No: 07-1151 IN RE: PHARMACY BENEFIT MANAGERS ANTITRUST LITIGATION MDL 1782 BELLEVUE… v. CAREMARKSPCS, INC., f/k/a ADVANCEPCS D.C. Civil No. 03-cv-04731 CaremarksPCS, Inc.,…

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No: 07-1151
IN RE: PHARMACY BENEFIT MANAGERS
ANTITRUST LITIGATION
(MDL 1782)
BELLEVUE DRUG CO.; ROBERT SCHREIBER, INC.,
doing business as BURNS PHARMACY;
REHN-HUERBINGER DRUG CO.,
doing business as PARKWAY DRUGS #4, on behalf of
themselves and all others similarly situated;
PHARMACY FREEDOM FUND;
NATIONAL COMMUNITY PHARMACISTS
ASSOCIATION
v.
*CAREMARKSPCS, INC., f/k/a ADVANCEPCS
(D.C. Civil No. 03-cv-04731)
*CaremarksPCS, Inc., f/k/a AdvancePCS,
Appellant
*(Amended in accordance with Clerk's Order dated 02/20/07)

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Appeal from the United States District Court
for the Eastern District of Pennsylvania
(Civ. No. 03-cv-04731)
District Judge: Hon. John P. Fullam
Argued: February 8, 2008
Before: McKEE and AMBRO, Circuit Judges,
and ALDISERT, Senior Circuit Judge
(Opinion filed: September 24, 2009)
STEVEN E. BIZAR, ESQ.
LANDON Y. JONES, III, ESQ.
Buchanan, Ingersoll & Rooney PC
50 South 16 Streetth
Two Liberty Place, Suite 3200
Philadelphia, PA 19102
MICHAEL SENNETT, ESQ.
PAULA W. RENDER, ESQ. (Argued)
Jones Day
77 West Wacker Drive, Suite 3500
Chicago, IL 60601
VICTOR E. GRIMM, ESQ.
JASON M. MARKS, ESQ.
Bell, Boyd & Lloyd LLP
70 West Madison Street, Suite 3100
Chicago, IL 60602
Attorneys for Appellant

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MICHAEL J. FREED, ESQ.
Freed Kanner London & Millen LLC
2201 Waukegan Road, Suite 130
Bannockburn, IL 60015
JEAN K. JANES, ESQ.
Much Shelist Denenberg Ament & Rubenstein, P.C.
191 North Wacker Drive, Suite 1800
Chicago, IL 60606
H. LADDIE MONTAGUE, JR., ESQ. (Argued)
MARTIN I. TWERSKY, ESQ.
Berger & Montague, P.C.
1622 Locust Street
Philadelphia, PA 19103
Attorneys for Appellees
OPINION
McKEE, Circuit Judge.
This action (the “Bellevue action”) is one of six similar
antitrust actions challenging the practices of prescription
benefits managers that have been transferred by the Judicial
Panel on Multidistrict Litigation for coordinated proceedings

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On March 24, 2004, AdvancePCS became a wholly owned1
subsidiary of Caremark Rx, Inc., and changed its name to
CaremarkPCS. In the proceedings in the district court, the
defendant was AdvancePCS and for consistency will be referred
to here as Advance PCS.
4
before the Honorable John P. Fullam of the United States
District Court for the Eastern District of Pennsylvania under the
caption: In re Pharmacy Benefit Managers Antitrust Litigation,
MDL Docket No. 1782. The Bellevue action had initially been
assigned to Judge Eduardo C. Robreno of the same Court. In an
order entered on August 24, 2004, before the Bellevue action
was transferred to Judge Fullam, Judge Robreno granted the
defendant’s motion to compel arbitration and stayed the action
pending arbitration. Judge Fullam subsequently vacated Judge
Robreno’s order compelling arbitration, and that order is the
subject of this appeal. The Appellant is AdvancePCS, the1
defendant in the Bellevue action. Because we hold that Judge

