Amicus Curiae Brief — Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1996

LEXECON, INC., et al.,

Petitioners,

v.

MILBERG WEISS BERSHAD HYNES

& LERACH, A PARTNERSHIP, ef ai.,

Respondents.

On Writ of Certiorari

to the United States Court of Appeals

for the Ninth Circuit

BRIEF OF WASHINGTON LEGAL FOUNDATION

AS AMICUS CURIAE

IN SUPPORT OF PETITIONERS

Daniel J. Popeo

Counsel of Record

David M. Young

WASHINGTON LEGAL

FOUNDATION

2009 Massachusetts Ave., NW

Washington, D.C. 20036

(202) 588-0302

Date: July 3, 1997

QUESTION PRESENTED

Whether a district court, to which a case has been

transferred solely for “consolidated pretrial proceedings”

under the federal multidistrict litigation statute, 28 U.S.C. §

1407(a), may transfer the case to itself for purposes of trial,

notwithstanding section 1407(a)’s explicit command that

every such case “shall be remanded” at the conclusion of

pretrial proceedings “to the district from which it was

transferred.”

TABLE OF CONTENTS

Page

QUESTION PRESENTED......................

TABLE OFCONTENTS ....................... ii

TABLE OF AUTHORITIES..................... iv

INTEREST OF THE AMICUS CURIAE ............-

STATEMENT OF THECASE .................... 2

SUMMARY OF ARGUMENT.................... 5

LS 6

1. THE PLAIN LANGUAGE OF 28 U.S.C. § 1407(a)

REQUIRES THAT THE TRANSFEREE COURT

REMAND THE CASE TO THE COURT IN WHICH

THE ACTION WAS ORIGINALLY FILED ...... 6

Il. THE CONTEMPORANEOUS AND SUBSEQUENT

LEGISLATIVE HISTORY OF SECTION 1407(a)

DEMONSTRATES THAT CONGRESS INTENDED

THE TRANSFEREE COURT TO REMAND THE

ACTION BEPORE TRIAL ................... 8

Ill. THE PRACTICE OF “SELF-TRANSFER” CANNOT

BE JUSTIFIED ON THE BASIS OF JPML RULE 14(b)

OR THE IMPROPER PRACTICE OF DISTRICT

EE EC Eb ca bccsecscccccccccess 10

iv

TABLE OF AUTHORITIES

Page

Cases:

American Tobacco Co. v. Patterson,

ro. LT Yd RR ce res Pe se ee 7

Amoco Production Co. v. Village of Gambell, Alaska,

Po te Ul eee err 8

Chevron, U.S.A., Inc. v. Natural Resources

Defense Council, 467 U.S. 837 (1984) ..........: mule

Finley v. United States,

GI UE, TRG occ ccc cccccctsessvcsssonss 12

Frazier v. Heebe,

GE GD 6 vc cc cr ctvcsesncedcccccsse 11

INS v. Cardoza-F onseca,

Ps ee ea 7

Mallard v. U.S. District Court for the

Southern District of lowa, 490 U.S. 296 (1988).....-. 8

McKee v. Bi-State Dev. Agency,

801 F.2d 1014 (8th Cir. 1986) ...... 2... eee eee 11

Pfizer, Inc. v. Lord,

447 F.2d 122 (2d Cir. 1971) ...........---55- 12-13

TVA v. Hill,

a ee ED 6 6.65 ie di ce tn te ncodagvewn suns 7

West Va. Univ. Hospitals, Inc. v. Casey,

GID TAG GO Good ob vc ccccncstvabavess one 8

Statutes and Rules:

PRURE. BOGE «5 ooo ccc ccesevicesevecsteni 1

Lee 0 rrr eee passim

_ \ a 00 ir 6,11, 12

EE MD, cs oc oaccnedacnewasenaie 10

v

Rules of Procedure of the Judicial Panel on Multidistrict

ie ts ceeence 11,12

Legislative Materials:

