Who's Who Legal Recognizes SHB

Who’s Who Legal: The International Who’s Who of Business Lawyers has named Shook, Hardy & Bacon its 2014 Product Liability Defense Law Firm of the Year.

The publication notes that "Shook Hardy & Bacon has a first-class product liability practice and is a go-to firm for numerous multinational organizations seeking to defend claims in the organic chemistry, electrical and mechanical engineering, pharmacology, toxicology, and computer software and hardware industries."

 
Who’s Who Legal has recognized 24 SHB partners as leading product liability defense attorneys, including your humble blogger.

Component Parts Supplier Case to Watch

The California Supreme Court has agreed to review a lower appeals court's ruling on the application of the component parts doctrine in a metal worker's suit claiming lung  injury. See Ramos, et al. v. Brenntag Specialties Inc., et al., No. B248038 (Cal. review granted 7/9/14).

In Ramos v. Brenntag Specialties, Inc. , 224 Cal.App.4th 123, the court had disagreed with the well-reasoned opinion in Maxton v. Western States Metals, 203 Cal.App.4th 81 (2012). 

Generally, suppliers of raw materials to manufacturers cannot be liable for negligence, or under a strict products liability theory, to the manufacturers‘ employees who sustain personal injuries as a result of using the raw materials in the manufacturing process. Only in extraordinary circumstances —such as when the raw materials are contaminated, the supplier exercises substantial control of the manufacturing process, or the supplier provides inherently dangerous raw materials— can suppliers be held liable. Product components include raw materials, bulk products, and other constituent products sold for integration into other products. The products at issue in these cases clearly are mere raw materials because they could be used in innumerable ways, and they were not sold directly to consumers in the market place. Rather, they were sold to plaintiff‘s employer for the purpose of using them to manufacture other products. 

Under California law, component and raw material suppliers are not liable to ultimate consumers when the goods or material they supply are not inherently dangerous, they sell goods or material in bulk to a sophisticated buyer, the material is substantially changed during the manufacturing process, and the supplier has a limited role in developing and designing the end product. When these factors exist, the social cost of imposing a duty to the ultimate consumers or users far exceeds any additional protection provided. The rationale for not imposing liability on a supplier of product components is a matter of equity and public policy. Such suppliers ordinarily do not participate in developing the product components into finished products for consumers. Imposing liability on suppliers of product components would force them to scrutinize the buyer-manufacturer‘s manufacturing process and end-products in order reduce their exposure to lawsuits. This would require many suppliers to retain experts in a huge variety of areas, especially if the product components are versatile raw materials. Courts generally do not impose this onerous burden on suppliers of product components because the buyer- manufacturer is in a better position to ensure safety.

In Ramos, a different lower appellate court rejected the argument that raw material suppliers are not liable for injuries caused by finished products that use those raw materials. Hopefully, the California Supreme Court will clarify.

Motion to Dismiss Granted in Juice Case

A California federal court has rejected a proposed class action complaint arising from alleged misleading labeling and advertising of vegetable juice products as "raw" and "organic." See Alamilla, et al. v. The Hain Celestial Group Inc., et al., No. 3:13-cv-05595 (N.D. Calif. 7/2/14).

Specifically, the complaint asserted that the effects of a pressure treatment in the making of the products were "similar to those of cooking and pasteurization, namely the destruction of vitamins, nutrients, live enzymes, nutritional value, and health benefits." On their own, said the court, these allegations might seem to state a plausible claim that the defendants' representations could lead a reasonable consumer to conclude that pressure treatment did not deprive the juice of its nutritional value in the same way that pasteurization does.

But, the court said, the complaint also incorporated by reference two articles that contradicted the plaintiffs' claim. In particular, the complaint quoted and incorporated by reference a published article that concluded that pressurization has "little or no effects on nutritional and sensory quality aspects of foods."  Although the plaintiffs did not include this specific conclusion language in their complaint, there was no doubt they had incorporated by reference the entire text of the articles they quoted in their complaint.

