Mass Tort Litigation Blog

Welcome to Our Newest Editor: Sergio Campos

We are pleased to announce that Sergio Campos, Associate Professor at the University of Miami School of Law, will be joining our blog. 

In addition to his stellar credentials (you can learn more about him on his faculty web page) Campos has written a very interesting paper called Mass Torts and Due Process and engaged our own Howard Erichson in a fruitful debate about Mass Torts in the Penn Law Review's online companion that we covered here.  He teaches civil procedure and complex litigation and his research interests include civil procedure, race and the law and torts. 

 

Supreme Court Rejects Tobacco Appeal

The Supreme Court yesterday rejected an appeal filed by Phillip Morris of a $270 million dollar judgment in a state court class action in Louisiana.  Justice Scalia had issued an order last September blocking the verdict.  .

As Lyle Dennison writes on Scotusblog, this is suprising given the Court's hints in the Wal-Mart decision. He explains:

After the Wal-Mart decision, the tobacco companies made a new plea to the Court to take up their case, since the Court had not resolved any constitutional questions in the retailer’s case.  But, at the most, Court observers had speculated that, if the Court did not grant review, it at least would wipe out the Louisiana court’s verdict and order it to reconsider under Wal-Mart.  An outright denial was not at all anticipated.

ADL

Supreme Court Issues Two Personal Jurisdiction Decisions - Both Products Liability Cases

The Supreme Court issued its decisions in Nicastro and Goodyear.  Coverage at the civil procedure and federla courts blog and more to come.

The bottom line: no revolution in the doctrine of personal jurisdiction - its as messy as ever.  I have really enjoyed reading the decisions, however, and am looking forward to teaching them.  Goodyear is a particularly masterful opinion in terms of clear and concise writing.

ADL

McGovern on Punitive Damages Class Actions

I just ran across an article by Francis McGovern entitled "Punitive Damages and Class Actions" 70 Louisiana L. Rev. 435 (2010).  Here is a flavor of the piece from the introduction:

Notwithstanding the chilly reception that punitive damages class actions have received from appellate courts, there are several approaches at the micro and macro levels of analysis suggesting that “hope” is still persistent. By disaggregating the United States Supreme Court punitive damages jurisprudence, it is possible to identify a limited number of factual scenarios where a class action for punitive damages could be successful. These micro-level observations can constitute a road map for navigating the current seemingly insurmountable barriers that have severely limited the use of class actions in punitive damages claims. At the macro level, there are two observations that could lead to a revision of punitive damages class actions: the seemingly undaunted, pragmatic desire on the part of trial judges to resolve similar cases collectively, and the powerful support for an economic vision of punitive damages that leads inevitably to a global, rather than individual, procedural approach.

ADL

More Coverage on Wal-Mart - Law Professors at the NY Times

The NYTimes Room for Debate feature has a series of short posts from various law professors about the Wal-Mart case.  There are a few good ones there from Richard Banks, Melissa Hart, Tanya Hernandez, and Suzette Malveaux.

I was especially taken with Richard Primus' take on the individualism espoused by the decision versus the potential for social reform that a more collectivist view permits.  This is the same argument (albeit in a different area of the law) as that made most forcefully by David Rosenberg in the mass tort context (see his article Decoupling Deterrence and Compensation Functions in Mass Tort Class Actions for Future Loss).

In a series of recent decisions the Supreme Court has shorn up the individualist approach to litigation.  Examples include Taylor v. Sturgell last term (rejecting a theory of 'virtual representation' in preclusion doctrine) and Smith v. Bayer this term (limiting the reach of the federal courts who have denied class certification to enjoin allegedly "copycat" state court class actions).  Sam Issacharoff has written about this phenomenon in the October 2007 Term in his article Private Claims, Aggregate Rights.  Wal-Mart v. Dukes is of a piece with this trend.

The problem of course is that the political economy of litigation and the structure of a mass consumption society does not fit well with the individualized approach that the Court prefers.   This lack of fit raises a deeper question - what sources should the Court use to determine these questions when it has a choice between adopting an interpretation of a procedural rule that is more friendly to aggregation and one that is more hostile?  A formalist would respond by saying that the Court was interpreting the law.  But the split between the Justices on the commonality question indicates that there are multiple interpretations available and the choice between them is based on something other than the clear language of the Rule.  That "something other" I think is a policy preference for individualism over aggregation, and there are good reasons for this preference, but also good reasons to be wary of formal individualism that ends up preventing the functional vidication of rights.

