2009 D e c i sion s O p inion s of the U nit e d S t a t e s C our t of Appe al s for the Thir d C ir c uit
9-24-2009 

# I n Re: P h a r m B e nefit
P r e c e de n t i al or N on-P r e c e de n t i al : P r e c e de n t i al D ock e t N o . 07-1151

F o l lo w thi s a nd a dd it ion al w ork s a t : h tt p://d i g it alc ommon s .l a w . v i l l a no v a . e du/thir dc ir c uit_2009

Thi s de c i sion i s br ou gh t t o y ou for f r e e a nd ope n a c c e s s b y the O p inion s of the U nit e d S t a t e s C our t of Appe al s for the Thir d C ir c uit a t V i l l a no v a U niv e r sit y S choo l of L a

w Di g it al R e posit or y

. I t h as be e n a c c e pt e d for inclusion in 2009 D e c i sion s b y a n a uthor i z e d a dmini s tr a t or of V i l l a no v a U niv e r sit y S choo l of L a

w Di g it al R e posit or y

. F or mor e infor m a t ion, p le as e c on t a ct Be n j a min . C a rl s on@l a

w . v i l l a no v a . e du
. R e c omme nde d C it a t ion

" I n R e: P h a r m Be nefit " (2009). 2009 D e cisio n s . P ape r 533. h tt p://d i g it alc ommon s .l a

w . v i l l a no v a . e du/thir dc ir c uit_2009/533PR EC ED EN TI AL UN I TE D S TA TE S C OU RT OF AP PE AL S FO R T HE TH IRD C IRCU IT No: 07- 1151 I N RE: PHARMACY BENEFI T MANAGERS AN TI TRUS T L I TI GA TI ON ( MDL 1782) B E L L E V U E D RU G C O .; R O B E R T S C H R E IB E R , IN C ., do i ng bu s i ne s s a s BU RN S P HA RM AC Y; R E H N -H U E R B IN G E R

D RU G C O ., doi ng bus i ne s s a s PARKW AY DRUGS #4, on be ha l f of th em selv es an dall o th ers sim ilarly situ ated ; PH AR MA CY FR EE DO M F UN D; NA TI ON AL CO MM UN I TY PH AR MA CI ST S

AS SO CI AT I ON
v. *CAREMARKSPCS, I NC. , f/k/ aADVANCEPCS

( D. C. Ci vi l No. 03- c v- 04731) *Car e m arks PCS, I nc . , f/k/ aAdva nc e PCS,

Appe l l ant *( Am e nde d i n a c c or danc e wi th Cl e rk' s Or de r da t e d 02/ 20/ 07)2 Ap peal from

the Unite d S tate s Dis tr ic t Cou rt f o r th e E astern D istrict o f

P en n sylv an ia ( Ci v. No. 03- c v- 04731) Distri ct Judg e: Ho n. John P. Fu ll am Ar gue d: Fe br

uary 8, 2008 B ef o re: M cK E E an dA M B R O , Circ uit J ud ges , an dA L D IS E R T , Se ni or

Ci r c ui t J udge ( Opi ni on fi l e d: Se pt e m

be r 24, 2009) ST EV EN E. BI ZA R, ES Q. LAND ON Y. J ON ES , I I I , ES Q. Buc hanan, I nge r s ol l & Roone y PC 50 So uth 1 6 Stre et

th Two Li be rty

Pl a c e , Sui t e 3200 Phi l a de l phi a , PA 19102 MI CH AE L S ENNE TT , ES Q. PAULA W
. RENDER, ESQ. ( Ar gue d) J o n e s D ay 77 W e s t W a c ke r Dr i ve , Sui t e 3500 Chi c a go, I L 60601 VI CT OR E. GR I MM , ES Q. J AS ON M. MA RK S, ES Q. Be l l , Bo y d & Ll oyd L LP 70 W e s t Ma di s on Str e e t , Sui t e 3100 Chi c a go, I L 60602 At t or ne y s f or Appe l lant3 MI CH AE L J
. FR EE D, ES Q. Fr e e d K ann e r

Lo nd on & Mi l l e n L LC 2201 W auke gan Roa d, Sui t e 130 Bannoc kburn, I L 60015 J EAN K
. J AN ES , ES Q. Muc h She l i s t

De ne nbe r g Am e nt

& Rube ns t e i n, P. C. 191 North W a c ke r

Dr i ve , Sui t e 1800 Chi c a go, I L 60606 H. LADDI E MONTAGUE, J R. , ESQ. ( Ar gue d) MA RT I N I
. TW ER SKY, ES Q. Be r ge r & Mont a gue , P. C. 16 22 Lo cust

Stre et Phi l a de l phi a , PA 19103 Attorney s f or Ap pellees OP I NI ON M cK E E , Ci r c ui t

J udge
. Thi s a c t i on ( the “Be l le v ue ac ti on ”) is on e of six si m il ar
ant i tr us t a c t i ons c ha l l e ngi ng the pr a c ti c e s of pr e s c r i pt i on benefits m anagers th at have been transferr ed by the Jud ic ia l Pane l on Mul t i di s tr i c t

Li t i ga t i on for

c oor di na t e d pr oce e di ngsO n M ar ch 24, 2004, A dvance PC S became a w hol l y ow ned 1 su b sid iar y o f

C a re m a rk R x , In c ., a n d c h a n g e d its n a m e to C ar emar kPC S. In t he pr ocee di ngs i n t he di s t r i ct cour t , t he defe ndant w as A dvance PC S and for cons i s t ency w i l l be r efe r r ed t o h e r e a s A dv a nc e PCS. 4 befo re the Hon orable John P. Fu ll am of th e Unite d S tate s Di s tr i c t Court for the Ea s t e rn Di s tr i c t

of Pe nns yl vani aunde r

the cap tio n : I n r e Pharmac

y Be ne f i t Manage r s Ant i tr us t

Li t i gat i on , MD L Docket No
. 17 82
. Th e Be l l e v ue ac ti on had initi al ly been
as si gn ed to Judg e Edu ar do C. Ro breno of the sam e C ou rt . In an order ent er ed on Au gu st

24 , 200 4, befo re the Be l l e v ue a c t i on
wa s tr ans fe rr e d t o Judge Ful l a m , Judg e R o b r e no gr ant e d the de fe ndant ’ s m ot i on t o c om pe l ar bi tr a t i on and s t ay e d the a c t i on pe ndi ng ar

bi tr a t i on. Judge Ful l a m

s ubs e que nt l y

va c a t e d Judge Robr e no’ s or de r

c om pe l l i ng ar bi tr a t i on, and tha t o r de r

i s the
s ubje c t of thi s ap p eal
. The Appe l l ant i s Adva nc e PCS, the 1 defend ant i n the Be l l e v ue a c t i on. Be c aus e we hol d tha t Judge5 F u l l am ’s o rd er v io latedth e law o f th e case d o ctrin e, w e w ill
va c a t e tha t

or de r and r e m and wi th di r e c t i ons t o r e i ns t a t e Judge Robr e no’ s or de r

c om pe l l i ng a r bi tr a t i on. I . FA CT S A ND PR OC ED URAL HI ST ORY B ellev u e D ru g C o ., In c., R o b ert S ch reib er, In c., d //b /a B u rn s P h a r macy , an dR eh n -H eu rb in g er D ru g C o ., d/b /a Parkway Drug s # 4 (“ Ph ar m ac y Plai ntiffs”) , are re ta il ph ar m ac y bu si ness es . The Ph ar