The articles the plaintiffs cited contradicted the allegation upon which their entire complaint hinged—namely, that pressure treatment deprives juice of nutritional value to a similar degree as pasteurization. Courts "need not accept as true allegations contradicting documents that are referenced in the complaint." Lazy Y Ranch LTD v. 24 Behrens, 546 F.3d 580, 588 (9th Cir. 2008). "A plaintiff can plead himself out of court by alleging facts which show that he has no claim, even though he was not required to allege those facts." See Sprewell v. Golden State Warriors, 266 F.3d 979, 988-989 (9th Cir. 2001). 

Accordingly, the complaint was dismissed with prejudice.
 

Chambers Rankings- SHB Recognized

Chambers & Partners has launched its 2014 edition of Chambers USA, recognizing Shook, Hardy & Bacon’s product liability, environmental, intellectual property, and labor and employment practices. Of particular note, Chambers stated that SHB has a “broad range of product liability clients and a great grasp of the science involved.” 

Chambers once again recognized the firm with a Band 1 national rating in the area of Products Liability & Mass Torts, noting SHB’s prominence in tobacco, pharmaceutical, toxic tort, and automobile matters.

Chambers also recognized more than 20 Shook attorneys with national and regional rankings, including my colleague Bill Martucci.


Your humble blogger was honored to be mentioned again in Chambers for Nationwide Product Liability & Mass Torts.

Class Certification Denied on Ascertainability Grounds

A federal court in New Jersey last week rejected a class certification effort by plaintiffs complaining about the marketing of Skinnygirl Margaritas. See Stewart v. Beam Global Spirits & Wine, Inc., No. 1:11-cv-05149 (D.N.J., 6/27/14).

Plaintiffs essentially allege that despite being marketed and sold as an "all natural" product and a "healthy alternative to other commercial Margarita products" defendants' low-calorie, pre-mixed alcoholic beverage product known as "Skinnygirl Margarita" allegedly did not live up to these claims. Plaintiffs purportedly purchased Skinnygirl Margarita based on these alleged representations by defendants in magazine advertisements and on the product packaging.

Plaintiffs moved for class certification, and the issue quickly became ascertainability. In recent years, the Third Circuit, like many courts, has increasingly emphasized the importance of ascertainability of a class with respect to classes certified under Rule 23(b)(3). See, e.g., Carrera v. Bayer Corp., 727 F.3d 300, 305-08(3d Cir. 2013); Hayes v. Wal-Mart Stores, Inc.,725 F.3d 349, 354-56 (3d Cir. 2013); Marcus v. BMW of N. Am., LLC,687 F.3d 583, 592-94 (3d Cir. 2012).  In Marcus, the Third Circuit recognized that "an essential prerequisite of a class action, at least with respect to actions [brought] under Rule 23(b)(3), is that the class must be currently and readily ascertainable based on objective criteria." Marcus, 687 F.3d at 592-93; see also Hayes, 725 F.3d at 355 ("As 'an essential prerequisite' to class certification, . . . plaintiff must show by a preponderance of the evidence that the class is ascertainable.") (citations omitted); Carrera, 727 F.3d at 306 ("a plaintiff must show, by a preponderance of the evidence, that the class is 'currently and readily ascertainable based on objective criteria,' and a trial court must undertake a rigorous analysis of the evidence to determine if the standard is met.") (citations omitted).

Several important objectives are served by virtue of the ascertainability requirement for Rule 23(b)(3) class actions: (1) the requirement eliminates serious administrative burdens that are incongruous with the efficiencies expected in a class action by insisting on the easy identification of class members; (2) the requirement protects absent class members by facilitating the best notice practicable' under Rule 23(c)(2); and (3) the requirement protects defendants by ensuring that those persons who will be bound by the final judgment are clearly identifiable. Marcus, 687 F.3d at 593; see also Hayes,725 F.3d at 355. 

Ascertainability thus consists of at least two important elements -- the class must be defined with reference to objective criteria, and there must be a reliable and administratively feasible mechanism for determining whether putative class members fall within the class definition.  See Hayes, 725 F.3d at 355. Ascertainability necessitates an inquiry into whether the defendants' records can ascertain class members, and if not, whether there is a reliable, administratively feasible alternative.  The Third Circuit has made clear that where class members are impossible to identify without extensive and individualized fact-finding or mini-trials, then a class action is inappropriate. Marcus, 687 F.3d at 593.

