm in 

the Northern District for Illinois. The law firm filed a motion under 

§ 1407 requesting the MDLP to empower the Arizona court which 

adjudicated the original S&L litigation to preside over the defamaVerDate Aug 04 2004 13:40 Mar 18, 2005 Jkt 039006 PO 00000 Frm 00002 Fmt 6659 Sfmt 6601 E:\HR\OC\HR024.XXX HR024
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3 102 F.3rd 1524 (9th Cir. 1996). 

4Lexicon at 964. 5 Hearing on H.R. 2112 Before the Subcomm. on Courts and Intellectual Property of the House 

Comm. on the Judiciary, 106th Cong., 1st Sess. (June 16, 1999) (statement of the Honorable 

John F. Nangle, Chairman, Judicial Panel on Multidistrict Litigation, at 5). 6See, e.g., MDL–1125—In re Air Crash Near Cali, Columbia, on 12/20/95, S.D. Fla. (Judge 

Highsmith). 

tion suit. The panel agreed, and the Arizona transferee court subsequently invoked its jurisdiction pursuant to § 1404 to preside over 

a trial that the law firm eventually won. Lexecon appealed, but the 

Ninth Circuit affirmed the lower court decision.3

The Supreme Court reversed, holding that § 1407 explicitly requires a transferee court to remand all cases for trial back to the 

respective jurisdictions from which they were originally referred. In 

his opinion, Justice Souter observed that ‘‘the floor of Congress’’ 

was the proper venue to determine whether the practice of self-assignment under these conditions should continue.4

Section 2 of the bill responds to Justice Souter’s admonition. In 

the absence of a Lexecon ‘‘fix,’’ the MDLP will be forced to remand 

cases to their transferor districts, and then have each original district court decide whether to transfer each case back to the transferee district for trial purposes under § 1404. This alternative, to 

invoke the Chairman of the MDLP, would be ‘‘cumbersome, repetitive, costly, potentially inconsistent, time consuming, inefficient, 

and a wasteful utilization of judicial and litigant resources.’’ 5

In the wake of the Lexecon, decision significant problems have 

arisen that have hindered the sensible disposition of multidistrict 

litigation. Transferee judges throughout the United States have 

voiced their concern to the MDLP about the urgent need to clarify 

their authority to retain cases for trial. Indeed, transferee judges 

have been unable to order self-transfer for trial, even though all 

parties to constituent cases have agreed on the wisdom of selftransfer for trial.6 Instead, complex multidistrict cases should be 

streamlined as much as possible by providing the transferee judge 

as much discretion as possible to expedite trial when the transferee 

judge, with full input from the parties, deems this to be appropriate. In other words, there is a pressing need to recreate the 

multidistrict litigation environment that existed before the Lexecon 

decision. 

The change advocated by the MDLP and other multidistrict practitioners is well-justified in light of judicial practice under the 

Multidistrict Litigation statute for the past 30 years. It promotes 

judicial administrative efficiency and will encourage parties to complex Federal litigation to settle. 

SECTION 3: TECHNICAL AMENDMENTS TO MULTIPARTY, MULTIFORUM

JURISDICTION OF DISTRICT COURTS/‘‘DISASTER’’ LITIGATION

The legislative history of § 3 of H.R. 1038 is intertwined with 

that of § 3 of H.R. 860 from the 107th Congress. 

As passed by the House on March 14, 2001, H.R. 860, the ‘‘Multidistrict, Multiparty, Multiforum Trial Jurisdiction Act of 2001,’’ 

contained the following core provisions. 

(1) Section 2 (Lexecon). Section 2 of the bill would have enacted 

a ‘‘straight’’ Lexecon fix identical to that of H.R. 1038. 

