Copyright 1999 Federal Document Clearing House, Inc.
Federal Document Clearing House Congressional Testimony
June 16, 1999
SECTION: CAPITOL HILL HEARING TESTIMONY
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HEADLINE:
TESTIMONY June 16, 1999 JOHN F. NANGLE SENIOR JUDGE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF MISSOURI HOUSE JUDICIARY COURTS AND
INTELLECTUAL PROPERTY FEDERAL COURT IMPROVEMENT MULTIDISTRICT JURISDICTION
BODY:
PREPARED STATEMENT OF JUDGE JOHN F. NANGLE,
CHAIRMAN, JUDICIAL PANEL ON MULTIDISTRICT LITIGATION, ON H.R. 2112 BEFORE THE
SUBCOMMITTEE ON COURTS AND INTELLECTUAL PROPERTY COMMITTEE ON THE JUDICIARY U.S.
HOUSE OF REPRESENTATIVES JUNE 16, 1999 INTRODUCTION My name is John F. Nangle. I
am a senior judge of the United States District Court for the Eastern District
of Missouri, although I transferred my duty station to Savannah, Georgia, almost
nine years ago. I am appearing here today as the Chairman of the Judicial Panel
on Multidistrict Litigation, composed of six other federal judges besides myself
-- William B. Enright (S.D. California), Clarence A. Brimmer (D. Wyoming), John
F. Grady (N.D. Illinois), Barefoot Sanders (N.D. Texas), Louis C. Bechtle (E.D.
Pennsylvania) and John F. Keenan (S.D. New York). On behalf of the seven of us,
I would like to thank the Subcommittee for its invitation to appear and testify
today. SECTION 2 OF H.R. 2112 -- TRANSFER FOR TRIAL OF MULTIDISTRICT LITIGATION
PREVIOUSLY TRANSFERRED FOR PRETRIAL Section 1407 of Tile 28 should be amended to
allow a transferee judge to retain cases for trial or transfer those cases to
another district for trial, as provided by Section 2 of H.R. 2112 and approved
by the Judicial Conference of the United States in September 1998. Section
1407(a) authorizes the Judicial Panel on Multidistrict Litigation to transfer
related cases, pending in multiple federal judicial districts, to a single
district for coordinated or consolidated pretrial proceedings, upon the Panel's
determination that centralizing those cases will serve the convenience of the
parties and witnesses and promote the just and efficient conduct of the cases.
The transferee judge, accordingly, becomes the federal judicial expert regarding
the cases as a result of supervising the day-to- day pretrial proceedings and
thereby becoming intimately familiar with the entire docket's dynamics and
nuances, including the underlying facts, laws, lawyers' tactics, and the
realistic settlement, judgment and attorneys' fee values. Section 1407(a) also
requires the Panel to remand each transferred case to its original district at
or before the conclusion of the coordinated or consolidated pretrial
proceedings, unless the case is previously terminated in the transferee court.
Nevertheless, since enactment of 1407 thirty years ago transferee judges were
authorized by circuit and district court case law to transfer those cases to
their own district or another district for trial under 28 U.S.C. 1404. The
Supreme Court reversed that practice in Lexecon Inc. v. Milberg Weiss, 523 U.S.