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5
Fullam’s order violated the law of the case doctrine, we will
vacate that order and remand with directions to reinstate Judge
Robreno’s order compelling arbitration.
I. FACTS AND PROCEDURAL HISTORY
Bellevue Drug Co., Inc., Robert Schreiber, Inc., d//b/a
Burns Pharmacy, and Rehn-Heurbinger Drug Co., d/b/a
Parkway Drugs # 4 (“Pharmacy Plaintiffs”), are retail pharmacy
businesses. The Pharmacy Freedom Fund and the National
Community Pharmacists Association (“Association Plaintiffs”)
are associations of community pharmacies and pharmacists,
respectively.
AdvancePCS is a prescription benefits manager (“PBM”)
for drug benefit plans sponsored by employers, unions,
government agencies, insurance plans and others (“Plan
Sponsors”). PBMs are retained by Plan Sponsors to efficiently
manage their benefit plans and to achieve cost savings for Plan

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Sponsors and plan members who may be required to pay a
portion of the drug cost, known as a co-payment. Efficiencies
and cost savings are achieved by PBMs in a variety of ways,
including negotiating discounts or rebates from drug
manufacturers, providing mail order prescription service to plan
members, contracting with retail pharmacies for reimbursement
when prescriptions are filled for plan members, and electronic
processing and paying of claims.
Here, the Pharmacy Plaintiffs entered into written
agreements (“Pharmacy Provider Agreements” or
“Agreements”) with AdvancePCS to provide prescription drugs
and related pharmacy services to persons covered by drug
benefit plans administered by AdvancePCS. The Pharmacy
Provider Agreements contain an “Arbitration Clause” which
provides:
Arbitration. Any and all controversies in

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connection with or arising out of this Agreement
will be exclusively settled by arbitration before a
single arbitrator in accordance with the Rules of
the American Arbitration Association. The
arbitrator must follow the rule of law, and may
only award remedies provided in this Agreement.
The award of the arbitrator will be final and
binding on the parties, and judgment upon such
award may be entered in any court having
jurisdiction thereof. Arbitration under this
provision will be conducted in Scottsdale,
Arizona, and Provider hereby agrees to such
jurisdiction, unless otherwise agreed to by the
parties in writing or mandated by Law, and the
expenses of the arbitration, including attorneys’
fees, will be paid by the party against whom the
award of the arbitrator is rendered. This Section
9.5 and the parties’ rights hereunder shall be
governed by the Federal Arbitration Act, 9 U.S.C.
§§ 1 et seq.
Section 9.5 (App. 488-89). The Pharmacy Provider
Agreements also contain a “Remedies Clause” which provides:
Remedies. Provider acknowledges that any
unauthorized disclosure or use of [AdvancePCS]
proprietary information would cause
[AdvancePCS] immediate and irreparable injury
or loss. Accordingly, should Provider fail to
abide by this Section 6 [captioned “Intellectual

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P r o p e r t y R i g h t s : C o n f i d e n t i a l i t y” ] ,
[AdvancePCS] shall be entitled to specific
performance including immediate issuance of a
temporary restraining order or preliminary
injunction enforcing this Agreement, and to
judgment for damages (including attorneys’ fees)
caused by the breach and to all other remedies
provided by this Agreement and applicable law.
Section 6.4 (App. 487). In addition, the Agreements contain
limitation of liability and indemnification provisions. The
limitation of liability provision reads:
Limitation on Liability. [AdvancePCS] shall not
be liable to Provider for any claim, injury,
demand or judgment based upon contract, tort or
other grounds (including warranty of
merchantability) arising out of the sale,
compounding, dispensing, manufacturing, or use
of any drug or device dispensed by or any
Pharmacy Services provided by Provider under
this Agreement. In no event is either party liable
to the other party for indirect, consequential or
special damages or any nature (even if informed
of their possibility), lost profits or savings,
punitive damages, injury to reputation or loss of
customers or business.
Section 7.1 (App. 487). The indemnification provision reads:

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Indemnification. Provider agrees to indemnify
and hold [AdvancePCS], its shareholders,
directors, employees, agents and representatives
free and harmless for, from and against any and
all liabilities, losses, settlements, claims,
demands, and expenses of any kind (including
attorneys’ fees), that may result or arise out of: (I)
any actual or alleged malpractice, negligence or
misconduct of Provider in the performance or
omission of any act or responsibility assumed by
Provider under this Agreement, or (ii) the sale,
compounding, dispensing, failure to sell,
manufacture or use of a drug or device dispensed
by Provider of Pharmacy Service provided by
Provider under this Agreement.
Section 7.2 (App. 487).
On August 15, 2003, the Pharmacy Plaintiffs, for
themselves and all other similarly situated pharmacies that
“contracted with AdvancePCS to dispense and sell brand name
and generic prescription drugs for any prescription drug benefit
plan(s),” Complaint ¶ 29, and the Association Plaintiffs filed a
complaint in the United States District Court for the Eastern
District of Pennsylvania captioned Bellevue Drug Co., et al. v.