When considering a plaintiff's proposed mechanism for ascertaining the class, the courts have cautioned against approving a method that would amount to no more than ascertaining by potential class members' "say so" -- by, for example, having potential class members submit affidavits that promise they meet the class definition. Without further indicia of reliability, permitting such a method would essentially force defendants to accept as true absent persons' declarations that they are members of the class, raising serious due process implications.   

Defendants argued that the proposed class members cannot be identified from sales records; they pointed out that the named plaintiffs themselves had no objective evidence, or even consistent testimony, regarding their own alleged purchases. Some defendants were several steps removed from the actual retail purchases, and as a result, never had any record of which consumers bought the product. Absent proper records, it would be impossible to determine class membership without significant inquiry, resulting in a mini-hearing on the merits of each case.  

Plaintiffs proposed a mechanism for ascertaining the Classes which required that putative class members submit affidavits or attestations regarding their membership in the Classes. And defendants responded that they cannot be required to simply accept the self-serving say so of proposed class members; they must be permitted to exercise its due-process right individually to probe each putative class member's statements regarding their claimed purchase. Defendants had a due process right to challenge not only the named plaintiffs' claims that they purchased Skinnygirl Margarita, but also the claims of absent class members. That means individualized fact-finding and mini-trials as to every single absent class member's claim, which in turn means that class treatment is per se inappropriate.

So, plaintiffs' only suggested method for ascertaining the putative class members rested entirely on the submission of affidavits by individuals who claim that they purchased Skinnygirl Margarita; those affidavits would actually  need to include: (1) dates of purchases of Skinnygirl Margarita; (2) locations and retail establishments where purchases were made; (3) frequency of purchases; (4) quantity of purchases; (5) cost of purchases, etc. These types of information would be vital to determining whether each putative member fits within the class definitions in this case.

Moreover, even assuming that the affidavits sought all that information, obtaining this information by way of affidavits did not appear to be an effective method for ascertaining the Classes. Without any independently verifiable proof of purchase through receipts, retail records, or otherwise, putative class members would likely not accurately remember every Skinnygirl Margarita purchase they made during the class period, let alone where these purchases were made and the prices they paid each time. The submission of affidavits supplying such information would be very likely to invite speculation, or worse, not to mention that this process would result in an extremely burdensome task for the Court or a claims administrator even attempting to verify class members' claims. See Weiner v. Snapple Beverage Corp., 2010 WL 3119452, at *13 (S.D. N.Y. Aug. 5, 2010). Such a method cannot fairly be construed as an administratively feasible one which utilizes objective criteria.

Defendants have a right to cross-examine the plaintiffs on their alleged purchases, and cannot be forced to accept as true absent persons' declarations that they are members of the class, without further indicia of reliability.  Despite plaintiffs' attempt to argue otherwise, the rulings in cases like Marcus, Hayes, and Carrera make clear that relying on affidavits of putative class members as the primary method of ascertaining the members of the class is not a prudent course of action for a district court and is generally insufficient to meet the requirements of Rule 23. Such affidavits essentially amount to nothing more than reliance on the subjective "say so" of the putative members that they meet the class definition and are entitled to relief, and practically ignores the need for a class definition based on objective criteria. 

Class certification denied.

 

SHB Ranked in The Legal 500 As A Top Litigation Firm

We are happy to note that Shook, Hardy & Bacon has been recognized as a nationally recommended firm in both litigation and intellectual property in the newly issued 2014 edition of The Legal 500 United States.


The firm was lauded for its “deep bench of trial lawyers and strong reputation for high-profile defense work across various industries,” including its defense of thousands of individual tobacco cases, multiple class actions, and multi-district litigation. 

SHB was one of only three firms to receive top-tier recognition in the guide’s product liability: consumer products section, and one of six to receive a top-tier ranking in the pharmaceuticals and medical devices category. Additionally, SHB’s automotive/transport and toxic tort defense practices earned tier-two rankings, placing each group among the top 16 practices in the nation.