26 (1998), because of the language of 1407, and observed that Congress properly
could resolve the issue. As of September 30, 1998, nearly 141,000 cases had been
included in 1407 proceedings. Approximately 140 transferee judges, as of
February 1999, were supervising about 160 groups of multidistrict cases, each
group composed of various numbers of cases, some totalling in the hundreds,
thousands or tens of thousands, in varying stages of development. This
multidistrict litigation entails significant national legal matters, such as
asbestos, silicone gel breast implants, diet drugs like fen-phen, hemophiliac
blood products, Norplant contraceptive and orthopedic bone screw products
liability litigation; all major air crashes including TWA Flight 800 off Long
Island, Secretary of Commerce Ron Brown in Croatia, ValuJet in the Florida
Everglades and recently Swiss Air near Nova Scotia; sales practices of several
insurance companies; billing by health care providers; antitrust allegations in
the markets for brand-name prescription drugs, compact discs, contact lenses,
corn sweeteners, explosives, tissues, toys and oil; securities laws claims
involving NASDAQ; notices in the sweepstakes business; various patents; and
employment practices. Often the transferee judge and the parties have focused on
a consolidated trial in the transferee district on the common liability issues,
such as whether a product is defective or causes a specific disease, or whether
defendants conspired to engage in unlawful conduct. Such a trial has obvious
efficiencies of resolving shared questions in one forum instead of multiple
forums, leaving individual issues such as damages to be tried later in the
transferee district or transferor districts, as may become appropriate. But, as
a practical matter, multidistrict cases, like other cases, usually settle before
any individual trials become necessary. The anticipation of trial in the
transferee judge's court historically has provided powerful inducement to spawn
global or individual settlements, either during pretrial, on the eve of trial,
during trial, after a consolidated liability trial, or, if necessary, after some
bellwether trials on damages. Even if the transferee judge does not exercise the
self-transfer authority, simply the parties' perception that the transferee
judge might order self-transfer has contributed significantly to the disposition
of many multidistrict dockets in advance of trial. Any interference with this
dynamic is no small matter, because within the nearly 141,000 actions included
in 1407 proceedings as of last September, many have involved multiple plaintiffs
and defendants, with correlating claims, counterclaims, cross-claims,
third-party claims and intervenors, totalling millions of claims altogether.
Since Lexecon, significant problems have arisen that have hindered the sensible
conduct of multidistrict litigation. Transferee judges throughout the United
States have voiced their concern to me about the urgent need to enact this
legislation. 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 self-transfer for trial. E.g., MDL-1125-- In re Air Crash Near Cali,
Colombia, on 12/20/95, S.D. Fla. (Judge Highsmith). The alternative recognized
in Lexecon is for the Panel to remand the 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. Clearly this
alternative is a cumbersome, repetitive, costly, potentially inconsistent, time
consuming, inefficient and wasteful utilization of judicial and litigants'
resources. Instead, complex multidistrict cases should be streamlined as much as
possible by providing the transferee judge as many options as possible to
reasonably expedite trial when the transferee judge, with full input from the
parties, deems appropriate. Importantly, self-transfer for trial by a transferee
judge is not to a distant, unfamiliar forum, but to one wherein the parties and
transferee judge have already become well acquainted through the ongoing
coordinated or consolidated pretrial proceedings pending before the transferee
judge. Venue is usually not a concern in any event because most key
multidistrict defendants conduct business nationwide. For those defendants who
do pose traditional venue concerns, such as local banks or health care
providers, were they to oppose trial transfer, the transferee judge surely would
weigh their concerns. The result could be either to sever their claims for a
remand suggestion to the Panel or a transfer for trial upon finding that the
interest of justice and the convenience of the parties and witnesses would be
served. Again, these parties' ongoing familiarity with the transferee judge may
cause them to prefer trial before the transferee judge, and they should have the
option to do so. Likewise, a transferee judge, particularly one sitting by
intraciruit or intercircuit assignment to supervise 1407 proceedings, may find
it expeditious to transfer multidistrict cases for trial to another district,
such as the one where the transferee judge normally sits. E.g., MDL-979--In re
Combustion, Inc., Hazardous Substances Cleanup Litigation, W.D. La. (Judge
Haik). Clearly, transferee judges and parties in centralized multidistrict cases
should have flexible options to conduct trials as expeditiously and fairly as
possible. Based upon prior positions taken by parties in multidistrict cases,
many experienced multidistrict litigators can be expected to support this
legislation. For example, among those filing amicus briefs in support of the
self-transfer authority advocated by the Lexecon defendants, who are traditional
plaintiffs' class action firms, were leading corporate and investment banking
firms, trade associations representing many of the nation's life and property
and casualty insurers, the trade association of the country's aerospace
manufacturers, a major pharmaceutical company, and a significant asbestos
litigation defendant. Lexecon Inc. itself did not object to self-transfer in the
main group of cases (arising from failure of Lincoln Savings & Loan
Association led by Charles Keating) from which Lexecon peripherally sprang. The
concept of trial transfer in conjunction with pretrial transfer for
multidistrict cases has already been enacted by Congress -- Section 1407(h)
authorizes the Panel to order transfer for trial, as well as pretrial, of any
action brought under Section 4C of the Clayton Act (the parens patriae
provisions). Indeed, in December 1998, after Lexecon ended the transferee
judge's self-transfer option, the Panel granted a motion for trial transfer of
parens patriae actions previously transferred for centalized pretrial under
1407(a) in MDL-1030--In re Disposable Contact Lens Antitrust Litigation, M.D.