Act of Sept. 30, 1976, Pub.L. 94-435, Title III, § 303,

RN a alll NES |p oA a 10

Act of Nov. 19, 1988, Pub.L. 100-702, 102 Stat. 4642 . 10

H.R. 4807, § 303, 100th Cong., 2d Sess. (1988) ...... 10

H.R. Rep. No. 1130, 90th Cong., 2d Sess.,

reprinted in 1968 US.C.C.AN. 1898 ........... 9,14

Other Materials:

Administrative Office of the United States Courts, Judicial

Business of the United States Courts: 1995 Report of the

SET SOL aba n0b cadanduh cbAc ied ase aceces 7

Amicus Curiae Brief of Charles Alan Wright Supporting

Petitioner on Petition for a Writ of Certiorari (April 11,

DE ite ha bao ela Uw al ke dat oie bas oe 11,12

George T. Conway III, Note, 7he Consolidation of Multistate

Litigation in State Courts, 96 YALE L.J. 1099 (1987) .. 13

John F. Cooney, Comment, The Experience of Transferee

Courts Under the Multidistrict Litigation Act, 39 U.CHi.

I ee ck « 13

Patricia D. Howard, A Guide to Multidistrict Litigation,

124 F.R.D. 479 (1989)

Note, The Judicial Panel and the Conduct of Multidistrict

Litigation, 87 HARV. L. REV. 1001 (1974) ........... 13

Report of the American Bar Association Section of Antitrust

Law Task Force to Review the Supreme Court's Decision

in California v. ARC American Corp., 59 ANTITRUST L. J.

GT at id ausehechasacedascheasccsas 13

vi

Robert H. Transgrud, Joinder Alternatives in Mass Tort

Litigation, 70 CORNELL L. REV. 779 Pre

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1996

No. 96-1482

LEXECON, INC., et al.,

Petitioners,

Vv.

MILBERG WEISS BERSHAD HYNES

& LERACH, A PARTNERSHIP, et al.,

Respondents.

On Writ of Certiorari

to the United States Court of Appeals

for the Ninth Circuit

BRIEF OF THE WASHINGTON LEGAL

FOUNDATION AS AMICUS CURIAE

IN SUPPORT OF PETITIONERS

INTEREST OF THE AMICUS CURIAE

The Washington Legal Foundation (WLF) is a non-profit

public interest law and policy center with supporters

nationwide.’ WLF seeks to promote and protect the free

' Pursuant to Supreme Court Rule 37.6, WLF hereby states

that no counsel for a party in this case authored this brief in whole

(continued...)

2

enterprise system and the economic and civil liberties of

individuals and businesses through civil justice reform. WLF

has devoted substantial resources to promoting civil justice

reform by filing comments on proposals to amend the Federal

Rules of Civil Procedure, by publishing monographs and

similar educational materials, and by filing amicus curiae

briefs in appropriate cases. See, e.g., Amchem Prods., Inc. v.

Windsor. No. 96-270 (June 25, 1997); Matsushita Elec. Indus.

Co., Lid. v. Epstein, 116 S. Ct. 873 (1996). WLF thus brings

a broader perspective to the issues in this case than that

presented by the parties in this action.

WLEF is filing this brief with the consent of petitioners

and respondents. WLF has lodged consent letters with the

Clerk of the Court.

STATEMENT OF THE CASE

In order to avoid repetitive argument, WLF adopts the

Statement of the Case of the petitioners. Briefly, this case

presents the question whether a federal district court

authorized to conduct consolidated pretrial proceedings may

transfer a case to itself for purposes of trial, notwithstanding

28 U.S.C. § 1407(a)’s mandate that “[eJach action so

transferred shall be remanded by the panel at or before the

conclusion of such pretrial proceedings to the district from

which it was transferred unless it shall have previously been

terminated... .” 28 U.S.C. § 1407(a). Citing an interest in

efficient litigation, the Ninth Circuit below endorsed the

increasingly widespread practice by which transferee courts

'(.. continued)

or in part.

js 3

refuse to remand such cases to the original courts i i

they were filed. cheat nec

Petitioner Lexecon is a law and economics consulting

firm. The respondents are two large law firms and certain

individual lawyers within those firms who specialize in

highly-publicized class action securities lawsuits. According

to Petitioners’ allegations, after Lexecon’s principal

petitioner Professor Danie Fischel, testified for the defense

in n lawsuits filed by the ts,

retaliated by trying to ruin Seen he vorra a

of business. Petitioners’ complaint alleged that respondents

falsely accused Lexecon of complicity with Charles Keating

in the notorious Lincoln Savings savings and loan scandal,

and by falsely portraying Professor Fischel as a crook and a

racketeer.