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The Association Plaintiffs joined the action solely to seek2
injunctive relief on behalf of their members and did not seek
status as representative plaintiffs or class members.
Similar complaints were filed in several federal district3
courts against various PBMs. Those complaints are: N. Jackson
Pharmacy v. Express Scripts Inc., No. 5:03-2696 (N.D. Ala.); N.
Jackson Pharmacy v. Medco Health Solutions, Inc., No. 5:-3-
2697 (N.D. Ala.); Mike’s Med. Ctr. Pharmacy v. Medco Health
Solutions, Inc., No. 3:05-5108 (N.D. Cal.); N. Jackson
Pharmacy v. Caremark RX Inc., No. 1:04-5674 (N.D. Ill.);
10
AdvancePCS, No. 2:03-cv-04731. The complaint alleged that2
AdvancePCS used the combined economic power of its Plan
Sponsors to reduce the contractual amount it pays to retail
pharmacies below the levels that would prevail in a competitive
marketplace. It also alleged that the Agreements impose certain
limitations on drug refills and co-payment charges to plan
members. The complaint asserted that the foregoing actions
constituted an unlawful conspiracy among AdvancePCS and its
Plan Sponsors to restrain competition in violation of Section 1
of the Sherman Act, 15 U.S.C. § 1.3

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Brady Enters., Inc. v. Medco Health Solutions, Inc., No. 2:03-
4730 (E.D. Pa.). The last named case, Brady Enters., Inc., was
filed simultaneously with the complaint here. Brady was
initially assigned to Judge Jan E. Dubois but, on August 27,
2003, it was reassigned to Judge Fullam.
In Eichorn v. AT & T Corp., we explained:4
Once there is the finding of antitrust injury, courts
examine the alleged illegal conduct under one of
two distinct tests: per se violation or rule of
reason. Under the per se test, “agreements whose
nature and necessary effect are so plainly
anti-competitive that no elaborate study of the
industry is needed to establish their illegality” are
found to be antitrust violations. For those
11
On September 25, 2003, AdvancePCS moved to dismiss
the complaint, arguing that the plaintiffs lacked standing.
AdvancePCS also argued that, even assuming arguendo that
plaintiffs had standing, they had not sufficiently alleged either
horizontal collusion to state a per se violation of the antitrust
laws or sufficient injury to competition to allege a rule of reason
violation. AdvancePCS submitted with that motion a binder of4

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activities not within the per se invalidity category,
courts employ the rule of reason test. Under this
test, plaintiffs have the burden of establishing
that, under all the circumstances, “the challenged
acts are unreasonably restrictive of competitive
conditions” in the relevant market.
248 F.3d 131, 139 (3d Cir. 2001) (citations omitted).
12
exhibits of allegedly judicially noticeable materials. The
materials included three lengthy government-sponsored studies
of the efficiency enhancing effects of PBMs, as well as
AdvancePCS’s own Form 10-K and other materials.
In an opinion dated March 2, 2004, Judge Robreno
denied AdvancePCS’s motion, finding that the Plaintiffs
suffered antitrust injury and had antitrust standing. The district
court further held that the allegations of horizontal collusion
were sufficient to allege both a per se violation and to state a
claim for restraint of trade under the rule of reason based upon

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“Horizontal collusion” exists where competitors at the same5
market level agree to fix or control the prices they will charge
for their respective goods or services. It is a per se unreasonable
restraint of trade under the Sherman Act. See In re Flat Glass
Antitrust Litig., 385 F.3d 350 (3d Cir. 2004).
AdvancePCS’s action was purportedly the result of the6
Federal Trade Commission’s decision (memorialized in a letter)
not to investigate a proposed acquisition of AdvancePCS by
Caremark, see n.1, supra.
13
alleged price suppression.5
On March 16, 2004, AdvancePCS filed an answer to the
complaint and moved to reconsider the March 2, 2004 order or
to certify it for interlocutory appeal pursuant to 28 U.S.C. §
1292(b). On April, 9, 2004, the Pharmacy Plaintiffs and the6
Association Plaintiffs filed an opposition to that motion. On
May 14, 2004, Judge Robreno denied AdvancePCS’s motion.
On May 17, 2004, AdvancePCS submitted a revised
corporate disclosure form to reflect the fact that it had been
acquired in March 2004 by Caremark. See n.1, supra.