Fla. (Judge Schlesinger). One of our most experienced transferee judges, Judge
Robert W. Sweet of the Southern District of New York, summed up the necessity
for Section 2 of H.R. 2112 superbly in a recent letter to me: "Lexecon has
substantially eviscerated the practical purposes of the MDL assignments. After
all, pretrial discovery and related proceedings simply set the stage for
ultimate resolution. In order to achieve the benefits of consolidation, the
assigned judge should have the ability to conduct a consolidated trial on
liability. Such a power would greatly enhance the possibility of settlement and,
most importantly, eliminate the threat of inconsistent determinations throughout
the country." Thus, I truly plead with this important House Subcommittee to
extend trial transfer authority to transferee judges who are already exercising
pretrial authority over multidistrict cases. The big winners will be your
constituents, both plaintiffs and defendants, who will reap substantial savings
of time and money. SECTION 3 OF H.R. 2112 -- STREAMLINING MULTIPLE LITIGATION
ARISING FROM SINGLE-EVENT CATASTROPHES Section 3 of H.R. 2112, which has passed
previous sessions of the full House of Representatives several times, creates a
special form of federal jurisdiction, carefully circumscribed to reach only
multiparty, multiforum, mass accident litigation. The legislation would amend
several portions of the Judicial Code in order to deal with problems of complex
litigation dispersed in multiple federal and state courts and arising out of
single-event catastrophes such as airline accidents, hotel fires, train wrecks
and other disasters in which many people are killed or seriously injured. In
particular, it would make minimal diversity of citizenship jurisdiction
available to parties in litigation arising out of a "single accident" in which
at least 25 people are killed or suffer injuries resulting in damages exceeding
$50,000 per person. To ensure that the litigation applies only to accidents
likely to give rise to duplicative, multiforum litigation, not only must the
parties meet the requirements of minimal diversity (meaning, generally, that at
least one defendant and one plaintiff be citizens of different states), but also
any two defendants must reside in different states, substantial parts of the
accident must have occurred in different states, or a substantial part of the
accident must have occurred in a state different from one in which a defendant
resides. Once an action meeting the above stated requirements makes its way into
a federal district court by filing, removal or intervention (pursuant either to
the special jurisdiction created by the bill or general diversity
jurisdiction), the legislation instructs the district court to notify
the Judicial Panel on Multidistrict Litigation, which under existing Section
1407 is authorized to transfer related civil actions to a single federal forum
for pretrial proceedings. That forum, the "transferee" court, is directed to
undertake a multifactor analysis leading to the designation of a single
jurisdiction whose substantive law is to be applied to all other actions arising
from the same accident, except to the extent that the transferee court orders
the application of additional sources of law with respect to a party, claim or
other element of an action. The transferee court is authorized to retain actions
transferred by the Panel not only for resolution of pretrial matters, as
currently provided by Section 1407, but also, at the transferee court's option,
for determination of liability and assessment of punitive damages. The
transferee court would have a similar option with respect to actions removed
from state court pursuant to the bill's multiparty, multiforum minimal
diversity jurisdiction. The legislation contemplates that
actions transferred under Section 1407 or removed pursuant to the minimal
diversity jurisdiction would be remanded to
their originating federal districts or state courts for the determination of
compensatory damages, unless the transferee court found, for the convenience of
the parties and witnesses and in the interests of justice, that the action
should be retained for the determination of such damages. Section 3 of H.R. 2112
benefits litigation that would ordinarily be centralized for pretrial
proceedings by the Panel under Section 1407 in three significant ways: 1) it
authorizes the transferee court to retain actions for trial of issues of
liability, punitive damages and/or compensatory damages; 2) it provides for