Petitioners sued respondents for malicious prosecution,

tortious interference with existing and prospective client

relationships, abuse of process, defamation, and commercial

disparagement. Petitioners filed their lawsuit in their home

district, the Northern District of Illinois, alleging diversity

jurisdiction. Initial pretrial matters were considered by that

court. After six months of pretrial proceedings, respondents

moved the Judicial Panel on Multidistrict Litigation (JPML)

to transfer the case to the District of Arizona, pursuant to 28

U.S.C. § 1407, and consolidate the case with litigation

involving the underlying Lincoln Savings dispute. However,

before the JPML could rule on the motion, the presiding judge

in the Lincoln Savings case recused himself from the Lexecon

case because he felt his involvement in the Lincoln Savings

case would make it improper for him to act as a judge in

Lexecon.

4

Respondents nonetheless renewed their motion to

transfer, and asked the JPML to sent the Lexecon case to any

other judge in Arizona. Over petitioners’ objection, the JPML

granted respondents’ motion, citing as grounds that there was

an extensive document depository in Arizona and that there

was a possibility of coordinating the action with an unfinished

settlement involving one of the Lincoln Savings defendants.

App. at 100a-102a. ;

Although there never were any coordinated proceedings

and the reasons for granting the transfer evaporated, see

Petitioners’ Brief in Support of Petition for Writ of Certiorari

at 6-7, the Arizona court proceeded to rule on various

substantive motions, granting respondents’ motion to dismiss

the malicious prosecution and abuse of process claims.

Petitioners then moved, pursuant to JPML Rule 14(d), to

remand the case back to the Northern District of Illinois. The

district court initially deferred decision on that motion until

the parties completed discovery.

After the parties completed discovery, petitioners

renewed their request to remand the case to Illinois.

Respondents objected and filed their own motion to transfer

the case permanently to Arizona, and filed a motion for

summary judgment on all remaining issues. The Arizona

court did not rule on petitioners’ remand motion, but granted

respondents summary judgment on all remaining issues

except for one aspect of petitioners’ defamation claim. App.

at 64a-77a.

The Arizona court later denied petitioners’ motion to

remand and granted respondents’ motion to transfer the case

permanently to the Arizona court. App. at 6la-62a.

Petitioners then petitioned the Ninth Circuit for a writ of

5

mandamus. A three-judge panel of the Ninth Circuit denied

the petition, with Judge Kozinski dissenting. App. at~58a-

59a. The trial on the defamation claim then went forward in

the Arizona court, and respondents prevailed in a jury trial.

On appeal, a differently-constituted panel of the Ninth

Circuit affirmed the district court in all respects. App. at 12a-

15a. Judge Kozinski, the only member of the panel who had

also ruled on the mandamus petition, again dissented. App.

at 30a. Petitioners then timely petitioned this Court for a writ

of certiorari, which this Court granted on May 13, 1997.

SUMMARY OF ARGUMENT

The Ninth Circuit erred in holding that an Arizona

district court, to which an action was transferred for

“coordinated or consolidated pretrial proceedings” under 28

U.S.C. § 1407(a), was permitted to transfer the action to itself

and conduct a trial. The district court’s retention of the case

for trial contravened the clear mandate of Section 1407(a)

which requires that “[eJach action so transferred shall be

remanded by the panel at or before the conclusion of such

pretrial proceedings to the district from which it was

transferred... .” 28 U.S.C. § 1407(a).