SHB was also highlighted in the guide’s intellectual property: patent prosecution section, which singled out SHB’s expertise in the telecom, computer software, and pharmaceutical and medical device industries.
 

Yet Another Artificial "Natural" Class Action Shot Down in the Food Court

A federal court has found numerous issues precluding class certification of three proposed class actions challenging the labels of defendant's food products.  See Jones  v. ConAgra Foods, Inc., No. 12-01633 (N.D. Cal. 6/13/14).

This was a putative consumer class action about allegedly deceptive and misleading labels on three types of food products. The court acknowledged that the Northern District has seen a flood of such cases in recent years.  Plaintiffs have challenged, with limited degrees of success, marketing claims on everything from iced tea to nutrition bars. Plaintiffs here moved to certify three separate classes under Federal Rule of Civil Procedure 23(b)(2) and 23(b)(3)–one for each type of food product at issue. The complaint, as is typical, alleged (1) unlawful, unfair, and fraudulent business acts and practices in violation of California Business and Professions Code section 17200 (“UCL”), (2) misleading, deceptive, and untrue advertising in violation of California Business and Professions Code section 17500 (“FAL”), (3) violations of the Consumers Legal Remedies Act (“CLRA”), and (4) restitution based on unjust enrichment.  Also, as typical, the claims centered on marketing about "natural" - "100% Natural" and a "natural source" of antioxidants. 

Lengthy and comprehensive opinion. Let's focus on just some of the key arguments. Although there is no explicit ascertainability requirement in Rule 23, courts have routinely required plaintiffs to demonstrate ascertainability as part of Rule 23(a). See, e.g., Astiana v. Ben & Jerry’s Homemade, Inc., 2014 WL 60097, at *1 (N.D. Cal. Jan. 7, 2014) (“apart from the explicit requirements of Rule 23, the party seeking class certification must also demonstrate that an identifiable and ascertainable class exists.”). A class is not ascertainable unless membership can be established by means of objective, verifiable criteria. See Xavier v. Philip Morris USA, Inc., 787 F. Supp. 2d 1075, 1088-90 (N.D. Cal. 2011).  Without an objective, reliable way to ascertain class membership, the class quickly would become unmanageable, and the preclusive effect of final judgment would be easy to evade.  Id. at 1089.  While there are a few outliers, multiple courts have concluded that the ascertainability requirement cannot be met in the context of low-cost consumer purchases that customers would have no reliable way of remembering. See, e.g., In re POM Wonderful LLC, 2014 WL 1225184, at *6 (C.D. Cal. Mar. 25, 2014) (unascertainable because “[f]ew, if any, consumers are likely to have retained receipts during the class period” and “there is no way to reliably determine who purchased Defendant’s [juice] products or when they did so.”); Red v. Kraft Foods, Inc., 2012 WL 8019257, at *5 (C.D. Cal. Apr. 12, 2012) (finding unascertainable a proposed class of purchasers of various cracker and cookie products marketed as healthy despite including partially hydrogenated vegetable oil and other unhealthy ingredients); Hodes v. Van’s Int’l Foods, 2009 WL 2424214, at *4 (C.D. Cal. July 23, 2009).

Even assuming that all proposed class members would be honest, the court found it hard to imagine that they would be able to remember which particular products they purchased from 2008 to the present, and whether those products bore the challenged label statements. As defendant pointed out with the Hunt's class, there were “literally dozens of varieties with different can sizes, ingredients, and labeling over time” and “some Hunt’s cans included the challenged language, while others included no such language at all.”  The court also noted a concern that the defendant would be forced to accept class members estimates without the benefit of cross-examination; this was not a case in which the consumers were likely to have retained receipts or where the defendant would have access to a master list of consumers.