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On June 21, 2004, some ten months after the Plaintiffs’
complaint was filed (but before any discovery began),
AdvancePCS filed a motion to compel arbitration in which it
asked the district court to enforce the arbitration clause in the
Pharmacy Provider Agreements and enter an order compelling
arbitration of all of the Plaintiffs’ claims. In the alternative,
AdvancePCS asked for an order compelling arbitration of the
claims of the Pharmacy Plaintiffs and staying the claims of the
Association Plaintiffs pending the completion of arbitration.
Plaintiffs based their opposition to the motion to compel
on two distinct grounds. First, they contended that AdvancePCS
waived any right to arbitrate by actively litigating the Plaintiffs’
claims for ten months. Second, they contended that the
arbitration agreement was unenforceable because it precluded
them from pursuing statutory antitrust remedies. The Plaintiffs
also claimed that they would not be able to afford arbitration,

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particularly in light of the provision in the Agreements that
costs and attorneys’ fees are to be paid by the party who loses
the arbitration.
In a Memorandum Order entered August 24, 2004, Judge
Robreno granted AdvancePCS’s motion to compel arbitration
and stayed the district court action. He found that the Pharmacy
Plaintiffs had entered into enforceable arbitration agreements
that encompassed any antitrust claims, and that AdvancePCS
had not waived its right to seek arbitration.
On September 7, 2004, the Plaintiffs filed a motion to
reconsider or, in the alternative, for certification of an
interlocutory appeal pursuant to 28 U.S.C. § 1292(b). Plaintiffs
urged the district court to reconsider its decision on the
enforceability of the arbitration agreement; alternatively, they
requested that the district court dismiss the case so that they
could file an appeal. On June 17, 2005, Judge Robreno denied

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reconsideration and certification and ordered that the case
remain stayed in accordance with the Federal Arbitration Act
(“FAA”), 9 U.S.C. § 3.
However, the Plaintiffs did not thereafter initiate
arbitration proceedings. AdvancePCS contends that on April 7,
2006, the Plaintiffs filed a motion before the Judicial Panel on
Multidistrict Litigation (“MDL Panel”) for transfer of this and
certain other cases under 28 U.S.C. § 1407 for coordinated
pretrial proceedings. The Plaintiffs dispute this claim and insist
that they did not file the motion before the MDL Panel. They
contend that the plaintiffs in the Brady action, see n.3, supra,
filed that motion.
In any event, on May 19, 2006, the Plaintiffs filed a
motion to lift the stay and dismiss the complaint so that they
could pursue an appeal of the district court’s August 24, 2004,
and June 17, 2005, orders. In that motion to dismiss, the

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Plaintiffs represented that they did not intend to arbitrate their
claims but desired to obtain appellate review of the orders
compelling arbitration.
As we noted at the outset, this case was transferred to
Judge Fullam by the MDL Panel. That transfer occurred on
August 24, 2006, before Judge Robreno ruled on the Plaintiffs’
motion to lift the stay and dismiss their complaint. In re
Pharmacy Benefit Managers Antitrust Litig., 452 F. Supp. 2d
1352 (Jud.Pan.Mult.Lit. 2006).
On August 25, 2006, Judge Robreno transferred this
action to Judge Fullam pursuant to the MDL Panel’s August 24,
2006 transfer order. On December 7, 2006, Judge Fullam
convened a status conference in the MDL proceedings, which
then included this action. At that conference, Judge Fullam
heard argument on the Plaintiffs’ motion to lift the stay and
dismiss the complaint.