removal from state court to federal court of related litigation arising from the
same, single accident; and 3) it directs the transferee court to select a single
source of substantive law to apply to all actions arising from the same
accident. Each of these provisions addresses problems currently contributing to
a waste of judicial resources, increased litigation costs, heightened risk of
inconsistent results, and delays in the dispensation of justice. If the Panel
had to identify today the single most useful improvement conferred by Section 3
of H.R. 2112, it would without doubt be the bill's provision allowing the
transferee court to retain actions for trial, as discussed previously in this
statement. The utility of self-transfer authority is particularly great in the
context of mass disaster litigations. For in such litigations all victims
(airplane or train passengers, hotel guests, etc.) will ordinarily be situated
identically vis-a-vis the defendants, making the case for consolidation of their
actions on common issues especially compelling. There usually are no "individual
differences" among the accident victims which would affect or complicate trial
of the issue of a defendant's liability or the appropriateness of an award of
punitive damages. Among other things, resolution of such matters in a single
transferee court would 1) ensure that the trial would occur before the
transferee judge who, as a result of presiding over day-to-day complex pretrial
proceedings, is the one judge most familiar with the factual and legal issues;
2) enable plaintiffs' counsel to coordinate their efforts and minimize their
fees and expenses through a single trial, thereby permitting them to maximize
the recoveries available to their clients; 3) ensure that insurance proceeds
available to deserving victims would not be depleted by the costs and attorneys'
fees incurred by defendants in repeated trials in multiple federal and state
jurisdictions; 4) eliminate the risk that punitive damages would be imposed in
an inconsistent manner or repeatedly assessed against the same defendant; 5)
eliminate the possibility of inconsistent adjudications on common liability
issues; and 6) conserve the already overtaxed resources of state and federal
courts by avoiding multiple and repeated trials before different courts on the
same common issues. Again, I emphasize the beneficial effect on settlements
arising from the parties' early knowledge of when and before whom trial would
occur. Additionally, in times past the concentration of all federal actions in a
single forum has further contributed to the parties' amenability to reach
stipulations greatly streamlining the conduct of certain litigations. In various
domestic air disasters, for example, the principal defendants have sometimes
stipulated to liability in exchange for plaintiffs' agreement to waive punitive
damages. Such results are more easily achievable when they can be implemented on
a "global" basis in a single forum. As a practical matter, litigants in mass
disaster dockets have themselves often recognized the desirability of single
trials of common issues. Often transferee judge decisions to consolidate trials
on the issue of liability are made upon the joint request of plaintiffs and
defendants. The post-Lexecon world has now created such anomalies as the one
recently occurring in the Panel's multidistrict docket dealing with the December
20, 1995 air crash near Cali, Colombia, that resulted in the deaths of 152
passengers and eight crew members. In certain of that litigation's constituent
actions, I reiterate, the transferee court was unable to order self-transfer
even though all parties agreed on its desirability. Section 3 of H.R. 2112 also
provides for removal from state court to federal court of related litigation
arising from the same, single accident. This would be a new device, carefully
drawn in the best tradition of cooperative and voluntary federalism, to allow
use of the federal judicial forum to deal with dispersed related actions arising
out of a single mass accident. It would satisfy a need for resolution in a
single forum that state court systems are constitutionally unable to fulfill,
because of limits on the states' ability to exercise personal jurisdiction over
all victims and defendants. It is not, therefore, rooted in the outmoded
diversity jurisdiction justification of avoidance of state
court prejudice against out of state litigants. The draftsmen are to be
commended on their balancing efforts and their sensitivity to concerns about