This unambiguous mandate is supported by the

contemporaneous and subsequent legislative history of

Section 1407. Congressional reports underscore what the

statute clearly states, that the transferee court’s role is only to

conduct coordinated or consolidated pretrial proceedings, and

at the conclusion of such proceedings to remand the case to

the original court for trial. Congress contemplated that any

additional role for the transferee court in conducting trial

would require congressional authorization and, in fact, since

6

1968 Congress has considered and authorized a limited trial

role for the transferee courts which is not applicable in this

case. This subsequent history further demonstrates that

Section 1407(a) as enacted did not authorize the transferee

courts to conduct trials.

The erroneous widespread practice of transferee courts to

“self-transfer” cannot be justified on the basis of JPML Rule

14(b) or long-standing practice. Although the JPML is

authorized to prescribe rules for the conduct of its business,

its authority is limited to rules “not inconsistent with Acts of

Congress and the Federal Rules of Civil Procedure.” 28

U.S.C. § 1407(f). Any construction of JPML Rule 14(b)

which authorizes self-transfer for trial is inconsistent with the

clear mandate of Section 1407(a) and is therefore invalid.

Further, the widespread use of self-transfer is not a legal basis

for upholding the validity of the practice in the face of the

congressional mandate to the contrary.

For these reasons and the reasons set forth below, the

Washington Legal Foundation (“WLF”) respectfully urges

this Court to reverse the decision below.

ARGUMENT

I. THE PLAIN LANGUAGE OF 28 U.S.C. § 1407(a)

REQUIRES THAT THE TRANSFEREE COURT

REMAND THE CASE TO THE COURT IN WHICH

THE ACTION WAS ORIGINALLY FILED.

This case presents a straightforward but important

question concerning the authority of federal district court

judges presiding over pretrial proceedings under 28 U.S.C. §

1407(a) to retain cases for trial. Under Section 1407(a), the

\V/

7

Judicial Panel on Multidistrict Litigation (JPML) may transfer

cases filed in federal district courts to another federal district

court fo: cousolidated pretrial proceedings. Since the JPML

was created in 1968, it has transferred over 90,000 cases for

consolidated pretrial proceedings, but less than four thousand

(representing less than four percent) of those cases were

remanded back for trial to the district court in which the

complaint was filed. Administrative Office of the United

States Courts, Judicial Business of the United States Courts:

1995 Report of the Director 32, 80 (1995); App. at 30a

(Kozinski, J., dissenting); see also Patricia D. Howard, A

Guide to Multidistrict Litigation, 124 F.R.D. 479, 479 (1989)

(“not uncommon” for transferee judge to transfer action to her

own district or a district other than that in which it was filed).

As these statistics indicate, it has become commonplace

for district courts hearing pretrial proceedings under Section

1407(a) to retain cases for trial. However, despite the

prevalence of this practice, Section 1407(a) does not authorize

district courts to retain such cases for trial. To the contrary,

the clear and unmistakable mandate of the statute which

authorizes the JPML to transfer cases requires that “[e]ach

action so transferred shall be remanded by the [JPML] at or

before the conclusion of such pretrial proceedings to the

district from which it was transferred unless it shall have been

previously terminated . . .” 28 U.S.C. § 1407(a) (emphasis

added).

The cardinal principle of statutory construction is that the

language chosen by Congress be given its plain meaning.

INS v. Cardoza-Fonseca, 480 U.S. 421, 447-48 (1987);

American Tobacco Co. v. Patterson, 456 U.S. 63, 68 (1982);

TVA v. Hill, 437 U.S. 153 (1978). If the statutory language is

clear, “that is the end of the matter; for the court . . . must give

8

effect to the unambiguously expressed intent of Congress ....”

Chevron, U.S.A., Inc. v. Natural Resources Defense Council,

467 U.S. 837, 842-43 (1984); see also West Va. Univ.

Hospitals, Inc. v. Casey, 499 U.S. 83, 101 (1991); Mallard v.

U.S. District Court for the Southern District of Iowa, 490

U.S. 296, 300-02 (1988); Amoco Production Co. v. Village of

Gambell, Alaska, 480 U.S. 531, 547-48 (1987) (unanimously

rejecting Ninth Circuit’s ruling that the term “in Alaska”

should be interpreted in a general, “nontechnical” sense to

mean the geographic region of Alaska).