m ac y Free do m Fu nd and the Nati on al Co mm un it y Ph ar m ac is ts Associ at ion (“Ass ociati on Plai ntiffs”)
are asso ciatio n s o f co mm u n ity p h arm acies an dp h arm acists,
r e s p e c t i v e l y. Ad vanc eP C S is a p resc ription b enefit s m anager ( “PBM ”) f o r d ru g b en e f

i t p lan s sp o n so redb y

em p lo y ers, u n io n s, go ve rnm e nt

a ge nc i e s , i ns ur anc e pl ans andothe r s ( “ Pl an S p o n so rs”). P B M s are retain ed b y P lan S p o n so rs to ef f icien tly
m anage their benefit plans and to ac hieve c ost s avings fo r Plan6 S p o n s o r s an dp l an m e mb e r s w h o m ay b e r e q u i r e dt o p ay a po rt ion o f the drug cost , kno wn as a co-pay m ent. Ef fici enci es
an dco s t s a v i n g s are ach iev edb y P B M s in a v ariety

o f w ay s, i nc l udi ng ne got i a t i ng di s c ount s or r e ba t e s fr omd rug
m anuf ac t ur e r s , providing m ai l order pres cr ipti on se rvic e t o p lan
m e m be r s , c ontr a c t i ng wi th r e t a i l pharm a c i e s for r e i m bur s e m e nt
w h en p rescrip tio n s are f

illedf o r p lan m em

b ers, an delectro n ic p ro cessin g an dp ayin g o f claim s. H er e, the Pharm ac y

Plai ntiffs ente re d into w ri tt en
a gr e e m e nt s ( “ Pha r m a c y Pr ovi de r Agr e e m ent s ” or

“ A g reem en ts”) w ith A d v an ceP C S to p ro v id e p rescri pt i on dr ugs
a nd r e l a t e dp h arm a c y

s e rv i c e s t o p e r s o n s c o v e r e db y d r ug benefit plans adm inis te re d b y Ad vancePCS . The Ph ar m ac y Prov ider Ag re em en ts co ntai n an “Arbitr at ion C la use” wh ic h p ro v id es: A rb i t ratio n . A n y

an dall co n tro v ersies in7 c onne c t i on wi th or

a r i s i ng out

of thi s Agr e e m e nt will be excl usivel y

se tt le d b y ar

bitr at ion b efore a s i ngl e ar bi tr a t or i n a c c or danc e wi th the Rul e s of the Am e r i c an Ar

bi tr a t i on As s oc i a t i on. The ar bitr at or m

ust follow th e rule of law, and m ay o n ly aw ardrem ed ies p ro v id edin th is A g reem en t. The awa r d of the arb i tr a t or wi l l be fi na l and bind ing o n the partie s, and j ud gm ent upo n such awa r d m ay

be e nt e r e d i n any co u rt ha vi ng j u risd ictio n th ereo f

. A rb itratio n u n d erth is prov is ion will be cond ucte d in S cott sdal e, Ar i z on a , andPr ov i de r

he r e by a gr e e s t o s uch jur i s di c t i on, u n le s s othe rwi s e a gr e e d t o by the part i e s i n wr i t i ng or

m anda t e d by

La w, and the ex p en ses o f th e arb itratio n , in clu d in g a tto rn ey s’ fe e s , wi l l be pa i d b y the party a ga i ns t whom the awa r d of the ar

bi tr a t or i s r e nde r e d. Thi s Se c t i on 9. 5 and the p art i e s ’ r i ght s he r e unde r s ha l l be gove rne d by

the Fe de r a l Ar

bi tr a t i on Ac t , 9 U. S. C. §§ 1 et se q . Se c t i on 9. 5 ( Ap p. 48 8- 89 )
. Th e Ph arm a c y Pr ov ider A g reem en ts also co n tain a “R em ed ies C lau se” w h ich p ro v id es: Re m e di e s . Pr ovi de r

a c knowl e dge s tha t

any unauthor i z e d di s c l os ur e or us e of [Adva nc e PCS] p ro p rietary in f o rm atio n woul d cau se [A dv ance PC S] im

m ediate and irr epar able inju ry o r lo ss. A cco rd in g ly , sh o u ld P ro v id er f ail to abide by this Sect ion 6 [capti on ed “I ntel le ct ual8 P r o p e r t y Righ t s : Con fide n t i a l i t y ” ] , [ A d v an ceP C S ] sh all b e en titledto sp ecif ic pe r fo rm anc e i nc l ud i ng i mm e di a t e i s s uanc e of a te m po rary re stra ining o rder

or prel im in ar

y in j u n c tio n en f

o rcin g th is A g reem en t, an dto j u d g m en t f

o r d am ag es (in clu d in g atto rn ey s’ f ees) ca used by the bre ac h and to al l o th er re m edie s pr ov i de d b y

thi s Ag r e e m e nt

anda pp l i c abl e l aw. S ectio n 6 .4 (A p p . 4 8 7 ). In ad d itio n , th e A g reem en ts co n tain l i m i t a t i on o f l i abi l i ty

and i nde mni fi c a t i on pr ovi s i ons . The lim itatio n o f

liab ility p ro v isio n read s: Li m i t a t i on on Li abi l i ty . [Adva nc e PCS] s ha l l not b e l i ab l e t o P r o v i d e r

f o r an y c l a i m , i n

j u ry, de m and or judgm e nt ba s e d upon c ontr a c t , t ort or ot he r gr ounds ( i nc l udi n g w a r r a nt y of m er chanta

bili ty ) ari si ng ou t o f the sa le , co m p o u n d in g , d isp en sin g , m an u f actu rin g , o r u se of any dr

ug or de vi c e di s pe ns e d by or any Ph ar m ac y Servic es prov ided by

P ro vider und er th is A g reem en t. In n o ev en t is eith er p arty liab le t o the othe r

party for i ndi r e c t , c ons e que nt ial or spec ia l dam ages or any

nature (e ven if inf

orm ed o f th eir p o ssib ility) , lo st p ro f its o r sav in g s, puni t i ve da m a ge s , i njury

t o r e put a t io n or

l os s of cu sto m ers o r b u sin ess. S ectio n 7 .1 (A p p . 4 8 7 ). T h e in d emn if icatio n p ro v isio n read s:9 I nd e mni fi c a t i on . Pr ov i de r a gr e e s t o i nd e mni fy an dh o ld[ A d v an ceP C S ] , its sh areh o ld ers, dire ct ors, em

ploy ee s, agents and rep rese ntat ives fr e e and harm l e s s for , fr om and a ga i nst an y

and all liab i l i t i e s , l os s e s , s e t t lem en ts, claim s, de m ands , a nd e xpe ns e s of a ny ki nd ( i nc l udi ng attorney s’ fees ), that

m ay re sult or ar is e out of

: ( I) any a c t ua l or a l l e ge d m a l pr a c t i c e , ne gl i ge nc e or m i s c o n du c t

o f P r o v i d e r i n th e p e r f

o rm an c e or om i s s i on of a ny

a c t or r e s pons i bi l i ty a s s um e d by Pro v id er un der this Agree m ent, or (i i) the s al e, co m p o u n d in g , d isp en sin g , f ailu re to sell, m anuf ac ture or use of

a drug o r devic e dis pensed b y P r o v i d e r o f P h arm a c y S e rv i c e p r o v i de d by P ro v id er u n d er th is A g reem en t. S ectio n 7 .2 (A p p . 4 8 7 ). On Augus t

15, 2003, the Pharm a c y Pl a i nt i ffs , for them se lves and all other s im il ar ly si tuat ed ph armaci es that