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That order was entered on December 19, 2006.7
18
On December 18, 2006, Judge Fullam sua sponte signed
an order and supporting memorandum vacating Judge
Robreno’s August 24, 2004, order compelling arbitration and
staying litigation. Judge Fullam then dismissed the then-7
pending motion to dismiss the complaint as moot. In re
Pharmacy Benefit Mangers Antitrust Litig. (Bellevue Drug Co.
v. AdvancePCS), 2006 WL 3759712 (E.D. Pa. Dec. 18, 2006).
In doing so, Judge Fullam explained that “Judge Robreno’s
Orders compelling arbitration were clearly appropriate under
the Federal Arbitration Act and the Congressional policies
reflected in that statute.” Id. at *1. However, Judge Fullam
believed that, in ordering arbitration, Judge Robreno “did not
actually decide that the issues involved were arbitrable, or even
whether the arbitration agreement relied upon was enforceable;

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19
he merely, in accordance with the general policy of favoring
arbitration, required that all issues be submitted initially to the
arbitrator for decision.” Id. Noting the “action of the [MDL
Panel] (which clearly assumed that the stay or proceedings did
not preclude coordinated pretrial proceedings),” Judge Fullam
reasoned that he could therefore “diverge from Judge Robreno’s
Orders to the limited extent of considering whether any useful
purpose would be served in submitting all preliminary
determinations to the arbitrator.” Id. Judge Fullam believed:
“the task assigned to me as transferee judge can best be
performed by expediting the decision which, I believe, would
necessarily have been reached by the arbitrator with respect to
the procedural aspects of this litigation.” Id. at *2.
In deciding the “procedural aspect of th[e] litigation,”
Judge Fullam found that because the “arbitrator must follow the
rule of law, and may only award remedies provided” in the

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We have jurisdiction pursuant to Sections 16(a)(1)(A) and8
(B) of the Federal Arbitration Act, 9 U.S.C. §§ 16(a)(1)(A) and
(B), which provide that appeals may be taken from orders
denying motions to compel arbitration and denying stays of
proceedings pending arbitration.
20
agreement, the “arbitrator is precluded from considering the
antitrust claims asserted by plaintiff in this litigation.” Id.
Thus, Judge Fullam had “no difficulty in concluding either that
the parties never intended this type of litigation to be submitted
to arbitration, or that the Arbitration Agreement is
unenforceable because it violates public policy.” Id. at
AdvancePCS then filed this appeal.8
II. DISCUSSION
AdvancePCS makes a number of arguments. It
contends, inter alia, that Judge Fullam’s order vacating Judge
Robreno’s order compelling arbitration violates the Federal
Arbitration Act (“FAA”); that the claims of the Pharmacy

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Plaintiffs and the Association Plaintiffs are subject to
arbitration; and that the arbitration clauses in the Pharmacy
Provider Agreements are valid and enforceable. However, we
need not address the merits of any of those arguments because
we agree with Advance PCS that Judge Fullam’s order vacating
Judge Robreno’s orders compelling arbitration cannot stand
under the law of the case doctrine.
In Arizona v. California, 460 U.S. 605 (1983), the
Supreme Court noted:
Unlike the more precise requirements of res
judicata, law of the case is an amorphous concept.
As most commonly defined, the doctrine posits
that when a court decides upon a rule of law, that
decision should continue to govern the same
issues in subsequent stages in the same case.
Id. at 618 (citations omitted). The “[l]aw of the case rules have
developed ‘to maintain consistency and avoid reconsideration
of matters once decided during the course of a single continuing

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lawsuit.’” Casey v. Planned Parenthood of Se. Pa., 14 F.3d
848, 856 (3d Cir. 1994) (quoting 18 Charles A. Wright, Arthur
R. Miller, Edward Cooper, Federal Practice and Procedure §
4478 at 788 (2d ed. 1981)).
“The . . . doctrine does not restrict a court’s power but rather
governs its exercise of discretion.” Pub. Interest Research
Group of NJ, Inc. v. Magnesium Elektron, 123 F.3d 111, 116
(3d Cir. 1997) (citations omitted). The Supreme Court has
explained the scope of this discretion as follows:
A court has the power to revisit prior decisions of
its own or of a coordinate court in any
circumstance, although as a rule courts should be
loathe to do so in the absence of extraordinary
circumstances such as where the initial decision
was clearly erroneous and would make a manifest
injustice.
Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 816
(1988) (citing Arizona v. California, 460 U.S. at 618 n.8).
In addition to the extraordinary circumstance noted by

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the Supreme Court in Christianson, we have we “recognized
several ‘extraordinary circumstances’ that warrant a court’s
reconsideration of an issue decided earlier in the course of
litigation.” Public Interest Research Group, 123 F.3d at 116-
17. In Public Interest Research Group, we explained that the
law of the case doctrine does not preclude a court from
revisiting its own decisions or one of a coordinate court where
(1) new evidence is available or (2) a supervening new law has
been announced. 123 F.3d at 117 (citations omitted). In
addition, we have held the “law of the case doctrine does not
preclude a trial judge from clarifying or correcting an earlier,
ambiguous ruling.” Swietlowich v. County of Bucks, 610 F.2d
1157, 1164 (3d Cir. 1979). We have also held that “a trial
judge has the discretion to reconsider an issue and should
exercise that discretion whenever it appears that a previous
ruling, even if unambiguous, might lead to an unjust result.” Id.