The language “shall be remanded” is decidedly

mandatory, leaving the court no room for discretion. Thus,

the plain language of the statute makes clear that a case

transferred for pretrial proceedings must be remanded back to

the original district court for trial.

Il. THE CONTEMPORANEOUS AND SUBSEQUENT

LEGISLATIVE HISTORY OF SECTION 1407(a)

DEMONSTRATES THAT CONGRESS INTENDED

THE TRANSFEREE COURT TO REMAND THE

ACTION BEFORE TRIAL.

The mandatory language of the statute is consistent with

the statutory purpose of Section 1407, as evidenced by the

legislative history. The report of the House Judiciary

Committee, concerning the bill which became Section 1407,

states:

[T]he bill provides for the transfer of venue of an

action for the limited purpose of conducting

coordinated pretrial proceedings. The proposed

statute affects only the pretrial stages in multidistrict

litigation. It would not affect the place of trial in any

9

case or exclude the possibility of transfer under

other Federal statutes.

***

The subsection requires that transferred cases be

remanded to the originating district at the close of

coordinated pretrial proceedings. The bill does not,

therefore, include the trial of cases in the

consolidated proceedings. The experience of the

Coordinating Committee was limited to pretrial

matters, and the committee consequently considers

it desirable to keep the legislative proposal within

the confines of that experience: Additionally, trial

in the originating district is generally preferable

from the standpoint of the parties and witnesses, and

from the standpoint of the courts it may be

impracticable to have all cases in mass litigation

tried in one district. * * *

If proposed section 1407 should be enacted and

future experience justifies extending it to include

consolidation and coordination for trial purposes as

well, only minor amendments to the present

language of the bill will be necessary.

H.R. Rep. No. 1130, 90th Cong., 2d Sess., reprinted in 1968

U.S.C.C.A.N. 1898, 1900, 1901-02.

Notably, since the 1968 enactment of Section 1407,

Congress has extended consolidation for trial purposes to a

limited class of cases, further underscoring that the 1968

legislation did not already permit a court to retain a case for

trial under Section 1407. In 1976, Congress added subsection

10

(h) to Section 1407 to allow the multidistrict panel to order

that parens patriae cases brought by state attorneys general

under Section 4C of the Clayton Act be transferred for both

pretrial purposes and for trial. Act of Sept. 30, 1976, Pub.L.

94-435, Title Il, § 303, 90 Stat. 1396. This legislation would

have been unnecessary had Section 1407 as originally enacted

permitted the court to retain a transferred case for trial.

Further, in 1988, the House of Representatives passed a

bill to amend Section 1407 to provide that in certain mass-

disaster litigation involving multiple parties and multiple

forums, “the transferee district court may, notwithstanding

any other provision of this section, retain actions so

transferred for the determination of liability.” H.R. 4807, §

303, 100th Cong., 2d Sess. (1988). Although the House

passed the legislation, this particular provision of the

legislation was eventually dropped and was not enacted into

law. See Act of Nov. 19, 1988, Pub.L. 100-702, 102 Stat.

4642. Again, this legislation would have been unnecessary

had Section 1407 already authorized the transferee court to

retain an action for trial.

Thus, the contemporaneous and subsequent legislative

history makes clear that the Congress meant what the statute

said, that transferee courts must remand the case back to the

original court for trial.

Il. THE PRACTICE OF “SELF-TRANSFER”

CANNOT BE JUSTIFIED ON THE BASIS OF

JPML RULE 14(b) OR THE IMPROPER

PRACTICE OF DISTRICT COURTS.

Contrary to the Ninth Circuit’s opinion, this “self-

transfer” procedure cannot be justified on the basis of JPML

11

Rule 14(b).2 App. at 14a. Although Section 1407(f)

authorizes the JPML to prescribe rules for the conduct of its

business, those rules must be “not inconsistent with Acts of

Congress and the Federal Rules of Civil Procedure.” 28

U.S.C. § 1407(f). Section 1407(f) therefore does not permit

the JPML to subvert the plain mandate of subsection (a) by

issuing a rule authorizing self-transfer when the statute

requires the remand of a case for trial.’ Cf Frazier v. Heebe,

482 U.S. 641, 645-46 (1987) (district court rule pertaining to

admission of nonresident attorneys held inconsistent with

Supreme Court rules of practice and procedure); McKee v. Bi-

State Dev. Agency, 801 F.2d 1014 (8th Cir. 1986) (district

court rule concerning finality of entry of judgment held

inconsistent with federal statute).

