The opinion of the court was delivered by: LORD
ADMINISTRATIVE ORDER NO. 71-5
MEMORANDUM AND ORDER TRANSFERRING "HUMAN CONSUMPTION CASES" TO THE DISTRICT OF MINNESOTA UNDER 28 U.S.C. § 1404(a)
MILES W. LORD, District Judge (By Assignment).
On December 2, 1970, the Judicial Panel on Multidistrict Litigation assigned the so-called "non-settling" antibiotic drug cases to the undersigned judge for coordinated or consolidated pretrial proceedings under 28 U.S.C. § 1407. In re Antibiotic Drugs, 320 F. Supp. 586 (Jud. Pan. Mult. Lit. 1970). With the exception of the action brought by the United States, all actions subject to this order involve treble damage claims allegedly resulting from purchases, either direct or indirect, of antibiotic drugs for human consumption.1
The "human consumption" category includes actions brought by states, cities, wholesale and retail drug stores, insurance companies, union welfare funds, the United States of America and two foreign nations. Many of them involve interlocking and overlapping claims. For example, each of the seven litigating states
seeks treble damages for reimbursements made by them for drugs purchased by their citizens under state welfare plans. However, the United States provides part of the funds for state welfare programs and it seeks prorata recovery for the same purchases.
Three large health insurance companies
seek treble damages allegedly resulting from their payments and inuring to them because of reimbursement for purchases of antibiotic drugs for their subscribers. These claims may be in conflict with both the consumer claims and the private hospital claims asserted by the litigating states. In addition, several union welfare funds also seek treble damages for reimbursed purchases made by their members or for drugs dispensed directly to their members.
It would appear that some union welfare funds may be insured by companies which may be included in the "insurance company class" and this would create a direct conflict between the two classes.
Finally, Thrifty Drug Stores, one of the largest drug chains on the west coast, seeks treble damages resulting from sales to consumers in several of the litigating states. This presents a direct conflict between Thrifty's claims and those of the affected states. There may also be a conflict between Thrifty's claims and those of some of the other "human consumption" plaintiffs. There is also a similar conflict and overlap on the international scene. The United States seeks damages resulting from its purchases of antibiotic drugs for distribution in its foreign aid program. The Republic of Vietnam apparently seeks treble damages resulting from some of the same purchases. As it stands now, many of these conflicting and overlapping cases will have to be tried separately in different districts and by different judges.
The defendants have indicated from the beginning of this litigation that they intend to urge that some of these plaintiffs are too remote or lack standing to assert their claims under the antitrust laws and that others "passed-on" the illegal overcharge (if any) to those who purchased from them. The court soon recognized that these apparent conflicts presented one of the biggest problems in "managing" this litigation and in an unsuccessful attempt to distill the litigation down to more manageable proportions, it encouraged the defendants to file motions to dismiss several categories of plaintiffs on the ground that their claims were too remote or that they lacked standing to assert them. These motions were heard in March in San Francisco and after much deliberation, the court concluded that it could not, at this stage in the proceedings, hold as a matter of law that any of the "human consumption" plaintiffs were too remote or lacked standing to assert their claims.
See, State of Minnesota v. U.S. Steel Corp., 438 F.2d 1380 (8th Cir. 1971).
The court had intended, after paring down the litigation, to consolidate several groups of plaintiffs, such as the seven litigating states, for jury trials at least as to liability. As a part of this plan and with the approval of the Chief Justice of the United States, the Judicial Panel on Multidistrict Litigation and the Chief Judges of two circuits involved, this judge was assigned to the Northern District of California under 28 U.S.C. § 292(c) for the purpose of trying the cases originally commenced in that district.
However, since these overlaps and conflicts cannot, in this court's opinion, be resolved prior to trial, it has become increasingly clear that they can only be satisfactorily resolved by a coordinated or consolidated trial or trials in one district directed by the judge who is most familiar with this massive litigation.
This led to the court's tenative conclusion that the transfer of all human consumption cases to a single district for trial purposes was a prerequisite to working out a realistic "trial plan" for them. Therefore, on April 5, 1971, this court ordered the parties to show cause why all human consumption cases (except the competitor cases) should not be transferred to the District of Minnesota pursuant to 28 U.S.C. § 1404(a). A hearing was held in New York City on May 5, 1971, and all parties had a full opportunity to present their views.
All defendants vigorously oppose the transfer of these cases to the District of Minnesota for trial and one of them, Chas. Pfizer & Co., seems to be categorically opposed to the transfer and consolidation of any of these cases for trial. Apparently Pfizer would prefer to try these 31 separate actions in the eleven districts in which they were filed.
The plaintiffs generally favor transfer to a single district and approve of the selection of the District of Minnesota.
The threshold question is whether this judge, as a transferee judge, has the authority to transfer actions transferred to the court under section 1407 to another district under section 1404(a).
In a comprehensive and typically well-written brief, the defendants point out quite correctly that Congress clearly limited the power of the Judicial Panel on Multidistrict Litigation to transfers for "coordinated or consolidated pretrial proceedings" and that it has no authority to transfer cases for trial. Since the Panel cannot transfer cases for trial neither, the defendants reason, can a transferee judge.
Although the defendants' reasoning has a certain initial appeal, it breaks down on careful analysis. Section 1407 created the Judicial Panel on Multidistrict Litigation and defined and limited its jurisdiction. Neither the Act nor its legislative history in any way limit the normal authority of a district court. Indeed the legislative history specifies that the transferee court has the "authority to render summary judgment, to control and limit pretrial proceedings, and to impose sanctions for failure to make discovery or comply with pretrial orders."
The legislative history also makes it quite clear that section 1407 was designed to affect "only the pretrial stages in multidistrict litigation [and not] the place of trial." Nor does transfer under section 1407 "exclude the possibility of transfer under other Federal statutes."
There is absolutely no reason to believe that the district judge to whom a case has been assigned under section 1407 has any less authority or power as to matters preceding the actual trial of a case than would a judge before whom the case was originally filed. It is equally clear that a motion to transfer a case for trial is a pretrial motion which generally should be determined prior to the completion of discovery. McDonnell Douglas Corp. v. Polin, 429 F.2d 30 (3d Cir. 1970). For these reasons, this Court has concluded, as have other transferee courts,
that a transferee district court has the authority to transfer under section 1404(a), cases transferred to it under section 1407. Any other holding would create an anomalous situation for the Panel has held that from the time of entry of its order of transfer until the time of entry of an order of remand, the transferor court is without jurisdiction and can issue no further orders. In re Plumbing Fixture Cases, 298 F. Supp. 484, 486 (Jud. Pan. Mult. Lit. 1968).
Thus, if the transferee judge cannot make a section 1404(a), or an even more critical section 1406(a) transfer, no court can and both sections 1404(a) and 1406(a) will have been temporarily suspended by section 1407. That surely cannot have been the intent of Congress.
Having decided that it has the authority to order a transfer under section 1404(a), the court must turn to the question of whether any or all of these cases should be transferred to a single district for trial at the completion of pretrial proceedings. The prerequisite for a section 1404(a) transfer is that it can only be to a district where the transferred action "might have been brought." No one suggests that any of the cases being considered for transfer could not have been brought in the District of Minnesota. The court notes that all defendants are named in the one "human consumption" case brought in the District of Minnesota
as well as ...