both usurpation of state jurisdiction and burdensome expansion of federal
diversity jurisdiction. As to the states' interests, it should
be noted that the new removal provisions are limited, first of all, to state
court cases arising from a single accident and only where related actions are
already pending in federal court. No effort is made to make minimal
diversity jurisdiction available to other kinds of mass torts
such as those arising from asbestos exposure or silicone breast implants. The
limited new jurisdiction creates no new federal substantive law. Moreover, it
establishes a presumption in favor of a novel measure - remand for compensatory
damage determinations from federal to state courts - when a claim was originally
filed in state court but then removed to federal court under the new
jurisdiction, and a decision has been reached upholding liability. Finally, in
many mass accident dockets, the bulk of civil actions arising therefrom will
already be pending in federal courts. As for the federal courts' interests in
this equation, it should be reiterated that the new jurisdiction remains narrow
in scope, and that the issues addressed in the removed state cases will for all
practical purposes be largely identical to those already being addressed in the
cases originally filed in federal court. And because Section 3 of H.R. 2112
couples the diversity threshold with other changes (such as those authorizing a
consolidated trial of liability and punitive damages issues and those relating
to the selection of a single choice of law for all actions), any increase in the
federal caseload associated with the expansion of diversity
jurisdiction in the context of Section 3 of H.R. 2112 will be more than
offset by the efficiencies gained through improved consolidation. Absent the
availability of a single federal forum for the adjudication of mass accident
cases, wasteful duplicative litigation is unavoidable. The reports that I
receive from individual transferee judges in the multidistrict "trenches" speak
far more adequately than can I to the nature and severity of the problem. A
couple of examples will serve to illustrate its range and extent. Judge William
L. Standish (W.D. Pennsylvania) is the transferee judge in the Panel's docket
arising from the USAir crash near Pittsburgh, Pennsylvania on September 8, 1994,
that resulted in the death of 132 passengers and crew members. He reports that
in addition to the federal actions centralized before him by the Panel for
pretrial proceedings, 22 other actions were pending in the Cook County, Illinois
Circuit Court. These actions were not removable to federal court or otherwise
transferable by the Panel because an individual resident of Illinois was joined
as a defendant in each of those cases, thereby destroying complete diversity
between the cases' plaintiffs and defendants. He writes: Because the Cook County
cases remained in the Illinois state court, there has been considerable
duplication of work by the attorneys involved, some of whom represent parties in
both jurisdictions. Two steering committees for plaintiffs were appointed;
attorneys have attended conferences, arguments and hearings in both Pittsburgh
and Chicago and both courts have been required to rule on various discovery and
other issues, sometimes inconsistently, despite the fact that the judges
involved communicated extensively with each other and, at times, had joint
hearings or arguments on discovery motions. The inconsistent rulings, for the
most part, resulted from differences in the Federal and Illinois Rules of Civil
Procedure relating to discovery, but they have caused inconvenience, additional
expenses and the expenditure of additional time by the attorneys in the conduct
of discovery. When discovery concludes, in the near future, motions for summary
judgment may be filed in both courts by the same parties, and it is possible
that rulings on these motions may differ. Another judge, Panel member Louis C.
Bechtle, commenting on how Section 3 of H.R. 2112 might have helped him in his
role as a settlement judge in the MDL (multidistrict litigation) arising out of
the fire disaster that took 97 lives and injured hundreds more at the Dupont
Plaza Hotel in San Juan, Puerto Rico, on New Year's Eve, 1986, writes that:
Citizens of Puerto Rico could not become parties to this MDL litigation because
of a lack of diversity with the principal defendants. This was especially
unfortunate because Puerto Rico does not provide for jury trials in such cases.