“ c o n tr a c t e dw i th A d v an c e P C S t o d i s p e n s e an d s e l l b r an dn a me
an dg en eric p rescrip tio n d ru g s f o r an y p rescrip tio n d ru g b en ef it pl an( s ) , ” Com

pl a i nt ¶ 29, and the As s oc i a t i on Pl a i nt i ffs fi l e d a
com plai nt in the Un it ed Stat es Distri ct Co urt fo r t h e E as te rn Di s tr i c t of Pe nns yl vani ac a pt i one d Bellev ue Drug Co ., et al. v

.T he A s s oci at i o n P l ai nt i ffs j oi ned t he ac t i on s ol el y t o s eek 2 i nj unct i ve r el i ef on be hal f of t hei r m em ber s and di d not s eek s ta tu s a s re p re s e n ta tiv e p la in tif f s o r c la s s m e m b e rs . Si m i l ar compl ai nt s w er e fi led in sever al fede r al di s t r i ct 3 c o u rts a g a in st v a rio u s P B M s. T h o se c o m p lain ts a re : N

. Jack s on P har m acy v. E

xpr es s Scr i

pt s I nc. , N o . 5 :0 3 -2 6 9 6 (N .D . A la.); N. Jack so n P h a r m acy v . Medco H eal t h Sol ut i ons , I

nc. , N o. 5:
- 3- 2 6 9 7 (N .D . A la.); M ike ’s M e d . C tr. P h a rm a c y v . Me d c o He a lth Sol ut i ons , I

nc. , N o . 3 :0 5 -5 1 0 8 (N .D . C a l.); N

. Jack s on Ph a r mac y v . Car e mar k RX Inc
. , N o . 1 :04 -56 7 4 (N
. D
. Il l. );

10 Adv anc e PCS , No. 2:03 -c v-04 73 1. Th e c om plai nt al le ged that 2 Ad vancePCS used the c om bined econo m ic po wer of its Plan S p o n so r s t o redu ce th e co n tractu al am o u n t it p ay s to retail pharm a c i e s be l ow the l e ve l s tha t woul d pr e va i l i n ac om

pe t i t i ve
m ark etp lace. It also alleg edth at th e A g reem en ts im p o se certain li m it at ions o n d rug refil ls and co-pay m ent c harges to plan
m e m be r s . The c om

pl a i nt a s serted tha t

the for e goi ng a c t i ons
co n stitu tedan u n law f

u l co n sp iracy am o n g A d v an ceP C S an dits Pl an Spons or s t o r e s tr a i n c om pe t i t i on i n vi ol a t i on of Se c t i on 1 of the She rm an Ac t , 15 U. S. C. § 1. 3B r ady E nt ers . , I nc. v. Medco Heal t h Sol ut i ons , Inc. , N o. 2: 03- 4 7 3 0 (E .D . P a .). T h e la s t n a m e d c a s e , B r ady Ent ers . , I nc. , w as f ile d s im u lta n e o u s ly w ith th e c o m p la in t h e re . Br a dy w as i ni t i al l y as s i gned t o J udge J an E. D uboi s but , on A ugus t 27, 2 0 0 3 , i t wa s r e a s s i g n e d t o J u d g e F u l l a m.
I n E i chor n v. A T & T C or p. , w e expl ai ned: 4 O n c e th e re is th e f

in d in g o f a n tit ru st in

ju ry , co u rts exami ne t he al l eged i l l egal conduct under one of t w o d ist i nct t es t s : per s e vi ol at i on or r ul e of reas on . U nd er t he p er s e t est , “agreem ents w ho se n a tu re a n d n e c e ss a ry e f f e c t ar e so p lain ly ant i

- compet it ive t hat no el abor at e s t udy of t he ind u str y is ne ed ed to estab li sh their i ll eg ali ty ” a re fou nd t o b e anti t rust viol at i on s. F or t ho se

11 O n S ep tem

b er 2 5 , 2 0 0 3 , A d v an ceP C S m o v ed to d ism iss the c om pl a i nt , a r gui ng tha t

the pl a i nt i ffs l acke d s t andi ng. Adva nc e PCS a l s o a r gue d tha t , e ve n a s s um i ng a r g ue ndo that plai ntiffs had stand ing, they had n ot suff

ic ie ntly al le ged either ho ri zontal coll us io n to state a p er se v io latio n o f th e an titru st l aws or s uffi c i e nt i njury t o c om pe t i t i on t o a l l e ge a r

ul e of r e a s on vi ol a t i on. Adva nc e PCS s ubm i t t e d wi th tha t m ot i on abi nde r of 4a c t i v i t i e s n o t w i t h i n t h e p e r s e i n v a l i d i t y c a t e g o r y, c o u rts e m p lo y th e ru le o f re a so n tes t. U n d e r th is t es t , pl ai nt i ffs have t he bur den of e s t abl i s hi ng t hat , under al l t he ci r cumst ance s , “t he cha l l enged act s ar e unr eas onabl y r es t r i ct i ve of c om pet i t i ve c o n d iti o n s” in th e re lev a n t m a rk e t. 2 4 8 F .3 d 1 3 1 , 1 3 9 (3 d C ir . 2 0 0 1 ) ( c ita tio n s o m itte d ). 12 e xhi bi t s of a l l e ge dl y

judi c i a l l y

not i c e abl e m a t e r i a l s . The
m at er ia ls incl ud ed thre e lengthy go vernm ent- spon sore d studies of the e ff ic ie ncy enhancing eff

ec ts of PB Ms, a s w el l a s A d v an ceP C S ’s o w n F o rm 1 0 -Kan do th er m aterials. I n an opi ni on da t e d March 2 , 2004, Judge Robr e no de ni e d Ad vanc e PC S’ s m ot i on , fi nd i ng that the Pl a i nt i ff s suff er ed anti tr

ust i nj ury and h ad anti tr

ust s tand ing. Th e dis tr ic t
c ourt furth er he l d tha t the a l l e ga t i ons of hor i z ont a l c ol l us i on
were su f f ic ient to al le ge bo th a p er se violat ion and to st at e a
c l a i m for r e s tr a i nt of tr a de unde r the r ul e of r e a s on ba s e d upon“ Ho r i z o n t a l c o l l u s i o n ” e x i s t s wh e r e c o mp e t i t o r s a t t h e s a me 5 m ar ket l evel agr ee t o fi x or cont r o l the p r i ces t hey w i l l char ge f o r th e ir re sp e c tiv e g o o d s o r se rv ice s. It is a p e r se u n re a so n a b le re s tr a in t o f

tr a d e u n d e r t h e S h e r m a n A c t. See In re F l at G l ass A nt i t r us tLi t ig. , 3 8 5 F .3 d 3 5 0 (3 d C ir . 2 0 0 4 ). A dvance PC S’ s act ion w as pur por t edl y t he r es ul t of t he 6 F ed era l T rad e C o m m issi o n ’s de cisi o n (m em o ri ali ze d in a l ett er) not t o i nves t i gat e a pr opos ed ac qui s i t i on of A dvance PC S by C a re m a rk , s ee n .1 , s upr a. 13 a l l e ge d pr i c e s uppr e s s i on. 5 On Ma r c h 16, 2004, Adva nc e PCS fi l e d an ans we r t o the
c om pl a i nt and m ove d t o r e c ons i de r the Mar c h 2, 2004 or de r

or to certif y it f o r in terlo cu to ry

ap p eal p u rsu an t t o 2 8 U .S .C . § 1292( b)
. On Apr i l , 9, 2004, the Pharm a c y Pl a i nt if f s an d the 6 Associ at i on Pl a i nt i ff

s fi l e d an o pp os i t i on t o that m ot i on . On May 14, 2004, Judge Robr e no de ni e d Adva nc e PCS’ s m ot i on. On May 17 , 200 4, A d v an ce PC S sub m itte d a re vise d corporat e dis cl osure form to reflec t t he fact that it had b ee n acq u iredin M arch 2 0 0 4 b y C arem ark
. See n .1 , su

p ra .14 O n Ju n e 2 1 , 2 0 0 4 , so m e ten m o n th s af ter th e P lain tif

f s’ comp la in t was file d (bu t before any disc ov er

y began), A d v an c e P C S f

ileda m o tio n to co m

p el arb itratio n in w h ich it
a s ke d the di s tr i c t

c o u rt to e nfor c e the ar

bi tr a t i on c l aus e i n the Pharm a c y Pr ovi de r Agr e e m e nt s and e nt e r an or de r c om pe l l i ng
ar bitr at ion o f all of th e P la inti ff s’ cl ai m s. In the a lt er

nati ve, Adva nc e PCS a s ke d for

a n or d e r c om pe l l i ng ar bi tr a t i on of the
c l a i m s of the Pharm a c y