(2) Section 3 (‘‘disaster’’ litigation). Section 3 of H.R. 860 conferred original jurisdiction on U.S. district courts to adjudicate any 

4 

7See H.R. Rept. No. 106–276, 106th Cong., 1st Sess. (1999) and H.R. Rept. No. 107–14, 107th 

Cong., 1st Sess. (2001) for a detailed explanation of why ‘‘disaster’’ litigation redress was needed. 8 H.R. 2215, Pub. L. No. 107–273. 

civil action arising out of a single accident in which at least 25 persons are either killed or injured. Damages for each person must exceed $150,000, and minimal diversity rules apply (i.e., jurisdiction 

will lie if any one plaintiff and any one defendant are from different States), with one exception: the ‘‘substantial majority’’ of all 

plaintiffs and the ‘‘primary’’ defendants are citizens of the same 

State, and the claims will be ‘‘primarily’’ governed by the laws of 

that State (i.e., State courts would hear these ‘‘exception’’ cases). If 

the base requirements of Section 3 are otherwise satisfied, the 

court may determine liability and punitive damages, but would remand to State courts for determination of compensatory damages.7

The Senate Committee on the Judiciary took no action on H.R. 

860, but the matter was revived during House-Senate conference 

deliberations on what became the ‘‘21st Century Department of 

Justice Appropriations Authorization Act.’’ 8 Pursuant to negotiations, the conferees agreed to take ‘‘half’’ of H.R. 860—section 3, or 

the ‘‘disaster’’ litigation portion. It is codified as section 11020 of 

the Department of Justice authorization statute. In addition, one of 

the threshold criterion triggering its application was changed in 

conference. Specifically, and in addition to the other criterion, a 

U.S. district court may only retain jurisdiction over such cases if 

at least 75 persons (not 25) have been killed or injured. 

The Committee believes that a straight Lexecon fix is meritorious 

in its own right, promoting as it does judicial efficiency. But there 

is another problem the legislation remedies in light of the legislative history of H.R. 860. 

The disaster litigation portion of H.R. 860 now set forth in the 

Department of Justice authorization statute contemplates that the 

Lexecon problem is solved. In other words, the new disaster litigation law only creates original jurisdiction for a U.S. district court 

to accept these cases and qualify as a transferee court under the 

multidistrict litigation statute. But the transferee court still cannot 

retain the consolidated cases for determination of liability and punitive damages, which effectively nullifies the statute. In this 

sense, the Lexecon fix—its freestanding merits aside—also functions as a technical correction to the recently-enacted disaster litigation measure. 

HEARINGS

No hearings were held on H.R. 1038. 

COMMITTEE CONSIDERATION

On March 3, 2005, the Subcommittee on Courts, the Internet, 

and Intellectual Property met in open session and ordered favorably reported the bill H.R.1038 by voice vote, a quorum being 

present. On March 9, 2005, the Committee met in open session and 

ordered favorably reported the bill H.R. 1038 by voice vote, a 

quorum being present. 

5 

VOTE OF THE COMMITTEE

In compliance with clause 3(b) of Rule XIII of the Rules of the 

House of Representatives, the Committee notes that there were no 

recorded votes during consideration of H.R. 1038. 

COMMITTEE OVERSIGHT FINDINGS

In compliance with clause 3(c)(1) of Rule XIII of the Rules of the 

House of Representatives, the Committee reports that the findings 

and recommendations of the Committee, based on oversight activities under clause 2(b)(1) of Rule X of the Rules of the House of Representatives, are incorporated in the descriptive portions of this report. 

NEW BUDGET AUTHORITY AND TAX EXPENDITURES

Clause 3(c)(2) of Rule XIII of the Rules of the House of Representatives is inapplicable because this legislation does not provide new budgetary authority or increased tax expenditures. 

CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

In compliance with clause 3(c)(3) of Rule XIII of the Rules of the 

House of Representatives, the Committee sets forth, with respect to 

the bill, H.R. 1038, the following estimate and comparison prepared 

by the Director of the Congressional Budget Office under section 

402 of the Congressional Budget Act of 1974: 

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, March 11, 2005. 

Hon. F. JAMES SENSENBRENNER, Jr., Chairman, 

Committee on the Judiciary, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 1038, the ‘‘Multidistrict 

Litigation Restoration Act of 2005.’’ 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Gregory Waring, who can 

be reached at 226–2860. 

