## Facts

- Lexecon Inc. and a principal were involved in securities litigation arising from the collapse of Lincoln Savings and Loan/American Continental Corp.
- Multiple related actions were centralized by the Judicial Panel on Multidistrict Litigation (JPML) in the District of Arizona for coordinated pretrial proceedings under 28 U.S.C. § 1407(a).
- Claims against Lexecon in the underlying class action were dismissed after a settlement or similar resolution.
- Lexecon later sued plaintiffs’ class counsel (Milberg Weiss and another firm) in the Northern District of Illinois, asserting state-law tort claims including defamation.
- The JPML transferred Lexecon’s Illinois suit to the District of Arizona under § 1407(a) for coordinated pretrial proceedings.
- After summary judgment, only Lexecon’s defamation claim against Milberg Weiss remained.
- Lexecon sought remand to the Northern District of Illinois; Milberg Weiss asked the Arizona transferee court to keep the case for trial by transferring it to itself under 28 U.S.C. § 1404(a).
- The Arizona court denied remand, kept the case for trial in Arizona, and a jury returned a verdict for Milberg Weiss.
- The Ninth Circuit affirmed, reasoning that a transferee court could retain a case for trial after completing pretrial work.

## Issues

1. Whether a district court presiding over an MDL transfer under 28 U.S.C. § 1407(a) may use 28 U.S.C. § 1404(a) to transfer the case to itself for trial rather than having the JPML remand it to the original district.
2. Whether § 1407(a)’s command that the JPML “shall remand” actions at or before the conclusion of pretrial proceedings leaves any room for transferee-court “self-transfer” for trial.

## Decision

- The Supreme Court unanimously reversed the Ninth Circuit.
- The Court held that an MDL transferee court conducting pretrial proceedings under § 1407(a) has no authority to invoke § 1404(a) to assign a transferred case to itself for trial.
- The Court concluded that § 1407(a)’s “shall remand” language imposes a mandatory obligation not subject to judicial discretion or efficiency-based exceptions.
- The Court rejected reliance on longstanding MDL practice and JPML rules as inconsistent with the statutory remand requirement.
- The case was remanded for proceedings consistent with the Court’s interpretation of § 1407(a).

## Legal Principles

- Under 28 U.S.C. § 1407(a), actions transferred by the JPML for coordinated or consolidated pretrial proceedings must be remanded to the transferor district at or before the conclusion of those pretrial proceedings.
- The term “shall” in § 1407(a) creates a mandatory duty to remand that cannot be displaced by a transferee court’s use of § 1404(a).
- A transferee court’s authority in an MDL under § 1407(a) is limited to pretrial proceedings; trial venue is controlled by the remand mechanism unless another lawful basis exists that does not contradict § 1407(a).
- Administrative practice or panel rules cannot authorize trial retention in the transferee district when the governing statute requires remand.

## Conclusion

The Court held that MDL transferee courts may not keep transferred cases for trial through a § 1404(a) self-transfer, because § 1407(a) requires remand to the original district at or before the end of coordinated pretrial proceedings.


Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26 (1998)