Pl a i nt i ffs and s t ayi ng the c l a i m s of the A sso ciatio n P lain tif

f s p en d in g th e co m

p letio n o f arb itratio n . Plai ntiffs base d their

op po si ti on to the m otion to com pel on two di s t i nc t

gr ounds
. Fi r s t , the y

c ont e n d e d

t ha t Adva nc e PCS
w aiv edan y

rig h t to arb itrate b y

activ ely litig atin g th e P lain tif

f s’
c l a i m s for

t e n m onth s. Se c ond, the y c ont e nde d tha t

the
ar bitr at ion agre em ent was un enfo rc ea ble bec ause it

prec luded the m fr om pu r s ui ng s t a t

ut or y ant i tr us t r e m e di e s . Th e Pl a i nt i ff

s
a l s o c l a i m e d tha t

the y woul d not

be abl e t o af

f or d ar bi tr a t i on,15 pa rt ic u larl y

in li gh t of the prov is ion in the Ag re em ents that cost s and att orney s’ fees ar e to be paid by the pa rt y w h o lo se s th e arb itratio n . I n a Me m oran du m

O rd er en teredA u g u st 2 4 , 2 0 0 4 , J udge Robr e no gr ant e d Adva nc e PCS’ s m ot i on t o c om pe l ar bitr a t i on and st ay ed the d is tr ic t cou rt ac ti on . He fo un d that the Pharm ac y P lain tif f s h aden teredin to en f

o rceab le arb itratio n ag reem en ts that en c om

pa s s e d any

ant i tr us t c l a i m s , and tha t

Adva nc e PCS h adn o t w aiv edits rig h t to seekarb itratio n . O n S ep tem

b er 7 , 2 0 0 4 , th e P lain tif

f s f ileda m o tio n to
re consider

or, i n the a lt er

nati ve, for cer

ti ficati on of

an i nt e r l oc ut or

y a pp e a l pu r s uant

t o 2 8 U
. S. C. § 1 29 2( b)
. Pl a i nt i ff s
ur ge d th e d istr i c t

c ourt t o r e c ons i de r

i t s de c i s i on on the enfo rc ea b ilit

y of the arbitrati on agre em ent; al te rnat ivel y , they
re qu es te d that the distri ct court dis m is s th e c as e s o that they could f il e an appeal
. On June 17 , 200 5, Judg e Rob re no denied16 reco n sid eratio n an dcerti f icatio n an do rd eredth at th e case
re m a i n s t ay e d i n a c c or danc e wi th the Fe de r a l Ar bi tr a t i on Ac t ( “ FAA” ) , 9 U. S. C. § 3. H o w ev er , t h e P lain tif

f s d idn o t th ereaf

ter in itiate
ar bi tr a t i on pr oc e e di ngs . Adva nc e PCS c ont e nds tha t on Apr i l 7, 2006, the Pl a i nt i ffs fi l e d am ot i on be for e the Judi c i a l Pane l on Mul t i di s tr i c t

Li t i ga t i on ( “ MDL Pane l ” ) for tr ans fe r of thi s and
ce rt ai n o ther

ca se s und er

28 U.S.C. § 1 40 7 f

or coordinated p retrial p ro ceed in g s. T h e P lain tif f s d isp u te th is claim

an din sist that they did n ot file the m otion b efore the MD L P an el . They contend th at th e pla inti ff s i n the Bradyactio n , se e n .3 , su p ra , f iledth at m o tio n . I n any e vent , on May

19, 2006, the Pl a i nt i ffs fi l e d a
m ot io n to lift the s tay

and d is m is s the com

plai nt so that

they
c oul d pur s ue an a

ppe a l of the di s tr i c t

c ourt ’ s Augus t

24, 2004,
and June 17, 2005, or de r s . I n tha t m ot i on t o di s m i s s , the17 P lain tif f s rep resen ted th at th ey d id n o t in ten d to arb itrate t h eir cl ai m s but desi re d to o btai n app el late re view o f th e o rder s
co m p ellin g arb itratio n . A s w e n o tedat th e o u tset, t h is case w as tran sf erredto Judge Ful l a m

by the MDL Pane l
. Tha t

tr ans fe r oc c u rred on A u g u st 2 4 , 2 0 0 6 , b ef

o re Ju d g e R o b ren o ru ledo n th e P lain tif f s’
m o tio n to lif

t th e stay

an d d ism iss th eir co m

p lain t. In re Pharmac yBe ne f i t Manage r s Ant i tr us t

Li t i g. , 452 F
. Supp. 2d 1 3 5 2 (Ju d .P an .M u lt.L it. 2 0 0 6 ). O n A u g u s t 2 5 , 2 0 0 6 , Ju d g e R o b ren o tran sf erredth is
a c t i on t o Judge Ful l a m pur s ua nt t o the MDL Pane l ’ s Augus t 24, 20 06 tr ansfer

order. On Decem

ber 7, 20 0 6 , Ju dg e Fullam
conv ened a s tatus c on ference in the MDL proceedi ng s, wh ic h then incl ud ed th is ac ti on . At that c on ference , Jud ge Fu ll am he ar d ar gum e nt

on the Pl a i nt i ffs ’ m ot i on t o l i ft th e st ay and d ism iss th e co m

p lain t.T hat or der w as ent er ed on D ece m ber 19, 2006. 7 18 O n D e c e mb e r

1 8 , 2 0 0 6 , Ju d g e F u l l a m su a sp o n te si gn ed
an or de r and s upport i ng m e m or andum va c a t i ng Judge Robr e n o ’s Augus t

24, 2004, or de r

c om pe l l i ng ar bi tr a t i on and
s t ayi ng l i t i ga t i on. Judg e Ful l a m the n di s m i s s e d the the n- 7 p en d in g m o tio n to d ism iss th e co m p lain t as m o o t. In re Pharmac yBe ne f i t Mange r s Ant i tr us t