Sincerely, 

DOUGLAS HOLTZ-EAKIN. 

Enclosure 

cc: Honorable John Conyers, Jr. 

Ranking Member 

H.R. 1038—Multidistrict Litigation Restoration Act of 2005. 

CBO estimates that implementing H.R. 1038 would have no significant impact on the Federal budget and would not affect direct 

spending or receipts. H.R. 1038 contains no intergovernmental or 

private-sector mandates as defined in the Unfunded Mandates Reform Act and would not affect the budgets of State, local, or tribal 

governments. 

Enacting H.R. 1038 would remove existing impediments to the 

consolidation of certain lawsuits within the Federal judicial system. 

6 

The bill would permit a Federal judge to consolidate such cases for 

trial on the common issues of liability and punitive damages if 

those cases were consolidated for pretrial proceedings. The bill also 

would allow Federal judges to determine compensatory damages in 

such consolidated cases under certain conditions. Under current 

law, cases related by one or more common questions of fact that 

are pending in multiple Federal judicial districts may be consolidated before a single Federal judge only for pretrial proceedings. At 

the end of those proceedings, each case must now be remanded for 

trial back to the judicial district where it originated. 

CBO expects that enacting this bill would result in a more efficient use of Federal judicial resources. Any savings realized by the 

Federal court system would be small, CBO estimates, and might be 

offset by increased court costs that could arise from additional 

cases being moved from State court to Federal court under the bill. 

Thus, CBO estimates that implementing H.R. 1038 would result in 

no significant net impact on the Federal budget. 

The CBO staff contact for this estimate is Gregory Waring, who 

can be reached at 226–2860. This estimate was approved by Peter 

H. Fontaine, Deputy Assistant Director for Budget Analysis. 

PERFORMANCE GOALS AND OBJECTIVES

H.R. 1038 does not authorize funding. Therefore, clause 3(c)(4) of 

Rule XIII of the Rules of the House of Representatives is inapplicable. H.R. 1038 would allow a designated U.S. district court under 

the multidistrict litigation statute to retain jurisdiction over referred cases arising from the same fact scenario for purposes of determining liability and punitive damages, or to send them back to 

the respective courts from which they were transferred. 

CONSTITUTIONAL AUTHORITY STATEMENT

Pursuant to Rule XI, clause 2(1)(4) of the Rules of the House of 

Representatives, the Committee finds the authority for this legislation in Article III, section 1, of the Constitution. 

SECTION-BY-SECTION ANALYSIS AND DISCUSSION

Section 1. Short Title. The Act may be cited as the ‘‘Multidistrict 

Litigation Restoration Act of 2005.’’ 

Section 2. Multidistrict Litigation. Section 2 affirms the authority 

of a transferee court to retain jurisdiction under the general multidistrict litigation statute over district and State actions initially referred to it for trial purposes, ‘‘in the interest of justice and for the 

convenience of the parties and witnesses.’’ Similarly, § 2 also specifies that a transferee court which retains jurisdiction over referred 

actions for trial may only make determinations regarding compensatory damages if it is convenient to the parties and witnesses and 

promotes the interest of justice. 

Section. 3. Technical Amendments to Multiparty, Multiforum 

Trial Jurisdiction Act of 2002. Section 3 clarifies that transferred 

actions brought under the ‘‘disaster’’ litigation statute (enacted as 

part of the ‘‘21st Century Department of Justice Appropriations 

Authorization Act’’) may be retained by the transferee court for determinations of liability and punitive damages. The determination 

of non-punitive (i.e., compensatory) damages may be retained by 

7 

the transferee court only if it is convenient to the parties and witnesses and promotes the interest of justice. 

Section 3 also prescribes the terms by which a determination 

governing liability, choice of law, and punitive damages may be appealed. 

Section 4. Effective Date. H.R. 1038 applies two effective dates to 

different provisions of the bill. The provisions of § 2 will apply to 

any civil action pending on or brought on or after the date of enactment of H.R. 1038. 