ADL

The NYT on Big Cases

Steven Greenhouse of the New York Times has an article today entitled "Wal-Mart Case is a Blow for Big Cases & Their Lawyers".  He quotes Heidi Li Feldman, of Georgetown, on the impact on other types of cases, especially those relating to the mortgage crisis:

 “A big mortgage broker might say, ‘At the national level, we have policies to abide by all of the rules and regulations that are applicable, and we delegate a lot of discretion to our branches,’ ” she said.

He also quotes John Coffee of Columbia Law on the effect of this case on securities actions: none.  The article is worth reading, with some good quotes from both sides in the case. 

Joe Sellers, attorney for the plaintiffs, is quoted as explaining that the ruling will break up the actions against Wal-Mart to a store or regional level.  This will be more expensive for plaintiffs, but as Sellers points out, if plaintiffs stick with it, the fragmented litigation will become much more expensive for Wal-Mart, which will have to defend on multiple fronts.  Had Wal-Mart permitted the class action to go forward and won on the merits, everything would be over.  Now there is the potential for multiple jurisdictions to issue different rulings not only because the facts of the cases will be different in different places, but also because of different views on the law.  Of course, for all this to be the case plaintiffs have to have the stomach and the resources to pursue the litigation; they say that they will.  It is the economics of litigation that make this case so troubling.

There has been a big debate in the academy over whether disuniformity is a good or bad thing, and the Court here has come out in favor of it by rejecting the centralization of these claims against Wal-Mart.    If you're interested, you might check out Amanda Frost, Overvaluing Uniformity or my own Recovering the Social Value of Jurisdictional Redundancy.

ADL

 

 

Some Links to Analysis of the Wal-Mart Opinion

Wal-Mart around the blogs:

Adam Steinman's recap of the case is available on Civil Procedure & Federal Courts Prof Blog.

Sergio Campos analyzes the case on Prawfsblawg.

Lyle Dennison's analysis is on Scotusblog.  Dennison points out the concrete importance of Wal-Mart v. Dukes for mass torts, particularlyPhilip Morris USA, Inc., et al., v. Jackson (docket 10-735) :

That is a case that turns entirely on constitutional questions — a massive class-action lawsuit against the nation’s major cigarette companies in Louisiana state court that resulted in an award of $270 million to a class of former smokers.

Justice Scalia stayed that ruling last September.  The Court has been holding the case until it decided the Wal-Mart case.  It now is expected to take action on that case; its options include granting the case, or sending it back to Louisiana courts to consider the impact of the Wal-Mart decision.   Since the Wal-Mart decision turns mainly upon the meaning of a federal court rule (Rule 23) that does not apply to class-action lawsuits in state court, it is unclear how much specific guidance state courts could take from Monday’s decision.

ADL

Wal-Mart v. Dukes - (b)2 is not to be.

As Erichson writes below, the Wal-Mart employment discrimination class action was decided today.   Here are some preliminary thoughts on two surprising things about the decision.

Most suprising.The thing I found most suprising about the decision was the unanimous agreement on limiting the scope of Rule 23(b)(2).  As our loyal readers know, two commonly used types of class actions were at issue in the case: injunctive class actions (brought under FRCP 23(b)(2)) and money damages class actions (brought under FRCP 23(b)(3)).  Because getting a class action certified under the money damages part of the rule - (b)(3) - is harder and more costly than the injunctive part - (b)(2) - it matters which one the plaintiffs are allowed to seek.  Here 9 agreed that claims for back pay need to be certified as a (b)(3).  This means that they need to meet the hightened requirements of superiority and predominance, which are exactly what they sound like - is the class action superior to individual actions? Do the common issues predominate over individual ones?

Title VII class actions seeking certification as injunctive actions and also asking for back pay are common.  Does every Title VII class action seeking pack pay now need to be certified as a money damages class action and meet these additional requirements? I am not sure. On the one hand, the Court wrote that a b(2) class action is not appropriate where plaintiffs seek an "individualized award of monetary damages." (Slip Op at 21).  Since all back pay awards are somewhat individualized, even if easily calculated, this would argue in favor of requiring (b)(3) certification of all back pay claims.  On the other hand, the Court left open the possibility of money damages in a b)(2) class action where money damages as "incidental".  Here the Court was particularly concerned about the fact that some class members for the back pay claims are no longer class members for the injuctive claim because they have left Wal-Mart's employment.  The Court explained that continually reevaluating the class to see who was still in Wal-Mart's employ & therefore entitled to both an injunction and back pay was inefficient.  Might it be then that a class could be structured so that every member of the class was still entitled to back pay and an injunction? What if the back pay was really small? 