? JPML Rule 14(b) provides, in pertinent part: “[eJach

transferred action that has not been terminated in the transferee

district court shall be remanded by the Panel to the transferor district

for trial, unless ordered transferred by the transferee judge to the

transferee or other district under 28 U.S.C. § 1404(a) or 28 U.S.C.

§ 1406.”

> Moreover, 28 U.S.C. § 1404(a) likewise provides no

authority for self-transfer. That provision for transfer of venue

allows transfer as follows, “For the convenience of parties and

witnesses, in the interest of justice, a district court may transfer any

civil action fo any other district or division where it might have

been brought” (emphasis added). 28 U.S.C. § 1404(a). Nothing in

this statute authorizes a district court to transfer an action to itself,

and such a reading would be nonsensical given that 28 U.S.C. §

1404 was enacted decades before 28 U.S.C. § 1407. See Amicus

Curiae Brief of Charles Alan Wright Supporting Petitioner on

Petition for a Writ of Certiorari, 6 (April 11, 1997) (“A 1948 statute

cannot be given a meaning it could not have had when it was

adopted in order to provide a result under a 1968 statute that

Congress specifically considered and expressly rejected.”’).

12

Moreover, Rule 14(b) governs only the internal

procedures of the JPML, not the authority of the district court.

Section 1407 only empowers the JPML to “prescribe rules for

the conduct of its business... .” 28 U.S.C. § 1407(f). As

dissenting Judge Kozinski noted, such rules are, in any case,

not entitled to substantial deference from this Court. App. at

49a (rules are “entitled to deference only to the extent they

cover JPML’s business; they cannot broaden the transferee

court’s authority to act under Section 1404(a).”). Unlike rules

promulgated pursuant to the Rules Enabling Act, 28 U.S.C.

§§ 2072-74, the JPML rules “ . . . are not voted upon by the

Judicial Conference of the United States; they are not adopted

by the Supreme Court; they are not put before Congress for

possible modification or rejection.” App. at 49a.

The JPML was no doubt convinced that its rule promoted

the efficient administration of justice, but this Court should

not allow this worthwhile goal to be accomplished through

subverting the congressional mandate. Moreover, this

practice cannot be justified on the basis of long-standing

practice. As amicus curiae Charles Alan Wright stated, “If

Congress has not given the courts authority to do something,

they cannot acquire that authority by adverse possession.”

Amicus Curiae Brief of Charles Alan Wright, supra, at 8; cf

Finley v. United States, 490 U.S. 545 (1989) (federal courts

lacked power to exercise pendent party jurisdiction

notwithstanding widespread lower court acceptance of such

jurisdiction).

Although courts following the Second Circuit’s decision

in Pfizer, Inc. v. Lord, 447 F.2d 122, 124-25 (2d Cir. 1971),

have often allowed this self-transfer practice, commentators

13

have been overwhelmingly critical.‘ See, e.g. Report of the

American Bar Association Section of Antitrust Law Task

Force to Review the Supreme Court's Decision in California

v. ARC American Corp., 59 ANTITRUST L. J. 273, 302 (1990)

(“[T]he use of Section 1404(a) transfers to consolidate

multidistrict cases for trial is of dubious legal validity.”);

George T. Conway III, Note, The Consolidation of Multistate

Litigation in State Courts, 96 YALE L.J. 1099, 1102-03 (1987)

(“[C]onsolidation for trial almost certainly defies both the

letter of section 1407 and the intent of its drafters.” (footnotes

omitted)); Robert H. Transgrud, Joinder Alternatives in Mass

Tort Litigation, 70 CORNELL L. REV. 779, 809 (1985) (“[It]

seems clear that the lower federal courts have done by judicial

fiat what Congress refused to do by statute in 1969: amend

section 1407 to allow transfers for trial.”); Note, The Judicial

Panel and the Conduct of Multidistrict Litigation, 87 HARV.