Section 3 applies to ‘‘disaster’’ cases that are addressed by § 1020 

of the Department of Justice authorization statute from the 107th 

Congress. The provision is therefore deemed to take effect as 

though it were a part of § 11020. This means that § 3 of the bill applies to any relevant civil action if the accident giving rise to the 

cause of action occurred on or after the 90th day after the date of 

enactment of the ‘‘21st Century Department of Justice Appropriations Authorization Act,’’ which was November 2, 2002. 

In conclusion, the Committee notes that the text of H.R. 1038 is 

identical to that of H.R. 1768 from the 108th Congress, which the 

House passed under suspension of the Rules by a rollcall vote of 

418–0 on March 24, 2004. 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of Rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (new matter is printed in italics 

and existing law in which no change is proposed is shown in 

roman): 

SECTION 1407 OF TITLE 28, UNITED STATES CODE 

§ 1407. Multidistrict litigation 

(a) When civil actions involving one or more common questions 

of fact are pending in different districts, such actions may be transferred to any district for coordinated or consolidated pretrial proceedings. Such transfers shall be made by the judicial panel on 

multidistrict litigation authorized by this section upon its determination that transfers for such proceedings will be for the convenience of parties and witnesses and will promote the just and efficient conduct of such actions. Each action so transferred shall be 

remanded by the panel at or before the conclusion of such pretrial 

proceedings to the district from which it was transferred unless it 

shall have been previously terminated or ordered transferred to the 

transferee or other district under subsection (i): Provided, however, 

That the panel may separate any claim, cross-claim, counter-claim, 

or third-party claim and remand any of such claims before the remainder of the action is remanded. 

* * * * * * * 

(i)(1) Subject to paragraph (2) and except as provided in subsection (j), any action transferred under this section by the panel 

may be transferred for trial purposes, by the judge or judges of the 

transferee district to whom the action was assigned, to the transVerDate Aug 04 2004 13:40 Mar 18, 2005 Jkt 039006 PO 00000 Frm 00007 Fmt 6659 Sfmt 6603 E:\HR\OC\HR024.XXX HR024
8 

feree or other district in the interest of justice and for the convenience of the parties and witnesses. 

(2) Any action transferred for trial purposes under paragraph 

(1) shall be remanded by the panel for the determination of compensatory damages to the district court from which it was transferred, 

unless the court to which the action has been transferred for trial 

purposes also finds, for the convenience of the parties and witnesses 

and in the interests of justice, that the action should be retained for 

the determination of compensatory damages. 

(j)(1) In actions transferred under this section when jurisdiction 

is or could have been based, in whole or in part, on section 1369 

of this title, the transferee district court may, notwithstanding any 

other provision of this section, retain actions so transferred for the 

determination of liability and punitive damages. An action retained 

for the determination of liability shall be remanded to the district 

court from which the action was transferred, or to the State court 

from which the action was removed, for the determination of damages, other than punitive damages, unless the court finds, for the 

convenience of parties and witnesses and in the interest of justice, 

that the action should be retained for the determination of damages. 

(2) Any remand under paragraph (1) shall not be effective until 

60 days after the transferee court has issued an order determining 

liability and has certified its intention to remand some or all of the 

transferred actions for the determination of damages. An appeal 

with respect to the liability determination and the choice of law determination of the transferee court may be taken during that 60-day 

period to the court of appeals with appellate jurisdiction over the 

transferee court. In the event a party files such an appeal, the remand shall not be effective until the appeal has been finally disposed of. Once the remand has become effective, the liability determination and the choice of law determination shall not be subject 

to further review by appeal or otherwise. 

(3) An appeal with respect to determination of punitive damages by the transferee court may be taken, during the 60-day period 

beginning on the date the order making the determination is issued, 

to the court of appeals with jurisdiction over the transferee court. 

(4) Any decision under this subsection concerning remand for 

the determination of damages shall not be reviewable by appeal or 

otherwise. 