The implication of the Court's rejection of "trial by fomula" (Slip Op at 27) in this case is very important for the survival of (b)(3) back pay claims. If the back pay claims are individualized and require individual hearings, then no class action will lie because these claims won't be certified as a b(3) either.  And this would have a genuine negative impact on persons entitled to back pay who would have had their claims vindicated in the class context.  The people who would suffer most under this would be people with legitimate claims for smaller amounts of back pay - in the $2,500 like the Dukes plaintiffs - because they would readily meet the superiority requirement (the only way they will be vindicated is through a class action mechanism) but are unlikely to meet the heightened predominance requirement. 

Second surprise & one for the academy. The majority relied heavily on the work of the late Richard Nagareda. It was good to see Richard's work recognized in this way, if sad to know that he is not alive to appreciate the compliment.  It was also interesting in light of the recent bruhaha over C.J. Robert's statements, in sum and substance, that the academy adds nothing to the practice of law or the work of judges. 

More on the applicability of Richard's work and where I disagree with him, as well as the implications of the Court's rejection of "trial by formula" for mass torts, a bit later. 

ADL

Wal-Mart v. Dukes Decision

The Supreme Court today decided Wal-Mart v. Dukes (opinion here), rejecting the massive gender discrimination class action. The Justices unanimously agreed that the class action could not be certified under Rule 23(b)(2) because the monetary damages claims were not "incidental" to the claim for injunctive relief. A 5-4 conservative majority (Scalia, Roberts, Kennedy, Thomas, Alito) went a huge step further, however, ruling that the class action also had to be rejected for lack of commonality under Rule 23(a)(2). Thus, even if the plaintiffs had sought certification under Rule 23(b)(3), or even if they had sought certification under Rule 23(b)(2) and limited their claims to injunctive relief, the class action would have to be rejected. In mass tort litigation, both the 23(b)(2) and the 23(a)(2) rulings will make it more difficult to obtain class certification. I know my co-bloggers have followed this case closely and I look forward to seeing their thoughts as well.

HME

Supreme Court decides Smith v. Bayer

Today, the Supreme Court decided Smith v. Bayer (opinion here), applying the Anti-Injunction Act to reject a federal court's attempt to control state court class certification.

The federal MDL judge in the Baycol litigation had rejected class certification for a class of West Virginia plaintiffs, finding that common questions did not predominate because each plaintiff would have to prove actual injury.  One of the members of the putative class filed a lawsuit in West Virginia state court (it was non-removable because it included several West Virginia defendants in addition to Bayer), and sought class certification.  Bayer asked the MDL judge for an order enjoining the state court from hearing Smith's motion to certify the class, arguing that Smith's class action was identical to the one the federal court had rejected.  The judge granted the injunction and the Eighth Circuit affirmed.

The Supreme Court unanimously reversed in an opinion by Justice Kagan.  The Anti-Injunction Act, 28 U.S.C. 2283, generally prohibits federal courts from enjoining state court proceedings.  Bayer argued that this case fits within the Act's relitigation exception; according to Bayer, issue preclusion prevents Smith from relitigating the issue of class certification.  The Court rejected this argument for two reasons: (1) it's not the same issue, and (2) it's not the same party. 

It's not the same issue because states are entitled to interpret their own procedural rules differently from federal courts' interpretation of the Federal Rules of Civil Procedure.  Last year's ruling in Shady Grove Orthopedic Associates v. Allstate (2010) emphasized that Rule 23 applies in federal courts and state courts apply their own class action rules.  The text of West Virginia's Rule 23 is nearly identical to the federal rule, but as Justice Kagan explained, federal and state courts "can and do apply identically worded procedural provisions in widely varying ways."  In the Rezulin litigation, the West Virginia Supreme Court announced that it did not necessarily follow the federal approach to class certification, particularly on the question of predominance.  Given that the state does not follow the federal interpretation of Rule 23, issue preclusion cannot prevent relitigation of class certification and the injunction was improper.

It's not the same party because Smith was not a named plaintiff in the federal court case.  You can't bind a non-party, as the Supreme Court emphasized in Taylor v. Sturgell (2008), where it rejected nonparty preclusion on a theory of virtual representation.  Bayer argued that Smith was bound as a member of the class, but the Supreme Court pointed out that there was no class because class certification was rejected: "The definition of the term 'party' can on no account be stretched so far as to cover a person like Smith, whom the plaintiff in a lawsuit was denied leave to represent."