Li t i g. ( Be l l e v ue Dr ug Co.
v . Adv anc e

PCS) , 200 6 WL 3 75 97 12 (E.D. Pa. Dec. 18 , 200 6). In do ing so, Judg e Fullam explai ned that “ Judg e Rob re no ’s Orders com

pell ing arbitrati on were cl earl y approp riat e u nd er the Feder al Arbitr at ion A ct and the Co ng re ss ional p o li ci es
re flec te d in that s tatute .” Id . at *1. H o w ev er, Jud ge Fu ll am be l i e ve d tha t , i n or de r i ng ar bi tr a t i on, Judge Rob ren o “ di d not
ac tual ly deci de that

the is sues invo lved were arbitra ble, or even wh ether the ar

bitr at ion agre em ent rel ie d up on was e nf orce able ;19 he m e r e l y , i n a c c or danc e wi th the ge ne r a l p o licy of fa vor i ng
ar bi tr a t i on, r e qui r e d tha t

a l l i s s ue s be s ubm i t t e d i ni t i a l l y t o the
ar bitr at or fo r dec is ion.” Id
. No t i ng the “ a c t i on of the [M DL P an el] (w h ich clearly

assu m edth at th e stay

o r p ro ceed in g s d id
no t pre cl ud e c oo rdinat ed pretri al proceedi ng s) ,” Judg e Fullam
r e a s on e d t ha t he could there fo re “diver ge fromJudg e Rob re no ’s Or de r s t o the l i m i t e d e xt e nt of c ons i de r i ng whe the r any us e ful pu rpose wou ld be se rved in subm itti ng al l pre li m inar y dete rm inat ions to the arbitrator. ” Id
. Judge Ful l a m be l i e ve d:

“ the t a s k a s s i gne d t o m e a s tr ans fe r e e judge c an be s t be p erf o rm edb y ex p ed itin g t h e d ecisio n w h ich , I b eliev e, w o u ld
n ecessarily

h av e b een reach edb y

th e arb itrato r w ith resp ect to the proce du ra l a spec ts of this li ti gati on .” Id
. a t

*2. In d eci d i n g th e “p ro cedu ral asp ect o f th [ e] litig atio n ,” Judge Ful l a m

found tha t be c aus e the “ ar bi tr a t or m us t fol l ow the
r ul e of l aw, and m ay

onl y awa r d r e m e di e s pr ovi de d” i n theW e have j ur i s di ct i on pur s uant to Sect i ons 16( a) ( 1) ( A ) and 8 ( B ) of t he Feder al A r bi t r at i on A ct , 9 U
. S. C
. §§ 16( a) ( 1) ( A ) and (B ), w h ich p rov ide th at ap p ea ls m ay b e tak en fr o m o rde rs deny i ng m ot i ons t o compel ar bi t r at i on and deny i ng s t ay s of p ro c e e d in g s p e n d in g a rb itr a tio n . 20 a gr e e m e nt , the “ ar

bi tr a t or i s pr e c l ude d fr o mc ons i de r i ng the
ant i tr us t c l a i m s a s s e rt e d by pl a i nt i ff i n thi s l i t i ga ti on .” Id
. Th us, Jud ge Fu ll am

had “no diff

ic ulty in concluding ei ther that the part ie s never i ntended this ty pe of li ti gati on to be subm itte d to arb itratio n , o r th at th e A rb itratio n A g r e e m en t is
un enfo rc ea

ble bec ause it

violat es pu blic po li cy .” Id . at A d v an ceP C S th en f

iledth is ap p eal. 8 I I . DI SCUSSI ON Ad vancePCS m akes a nu m ber of ar gu m en ts . It
co n ten d s, in ter a lia , tha t

Judge F ul l a m ’ s or de r

va c a t i ng Judge Ro breno’s order c om

pell ing arbitrati on violat es the Feder al Ar bi tr a t i on Ac t

( “ FA A” ) ; that

the c l a i m s of

the Ph arm a cy21 P lain tif f s an dth e A sso ciatio n P lain tif f s are su b

j ect to
ar bitr at ion; an d th at

the arbitrati on cl ause s i n the Ph ar m ac y Pr ov i de r Ag r e e m e nt s ar e va l i d a nd e nf or c e abl e . Ho we ve r , we
n eed n o t ad d ress th e m erits o f an y o f th o se arg u m en ts b ecau se
we a gr e e wi th Adva nc e PCS tha t Judge Ful l a m ’ s or de r va c a t i ng Judge Robr e no ’s or de r s c om pe l l i ng ar bi tr a t i on c annot

s t and
un der the law o f the ca se do ctri ne. In A rizo n a v. C

a lifo rn ia , 4 6 0 U
. S
. 6 0 5 ( 1 9 8 3 ) , t he Supr e m e Court

not e d: Un li ke the m ore prec is e r equire m en ts of re s j u d icata, law o f th e case is an am o rp h o u s co n cep t. A s m o st co mm o n ly

d ef in ed , th e d o ctrin e p o sits that wh en a court deci des upo n a rule of law, that d e c i s i o n s h o u l dc o n t i n u e t o g o v e rn th e s a me issu es in sub seq u en t stag es in th e sam e case. Id
. a t 618 ( c i t at i ons om i t t e d)
. The “ [l ]a w of the c a s e r ul e s ha ve de ve l ope d ‘ t o m a i nta i n c ons i s t e nc y and a voi d r e c ons i de r a t i on of m a t t e r s onc e de c i de d dur i ng the c our s e of a s i ngl e c ont i nui ng22 lawsuit. ’” Cas e

yv . Plan n ed Par e nt

hood of Se

. Pa. , 14 F. 3d 848, 856 ( 3d Ci r . 1994) ( quot i ng 18 Char l e s A. W r i ght , Arthur R
. M iller, E d w ardC o o p er, F ed era l P ra ctice a n d

P ro ced u re § 4 4 7 8 at 7 8 8 (2 ded . 1 9 8 1 )). “The . . . d octr ine does not re stri ct a c ou rt ’s po wer but rat

her go v er ns it s e xerc is e of d is cr et ion.” Pu b. Inte rest Rese arch G r o u p o f N J , I n c . v . M a gn es i u m E l e k

tr on , 1 2 3 F. 3d 111, 116 (3d C ir . 1 99 7) (c it at ions om itte d). The Su prem e Cou rt has
ex p lain edth e sco p e o f

th is d iscretio n as f

o llo w s: A c ourt ha s the powe r t o r e vi s i t pr i or de c i s i ons of i t s own o r o f a c oor di na t e c ourt i n any c i r c um s t anc e , a l though a s ar ul e c ourt s s houl d be loathe to do so in the a

bsence of extr ao rdinar

y c i rcum s t anc e s s uc h a s whe r e the i ni t i a l de c i s i on w as clearly

erro n eo u s an d w o u ld m ak e a m an if est inju st ic e. Chr i s t i ans on v . Col t

I ndus

. Ope rat i ng Cor

p. , 486 U. S. 800, 816 ( 1988) ( c i t i ng A rizo n a v. C a lifo rn ia , 4 6 0 U .S . at 6 1 8 n .8 ). I n a ddi t i on t o the e xtr a o rd in ary c i r c um s t anc e not e d by23 the Supr e m e Court

i n Chr i s t i ans on , we have we “ r e c ognize d
se ve r a l ‘ e xtr a or di nary

c i r c um s t anc e s ’ that

warr ant ac ou rt ’s
r e c ons i de r a t i on o f a n i s s ue de c i de d e ar l i e r i n the c our s e of li ti gati on .” Publ i c I

nt e r es t Res e ar c h Gr oup , 1 2 3 F. 3d at 116- 17. I n Publ i c I

nt e r es t Res e ar c h Gr oup , we e xpl a i n e d that the l aw of the c a s e doc tr i ne doe s not pr e c l ude a co u rt

fr om
re visi ti ng it s own deci si on s or o ne of a coo rdinat e c ou rt wh er e (1) new evidence is avai la ble or ( 2) a s up er

vening new law has been anno un ce d. 12 3 F .3d a t 11 7 (ci tati on s om itte d). I n
a ddi t i on, we ha ve he l d the “ l aw of the c a s e doc trin e d o e s not prec lud e a tr ia l jud ge fromcl ar ifying o r c orre ct ing an ear li er , am bigu ou s r uling.” Sw ie tlow ic h v. Cou nty of Bucks , 610 F. 2d 11 57 , 11 64 ( 3d Ci r . 19 79 )
. W e have a l s o he l d that “ atr ia l j u d g e h as th e d iscretio n to reco n sid er an issu e an dsh o u ld
e xe r c i s e tha t