(5) Nothing in this subsection shall restrict the authority of the 

transferee court to transfer or dismiss an action on the ground of 

inconvenient forum. 

MARKUP TRANSCRIPT

BUSINESS MEETING 

WEDNESDAY, MARCH 9, 2005 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON THE JUDICIARY, 

Washington, DC. 

The Committee met, pursuant to notice, at 10:00 a.m., in Room 

2141, Rayburn House Office Building, Hon. F. James Sensenbrenner, Jr. [Chairman of the Committee] presiding. 

9 

Chairman SENSENBRENNER. The Committee will be in order. A 

working quorum is present comprised entirely of Members of the 

majority party. So rather than doing a ratification of minority Committee assignments, since there is no one here to make a motion 

to do that, we will now go to the next item on the agenda which 

is the adoption of S. 167, the ‘‘Family Entertainment and Copyright 

Act of 2005,’’ and the Chair recognizes the gentlemen from Texas, 

Mr. Smith, the Chairman of the Subcommittee on Courts, the 

Internet, and Intellectual Property for a motion. 

Mr. SMITH. Mr. Chairman, I ask unanimous consent that we consider the following bills en bloc: S. 167, H.R. 683, H.R. 1036, H.R. 

1037, H.R. 1038. 

Chairman SENSENBRENNER. How about House Concurrent Resolution—— 

Mr. SMITH. It’s my understanding, Chairman, that needs to be 

considered separately. 

Chairman SENSENBRENNER. Okay. Without objection, the 5 bills 

mentioned by the gentleman from Texas will be considered en bloc, 

and the Chair recognizes the gentleman from Texas to explain 

them. 

Mr. SMITH. I’ll try to be brief, Mr. Chairman. The first bill, S. 

167 really consists of three previous bills that this Committee has 

approved and that passed the House last year. The first one is the 

Family Movie Act, and I think Members will recall that that simply 

gives parents the right to determine what their children see when 

they rent or buy a movie video. 

The second part of this particular bill is the Art Act which creates new penalties for those who camcord movies in public theaters 

and who willfully infringe copyright law by distributing copies of 

prereleased works, movies or otherwise. 

The Trademark Dilution Revision Act of 2005 simply, basically 

protects trademarks in a better way and also makes sure that people cannot infringe trademarks as easily as they do now. It also 

does a good job of trying to keep us out of court to determine some 

of the ambiguities of that particular subject. 

The two technical correction bills are just that, technical corrections of the Satellite Viewer, Home Viewer Movie Act, and the 

technical corrections, in addition to the satellite corrections are 

technical corrections of the CARP bill, which we approved last year 

and which passed the House. 

The last bill in the en bloc package, Mr. Chairman, is your bill, 

the Multidistrict Litigation Restoration Act of 2005, and I will yield 

to you to make any comments on that. 

And that would be the quick summary of the five bills en bloc. 

[The bill, H.R. 1038, follows:] 

10 

I

109TH CONGRESS

1ST SESSION H. R. 1038

To amend title 28, United States Code, to allow a judge to whom a case

is transferred to retain jurisdiction over certain multidistrict litigation

cases for trial, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

MARCH 2, 2005

Mr. SENSENBRENNER introduced the following bill; which was referred to the

Committee on the Judiciary

A BILL

To amend title 28, United States Code, to allow a judge

to whom a case is transferred to retain jurisdiction over

certain multidistrict litigation cases for trial, and for

other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Multidistrict Litigation

5 Restoration Act of 2005’’.

6 SEC. 2. MULTIDISTRICT LITIGATION.

7 Section 1407 of title 28, United States Code, is

8 amended—


1038I.AAB
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2

•HR 1038 IH

1 (1) in the third sentence of subsection (a), by

2 inserting ‘‘or ordered transferred to the transferee

3 or other district under subsection (i)’’ after ‘‘termi4 nated’’; and

5 (2) by adding at the end the following new sub6 section:

7 ‘‘(i)(1) Subject to paragraph (2) and except as pro8 vided in subsection (j), any action transferred under this

9 section by the panel may be transferred for trial purposes,

10 by the judge or judges of the transferee district to whom

11 the action was assigned, to the transferee or other district

12 in the interest of justice and for the convenience of the

13 parties and witnesses.