Second, there was a standing issue. California courts require plaintiffs who are seeking injunctive relief under these claims -- a change in defendant's sales practices -- to express an intent to purchase the products in the future. See, e.g., Rahman v. Mott’s LLP, 2014 WL 325241, at *10 (N.D. Cal. Jan. 29, 2014) (“to establish standing [for injunctive relief], plaintiff must allege that he intends to purchase the products at issue in the future”); Jou v. Kimberly-Clark Inc., No. 13-3075, 2013 WL 6491158, at *4 (N.D. Cal. Dec. 10, 2013) (“[b]ecause Plaintiffs fail to identify any allegation in their
Complaint that suggests that they maintain an interest in purchasing the diapers or wipes, or
both, in the future, Plaintiffs have not sufficiently alleged standing to pursue injunctive relief").

Here, plaintiffs could point to no evidence that the class reps intended to buy the specific products again. Some still had leftover product and had not used them at all since the litigation was filed. Without any evidence that plaintiffs planned to buy such products in the future, they did not have standing to bring an injunctive class. 

Turning to the damages classes, the court found additional problems. Here, there was a lack of cohesion among the class members, both because consumers were exposed to label statements that varied by can size, variety, and time period (and the challenged ingredients also differed), but more importantly because even if the challenged statements were facially uniform, consumers’
understanding of those representations would not be. Plaintiff's' expert did not explain how the challenged statements, together or alone, were a factor in any consumer’s purchasing decisions. She did not survey any customers to assess whether the challenged statements were in fact material to their purchases, as opposed to, or in addition to, price, promotions, retail positioning, taste, texture, or brand recognition. The expert acknowledged in her deposition that some
customers have never noted the “natural claim,” some have never looked at the ingredients list, some would buy a product regardless of whether the product says “natural,” and some do not care about labeling statements.

This rather startling admission might have something to do with the fact that there is no single, controlling definition of the word “natural.” See Pelayo v. Nestle USA, Inc., 2013 WL 5764644, at *4-5 (C.D. Cal. 2013) (discussing lack of a common understanding of the term “all natural” that is shared by reasonable consumers). It is undisputed that the FDA has not defined the word “natural.” See Lockwood v. ConAgra Foods, Inc., 597 F. Supp. 2d 1028, 1034 (N.D. Cal. 2009). Moreover, it was not clear that the challenged ingredients here are not “natural.”

Here, there are numerous reasons why a customer might buy the products, such as Hunt’s tomatoes, and there was a lack of evidence demonstrating the impact of the challenged label statements. Accordingly, Plaintiffs lacked common proof of materiality.

Multiple courts have refused to certify classes where such individual purchasing inquiries predominated, and the court was not convinced that the common questions would predominate over the individual questions. Who purchased what, when during the relevant class period, which kind of products they purchased, how many they purchased, and whether the kinds they purchased contained the alleged false nutritional information. Whether this is viewed as a predominance question, an ascertainability question, or a manageability question, it was clear that the defendant had no way to determine who the purchasers of its products are, i.e., the identity of class members. And thus it was true that individualized purchasing inquiries will be required to determine how many and which kind of products each class member bought.

Finally, In Comcast Corp. v. Behrend, 133 S.Ct. 1426, 1433-34 (2013), the Supreme Court
held that in order to satisfy the predominance inquiry, plaintiff must also present a model that
(1) identifies damages that stem from the defendant’s alleged wrongdoing and (2) is
“susceptible of measurement across the entire class.” 133 S.Ct. at 1433-34. “At class certification, plaintiff must present a likely method for determining class damages, though it is not necessary to show that his method will work with certainty at this time.” Chavez, 268 F.R.D. at 379.  Here plaintiffs' first theory called for return of the purchase price. That method did not account for the value class members received from the products, and so it was incorrect. The products were not
“economically worthless.”  In the alternative, plaintiffs proposed calculating damages via a benefit-of-the-bargain analysis.  But their expert failed to identify a comparator product in order to calculate the alleged percentage of overpayment.  

For a variety of good reasons, certification denied.

Class Certification Reversed in Unfair Trade Practices Case

A Florida appeals court recently decertified a class action with an unusual theory: a car maker who allegedly used headlights that can be too easily stolen in its luxury vehicles. See Porsche Cars v. Peter Diamond, et al., No. 3D12-2829 3d DCA Fla. 6/12/14).  One wonders why and how theft of auto parts is not the responsibility of the thief, but perhaps we digress. 

