Opinion ID: 788583
Heading Depth: 2
Heading Rank: 2

Heading: Authority to Remand

Text: 18 We review de novo whether 28 U.S.C. § 1407, the multidistrict litigation statute, prohibits a district court from issuing a remand order in contravention of a potential transferee court's earlier jurisdictional ruling. See Resolution Trust Corp. v. Gallagher, 10 F.3d 416, 418 (7th Cir.1993) (questions of statutory construction are subject to de novo review). Section 1407 provides, in part: 19 (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.... 20 (b) Such coordinated or consolidated pretrial proceedings shall be conducted by a judge or judges to whom such actions are assigned by the judicial panel on multidistrict litigation.... 21 28 U.S.C. § 1407. Under the rules of procedure adopted by the JPML, see 199 F.R.D. 425 (2001), upon learning of a potential tag-along action, an order may be entered by the Clerk of the [JPML] transferring the action to the previously designated transferee district court. JPML Rule 7.4(a). The Clerk of the [JPML] shall serve this order on each party to the litigation but, in order to afford all parties the opportunity to oppose transfer, shall not send the order to the clerk of the transferee district court for fifteen days from the entry thereof. Id. If there is no opposition to the transfer in response to the conditional transfer order, the clerk of the JPML will transmit a final transfer order to the transferee court. See JPML Rule 7.4(d). Conditional transfer orders do not become effective unless and until they are filed with the clerk of the transferee district court. JPML Rule 7.4(e). The pendency of a conditional transfer order does not affect or suspend orders and pretrial proceedings in the district court in which the action is pending and does not in any way limit the pretrial jurisdiction of that court. JPML Rule 1.5. 22 In this case, the district court remanded after the JPML issued a conditional transfer order but before transmittal of a final transfer order to the previously designated transferee, Judge Cote in the Southern District of New York. Therefore, the transfer had not become effective and the conditional order did not in any way limit the pretrial jurisdiction of the district court. JPML Rules 1.5, 7.4(e). Under the JPML rules of procedure, the district court did not exceed its authority in issuing the remand order. At oral argument, appellants acknowledged that they cannot prevail in this appeal without showing that JPML Rule 1.5 is invalid. They have attempted to do so by arguing that the rule conflicts with the text, structure, and purpose of § 1407. 23 Appellants' textual argument for invalidating Rule 1.5 is based on the language in the statute providing that consolidated pretrial proceedings shall be conducted by the transferee judge. 28 U.S.C. § 1407(b). Appellants contend that the word shall signals an obligation of the transferee court and deprives other courts of the authority to interfere with the transferee court's actions: given the scope of the transferee court's authority over pretrial proceedings, it follows inevitably that once a transferee court has been designated, potential transferor courts — such as the district court below — do not enjoy the latitude to issue decisions contrary to the rulings of the transferee court. We disagree. Subsection (b) provides that the transferee judge shall conduct consolidated pretrial proceedings, but subsection (a) states that actions must be transferred, not merely designated, for consolidated pretrial proceedings to be conducted. Thus, though the statute identifies a duty of the transferee court after an action has been transferred, it does not suggest, even implicitly, that the authority of either court is affected before transfer by the mere designation of a transferee court. Consistent with this, Rule 1.5 states that the authority of the potential transferor court is not limited in any way prior to actual transfer. There is no textual conflict between § 1407 and Rule 1.5 that would support striking the latter or finding that the district court exceeded its authority in this case. 24 Appellants' structural argument for invalidating Rule 1.5 flows from their observation that § 1407, implicitly, and the rules, explicitly, contemplate tag-along actions that are brought to the JPML's attention for transfer after a multidistrict litigation has already been assigned to a transferee court. From this, appellants conclude that the command that pretrial proceedings `shall' be before the designated transferee court affects not only cases transferred, but also those waiting to be transferred. Appellants contend that the contrary interpretation leads to absurd results because it would allow potential transferor courts to issue rulings discordant with those of the transferee court, which clearly undermines the stated purposes of the multidistrict litigation statute. 25 We find nothing absurd in district courts individually evaluating their own jurisdiction. Furthermore, Congress has indicated a preference for remands based on such individualized jurisdictional evaluations and a tolerance for inconsistency. As we have explained, 28 U.S.C. § 1447(d) bars appellate review of a remand order based on a district court's determination that it lacks subject matter jurisdiction. See Baker v. Kingsley, 387 F.3d 649, 653-54 (7th Cir.2004). This creates a one-bite-at-the-apple scheme, under which inconsistent jurisdictional decisions by district courts cannot be brought in line through the appellate process. Adkins v. Ill. Cent. R.R. Co., 326 F.3d 828, 832 (7th Cir.2003). Even clear errors in a district court's jurisdictional analysis may not be corrected by the courts of appeals if the district court thought that it lacked subject matter jurisdiction. See Baker, 387 F.3d at 655. Section 1447(d) makes clear that errors in favor of remand which yield inconsistent holdings on subject matter jurisdiction must be tolerated. See id. If the courts of appeals have no power to bring consistency to these remand orders, there is no reason why a sister district court, in a different circuit, should have this power. After a transfer takes place under § 1407, the transferee court has authority to issue consistent jurisdictional rulings in all of the transferred cases before it. Before the transfer is effective, however, the potential transferee court wields no such power over individual, unconsolidated cases. 26 Finally, appellants' statutory purpose argument for invalidating Rule 1.5 relies on § 1407's goal of centralizing civil litigation involving one or more common questions of fact that are pending in different districts. 28 U.S.C. § 1407(a). The JPML is empowered to effectuate this goal by transferring pending actions upon determining that such transfers will be to the convenience of parties and witnesses and will promote the just and efficient conduct of such actions. Id. Appellants argue that the district court's order issued during the pendency of the transfer process undermines the purposes of the statute, namely, promotion of efficient litigation and avoidance of inconsistent contemporaneous rulings in like cases. 27 Undoubtedly, efficiency and consistency are goals of § 1407. It does not follow from this premise, however, that any rule that limits efficiency or allows inconsistency conflicts with the statute and may not stand. As appellants acknowledge, among the statute's stated goals are the convenience of parties and witnesses and the just ... conduct of such actions. § 1407(a). To this end, the JPML rules provide for a conditional transfer period in order to afford all parties the opportunity to oppose transfer. JPML Rule 7.4(a). Appellants do not, and cannot, suggest that the existence of this pre-transfer interim conflicts with the purposes of § 1407. 28 We need not decide if a district court ever exceeds its authority in acting during this period. We are satisfied, however, that it does not do so when it rules on its own jurisdiction. This, after all, is a fundamental obligation of all courts of limited jurisdiction. See Hay v. Ind. State Bd. of Tax Comm'rs, 312 F.3d 876, 878 (7th Cir.2002). Though some district courts stay proceedings during the interim following a conditional transfer order, see, e.g., Bd. of Trs. of the Teachers' Ret. Sys. of the State of Ill. v. WorldCom, Inc., 244 F.Supp.2d 900 (N.D.Ill.2002), this is not required where the court concludes that it lacks subject matter jurisdiction. We will not require a district court that believes that it lacks subject matter jurisdiction over a case to facilitate a transfer under § 1407, a statute that does not itself confer jurisdiction. Rule 1.5, as applied in this case, does not conflict with the text, structure, or purpose of § 1407, and the district court did not exceed its authority in issuing a remand order.