Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach
Supreme Court of the United States
November 10, 1997, Argued ; March 3, 1998, Decided
[***68] [**959] [*28] JUSTICE SOUTER delivered the opinion of the Court.
28 U.S.C. § 1407(a) authorizes the Judicial Panel on Multidistrict Litigation to transfer civil actions with common issues of fact "to any district for [***69] coordinated or consolidated pretrial [****6] proceedings," but imposes a duty on the Panel to remand any such action to the original district "at or before the conclusion of such pretrial proceedings." Ibid. The issue here is whether a district court conducting such "pretrial proceedings" may invoke § 1404(a) to assign a transferred case to itself for trial. We hold it has no such authority.
In 1992, petitioners, Lexecon Inc., a law and economics consulting firm, and one of its principals (collectively, Lexecon), brought this diversity action in the Northern District of [*29] Illinois against respondents, the law firms of Milberg Weiss Bershad Hynes & Lerach (Milberg) and Cotchett, Illston & Pitre (Cotchett), claiming malicious prosecution, abuse of process, tortious interference, commercial disparagement and defamation. The suit arose out of the firms' conduct as counsel in a prior class action brought against Charles Keating and the American Continental Corporation for violations of the securities and racketeering laws. Lexecon also was a defendant, charged with giving federal and state banking regulators inaccurate and misleading reports about the financial condition of the American Continental Corporation and its subsidiary [****7] Lincoln Savings and Loan. Along with other actions arising out of the failure of Lincoln Savings, the case against Lexecon was transferred under § 1407(a) for pretrial proceedings before Judge Bilby in the District of Arizona, where the matters so consolidated were known as the Lincoln Savings litigation. Before those proceedings were over, the class action plaintiffs and Lexecon reached what they termed a "resolution," under which the claims against Lexecon were dismissed in August of 1992.
Lexecon then filed this case in the Northern District of Illinois charging that the prior class action terminated in its favor when the respondent law firms' clients voluntarily dismissed their claims against Lexecon as meritless, amounting to nothing more, according to Lexecon, than a vendetta. When these allegations came to the attention of Judge Bilby, he issued an order stating his understanding of the terms of the resolution agreement between Lexecon and the class action plaintiffs. 102 F.3d 1524, 1529, and n. 2 (CA9 1996). Judge Bilby's characterization of the agreement being markedly at odds with the allegations in the instant action, Lexecon appealed his order to the Ninth Circuit. Read The Full CaseNot a Lexis Advance subscriber? Try it out for free.
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523 U.S. 26 *; 118 S. Ct. 956 **; 140 L. Ed. 2d 62 ***; 1998 U.S. LEXIS 1598 ****; 66 U.S.L.W. 4158; 98 Cal. Daily Op. Service 1482; 98 Daily Journal DAR 2041; 1998 Colo. J. C.A.R. 940; 11 Fla. L. Weekly Fed. S 361
LEXECON INC. ET AL., PETITIONERS v. MILBERG WEISS BERSHAD HYNES & LERACH ET AL.
Prior History: [****1] ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT.
Disposition: 102 F.3d 1524, reversed and remanded.
pretrial proceedings, consolidated, cases, transferred, venue, self-assignment, pretrial, multidistrict litigation, district court, coordinated, proceedings, terms, courts, terminated, law firm, assign, class action, authorizes, limits
Civil Procedure, Venue, Federal Venue Transfers, Convenience Transfers, General Overview, Improper Venue Transfers, Preliminary Considerations, Multidistrict Litigation, Trials, Consolidation of Actions