Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach

dissenting.

Since the Judicial Panel on Multidistrict Litigation (JPML) was created in 1968, it has transferred 92,562 cases for consolidated pretrial proceedings. Only 3,508 of these—less than four percent—have been sent back for trial in the district where the complaint was filed. Administrative Office of the United States Courts, Judicial Business of the United States Courts: 1995 Report of the Director 32. Yet the statute which authorizes the JPML to transfer cases for coordinated or consolidated pretrial proceedings commands 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.... ” 28 U.S.C. § 1407 (a). These numbers tell the story of a remarkable power grab by federal judges who have parlayed a narrow grant of authority to conduct consolidated discovery into a mechanism for systematically denying plaintiffs the right to trial in their forum of choice.

You don’t have to stare very long at the statutory language and drafting history to realize this is not at all what Congress had in mind when it passed 28 U.S.C. § 1407 . The language itself is clear as…

Of the many consequences of the failure of Lincoln Savings and Loan and its parent, American Continental Corporation, the litigation that produced these consolidated appeals was just one. At the heart of these appeals is a suit by Lexeeon Inc. against a number of the attorneys who represented the consolidated class of investors who lost money in the collapse of Lincoln Savings and its parent. Lexeeon is a law and economies consulting firm that frequently serves as a defense expert in securities class actions prosecuted by the law firms that are defendants here. Lexeeon had prepared several reports for Lincoln Savings and American Continental, and consequently became a target of the class’ claims. In due course these claims were resolved. Thereafter Lexeeon and its principal, Professor Daniel R. Fischel of the University of Chicago Law School, brought an action for, inter aha, malicious prosecution and defamation in federal district court for the Northern District of Illinois against several of the class attorneys— Milberg Weiss Bershad Hynes & Lerach and affiliated attorneys (“Milberg Weiss”), and Cotchett Illston & Pitre and affiliated attorneys (“Cotchett”). 1 The underlying…