The result was that the claimants who could not be in the federal MDL litigation
would not have the full benefit of the federal discovery, and other processes
related to a jury trial, yet those citizens were the victims of the same
catastrophe as those who were citizens of states other than Puerto Rico and
whose cases were being administered in the MDL. Under the new legislation those
persons could intervene in the MDL proceedings and fully participate in all
phases of the litigation including the settlement course, on the same basis as
other claimants. Also because of the proposed removal provisions, the defendants
could defend in one forum at one time and under the same standards. Considerable
financial and professional resources of all parties and the state, territorial,
and local governments would have been achieved had the proposed legislation been
in place at that time. ....I would also add that in my conversations
with...citizens of Puerto Rico regarding the Dupont Plaza fire, nearly all would
have preferred to be included in the MDL for the pre-trial proceedings including
full discovery and ultimate disposition. I want to further emphasize here that
when state cases such as these are tried in their respective jurisdictions, a
myriad of additional costs and duplications arise as a result of trial of the
same liability issues in both state and federal court. Ultimately, it must be
remembered, the plaintiffs' lawyers and the defendants' lawyers always get paid
in full for their services. It is rather the parties on both sides who pay the
price for the system's deficiencies. Defendants, and their insurance companies,
expend vast sums relitigating the same issues in forum after forum. And the
victims of these horrible tragedies and/or their survivors, whose lives have
already been touched by unfathomable sorrow, suffer the final indignity of
seeing sums otherwise available to assuage their losses being consumed by
unnecessary transactional costs. The third major area of improvement provided by
Section 3 of H.R. 2112 is found in its directive to the transferee court to
select a single source of substantive law to apply to all actions arising from
the same accident. The lawyers among you on this Subcommittee may well recall
"Conflicts of Law" as one of your most difficult and challenging law school
courses, and well you should. For the conflicts analysis, especially in the
context of mass disaster litigations, where plaintiffs may reside and file suit
in different states, where the accident may have occurred in yet another, and
where defendants are located still elsewhere, is among the most demanding and
time-consuming tasks facing any lawyer or judge. I would like to illustrate this
point with an example taken from the multidistrict docket arising from the May
25, 1979 crash of a DC-10 jet airplane, designed and built by McDonnell Douglas
Corp. (MDC), and operated by American Airlines (American), which was scheduled
to fly from Chicago, Illinois, to Los Angeles, California. The plane crashed
shortly after take-off, killing all 271 persons aboard and two persons on the
ground. Eventually 118 wrongful death actions were centralized by the Panel in
the Northern District of Illinois. Among the many issues addressed by the
transferee court in this docket was whether punitive damages would be allowed in
the actions. The centralized cases were originally filed in Illinois,
California, New York, Michigan, Hawaii and Puerto Rico federal district courts
by plaintiffs and their decedents who were residents of California, Connecticut,
Hawaii, Illinois, Indiana, Massachusetts, Michigan, New Jersey, New York,
Vermont, Puerto Rico, Japan, the Netherlands and Saudi Arabia. MDC was a
Maryland corporation, having its principal place of business in Missouri.
Plaintiffs contended that MDC's conduct in the design and manufacture of the
DC-10 was egregious, and that MDC's misconduct occurred in California. American
was a Delaware corporation whose principal place of business, because of a move
from New York to Texas that happened to occur during 1979, was in dispute. The
plaintiffs contended that American's conduct regarding the maintenance of the
DC-10 was also egregious, and that American's misconduct occurred in Oklahoma,
the site of American's maintenance base. Both defendants moved in a pretrial
motion to strike the claims for punitive damages on the ground that such claims
failed to state legally sufficient claims for relief. Almost everything related
to this matter was in dispute: whether certain states allowed punitive damages,
the choice-of-law theories to be used regarding certain states, and the results
of the application of the choice-of-law theories which were to be used. In
conducting its analysis, the transferee court had to consider the substantive
law of the place of the disaster, the law of the place of manufacture of the
aircraft, the law of the primary place of business of MDC, the law of the
primary place of business of American, and the law of the place of maintenance
of the aircraft. As if this were not a sufficiently daunting task, the court
then had to apply the separate choice-of-law rules of each state where a
constituent action had originally been filed. The "good" news for the poor
transferee court was that in this docket there were "only" six such
jurisdictions. The transferee court thus labored on. Under the Illinois "most
significant relationship" test, the court found that the law of the principal
place of business should prevail with regard to the punitive damages question.