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(citing Messenger v. Anderson, 225 U.S. 436 (1912)).
However, we have also been careful to caution that if a “trial
judge decides to change or explain an earlier ruling, he should
state his reasons on the record” and also “take appropriate steps
so that the parties are not prejudiced by reliance on the prior
ruling.” Id.
Judge Fullam did not rely on any of the recognized
exceptions to the law of the case doctrine in vacating Judge
Robreno’s order compelling arbitration. He also failed to find
any extraordinary circumstance that would have justified
vacating Judge Robreno’s order compelling arbitration.
Moreover, Judge Fullam held that Judge Robreno’s order was
“clearly appropriate” under the FAA, 2006 WL 3759712, at *1,
and it is clear that Judge Fullam misread Judge Robreno’s
opinion in support of the August 24, 2004, order compelling
arbitration. As stated above, Judge Fullam believed that Judge

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Robreno:
did not actually decide that the issues involved in
the present case were arbitrable, or even whether
the arbitration agreement relied upon was
enforceable; he merely, in accordance with the
general policy of favoring arbitration, required
that all such issues be submitted initially to the
arbitrator for decision.
Id. That is simply not accurate. In compelling arbitration,
Judge Robreno expressly stated: “it is unmistakably clear that
the instant dispute falls within the scope of the Arbitration
Agreement,” App. A245, and he expressly found “that there is
a valid agreement to arbitrate between the parties.” App. A268.
In fact, the “Remedies” section of Judge Robreno’s August 20,
2004, Memorandum begins: “[f]inding that there is a valid
agreement to arbitrate between the parties and that the instant
dispute falls within the scope of the Arbitration Agreement . .
. and that the Arbitration Agreement is not unconscionable, the
Court will grant the . . . motion to compel arbitration and stay

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26
the proceedings pending the outcome of arbitration.” Id.
Thus, Judge Robreno could not have been clearer, and
Judge Fullam’s reading of Judge Robreno’s Memorandum is
clearly inconsistent with Judge Robreno’s findings and legal
conclusions.
Judge Fullam was nevertheless convinced that he had
the authority to vacate Judge Robreno’s order compelling
arbitration “notwithstanding ‘law of the case’ principles.” 2006
WL 3759712, at *1. Judge Fullam explained: “As a general
proposition, a transferee judge under the Multidistrict statute
may vacate or modify any order of a transferor court bearing
upon pretrial matters.” Id. However, we can find nothing in the
text of 28 U.S.C. § 1407, the Multidistrict litigation transfer
statute, that authorizes a transferee judge to vacate or modify an

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That statute provides:9
(a) When civil actions involving one or more
common questions of fact are pending in different
districts, such actions may be transferred to any
district for coordinated or consolidated pretrial
proceedings. Such transfers shall be made by the
judicial panel on multidistrict litigation authorized
by this section upon its determination that
transfers for such proceedings will be for the
convenience of parties and witnesses and will
promote the just and efficient conduct of such
actions. Each action so transferred shall be
remanded by the panel at or before the conclusion
of such pretrial proceedings to the district from
which it was transferred unless it shall have been
previously terminated: Provided, however, That
the panel may separate any claim, cross-claim,
counter-claim, or third-party claim and remand
any of such claims before the remainder of the
action is remanded.
(b) Such coordinated or consolidated pretrial
proceedings shall be conducted by a judge or
judges to whom such actions are assigned by the
judicial panel on multidistrict litigation. For this
purpose, upon request of the panel, a circuit judge
27
o r d e r o f a t r a n s f e r o r j u d g e . 9