L. REV. 1001, 1030-31 (1974) (legislative history of section

1407 emphasizes it would be used only for pretrial

proceedings); John F. Cooney, Comment, The Experience of

Transferee Courts Under the Multidistrict Litigation Act, 39

U.CHI. L. REV. 588, 606 (1972) (“[T]}he apparently mandatory

nature of the remand clause . . . implies that transferee courts

lack this jurisdiction [to grant a section 1404 motion].”); see

also additional authorities noted at app. 35a-36a (Kozinski, J.,

dissenting. ). '

* Lower courts authorizing self-transfer have cited Pfizer

like a mantra, but that decision could hardly be considered seminal

given its limited analysis. See id. at 124-25. Nonetheless, the lower

courts have displayed a deference to Pfizer which is remarkable for

the courts’ lack of critical analysis. See App. at 32a-34a (Kozinski,

J., dissenting); id. at 59a (Kozinski, J., dissenting) (“[m Jost [courts

following Pfizer] have simply taken their place at the head of an

ever-growing string cite.”).

14

It may well be that judicial economy or other policy

considerations would be served by allowing Section 1407(a)

transferee courts to conduct trials. Or perhaps not.

Consideration of the convenience of parties and witnesses,

and traditional deference to the plaintiff's choice of forum,

may suggest otherwise. See H.R. Rep. No. 1130, 90th Cong..,

2d Sess., reprinted in 1968 U.S.C.C.A.N. at 1901 (“. . . trial

in the originating district is generally preferable from the

standpoint of the parties and witnesses, and from the

standpoint of the courts it may be impracticable to have all

cases in mass litigation tried in one district.”). That policy

decision is not obvious, nor is it one that Congress has

delegated to transferee courts under Section 1407(a).

Along these lines, this case demonstrates why no court

should presume that policy considerations dictate retention by

the transferee court of a transferred case for trial. The

petitioners alleged that respondents falsely defamed

petitioners by making unfounded allegations concerning

petitioners’ ties to Charles Keating and the notorious Lincoln

Savings scandal. Through the use of a Section 1407(a)

transfer, and under the guise of consolidating pretrial

proceedings, respondents forced petitioners to try their

allegations in a distant forum where resentment toward

Keating and anyone connected with him was likely to be most

intense. Moreover, there was no connection between Arizona

15

and the parties, the witnesses, or the law

lied case.°

App. at 45a-47a (Kozinski, J., Giesettiog). —

But, in any event, that policy decision is for Congress

— the federal courts. Section 1407(a) does not ra

free court to exercise its discretion to retain a

transferred action for trial. Our civil justice system cannot

function fairly or effectively if judges ignore statutes which

confine their authority, and this Court should not countenance

a practice by which judges subvert the clear congressional

mandate in order to enhance their judicial authority.

* The Ninth Circuit accuses petitioner Lexecon of bei

nth of bein

stranger to the District of Arizona”, app. at 18a, but then cites only

Lexecon’s participation in the underlying Lincoln Savings litigation

and the transferee court’s familiarity with the Lexecon suit. In these

matters Lexecon’s appearance in Arizona could hardly be

veean voluntary. First, Lexecon appeared as a defendant ina

it in which it claimed it was improperly named by the

respondents as a means of retaliation against Lexecon, and second,

it appeared as a plaintiff which had opposed the transfer of its

lawsuit to Arizona. It may be accurate to say that Lexecon was not

_ 4 stranger to Arizona, but under these circumstances it was no more

than an accidental tourist.

16

CONCLUSION

For the foregoing reasons, WLF respectfully requests that

this Court reverse the decision of the Ninth Circuit.

Respectfully submitted,

Daniel J. Popeo

Counsel of Record

David M. Young

WASHINGTON LEGAL

FOUNDATION

2009 Massachusetts Ave., NW

Washington, D.C. 20036 -

(202) 588-0302