Finding that New York was American's principal place of business at the time of
the crash and did not allow punitive damages, and that Missouri, MDC's principal
place of business did, the court, ruling in the cases filed in Illinois, allowed
the motions to strike punitive damage claims against American but not against
MDC. Turning then to the cases filed in California, and applying that state's
"comparative impairment" test, the transferee court held that the policies of
the state of the principal place of business would be impaired more than the
policies of the state of misconduct if those policies were not applied. Thus the
court again allowed the motion to strike punitive damages with regard to
American but not MDC. Additional analyses were required, before reaching the
same results, with respect to the cases originally filed in New York, Michigan,
Puerto Rico and Hawaii. There is quite simply no good reason why courts and
parties should be subjected to the uncertainties, delays and expense created by
a need for this kind of repeated choice-of-law analysis. Victims of mass torts
occurring in a single accident should have similar claims decided in a similar
fashion, and should receive prompt compensation for their injuries with a
minimum of litigation costs. Under the choice-of-law provisions of Section 3 of
H.R. 2112, the transferee court undertakes one multifactor analysis leading to
the designation of a single jurisdiction whose substantive law is to be applied
to all other actions arising from the same accident. The transferee court is
also given the flexibility to order, in those few situations where it might
otherwise be appropriate, the application of additional sources of law with
respect to a party, claim or other element of an action. The choice-of-law
resolution remains a complex process, but it is a process that is much
simplified, much less costly, and able to provide certainty to all affected
parties, counsel and courts. Finally, the bill's provision that the choice of
substantive law adopted by the transferee court continues to control in cases
returned to federal or state courts for determination of compensatory damages
ensures that those courts will be spared the need to themselves address the
conflicts of law issues. Apart from the individual merits of these three
improvements incorporated into Section 3 of H.R. 2112, there are also
significant synergistic benefits arising from operation of the provisions in
tandem. For example, a single trial addressing the common liability issues
present in all cases arising from the same accident (regardless of where
originally filed), and using the same source of substantive law, will go far in
ridding our justice system of the scourge of forum shopping by both plaintiffs
and defendants. Incredible savings can also be achieved through the
concentration of any appellate proceedings. To illustrate, a single Death on the
High Seas Act issue in the multidistrict litigation resulting from the shooting
down of the Korean Air Lines plane on September 1, 1983, was whether pre- death
pain and suffering was recoverable. This issue was addressed by the Supreme
Court and three different circuit courts of appeal after numerous district
courts had faced related evidentiary and reasonableness issues. It took fifteen
years to resolve a legal issue that was common to all plaintiffs with respect to
that tragedy. The 1979 air crash in Chicago referred to above offers another
example. The appellate court, while "generally agreeing with the district court
regarding which states allow punitive damages and the choice-of-law theories to
be used," reached a different result in applying those theories. Fortunately,
review was confined to one circuit, but this is by no means guaranteed in an
environment such as that currently existing, where actions must be remanded for
trial and the only mechanism for review of a transferee court's ruling on a
motion to dismiss punitive damages claims would be that of interlocutory appeal
- a process occurring at the considerable discretion of the appellate court with
jurisdiction over the transferee court. In concluding, I would briefly like to
make two final points. The first, as evidenced by the dates of the mass
disasters to which I have specifically alluded in my remarks (air crashes in
1979, 1983, 1994 and 1995, and a hotel fire in 1986), is that the problems posed
by the conduct of complex litigation arising from single incident accidents are
not new ones. The second point, flowing from the first, is that the solutions
found in Section 3 of H.R. 2112 are themselves not new proposals. To the great
credit of this Subcommittee and the House of Representatives, three times in the
last ten years bills substantially similar to Section 3 of H.R. 2112 have passed
the House only to die in the Senate. No better demonstration of the bipartisan
appeal of the solutions found in Section 3 of H.R. 2112 can be made than to cite
the history of those past bills. H.R. 3406, from the 1989-90 101st Congress, and
H.R. 2450, from the 1991-92 102nd Congress, were introduced, respectively, by
Democratic Congressmen Robert W. Kastenmeier and William J. Hughes, and passed
the House at a time when members of the Democratic Party were in the majority.
It is interesting to note that Congressman Jack Brooks from Texas submitted a
very thorough and supportive report on this precise bill in June 1990.
Similarly, Section 7 of H.R. 1252 (the Judicial Reform Act of 1997), from the
1997-98 105th Congress, passed the House at a time when the Republican Party was
in the majority - Section 7 was initially introduced during the 105th Congress
by Republican Congressman F. James Sensenbrenner, Jr., as a free-standing bill
before being included in H.R. 1252. Again, thank you very much for the
opportunity to testify today. I would be pleased to answer any questions you may
have.
LOAD-DATE: June 17, 1999