The Court got it right.  It's a complicated case but it was an easy decision.  State courts have their own rules and are entitled to decide what procedures to follow.  Even though a federal judge concluded (correctly, in my view) that the mass tort litigation involving Baycol was not suitable for a class action under Federal Rule 23, the West Virginia state court is entitled to decide that issue under the West Virginia class action rule.  But the decision shows how messy things get when mass disputes are litigated in both federal and state courts.  Justice Kagan's opinion acknowledges the "special problems of relitigation" that can be presented by class actions, but suggests that the solution lies in removal under CAFA and transfer under the MDL statute, rather than departing from fundamental principles of preclusion.

HME

BP Oil Spill Appeals Judges Appointed

The Gulf Coast Claims Facility has appointed twenty-five people to serve as appeals judges for BP's private compensation system.  Alabama's Press Register describes the process as follows:

Anyone who files a claim valued at more than $250,000 can protest the claims operation’s initial ruling to the appeals panel. BP can protest the decision on any claim above $500,000.

The judges will serve in panels of three. The panels will have 14 days to rule on each case before them.

If claimants are not happy with the appeals ruling, they can file their claim with the U.S. Coast Guard, or sue BP and other companies involved in the spill.

Jack Weiss, LSU's law school dean selected the following people to serve on the panel:

• Judge Delores R. Boyd (ret.) of Montgomery, Alabama. Boyd is a former Magistrate Judge of the United States District Court for the Middle District of Alabama.
• Dean John L. Carroll of Birmingham, Alabama. Carroll is the Dean and Ethel P. Malugen Professor of Law at the Cumberland School of Law of Samford University and a former Magistrate Judge of the United States District Court for the Middle District of Alabama.
• Judge William R. Gordon (ret.) of Montgomery, Alabama. Gordon is a former Circuit Judge of the 15th Judicial Circuit Court of Alabama.
• Justice Champ Lyons, Jr. (ret.) of Point Clear, Alabama. Lyons is a former Associate Justice of the Supreme Court of Alabama.
• Judge Edward B. McDermott (ret.) of Dauphin Island, Alabama. McDermott is a former Circuit Judge of the 13th Judicial Circuit Court of Alabama.
• Judge Kenneth O. Simon (ret.) of Birmingham, Alabama. Simon is a former Circuit Judge of the 10th Judicial Circuit Court of Alabama.
• Professor Charles W. Ehrhardt of Tallahassee, Florida. Ehrhardt is the Ladd Professor Emeritus at Florida State University College of Law.
• J. Joaquin Fraxedas of Altamonte Springs, Florida. Fraxedas is an attorney mediator/arbitrator and a Distinguished Fellow of the American College of Civil Trial Mediators.
• Judge Melvia B. Green (ret.) of Tampa, Florida. Green is a former Judge of the 3rd District Court of Appeal of Florida.
• Justice Major B. Harding (ret.) of Tallahassee, Florida. Harding is a former Chief Justice of the Supreme Court of Florida.
• Judge John J. Upchurch (ret.) of Ormond Beach, Florida. Upchurch is a former Chief Judge of the 7th Judicial Circuit Court of Florida and was appointed by the Supreme Court of Florida as a charter member of the Supreme Court Committee on Mediation and Arbitration.
• Dean Donald J. Weidner of Tallahassee, Florida. Weidner is the Dean and Alumni Centennial Professor at Florida State University College of Law.
• Judge Gerald T. Wetherington (ret.) of Coral Gables, Florida. Wetherington is a former Chief Judge of the 11th Judicial Circuit Court of Florida and has served as a Judge Pro Tempore of the 2nd and 4th District Courts of Appeal of Florida.
• Judge Robert J. Burns, Sr. (ret.) of Metairie, Louisiana. Burns is a former Chief Judge of the 24th Judicial District Court of Louisiana and served as a Judge Pro Tempore of the 5th Circuit Court of Appeal.
• Judge Philip C. Ciaccio (ret.) of New Orleans, Louisiana. Ciaccio is a former Judge of the Louisiana 4th Circuit Court of Appeal and has served as a Justice Ad Hoc of the Supreme Court of Louisiana.
• Judge David S. Gorbaty (ret.) of Chalmette, Louisiana. Gorbaty is a former Judge of the Louisiana 4th Circuit Court of Appeal.
• Chancellor Freddie Pitcher, Jr. of Baton Rouge, Louisiana. Pitcher is the Chancellor and Professor of Law at the Southern University Law Center and a former Judge of the Louisiana 1st Circuit Court of Appeal.
• Professor Ronald J. Scalise, Jr. of New Orleans, Louisiana. Scalise is the A.D. Freeman Associate Professor of Civil Law at Tulane Law School.
• Lynne R. Stern of New Orleans, Louisiana. Stern is an attorney mediator/arbitrator and past Chairman of the Alternative Dispute Resolution Section of the Louisiana State Bar Association.
• Professor Guthrie T. Abbott of Oxford, Mississippi. Abbott is a Professor Emeritus of Law at the University of Mississippi School of Law.
• Professor Patricia W. Bennett of Madison, Mississippi. Bennett is a Professor of Law at Mississippi College School of Law.
• Richard T. Bennett of Clinton, Mississippi. Bennett is an attorney mediator/arbitrator, former President of the Mississippi State Bar and serves on the Board of Directors of the American Arbitration Association.
• Judge W. Raymond Hunter (ret.) of Gulfport, Mississippi. Hunter is an attorney mediator/arbitrator, a former Municipal Court Judge for the City of Long Beach and serves as President of the Mississippi Chapter of Attorney-Mediators.
• Harold D. Miller, Jr. of Madison, Mississippi. Miller is an attorney mediator/arbitrator and served as the first Chairman of the Alternative Dispute Resolution Section of the Mississippi State Bar.
• Anne P. Veazey of Ridgeland, Mississippi. Veazey is an attorney mediator/arbitrator and serves on the Executive Committee of the Mississippi State Bar Alternative Dispute Resolution Section