This case focuses on Porsche’s High Intensity Discharge Headlights. The Headlights are an upscale amenity in the luxury car market.  The intense blue-white light given by the Headlights is closer to natural daylight than the yellowish light of regular headlights. The Headlights provide better nighttime visibility than older types of headlights. Since model year 2000, the Headlights have been offered as standard or optional equipment across the Porsche vehicle line. The Headlights were mounted on modules that were slid into a plastic tray in the fender and clamped in place. This mounting made the Headlights less expensive to install and repair. Plaintiffs alleged it made them "easier" to steal. 

In this proposed class action, the class representatives asserted unfair trade practices and unjust enrichment claims. They alleged the defendant distributed a product highly susceptible to theft without taking any remedial steps. Specifically, the defendant allegedly failed to “notify owners of the flaw and potential risk of theft so they could take their own precautions,” to “offer replacement lights at reduced costs,” and to “work with law enforcement agencies to assist in the prevention of the theft of their headlights.”  This, the representatives members allege, violated the Florida Deceptive and Unfair Trade Practices Act (“FDUTPA”).  There was an unjust enrichment claim, and the plaintiffs also alleged that the defendant distributor could have redesigned the vehicles in
various ways, even though a car distributor does not design or manufacture vehicles.

The opinion did not reach the issue of whether such a factual theory of damages is viable (it would have been nice to see a blow struck for common sense). But the decision focused on the legal issues raised by the class action. The trial court certified the case as a rule 1.220(b)(3) class action. In a (b)(3) class action, common issues must predominate over individual issues. Fla. R. Civ. P. 1.220(b)(3). Common issues predominate when, considering both the rights and duties of the class members, the proof offered by the class representatives will necessarily prove or disprove the cases of the absent class members.  The class representative’s case must not merely raise a common question, but that proof of the class representative’s case must also answer the question.

FDUTPA declares unlawful unfair methods of competition, unconscionable acts or practices, and unfair or deceptive acts or practices in the conduct of any trade or commerce.  The term “unfair” is
not defined in FDUTPA. Here, the trial judge defined unfair trade practice as one that “offends established policy” and “is immoral, unethical, oppressive, unscrupulous or substantially injurious to customers.” This definition derives from a 1964 Federal Trade Commission policy statement. In 1980, however, the Federal Trade Commission updated its definition of unfair trade practice. The new definition established a three-pronged test for “unfairness,” which requires that the injury to the consumer:
(1) must be substantial;
(2) must not be outweighed by any countervailing benefits to consumers or competition that the practice produces; and
(3) must be an injury that consumers themselves could not reasonably have avoided.

The court held that Florida law adopted the definition of unfairness contained in the 1980 Policy Statement. The state legislature provided that violations of FDUTPA include violations of the standards of unfairness and deception set forth and interpreted by the Federal Trade Commission or the federal courts. The Florida Legislature amended FDUTPA in 1983, 2001, 2006, and 2013, for the specific purpose of adding to Florida Law the latest interpretations by the Federal Trade Commission or federal courts that occurred since the last statutory amendment.  In light of this history, the 1980 Policy Statement is clearly one of the “standards of unfairness” interpreted by the Federal Trade Commission and federal courts. 

The trial court erroneously adopted the premise that the distributor’s actions could be found to be an unfair trade practice regardless of whether class members knew and could have avoided the risk of the Headlight thefts. From this premise, it reasoned “an individual class member’s pre-purchase knowledge of the potential risk of theft was not relevant to the Plaintiff’s FDUTPA claim.” Since the premise was wrong, so was the conclusion.  The individual class member’s knowledge of the risk of Headlight theft bears on whether the practice was unfair because it impacts whether the consumer could reasonably avoid the risk. Given the nature of the claim in this case—that the Headlights functioned great as headlights but were too susceptible to theft—an individual class members knowledge of the risk of  theft goes to the heart of his or her claim.