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or a district judge may be designated and assigned
temporarily for service in the transferee district by
the Chief Justice of the United States or the chief
judge of the circuit, as may be required, in
accordance with the provisions of chapter 13 of
this title. With the consent of the transferee
district court, such actions may be assigned by the
panel to a judge or judges of such district. The
judge or judges to whom such actions are
assigned, the members of the judicial panel on
multidistrict litigation, and other circuit and
district judges designated when needed by the
panel may exercise the powers of a district judge
in any district for the purpose of conducting
pretrial depositions in such coordinated or
consolidated pretrial proceedings.
(c) Proceedings for the transfer of an action under
this section may be initiated by--
(i) the judicial panel on
multidistrict litigation upon its
own initiative, or
(ii) motion filed with the panel by
a party in any action in which
28

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transfer for coordinated or
consolidated pretrial proceedings
under this section may be
appropriate. A copy of such
motion shall be filed in the
district court in which the moving
party's action is pending.
The panel shall give notice to the parties in all
actions in which transfers for coordinated or
co n so lid ated p retr ia l p ro c e e d ing s are
contemplated, and such notice shall specify the
time and place of any hearing to determine
whether such transfer shall be made. Orders of the
panel to set a hearing and other orders of the
panel issued prior to the order either directing or
denying transfer shall be filed in the office of the
clerk of the district court in which a transfer
hearing is to be or has been held. The panel's
order of transfer shall be based upon a record of
such hearing at which material evidence may be
offered by any party to an action pending in any
district that would be affected by the proceedings
under this section, and shall be supported by
findings of fact and conclusions of law based
upon such record. Orders of transfer and such
other orders as the panel may make thereafter
shall be filed in the office of the clerk of the
29

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district court of the transferee district and shall be
effective when thus filed. The clerk of the
transferee district court shall forthwith transmit a
certified copy of the panel's order to transfer to
the clerk of the district court from which the
action is being transferred. An order denying
transfer shall be filed in each district wherein
there is a case pending in which the motion for
transfer has been made.
(d) The judicial panel on multidistrict litigation
shall consist of seven circuit and district judges
designated from time to time by the Chief Justice
of the United States, no two of whom shall be
from the same circuit. The concurrence of four
members shall be necessary to any action by the
panel.
(e) No proceedings for review of any order of the
panel may be permitted except by extraordinary
writ pursuant to the provisions of title 28, section
1651, United States Code. Petitions for an
extraordinary writ to review an order of the panel
to set a transfer hearing and other orders of the
panel issued prior to the order either directing or
denying transfer shall be filed only in the court of
appeals having jurisdiction over the district in
30

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which a hearing is to be or has been held.
Petitions for an extraordinary writ to review an
order to transfer or orders subsequent to transfer
shall be filed only in the court of appeals having
jurisdiction over the transferee district. There
shall be no appeal or review of an order of the
panel denying a motion to transfer for
consolidated or coordinated proceedings.
(f) The panel may prescribe rules for the conduct
of its business not inconsistent with Acts of
Congress and the Federal Rules of Civil
Procedure.
(g) Nothing in this section shall apply to any
action in which the United States is a complainant
arising under the antitrust laws. “Antitrust laws”
as used herein include those acts referred to in the
Act of October 15, 1914, as amended (38 Stat.
730; 15 U.S.C. 12), and also include the Act of
June 19, 1936 (49 Stat. 1526; 15 U.S.C. 13, 13a,
and 13b) and the Act of September 26, 1914, as
added March 21, 1938 (52 Stat. 116, 117; 15
U.S.C. 56); but shall not include section 4A of the
Act of October 15, 1914, as added July 7, 1955
(69 Stat. 282; 15 U.S.C. 15a).
31

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(h) Notwithstanding the provisions of section
1404 or subsection (f) of this section, the judicial
panel on multidistrict litigation may consolidate
and transfer with or without the consent of the
parties, for both pretrial purposes and for trial,
any action brought under section 4C of the
Clayton Act.
28 U.S.C. § 1407.
32
Moreover, if Judge Fullam’s interpretation of the statute were
accurate, litigation could begin anew with each MDL transfer.
Section 1407 does allow the Joint Panel on Multidistrict
Litigation to “prescribe rules for the conduct of its business not
inconsistent with Acts of Congress and the Federal Rules of
Civil Procedure,” 28 U.S.C. § 1407(f), but there is nothing in
the rules adopted by the Joint Panel on Multidistrict Litigation
that authorizes a transferee judge to vacate or modify the order
of a transferor judge, see 199 F.R.D. 425 (2001). Moreover, we
do not believe that Congress intended that a “Return to Go”