14 ‘‘(2) Any action transferred for trial purposes under

15 paragraph (1) shall be remanded by the panel for the de16 termination of compensatory damages to the district court

17 from which it was transferred, unless the court to which

18 the action has been transferred for trial purposes also

19 finds, for the convenience of the parties and witnesses and

20 in the interests of justice, that the action should be re21 tained for the determination of compensatory damages.’’.


1038I.AAC
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3

•HR 1038 IH

1 SEC. 3. TECHNICAL AMENDMENT TO MULTIPARTY, MULTI2 FORM TRIAL JURISDICTION ACT OF 2002.

3 Section 1407 of title 28, United States Code, as

4 amended by section 2 of this Act, is further amended by

5 adding at the end the following:

6 ‘‘(j)(1) In actions transferred under this section when

7 jurisdiction is or could have been based, in whole or in

8 part, on section 1369 of this title, the transferee district

9 court may, notwithstanding any other provision of this

10 section, retain actions so transferred for the determination

11 of liability and punitive damages. An action retained for

12 the determination of liability shall be remanded to the dis13 trict court from which the action was transferred, or to

14 the State court from which the action was removed, for

15 the determination of damages, other than punitive dam16 ages, unless the court finds, for the convenience of parties

17 and witnesses and in the interest of justice, that the action

18 should be retained for the determination of damages.

19 ‘‘(2) Any remand under paragraph (1) shall not be

20 effective until 60 days after the transferee court has

21 issued an order determining liability and has certified its

22 intention to remand some or all of the transferred actions

23 for the determination of damages. An appeal with respect

24 to the liability determination and the choice of law deter25 mination of the transferee court may be taken during that

26 60-day period to the court of appeals with appellate jurisVerDate Aug 04 2004 13:40 Mar 18, 2005 Jkt 039006 PO 00000 Frm 00012 Fmt 6659 Sfmt 6601 E:\HR\OC\HR024.XXX HR024

1038I.AAD
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•HR 1038 IH

1 diction over the transferee court. In the event a party files

2 such an appeal, the remand shall not be effective until the

3 appeal has been finally disposed of. Once the remand has

4 become effective, the liability determination and the choice

5 of law determination shall not be subject to further review

6 by appeal or otherwise.

7 ‘‘(3) An appeal with respect to determination of puni8 tive damages by the transferee court may be taken, during

9 the 60-day period beginning on the date the order making

10 the determination is issued, to the court of appeals with

11 jurisdiction over the transferee court.

12 ‘‘(4) Any decision under this subsection concerning

13 remand for the determination of damages shall not be re14 viewable by appeal or otherwise.

15 ‘‘(5) Nothing in this subsection shall restrict the au16 thority of the transferee court to transfer or dismiss an

17 action on the ground of inconvenient forum.’’.

18 SEC. 4. EFFECTIVE DATE.

19 (a) SECTION 2.—The amendments made by section

20 2 shall apply to any civil action pending on or brought

21 on or after the date of the enactment of this Act.

22 (b) SECTION 3.—The amendment made by section 3

23 shall be effective as if enacted in section 11020(b) of the


1038I.AAE
14 

5

•HR 1038 IH

1 Multiparty, Multiforum Trial Jurisdiction Act of 2002

2 (Public Law 107–273; 116 Stat. 1826 et seq.).

Æ


1038I.AAF
15 

Chairman SENSENBRENNER. The Chair passes on this. 

Without objection, all Members may place opening statements in 

the record on each of the bills being considered en bloc at this time. 

Hearing no objection, so ordered. 

[The prepared statement of Mr. Berman follows:] 

PREPARED STATEMENT OF THE HONORABLE HOWARD L. BERMAN, A REPRESENTATIVE

IN CONGRESS FROM THE STATE OF CALIFORNIA, AND RANKING MEMBER, SUBCOMMITTEE ON COURTS, THE INTERNET, AND INTELLECTUAL PROPERTY

Mr. Chairman, 

I intend to support H.R. 1038, The Multidictrict Litigation Restoration Act of 

2005, and would ask my colleagues to do the same. 