To prove an unfair trade practice, the class must prove that the injury caused by the allegedly unfair trade practice could not have been reasonably avoided by the consumers.  The idea behind the reasonably avoidable inquiry is that free and informed consumer choice is the first and best
regulator of the marketplace: consumers may act to avoid injury before it occurs if they have reason to anticipate the impending harm and the means to avoid it, or they may seek to mitigate the damage afterward if they are aware of potential avenues toward that end.  A jury might well find that a consumer who knew the Headlights were targeted by thieves had avenues available to reasonably avoid the risk. This is particularly true where, as here, the alleged problem of theft was greater in some geographic locations than others. How about consumers park in only safe areas, install alarm systems extending to the mounting module, or, if these options were not acceptable, decline to purchase or lease a Porsche with the Headlights? Given the theory of this case, the knowledge of some class members that the Headlights were prone to theft could not be ignored.

Similarly, the determination of unjust enrichment would turn on individual facts. A court would be hard pressed to conclude that a distributor was unjustly enriched when class members with the sophistication and knowledge of the product continued to seek out the Headlights even when they knew of the thefts.

The court concluded that when the individual knowledge and experience of the consumer is an
important element of the cause of action and its defense, there can be no class-wide proof that injury was not reasonably avoidable.

Class certification reversed and remanded. 

Summary Judgment Affirmed in Medical Monitoring Class Action

The First Circuit  has affirmed a district court ruling rejecting a proposed class action seeking medical monitoring  for alleged exposure to hazardous beryllium.  See Barry Genereux, et al. v. Raytheon Company, No. 13-1921 (1st Cir. 6/10/14).

MassTortDefense has posted on medical monitoring several times before, incuding here and here. The clear trend has been away from recognizing these claims, see Lowe v. Philip Morris USA, Inc., 344 Or. 403, 183 P.3d 181 (2008), or to narrow their scope. See Sinclair v. Merck & Co., 195 N.J. 51, 948 A.2d 587 (2008).

Where recognized, medical monitoring plaintiffs typically must prove:
1. exposure greater than normal background levels;
2. to a proven hazardous substance;
3. caused by the defendant's negligence;
4. as a proximate result of the exposure, plaintiff has a significantly increased risk of contracting a serious latent disease;
5. a monitoring procedure exists that makes the early detection of the disease possible;
6. the prescribed monitoring regime is different from that normally recommended in the absence of the exposure; and
7. the prescribed monitoring regime is reasonably necessary according to contemporary scientific principles.


The plaintiffs in this case filed a putative class action filed in the United States District Court for the District of Massachusetts, invoking federal diversity jurisdiction under the special jurisdictional provisions of the Class Action Fairness Act, 28 U.S.C. § 1332(d)(2). Their complaint alleged that the defendant, Raytheon Company, endangered the health of the plaintiffs and others similarly situated by negligently exposing them to beryllium used in the manufacturing process at its plant in Waltham, Massachusetts.

Beryllium is a useful but potentially hazardous substance, and sufficient exposure to it is a risk factor for a malady known as Chronic Beryllium Disease (CBD). This malady is characterized by inflammation and scarring of lung tissue. Although there is no known cure for CBD, early detection and treatment can ameliorate its impact. The pathogenesis of CBD may begin with beryllium sensitization (BeS). Even though BeS is regarded as an abnormal medical finding, it can be asymptomatic and is typically not treated. Plaintiffs argued that persons with BeS should receive periodic clinical screenings to detect actual disease onset because those persons who are diagnosed with BeS are allegedly at a risk of developing CBD during their lifetimes.

The plaintiffs sought to represent two proposed classes. One comprised all persons who worked at the Waltham plant for at least one month prior to 1997. The other comprised all persons who lived with members of the first class and thus were subject to alleged take-home beryllium exposure. Persons already diagnosed as having CBD were excluded from both proposed classes. Following extensive pretrial discovery and work devoted to a narrowing of the issues, the district court granted summary judgment in favor of Raytheon. See Genereux v. Hardric Labs., Inc., 950 F.Supp.2d 329, 341 (D. Mass. 2013). An appeal ensued.

