Friday, April 23, 2010

Seventh Circuit Rules that Daubert Applies During Class Certification

In an April 7, 2010, decision, American Honda Motor Co. v. Allen, the Seventh Circuit held that "when an expert's report or testimony is critical to class certification, . . . a district court must conclusively rule on any challenge to the expert's qualifications or submissions prior to ruling on a class certification motion.  That is, the district court must perform a full Daubert analysis before certifying the class is the situation warrants." (Opinion at p. 6)  This is not a surprise given the recent push by the Second, Third, Fifth and Seventh Circuits to delve further into the merits during class certification and to resolve mixed issues of law and fact that are relevant to class certification by a preponderance of the evidence (See, e.g., In re Hydrogen Peroxide Antitrust Litig., 552 F.3d 305, 311-12 (3d Cir. 2008); Oscar Private Equity Investments v. Allegiance Telecom., Inc. 487 F.3d 261, 268 (5th Cir. 2007); In re IPO Securities Litig., 471 F.3d 24, 40 (2d Cir. 2006); Szabo v. Bridgeport Machines, Inc., 249 F.3d 672, 676 (7th Cir. 2001).

On the whole, this is a positive development.  As I wrote in a law review comment in 2004, "Most courts faced with evidentiary concerns during certification evade Daubert challenges by claiming that this asks them to travel into the prohibited area of 'merit inquiry.'  Courts have not uniformly applied the restriction against an inquiry into the merits, which has produced a hodgepodge of discretionary decisions that lack a principled justification.  When conducting a rigorous analysis in complex cases, district courts must often examine more than just the pleadings to understand the claims, defenses, facts, and applicable substantive law before 'mak[ing] a meaningful determination of the certification issues.'  This examination does not stop when the court encounters an expert opinion."  (at p. 1080)  Although I have some concerns about the move toward a merits inquiry at class certification (particularly when discovery is curtailed), when an expert is used to support the Rule 23(a) or 23(b) requirements, it makes sense to subject that expert to a full Daubert analysis particularly given all that rides on the class certification decision.

ECB

April 23, 2010 in Class Actions, Procedure | Permalink | Comments (0) | TrackBack (0)

Wednesday, April 21, 2010

Remaining Pockets of Lead Poisoning

An article today in The New York Times discusses the remaining pockets of lead poisoning in urban areas, despite the nationwide trend of decreasing lead poisoning.

BGS

April 21, 2010 in Environmental Torts, Lead Paint, Products Liability | Permalink | Comments (0) | TrackBack (0)

Sharkey on the Exxon Valdez Litigation

Catherine Sharkey (NYU) has posted "The Exxon Valdez Litigation Marathon: A Window on Punitive Damages" on SSRN.

It looks like one of the things Sharkey discusses in the paper (which I haven't read yet but looks fascinating and important) is the fact that the Exxon case was a punitive damages class action.  Notably, it was a punitives class sought by the defendants not plaintiffs.  The plaintiffs actually opposed the class certification (and lost).  It seems to me that from an economic point of view punitive damages classes make perfect sense because punitives are all about defendants' conduct, not plaintiff's, so individual issues should not predominate.  We only start to get concerned about the relationship between plaintiff's harm and defendant's punitive exposure when we know that many other cases are going to come about seeking punitive damages (in other words, the defendant faces duplicative awards for the same conduct).  For contrary views see Nagareda, Punitive Damages Class Actions and the Baseline of Tort and Sheila Scheuerman, Two World Collide: How the Supreme Court's Recent Punitive Damages Decisions Affect Class Actions.

Here is the abstract of Sharkey's paper:

The Exxon Valdez litigation marathon - a protracted, two-decade-long battle over the propriety and constitutionality of the jury’s $5 billion punitive damages award - provides a window into the past, present, and future of punitive damages. Acting akin to a common law court under federal admiralty jurisdiction, the U.S. Supreme Court provided a template for lower courts to follow. Free of constitutional constraints, the Court diagnoses the problem with punitive damages - unpredictability - and propose a solution: a 1:1 ratio of punitive to compensatory damages. The flaws in the Court’s statistical analysis provide a reminder that those “unsophisticated in statistics” should proceed with caution. The Court’s single-minded focus on unpredictability almost inexorably drives it to embrace and reinforce an exclusively retributive rationale for punitive damages. The Court invokes the analogy of the sentencing guidelines as a model for achieving greater predictability; once enamored with this model, the linkage between the guidelines and criminal retribution spills over to punitive damages as civil retribution. There is, moreover, an uncanny coincidence between the Court’s common law, policy-laden analysis, and the heavy-handed direction its constitutional excessiveness decisions had been taking.

Three issues loom large on the horizon of punitive damages doctrine and policy. First, the Court’s fixation on unpredictability can be linked with a broader trend in the Court’s jurisprudence of circumscribing the role of the civil jury in the name of certainty, predictability, and efficiency. Second, the Court had before it a case in a unique procedural posture: the plaintiffs were part of a “limited fund,” mandatory, non-opt out class action for resolution of punitive damages only. Because that element of the case was not appealed to the Court, the Court left for another day resolution of the classwide determination of punitive damages. Third, the Court’s quest for a national solution to the punitive damages problem and its equation of punitive damages and criminal fines presage impending federalism battles. By elevating a single punitive damages goal - that of retributive punishment - the Court sets the stage for a clash with state courts and legislatures who might be inspired to define their legitimate state interests in punitive damages differently.

ADL

April 21, 2010 in Mass Tort Scholarship, Punitive Damages | Permalink | Comments (0) | TrackBack (0)

Monday, April 19, 2010

ACI Conference on Chemical Products Liability and Environmental Litigation

American Conference Institute will be hosting a conference on Chemical Products Liability and Environmental Litigation on April 28-29, 2010 in Chicago, IL.  I will be speaking on mass torts and ethics, with particular attention to the ethics of mass settlements.  Here's the brochure (Download ACI Brochure).  

BGS

April 19, 2010 in Aggregate Litigation Procedures, Conferences, Environmental Torts, Informal Aggregation, Mass Tort Scholarship, Pharmaceuticals - Misc., Products Liability, Settlement | Permalink | Comments (0) | TrackBack (0)

Jennifer Wriggins on Torts, Insurance and the Value of Injury

At Torts Prof Blog.  A very interesting post. 

ADL

April 19, 2010 in Mass Tort Scholarship | Permalink | Comments (0) | TrackBack (0)