This Committee has approved legislation containing the provisions of H.R. 1038 

in each of the past three Congresses. In the 106th Congress, the House passed the 

bill by voice vote on suspension. In the 107th Congress, the House passed identical 

legislation by unanimous consent, and last year the exact same bill passed the 

House 418–0. Each time, the legislation has died in the Senate. 

This bill has a very narrow purpose and effect—it would simply overturn the 1998 

Lexecon decision of the Supreme Court. 

The Lexecon decision held that a multidistrict litigation transferred to a federal 

court for pretrial proceedings cannot be retained by that court for trial purposes. 

In so holding, the Lexecon decision upset decades of practice by the Multidistrict 

Litigation Panel and federal district courts. The Lexecon decision also increases the 

cost and complexity of such multidistrict litigations by requiring courts other than 

the tranferee court, which has overseen discovery and other pretrial proceedings, to 

conduct the trial. 

This bill overturns the Lexecon decision in a carefully calibrated manner. While 

the bill allows a transferee court to retain a case for trial on liability issues and, 

when appropriate, on punitive damages, it creates a presumption that the trial of 

compensatory damages will be remanded to the transferor court. In so doing, the bill 

is careful to overturn the Lexecon decision without expanding the power previously 

exercised by transferee courts. More importantly, the presumption regarding the 

trial of compensatory damages ensures that plaintiffs will not be unduly burdened 

in pursuit of their claims. 

This bill(s narrow breadth should be contrasted with broader, and more troubling 

legislation to expand federal court jurisdiction, such as so called class action reform. 

I ask my colleagues to vote for H.R. 1038, and then for the bill as amended. 

I yield back the balance of my time. 

Chairman SENSENBRENNER. Are there any amendments to any of 

the bills? 

[No response.] 

Chairman SENSENBRENNER. There being no amendments, without objection, the previous question is ordered on reporting the bills 

favorably and the vote on reporting these bills favorably will be 

taken when a reporting quorum is present. 

Without objection the order for the previous question is vitiated. 

There is a Subcommittee amendment on H.R. 683, the Dilution 

Bill. Without objection, the Subcommittee amendment is agreed to. 

Hearing none, so ordered. 

And now without objection, the previous question is ordered on 

reporting the bills favorably with H.R. 683 being reported favorably 

as amended. And the vote will be taken at the time that a reporting quorum appears. 

[Intervening business.] 

Chairman SENSENBRENNER. If there are no further amendments, 

without objection, the previous question is ordered favorably reporting Senate 167. 

We are still one short of a reporting quorum. I would ask the 

Members present to be patient, and as soon as we round up—here 

we go. They have been rounded up. [Laughter.] 

16 

The previous question has been ordered on reporting favorably 

the following bills: Senate 167, H.R. 683, H.R. 1036, H.R. 1037 and 

H.R. 1038. So many as are in favor of reporting these bills favorably will say aye. 

Opposed, no? 

The ayes appear to have it. The ayes have it, and the bills are 

reported favorably. 

Without objection, those bills which were amended here, meaning 

H.R. 683, will be reported favorably to the House in the form of a 

single amendment in the nature of a substitute, incorporating the 

amendments adopted here today. That unanimous consent request 

also includes Senate 167 as amended. 

Is there any objection? 

[Intervening business.] 

Chairman SENSENBRENNER. With the next unanimous consent 

request, the gentleman will be given the right to file dissenting 

views on that bill. There will be separate Committee reports that 

will be filed on each of the bills considered en bloc. Does the gentleman withdraw his reservation? 

Mr. WATT. Yes. 

Chairman SENSENBRENNER. Okay. Without objection, all Members will be given 2 days as provided by House rules, in which to 

submit additional dissenting supplemental or minority views, and 

without objection the staff is directed to make any technical and 

conforming changes. 