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33
card would be dealt to parties involved in MDL transfers.
Judge Fullam’s belief that he had the authority to vacate
or modify any order of a transferor court was based on two
sources, viz., the Manual for Complex Litigation (“MCL-4th”),
§ 20.132 (4th ed. 2004) and In re Upjohn Co. Antibiotic
Cleocin Prods. Liab. Litig., 644 F.2d 114 (6th Cir. 1981). The
MCL-4th, § 20.132 does state, inter alia, that: “The transferee
judge may vacate or modify any order of a transferor court,
including protective orders; unless altered, however, the
transferor court’s orders remain in effect.” However, that
clearly does not have the force of law and can not undermine
Supreme Court precedent or the decisions of this court. See
MCL-4th, Introduction (advising that the MCL-4th “is not, and
should not be cited as, authoritative legal or administrative
policy”).
Interestingly, the cited provision in the MCL-4th stating

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The court in Upjohn, defined the issue before it as follows:10
“The issue in this appeal is the extent to which a transferee
judge in multidistrict litigation proceedings under 28 U.S.C. §
1407 may vacate and modify protective orders earlier entered by
transferor courts, where those orders enjoin the use of discovery
materials obtained through the federal litigation by others not
parties to the multidistrict litigation.” 664 F.2d at 115.
34
that the transferee court may vacate or modify any order of a
transferor court is based on In re Upjohn, supra. See MCL-4th,
§ 20.132 n.659. However, Upjohn only held that a transferee
court can modify a transferor court’s protective order when
necessary to “harmonize activity relating to discovery.” 664
F.2d at 118. Therefore, Upjohn only applies to protective
orders that are required to “harmonize . . . discovery.” Upjohn10
does not carve an exception out of the law of the case doctrine
that gobbles up the limitations inherent in that doctrine. Thus,
Upjohn does not support a claim that a transferee court has the
power to vacate or modify any order of a transferor court. On

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35
the contrary, the Upjohn court was very careful to limit the
reach of its discussion:
[I]t cannot be successfully urged that a transferee
court is without power to modify or even vacate
a protective order once entered when
circumstances so dictate. Clearly, the power of a
district judge includes the power to modify a
protective order. . . .
**************
Therefore, if the judicial power to modify a
protective order exists, it must be capable of
being exercised on need, and in cases where the
proceedings have been transferred, it must follow
that such power must then pass to the transferee
judge. It cannot exist in a vacuum. This
conclusion is buttressed by the express language
in the statute conferring all powers of the district
judge upon the transferee judge.
Id. (emphasis added). Under Upjohn, the power of the
transferor court “pass[es] to the transferee judge.” Therefore,
if the transferor judge has the power to vacate or modify a
protective order when needed, commonsense compels the

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36
conclusion that the transferee court must also have the power to
vacate or modify a protective order of a transferor court when
necessary and appropriate. Concomitantly, absent such need or
propriety (i.e., “extraordinary circumstances”), the transferee
court simply does not have the power to vacate or modify an
existing protective order.
Accordingly, if the transferor court is bound by the law
of the case doctrine (subject to the exceptions discussed above),
the transferee court must be similarly bound. Nothing in §
1407 suggests that Congress intended to confer more power on
the transferee court than the transferor court would have had
absent the transfer under 20 U.S.C. § 1407.
Judge Fullam therefore interpreted Upjohn far too
liberally in stating: “As a general proposition, a transferee judge
under the Multidistrict statute may vacate or modify any order
of a transferor court bearing upon pretrial matters. 2006 WL

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37
3759712, at *1 (citing In re Upjohn, supra; MCL-4th, §
20.312). On the contrary, given the havoc and potential delay
and confusion that such a broad proposition could visit on
parties involved in multidistrict litigation, it is not surprising
that the Upjohn court cautioned: “The rule of the law of the
case . . . is particularly applicable to multidistrict litigation in
which the presence of a large number of diverse parties might
otherwise result in constant relitigation of the same legal issue.”
664 F.2d at 119 (emphasis added).
III. CONCLUSION
Because Judge Fullam’s order vacating Judge Robreno’s
order compelling arbitration violated the law of the case
doctrine, we will vacate Judge Fullam’s order and remand with
directions to reinstate the order compelling arbitration and
staying this case pending arbitration.

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