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In re IKO Roofing Shingle Products Liability Litigation

United States Court of Appeals, Seventh Circuit

July 2, 2014


Argued June 5, 2014

Appeal from the United States District Court for the Central District of Illinois. No. 09-md-2104 -- Harold A. Baker, Judge.

For DEBRA ZANETTI, on behalf of herself and others similarly situated, Michael Hight, Michael Augustine, Belinda Curler, David Greenough, Plaintiffs - Appellants: Christopher M. Ellis, Attorney, Jon D. Robinson, Attorney, Bolen Robinson & Ellis, Decatur, IL; Samuel Issacharoff, Attorney, New York University Law School, New York, NY.

For IKO MANUFACTURING INCORPORATED, a Delaware Corporation, IKO INDUSTRIES INCORPORATED, a Canadian corporation, IKO INDUSTRIES LIMITED, a Canadian corporation, IKO MIDWEST INCORPORATED, an Illinois corporation, IKO PRODUCTION INCORPORATED, a Delaware corporation, Defendants - Appellees: Christopher Macneil Murphy, Attorney, Aron J. Frakes, Attorney, Steven P. Handler, Attorney, Mcdermott, Will & Emery, Chicago, IL.

Before WOOD, Chief Judge, and EASTERBROOK and KANNE, Circuit Judges.


Easterbrook, Circuit Judge 

Purchasers of organic asphalt roofing shingles in many states have filed suits against IKO Manufacturing and affiliated firms, contending that it falsely told customers that these shingles met an industry standard known as ASTM D225, and that

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compliance had been ascertained by use of a testing protocol known as ASTM D228. What distinguishes an " organic" asphalt tile is the inclusion of a layer made from felt or paper; tiles that include a fiberglass layer are not called organic, even though asphalt itself has organic components. We omit other details about the tiles and the standards, for the merits of plaintiffs' claims are not material to the current dispute.

In 2009 the Panel on Multidistrict Litigation transferred all of the federal suits to the Central District of Illinois for consolidated pretrial proceedings under 28 U.S.C. § 1407. Plaintiffs asked the court to certify a class that would cover IKO's sales in eight states since 1979. The court declined, (C.D. Ill. Jan. 28, 2014), and we granted the plaintiffs' request for interlocutory review under Fed.R.Civ.P. 23(f).

Before addressing plaintiffs' arguments about the class-certification decision, we must consider whether the judge who denied plaintiffs' motion had authority to preside over the litigation. Section 1407(b) provides that the " pretrial proceedings shall be conducted by a judge or judges to whom such actions are assigned by the judicial panel on multidistrict litigation." The Panel assigned the cases to Judge McCuskey, who had agreed to accept them. In his capacity as the district's Chief Judge at the time, he reassigned them to Judge Baker early in 2010. Unfortunately, Judges McCuskey and Baker failed to recognize that § 1407(b) gives the Panel exclusive power to select the judge. Its rules provide that, " [i]f for any reason the transferee judge is unable to continue those responsibilities, the Panel shall make the reassignment of a new transferee judge." Rules of Procedure of the United States Panel on Multidistrict Litigation 2.1(e). Neither judge asked the Panel to change the assignment. The Panel proceeded to transfer follow-on cases to Judge McCuskey through 2012, without appreciating that all he did was relay them to Judge Baker. Eventually the Panel got wind of the situation (the record does not reveal how) and on February 12, 2014, issued an order transferring all of the cases to Judge Baker. But he had denied plaintiffs' motion for class certification two weeks earlier. In legal jargon, he was acting ultra vires .

If the problem deprived the court of subject-matter jurisdiction, then there is nothing for us to do but vacate the order of January 28--and every other order Judge Baker entered during the preceding four years. We do not think, however, that § 1407 affects subject-matter jurisdiction, a term that deals with the tribunal 's adjudicatory competence. See, e.g., Gonzalez v. Thaler, 132 S.Ct. 641, 181 L.Ed.2d 619 (2012); Henderson v. Shinseki, 131 S.Ct. 1197, 179 L.Ed.2d 159 (2011); Reed Elsevier, Inc. v. Muchnick, 559 U.S. 154, 130 S.Ct. 1237, 176 L.Ed.2d 18 (2010); Minn-Chem, Inc. v. Agrium, Inc., 683 F.3d 845 (7th Cir. 2012) (en banc).

All of these suits are properly in federal court, and for that matter properly in the Central District of Illinois for consolidated pretrial proceedings. A district court's error in complying with § 1407(b), which gives the Panel exclusive authority to select the transferee judge, does not vitiate the Panel's selection of the appropriate district court, the subject of a separate clause in § 1407(a). In the Supreme Court's current terminology, § 1407(b) creates a case-processing rule rather than a jurisdictional one. One vital difference between the two is that the litigants may waive or ...

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