di s c r e t i on wh en ev er

i t a ppe ar s tha t

apr e vi ous ruli ng , e ven if u nam

bigu ou s, m ight le ad to an un ju st re sult .” Id
.24 ( c i t i n g M

esse nge r v . Ande r

s on , 225 U.S. 43 6 (19 12 ))
. Ho wever, we have als o b ee n car ef u l to ca ution that i f a “tri al j u d g e d ecid es to ch an g e o r ex p lain an earlier ru lin g , h e sh o u ld
s t a t e hi s r e a s ons on the r e c or d” and a l s o “ t a ke a ppr opr i a t e s t e ps
s o t ha t th e p art i e s ar e n o t

p r e j u d i c e db y

r e l i an c e o n th e p r i or ruli ng .” Id
. Judg e Fu ll am did not re ly on any of the r ec og nize d
e xc e pt i ons t o the l aw of the c a s e d o c tr i ne i n va c a t i ng Judge Robr e no’ s or de r

c om pe l l i ng ar bi tr a t i on. He a l s o fa i l e d t o fi nd any extr aordinar

y ci rc um st ance that wo uld have justi fied
v ac a tin g Ju d g e R o b ren o ’s o rd er co m p ellin g arb itratio n . Mo re ov er , Jud ge Fu ll am

held that Judg e Ro breno’s order was

“ c l e ar l y a ppr opr i a t e ” unde r the FAA, 2006 W L 3759712, a t *1, and it i s c le ar

that Judg e Fullam

m is re ad Judg e Rob re no ’s opi ni on i n s upport

of the Augus t

24, 2004, or de r

c om pe l l i ng
ar bi tr a t i on. As s t a t e d above , Judge Ful l a m be l i e ve d tha t

Judge25 Robr e no: d idn o t actu ally d ecid e th at th e issu es in v o lv edin the pre se nt ca se were ar

bitr able , or e ven w hether the arbitrati on agre em ent r el ie d u p o n w as e nfor c e abl e ; he m e r e l y , i n a c c or danc e w i th the general po li cy

of favo ri ng ar

bitr at ion, re qu ir ed t ha t a l l s u c h i s s u e s b e s ub m i t t e di n i t i a l l y t o the ar bi tr a t or for de c i s i on. Id
. Tha t

i s s i m pl y not a c c ur a t e . I n c om

pe l l i ng a r bi tr a t i on, Judg e Rob re no expres sl y st at ed: “ it

is un m is takably

cl ear that the i ns t ant

di s put e fa l l s wi thi n the s c ope of the Ar bi tr a t i on A g reem en t,” A p p . A 2 4 5 , an d h e ex p ressly f o u n d “th at th ere is
ava l i d a gr e e m e nt

t o ar bi tr a t e be twe e n the pa rt i e s . ” App. A268. I n fa c t , the “ Re m e di e s ” s e c t i on of Judge Robr e no’ s Augus t 20, 2 0 0 4 , M em o ran du m

b e g i n s : “[ f

] in d in g th at th ere is a v alid
a gr e e m e nt

t o a r bi tr a t e be twe e n th e pa rt i e s a nd tha t the i ns t ant d isp u te f alls w ith in th e sco p e o f

t h e A rb itratio n A g reem en t . .

. and tha t the Ar

bi tr a t i on Agr e e m e nt i s not unc ons c i onabl e , the Co urt w ill grant the .
. . m otion to com pel arbitrati on and stay26 the proce edings pend ing the ou tc om e of arbit rati on .” Id
. Thus , Judge Robr e no c oul d not ha ve be e n c l e ar e r , and Ju d g e F u llam ’s read in g o f Ju d g e R o b ren o ’s M emo r a n d u m is cl earl y inconsis te nt with Judg e R o b re no ’s find ings and legal
co n clu sio n s. Judg e Fullam

was nevert

hele ss conv inced that

he had the author i ty

t o va c a t e Judge Robr e no’ s or de r c om pe l l i ng
ar bi tr a t i on “ notwi ths t andi ng ‘ l aw of the c a s e ’ pr i nc i pl e s . ” 2006 WL 37 59 71 2, at

*1 . Jud ge Fu ll am

explai ned: “As a general p ro p o sitio n , a tran s f

eree j u d g e u n d er th e M u ltid istrict statu te
m ay va c a t e or

m odi fy an y or de r of atr ans fe r or

c ourt be ar i ng up on pretri al m atte rs .” Id
. Howe ve r , we c an fi nd nothi ng i n the te xt of 28 U.S.C. § 1 40 7, the M u lt id is tr ic t l it igat ion transfer st at ute, that authoriz es a tr ansfer ee ju dg e to vaca te or m od ify anT hat s t at ute pr ov i des: 9 ( a) W h en civil acti o n s inv o lving o n e o r m o re comm on ques t i ons of fact ar e pendi ng i n di ffe r ent di s t r i ct s , s uch ac t i ons m aybe t r ans fe rred t o any di s t r i ct for coor di nat ed or cons ol i dat ed pr et r i al pr ocee di ngs . Such t r ans fer s s hal l be m ade byt he j udi ci al pa n e l o n mul t i d i s t r i c t l i t i gat i on aut hor i zed by t hi s s ect i on u p o n i t s det er m i nat i on t hat t r ans fer s for s uch pr ocee di ngs w i l l be for t he c o n v e n ien c e o f

p a rties a n d w it n e s se s a n d w ill pr om ot e t he jus t and ef fi ci ent conduct of s uch act i ons . E ach a ct i on s o t r ans fer red sha l l be r emanded by t he pane l at or befor e t he conc l us i on o f s u c h p r e t r i a l p r o c e e d i n g s t o t h e d i s t r i ct fr om w hi ch i t w as t r ans fer r ed unl es s i t s hal l have be en p re v io u s ly ter m in a ted : P r ovi ded, how eve r , T hat t h e p a n e l m a y s e p a r a t e a n y c l a i m , c r o s s - c l a i m, count er - cl ai m , or t hi r d- par t y cl aim and r emand any of s uch cl ai m s before t he r emai nder of t he act i on i s r emanded. ( b) Such coor di nat ed or cons ol i dat ed pr et r i al pr ocee di ngs s hal l be conduc t ed b y a j udge or j udges t o w hom s uch act i ons ar e ass i gned by t he ju d icia l p a n e l o n m u lti d ist r ic t li tig a tio n . F o r th is pur pos e, upon r eques t of t he panel , a ci r cui t j udge

27 order of a tra nsfe r o r j u d g e . 9or a di s t r i ct j udge m ay be des i gnat ed and a s s i gned t empora r i l y for s er vi ce i n t he t r ans fer ee di s t r i ct by t he C hi ef J us t i ce of t he U ni t ed S t at es or t he chi ef ju d g e o f th e c irc u it, a s m a y b e re q u ire d , in acc or dance w i t h t he pr ovi s i ons of cha pt er 13 of t hi s t i t l e. W i t h t he cons ent of t he t r ans fer ee di s t r i ct cour t , s uch act i ons m ay be as s i gned by t he panel t o a j udge or j udges of su ch di s t r i ct
. T he jud g e o r j u d g es to w h o m su ch ac ti o n s are as s i gned, t he mem ber s of t he j udi ci al p an el on m ul t i di s t r i ct l i t i gat i on, and ot her ci r cui t and di s t r i ct j udges des i gnat ed w hen nee ded by t he panel m ay exer ci s e t he pow er s of a di s t r i ct j udge i n any di s tr ict for t he pur pos e of c onduct i ng pr et r i al d epos i t i ons i n s uch coor di nat ed or con sol i dated pret ri al proceed i ng s. ( c) Pr ocee di ngs for t he t r ans fer of an a ct i on under this section m ay b e initi ated b y -- (i) t he j udic i al panel on m u ltid istric t li tig a tio n u p o n its ow n i ni t i at i ve, or (ii) m ot i on fi l ed w i t h t he pane l by a p art y i n any act i on i n w hi ch

