Mr. KASTENMEIER. You aren't implying that we might consider linking another general change in diversity jurisdiction with this bill, however, are you? Mr. BRANSDORFER. I would like to say that that is a good idea. It was a good idea in the prior Congress and, as you know, Mr. Chairman, that linkage did not follow through, so I again feel that diversity, on behalf of the Department, as to this bill does not have the role it had before, but we are not saying at this time that our suggestion that the committee approval and that this legislation be given overall favorable approval is linked notwithstanding our feeling that diversity should be eliminated. Mr. KASTENMEIER. And your view about diversity generally, and the linkage to this particular bill, has to do with the Department's concern about overloaded district courts. Mr. BRANSDORFER. Yes, yes, Mr. Chairman. Mr. KASTENMEIER. We didn't go into a great deal of discussion with Judge Schwarzer with respect to the choice of law provisions, but my understanding is that Judge Schwarzer feels that there may be circumstances in which one State's law is the most appropriate as applied to one particular defendant, while a different State's law is more appropriate as applied to another defendant. He recommends that judges be given the latitude to apply the law of more than one State. That being the case, do you have any difficulty with that proposal? Do you see any problem with it? Mr. BRANSDORFER. Well, I think there could be problems, Mr. Chairman. Under section 1658, the choice of law would be based upon what I consider to be, by reading the legislation, to be a wide variety of relevant considerations-11 of those are mentioned specifically-but the bottom line would be that there would be one applicable substantive law that would be determined by that judge to apply. I think that has merit because in the event that there were a number of different substantive law applications, it seems to me that confusion, as well as conflicts might well arise within the same series of hearings, all involving this one transaction. I must say Judge Schwarzer is correct that that may well pose some problems within the case itself in terms of the ultimatethese are my words, not his-the ultimate choice of law, but I think that the objectives of the bill, to simplify this very complex procedure, is well served by the approach that is in the present legislation, with the understanding that the judge does have, in addition to these 11 specific area to consider, other relevant considerations. Mr. KASTENMEIER. I believe the next witness will testify-certainly it is in her written testimony-that the transferee court should be authorized to resolve punitive damage issues as a matter of course. Do you find that an acceptable suggestion? Mr. BRANSDORFER. On the issue of punitive damages, there have been many, many proposals. I refer to what has been one of the most comprehensive outside studies that recently has been published, and I am referring to the American College of Trial Lawyers "Task Force Report on Punitive Damages," that is dated March 3. There are a number of proposals that have been embodied in that report as to the handling of punitive damages. I am not prepared to say that we feel that the suggestion made is sound or not sound. I personally have been very interested in a number of proposals made which differ, a number of them differ from the suggestions of what is anticipated to be testimony. If it would be of assistance to the subcommittee, I would be glad to submit a supplemental report as to that specific question. But I really am not prepared to tell you, I am sorry, that I think it is a good or a bad suggestion without further study. Mr. KASTENMEIER. We would request an additional letter, or if you wish to call it a report, amplifying on that issue. That would be helpful. Mr. BRANSDORFER. We will do that promptly. [The information follows:] Subcommittee on Courts, Intellectual Property, and the Administration of Justice Committee on the Judiciary U.S. House of Representatives 2138 Rayburn House Office Building Washington, D.C. 20515-6216 Dear Congressman Kastenmeier: This is in response to your request for the views of the Department of Justice concerning the issues raised in the testimony of Judge William Schwarzer and Professors Robert Sedler and Aaron Twerski on section 6 ("Choice of Law") of H.R. 3406, the "Multiparty Multiforum Jurisdiction Act of 1989." In addition, Judge Schwarzer and Ms. Wrubel recommended that the bill be revised to avoid the risk of multiple awards of punitive damages by giving the transferee court explicit authority to retain jurisdiction for punitive damages determinations. have asked for our views on this subject as well. You We believe that the single state choice of law provision would make a desirable reform in existing law, and that no serious constitutional argument can be made against it. We also believe that the provision would be significantly improved if it embodied an even clearer, simpler, and less discretionary rule for the choice of law. As we explain, we are not prepared to comment at length on the punitive damages issue in the absence of a specific legislative proposal regarding it. Our views set forth below represent a refinement of Mr. Bransdorfer's testimony as to the single jurisdiction choice of law approach set forth in the Bill. As set forth below, a nondiscretionary, more than single jurisdiction choice of law regime would also be acceptable. We state our analysis at some length. In general, H.R. 3406, in a provision to be codified at 28 U.S.C. § 1367, would grant the federal district courts original jurisdiction in certain mass tort cases involving "minimal diversity" between adverse parties. Section 6 of the bill, which would enact a new 28 U.S.C. § 1658, prescribes a choice of law rule for such actions. Specifically, proposed section 1658 instructs the courts to "determine the source of the applicable substantive law" in such cases. In making that determination, the courts "shall not be bound by the choice of law rules of any State," but "may consider" certain factors eleven of which are enumerated in choosing the applicable rule. The court shall then "enter an order designating a single jurisdiction whose substantive law is to be applied" to all the actions before it, "except where Federal law applies or the order specifically provides for the application of the law of another jurisdiction with respect to an action or an element of an action." - - Judge Schwarzer, in the portion of his comments that provides his personal views on the proposed legislation, objects to section 1658 (b) on the grounds that it would require a court to apply the substantive law of a "single jurisdiction" to all the actions before it. Acknowledging that "this is desirable as a general proposition," Judge Schwarzer believes that "situations may arise in which different issues will require the application of the substantive law of different jurisdictions." Accordingly, he recommends that the subsection be amended.1 2 Professors Sedler and Twerski, in more detailed comments, make two main objections to proposed section 1658. First, they argue that by freeing the federal district courts from the obligation to follow state conflicts rules in mass tort cases, "it would undermine the ability of the states to develop and apply their own law to disputes between private persons in multiparty torts cases." Joint Statement at 10. Second, they point out that section 1658 would require the district court to designate "a single [state] jurisdiction whose substantive law is to be applied" to all actions arising from the disaster and to all elements of each action, unless federal law applies or the court specifically determines that some other state's law shall apply. Id. at 12. But, they argue, "[b]ecause of constitutional 1 See Prepared Statement of William W. Schwarzer Concerning H.R. 3406, dated November 15, 1989, at 3. 2 See Joint Statement of Robert A. Sedler, Professor of Law Wayne State University, and Aaron D. Twerski, Professor of Law, Brooklyn Law School, dated November 15, 1989 (the "Joint Statement"). |