ECB

Monestier on Transnational Class Actions and Preclusion

Tanya Monestier (Roger Williams) has posted her paper, Transnational Class Actions and the Illusory Search for Res Judicata, on SSRN.  It raises a number of important issues about the intersection of preclusion, international law, and class actions (there's a Rule 23(b)(3) manageability question involved as well).  Here's the abstract:

The transnational class action – a class action in which a portion of the class consists of non-U.S. claimants – is here to stay. Defendants typically resist the certification of transnational class actions on the basis that such actions provide no assurance of finality for a defendant, as it will always be possible for a non-U.S. class member to initiate subsequent proceedings in a foreign court. In response to this concern, many U.S. courts will analyze whether the “home” courts of the foreign class members would accord res judicata effect to an eventual U.S. judgment prior to certifying a U.S. class action containing foreign class members. The more likely the foreign court is to recognize a U.S. class judgment, the more likely that an American court will include those foreigners in the U.S. class action.

Current scholarship accepts propriety of the res judicata analysis, but questions the manner in which the analysis is carried out. This Article breaks from the existing literature by arguing that the dynamics of class litigation render the res judicata effect of an eventual U.S. class judgment inherently unknowable to a U.S. court ex ante. In particular, I argue that certain “litigation dynamics” – specifically the process of proving foreign law via experts, the principle of party prosecution, and the litigation posture of the action – complicate the transnational class action landscape and prevent a court from accurately analyzing the res judicata issues at play. This is exacerbated by the “structural dynamics” of class litigation: the complexity of foreign law on the recognition and enforcement of judgments; the newness of class action law in most foreign countries; and the distinction between general and fact-specific grounds for non-enforcement of a U.S. class judgment. Accordingly, I argue that U.S. courts should abandon their illusory search for res judicata. Instead, courts should avoid the res judicata problem altogether by employing an opt-in mechanism for foreign class plaintiffs, whereby such plaintiffs are not bound unless they affirmatively undertake to be bound by U.S. class judgment. An opt-in mechanism for foreign plaintiffs also provides several advantages over the current opt-out mechanism: it allows all foreign claimants to participate in U.S. litigation if they so choose; it provides additional protections for absent foreign claimants; it respects international comity; and it sufficiently deters defendant misconduct.

ECB

Litigation Finance: Lend to the Lawyers

BNA reports on Core Funding Group LP v. McIntire, E.D. La., Civ. No. 07-4273, 5/11/11.  In this case, the Eastern District of Louisiana Judge upheld an agreement between a mass tort lawyer and a creditor who had loaned the lawyer money to fund his part in a mass tort litigation.

Because the loan was to the lawyer, not the client, and therefore did not promote speculation or invite meddling in the lawsuit.  If you have access to BNA you can find the squib here.

ADL