28t r ans f e r f o r c oor di nat ed or cons ol i dat ed pre t r i al pr ocee di ngs under t hi s s ect i on m ay be appr opr i at e. A copyof s uch m ot i on sh al l be fi l ed i n t he di s t r i ct cour t i n w hi ch t he movi ng par t y ' s act i on i s pendi ng.
T h e p a n e l s h a ll g iv e n o tice to th e p a rties in a ll act i ons i n w hi ch t r ans fer s for coor di n ated or co n so li d ated p retr ia l p ro c e e d ing s are cont empl at ed, and s uch not i ce s hal l s peci fy t he t i me a n d p l a c e o f

a n y h e a r i n g t o d e t e r mi ne w het her s uch t r ans fer s hal l be m ade. O r der s of t he panel t o s et a hea r i ng and ot h er or der s of t he panel i s s ued pr i or t o t he or der ei t her di r ect i ng or deny i ng t r ans fer s hal l be fi l ed i n t he off i ce of t he cl er k of t he di s t r i ct co u r t i n w hi ch a t r ans fer h e a r i n g i s t o b e o r h a s b e e n h e l d
. T h e p a n e l 's or der o f t r a n s f e r s h a l l b e b a s e d u p o n a r e c o r d of s uch hea r i ng at w h ic h m at er i al evi dence m ay be offe r ed by any par t y t o an ac t i on p en d i ng i n any di s t r i ct t hat w oul d be affec t ed by t he pr ocee di ngs under t hi s s ect i on, and s hal l be s uppor t ed by fi ndi ngs of fa ct and con cl us i ons of l aw bas ed upon s uch r ecor d
. O rder s of t r ans fer and s uch ot her or der s as t he pane l m ay m ake t her eaf t er s hal l be fi l ed i n t he off i ce of t he cl er k of t he 29di s t r i ct cour t of t he t r ans fer ee di s t r i ct and s hal l be eff ect i ve w hen t hus fi led. T he cl er k of t he tra n sf e re e d istric t co u rt sh a ll fo rth w ith tra n sm it a c e r ti f ie d c o p y o f

th e p a n e l' s o rd e r to tra n sf e r to t he cl er k of t he di s t r i ct cour t fr om w hi ch t he act i on i s bei ng t r ans fer red
. A n or der deny i ng tra n sfer shal l be fil ed in each d i st ri ct w herein t her e i s a ca s e pending i n w hi ch t he mot i on for t r ans fer has been made. ( d) T he j udi ci al panel on m ult i di s t r i ct l i t i gat i on s hal l cons i s t of s even c i r cui t and di s t r i ct j udges des i gnat ed fr om t i m e t o t i m e by t he C hi ef J us t i ce of t he U n i t ed St at es , no t w o of w hom s hal l be fr om t he s ame ci r cui t
. T he conc ur r ence of four m ember s s h a l l b e n e c e s s a r y t o a n y a c t i o n b y t he p a n e l. ( e) N o pr ocee di ngs for r evi ew of any or der of t he p an el m ay b e p e rm itted ex ce p t by ex tr ao rdin ary w r i t pur s uant t o t he pr ovi s i ons of t i t l e 28, s ect i on 1651, U ni t ed St at es C o d e. Pet i t i ons for an ext r aor di nar y w r i t t o r evi ew an or der of t he pane l t o set a t r ans fer hear i ng and ot her or der s of t he panel i s s ued pr i or t o t he or der ei t her di r ect i ng or deny i ng t r ans fer s hal l be fi l ed onl y i n t he cour t of a p p e a ls h a v in g ju risd ictio n o v e r th e d istric t in

30w hi ch a he aring i s t o be or has been he l d. Pet i t i ons for an ext r aor di nar y w r i t t o r evi ew an or der t o t r ans fer or or ders su bs equent t o t r ans fer s hall b e fi l ed onl y i n t he cour t of appe al s havi ng juri sd ict ion o v er the tr an sfe re e d ist ri ct. T h ere s hal l b e n o a p p e a l o r r e v i e w of a n o r d e r o f

t he panel deny ing a m ot i on t o t r ans fer for con sol i dated or coordi nated proceed i ng s. (f) T he pane l m ay pr es cr i be r ul es for t he conduc t of i t s bus i nes s not i ncons i s t ent w i t h A ct s of C o n g re ss a n d th e F e d e ra l R u les o f C iv il Pr ocedur e. ( g) N ot hi ng i n t hi s s ect i on s hal l appl y to any act i on i n w hi ch t he U ni t ed St at es i s a compl ai nant ari si ng un der t he an t i t rust law s. “A nti t rust l aw s” as us ed her ei n i ncl ude t hos e act s r efe r r ed t o i n t he A c t o f O c to b e r 1 5 , 1 9 1 4 , as a m e n d e d (3 8 S tat. 730; 15 U
. S. C
. 12) , and al s o inclu de t he A ct of J une 19, 1936 ( 49 St at
. 1526; 15 U
. S. C
. 13, 13a, and 13b) and t he A ct of Sept ember 26, 191 4 , as adde d M ar ch 21, 1938 ( 52 St at
. 116, 117; 15 U
. S. C
. 56) ; but s hal l not i ncl ude s ect i on 4A of t he A ct of O ct o b er 1 5 , 1914, as added J ul y 7, 1955 (69 S tat
. 2 8 2 ; 15 U
. S
. C
. 1 5 a).

31( h) N ot w i t hs t andi ng t he pr ov isi ons of s ect i on 1404 or s ubs ect i on ( f) of t hi s s ect i on, t he j udi ci al p a n e l o n m u lti d istric t li tig a tio n m a y c o n so lid a te and transf

er w i t h or w i t hout t he cons ent of t he p art i es, for bo t h p ret ri al pu rposes and fo r t ria l, any act i on br ought under sect i on 4C of t he C layt o n A c t. 2 8 U .S .C . § 1 4 0 7
. 32 Mo re ov er , i f Jud ge Fu llam’s in te rpre tati on of the s tatute were
ac cura te , l it igat ion cou ld begin anew w it h eac h M DL tr ansfer
. Sect ion 1 40 7 d oes a ll ow the J oint Panel on M ulti d is tr ic t Li t i ga t i on t o “ pr e s c r i be r

ul e s for the c onduc t

of i t s bus i ne s s not i nc ons i s t e nt

wi th Ac t s of Congr e s s and the Fe d eral R u l e s of C iv il P ro cedu re,” 2 8 U .S .C . § 1 4 0 7 (f ), b u t th ere is n o th in g in the r ul e s a dopt e d by

the J oi nt Pane l on Mul t i di s tr i c t

Li t i ga t i on that authoriz es a transfere e j ud ge to vaca te or m od ify the order
o f a tran sf ero r j u d g e, se e 19 9 F. R. D. 42 5 ( 20 01 )
. Mo r e ov e r , we do not be l i e ve tha t