[Intervening business.] 

Chairman SENSENBRENNER. There being no further business to 

come before the Committee, the Committee stands adjourned. 

[Whereupon, at 10:17 a.m., the Committee was adjourned.] 

(17) 

1See Hearing on H.R. 2112 Before the House Subcommittee on Courts and Intellectual Property, 106th Cong. (1999) (statement of Brian Wolfman, Staff Attorney, Public Citizen). 2Pub. L. No. 107–273. 

3For example, § 11020 creates Federal jurisdiction for civil actions arising out of a single accident that results in the death or injury of 75 or more persons when specified conditions are met. 

Under the original version of this bill Federal district courts were authorized to adjudicate cases 

arising out of a single accident where at least 25 persons were killed or injured. 4The Class Action Fairness Act was signed into law on February 18, 2005. See Pub. L. No. 

109–2 

DISSENTING VIEWS

I opposed reporting H.R. 1038, the ‘‘Multidistrict Litigation Restoration Act of 2005,’’ to the full House at the March 9, 2005 Judiciary Committee markup because I object to the process under 

which the bill was considered and because I object to certain substantive provisions of the bill. 

I object to the process because the Subcommittee on Courts, the 

Internet, and Intellectual Property did not conduct a hearing on 

H.R. 1038. The Subcommittee reported the bill by voice vote on 

March 3, 2005 and the full Committee markup was held less than 

one week later. Those who support H.R. 1038 contend that the bill 

did not warrant a hearing in light of other hearings and markups 

on identical or related bills from previous Congresses. The last 

hearing on a prior version of this bill was in the 106th Congress. 

However, subsequent versions of the bill have undergone substantial changes worthy of examination. At the hearing on this bill during the 106th Congress the Subcommittee heard testimony from a 

witness who expressed serious concerns about the bill’s expansion 

of Federal jurisdiction. 1 These concerns have never been addressed. I believe a hearing should have been held in this Congress 

to evaluate the revised bill and to determine whether the revisions 

remedied the serious federalism issues raised by the prior iteration 

of this bill or made them worse. 

In addition to my concerns about process, I also object to certain 

substantive provisions of H.R. 1038. A prior version of this bill, 

H.R. 860 was partially passed into law in the ‘‘21st Century Department of Justice Appropriation Authorization Act,’’ 2 codified as 

§ 11020 of the DoJ bill. Despite some adjustments 3, I believe 

§ 11020 inappropriately expands the jurisdiction of the Federal 

courts by infringing on the traditional jurisdiction of the state 

courts with are better equipped to handle personal-injury and 

wrongful death cases. H.R. 1038 compounds that problem by insuring that the transferee court can retain the consolidated cased for 

determination of liability and punitive damages. Expanding Federal jurisdiction will add an additional burden to the Federal courts 

at a time when our Federal courts are already overcrowded and 

backlogged. Moreover, in light of passage (also without the benefit 

of a timely hearing) of S. 5, the ‘‘Class Action Fairness Act of 

2005,’’ 4 which steers most class actions and mass tort cases into 

18 

Federal court, I believe H.R. 1038 will exacerbate the strain already imposed on the Federal courts. While the bill’s proponents 

maintain that the bill will increase judicial efficiency for the Federal courts, a proposition with which I disagree, it would do so by 

encroaching on the jurisdiction of state courts and states’ rights 

and would do so at the expense of accident victims. I think we have 

lost sight of the fact that the courts are for the convenience of litigants, not judges and administrators. 

While some may characterize this bill as a ‘‘non-controversial’’ 

piece of legislation that should be quickly moved through the legislative process, I believe that the landscape has changed with the 

passage of the Class Action Fairness Act. Accordingly, I believe 

that we failed to properly exercise our responsibility as Members 

of the Judiciary Committee by not conducting a more extensive review of this bill. Consequently, while I favor some of the provisions 

of the bill, I oppose reporting H.R. 1038 to the full House. 

MELVIN L. WATT. 

Æ