Congr e s s in ten d e d tha t

a“ Re t urn t o Go”33 cardw o u ldb e d ealt to p arties in v o lv edin M D L tran sf ers. Ju d g e F u llam ’s b elief

th at h e h ad th e au th o rity to v acate
or m od i f y an y o r d e r o f atr an s f e r o r c o u rt w a s b a s e do n two
so u rces, viz ., the Manu al fo r Co m plex Liti gati on (“ MC L-4th”), § 20. 13 2 (4 th e d. 2004) and In re U p jo h n Co . A n tib io tic Cl e oc i n Pr ods

. Li ab. Li t i

g. , 644 F. 2d 114 ( 6th Ci r . 1981)
. The M C L -4 th , § 2 0 .1 3 2 d o es state, in ter a lia , that: “The tr ansfer ee j u d g e m ay v acate or m o d if y an y o rd er o f a tran s f

e r o rco u rt, i nc l udi ng pr ot e c t i ve or de r s ; unl e s s a l t e r e d, howe ve r , the tr ansfer or court’ s order s r emai n in effect. ” How ever , that
c l e ar l y doe s not ha ve th e for c e of l aw a nd c an not unde rm i ne S up rem e C o u rt p reced en t o r th e d ecisio n s o f th is co u rt. See MCL- 4th, I ntr oduc t i on ( a dvi s i ng tha t the MCL- 4th “ i s not , a nd
s houl d not

be c i t e d a s , author i t a t i v e lega l or a dm i ni s tr a t i ve p o licy ”). I nt e r e s t i ngl y , the c i t e d pr ovi s i on i n the MCL- 4th s t a t i ngT he cour t i n U pj ohn , defined the i ssue befo re i t as fol l ow s: 10 “The i s s ue i n t hi s appea l i s t he e x te nt t o w hi ch a t r ans fer ee ju d g e in m u ltid is tr ic t liti g a tio n p r o c e e d in g s u n d e r 2 8 U .S .C . § 1407 m ay vaca t e and modi fy pr ot ect i ve or der s ear l i er ent er ed by tr an sfe ror c o u rt s, w h ere tho se o rde rs en join the u se o f d isco v ery m at er i al s obt ai ned t hr ough t he fe der al l i ti g at i on by ot her s not p a rt ie s to th e m u ltid is tr ic t liti g a tio n .” 6 6 4 F .2 d a t 1 1 5
. 34 that t he tr ans fe r e e c ou rt

m ay va c a t e or

m od i fy any or de r of a tr ans fe r or c ourt i s ba s e d on I

n r e Upj ohn , su

p ra . See MCL- 4th, § 2 0 .1 3 2 n .6 5 9
. H o w ev er, Upj ohn on ly held that a transfere e court c an m od ify

a transfe ro r c ou rt ’s protec ti ve order when
ne c e s s ary t o “ harm oni z e a c t i vi ty

r e l a t i ng t o di s c o v ery . ” 664 F .2 d at 1 1 8 . T h eref

o re, Upj ohn onl y

a ppl i e s t o pr ot e c t i ve
o rd ers th at are req u iredto “h arm o n ize . . . d isco v ery .” Upj ohn 10 doe s not c arve an e xc e pt i on out of the l aw of the c a s e doc tr i ne th at g o b b les up th e lim itatio n s in h eren t in th at d o ctrin e. T h u s, Upj ohn doe s not

s upport ac l a i m tha t atr ans fe r e e c ourt

ha s the p o w e r t o v a c a t e o r

m o d i f y anyor de r

of atr ans fe r or

c ou rt
. On35 the c on tr ar

y , the Upj ohn c ourt

wa s ve ry

c aref ul t o l i m i t

the reach o f its d iscu ssio n : [I]t cannot be succ es sfully urged that a tr ansfer ee co u rt is w it h o u t p o w er to m o d if y o r ev en v acate a pr ot ectiv e o rd er o n ce en t e r e d wh en circu m sta n ces so d icta te . Cl e ar l y , the po we r of a d i s t r i c t j u d g e i n c l u d e s th e p o w e r t o m o d i f

y a p ro tectiv e o rd er. . . .

************** T h e r e f o r e , i f th e j u d i c i a l p o w e r

t o m o d i f

y a p ro tectiv e o rd er ex ists, i t mus t be c apab le of being exerci

se d o n n ee d , and i n c a s e s whe r e the pr oc e e di ngs ha ve be e n tr ans fe rr e d, i t m us t fol l ow that such po wer m

ust t hen p as s t o t he tr ansfer ee j u d g e. It can n o t ex ist i n a v acu u m . T h is c onc l us i on i s but tr e s s e d by the e xpr e s s l angua ge in the s tatute conf

er ri ng al l po wers of the dis tr ic t ju dg e upo n the tr ansfer ee ju dg e.
Id . ( em ph as is ad d ed ). Un der Upj ohn , the powe r of the tr ansfer or court “pass [es] to the transfere e j ud ge.” Th er efore, i f th e tr a n s f

e r o rj u d g e h a s th e p o w e r t o v a c a t e o r

m o d i f y a pr ot e c t i ve or de r

whe n ne e de d, c omm ons e ns e c om pe l s the36 co n clu sio n th at th e tran sf

eree cou rt m

u st also h av e th e p o w er to
vaca te or m od ify

a prote ct ive o rd er of

a transferor court when
ne c e s s ary and a ppr opr i a t e . Conc om i t ant l y , abs e nt s uc h ne e d or p r o p r i e ty ( i. e. , “e xtra ordinary ci rc um st ance s” ), the trans f eree court s im ply do es no t have the po wer t o v ac at e o r m od ify an exis ti ng protec ti ve order. Accordingly , i f the tr ansfer or court i s bou nd by the l aw of the c as e doctr ine ( subj ec t t o the exce ptions disc usse d abo ve), the tr ans fe r e e c ourt

m us t be s i m i l ar l y

bound. Noth ing i n § 1407 s ugge s t s tha t

Congr e s s i nt e nde d t o c onfe r m or e powe r

on th e transfere e c ou rt

than the transferor court would h ave had ab sen t th e tran sf

er u n d er 2 0 U .S .C . § 1 4 0 7
. Judge Ful l a m

the r e for e i nt e r

pr e t e d Upj ohn fa r

t oo l i be r a l l y i n s t a t i ng: “ As age ne r a l pr opos i t i on, atr ans fe r e e judge
u n d e r th e M u l t i d i s tr i c t

s t a t u t e m ay v a c a t e o r

m o d i f y anyorder of a transferor court beari ng up on pretri al m atte rs . 200 6 WL37 3759712, a t

*1 ( c i ti ng I

n r e Upj ohn , su

p ra ; M C L -4 th , § 20 .312 ). On the contrary , given the havo c and p otenti al delay
a nd c on f u s i o n th a t

s u c h ab r o a dp r o p o s i t i o n c o u l dv i s i t on part i e s i nvol ve d i n m

ul t i di s tr i c t

l i tig ation, i t

i s not s ur pr i s i ng that the Upj ohn c ourt

c aut i one d: “ The r

ul e of th e law of the case . . . is p articu larly

ap p licab le to m

u l t i d istrict litig atio n in whi c h the pr esenc e of al ar ge num be r of di ve r s e part i e s m i ght
o th erw ise resu lt in co n stan t relitig atio n o f th e sam e leg al issu e.” 66 4 F .2d at 119 (e m

ph as is added). I I I . CONCLUSI ON Beca use Jud ge Fu ll am ’s order

va c at i ng Judg e Rob re no ’s
o rd er co m

p ellin g a rb i tratio n v io latedth e law o f th e case d o ctrin e, w e w ill v acate J u d g e F u llam ’s o rd er an drem an dw ith di r e c t i ons to rei ns t a t e the or de r c om pe l l i ng ar

bi tr a t i on and
s t ayi ng thi s c a s e pe ndi ng ar bi tr a t i on.