The Court of Appeals noted that the cornerstone of an action for medical monitoring under Massachusetts law is the decision in Donovan v. Philip Morris USA, Inc., 914 N.E.2d 891 (Mass. 2009). There, the court ruled that the cost of medical monitoring may be recoverable in a tort suit under Massachusetts law under certain circumstances.  The First Circuit read the Donovan decision as tethering its holding to a doctrinal mooring: a combination of a defendant's alleged failure to meet an appropriate standard of care, a clear causal connection between that failure and the plaintiffs' alleged injuries, and resulting damages. To identify the injury in the absence of evidence that a plaintiff actually has a full-blown disease, the court demanded a showing that some subcellular or other physiological change has put plaintiffs at increased risk. The court noted that under the unique cause of action recognized in Donovan, increased epidemiological risk of illness caused by exposure, unaccompanied by some subcellular or other physiological change, is not enough to permit recovery in tort.

Here, the summary judgment record disclosed no evidence that any plaintiff — named or unnamed, employee class or take-home class — had as yet developed BeS. This gap in the proof was fatal to the plaintiffs' principal theory of liability. The plaintiffs had not carried their burden that under Massachusetts law that defines actionable injury in the medical monitoring milieu in terms of subcellular or other physiological change; the record revealed no significantly probative evidence of such an injury here.

In the alternative, the plaintiffs argued that the Massachusetts high court had speculated about whether a cause of action for medical monitoring might ever exist when no subclinical changes had occurred.  The trial court concluded that plaintiffs hadn't preserved a claim under this alternative theory.  The court of appeals agreed.  In complex cases, considerations of both fairness and efficiency dictate that a trial judge use his best efforts to winnow and clarify the issues.Plaintiffs' counsel had multiple opportunities to expound a new theory of the case that encompassed this issue.  A status conference transcript where the issue was raised was transparently clear: the plaintiffs told the court that they were not pursuing a theory based on any question that the SJC had allegedly left for another day.

Decision Affirmed.

Class Plaintiffs Ordered to Brief Damages Theory Under Comcast

We have posted about the impact of Comcast Corp. v. Behrend, 133 S. Ct. 1426, 1435 (2013). As the Supreme Court reemphasized in Comcast, in order for Rule 23(b)(3)’s predominance requirement to be satisfied, a plaintiff must bring forth a damages measurement that can be applied class-wide and that ties the plaintiffs’ legal theory to the impact of the defendant’s allegedly illegal conduct. Thus, after Comcast, a key question is whether a plaintiff has met its burden of establishing that damages can be proven on a class-wide basis. See In re Diamond Foods, Inc., Sec. Litig., 2013 WL 1891382, at *252 (N.D. Cal. May 6, 2013).

One approach of lower courts to this issue is to require plaintiffs seeking class certification of their state law claims to file briefing specifically to address whether they have a reasonable way to measure damages on a class-wide basis.  See Edwards v. Nat'l Milk Producers Fed'n, No. 3:11-cv-04766-JSW (N.D. Cal., 5/28/14).

The trial court noted that in Comcast, the Supreme Court held that “[c]alculations need not be exact, ... but at the class certification stage (as at trial), any model supporting a plaintiff’s damages case must be consistent with its liability case, particularly with respect to the alleged anticompetitive effect of the violation.” Comcast, 133 S.Ct. at 1433 (internal quotation marks and citations omitted).
Moreover, “for purposes of Rule 23, courts must conduct a rigorous analysis to determine
whether that is so.” Id. (internal quotation marks and citation omitted).

Plaintiff moved for class certification in an antitrust case involving milk cow herds, and defendants moved to strike plaintiff's expert, Dr. Connor.  He purported to calculate the effects of the defendant's herd retirement program on a national level and multiplied his total calculation by the percentage of the population of the states in which Plaintiffs were bringing state-law claims. The problem with this method was that Plaintiffs, as indirect purchasers, were not bringing a federal anti-trust claim. They were only bringing state-law claims, and not in every state. Dr. Connor’s calculations included the effects from states in which Plaintiffs were not challenging any activity as illegal.

Thus, the Court found that Plaintiffs had not shown “that their damages stemmed from the defendant’s actions that created the legal liability.” Leyva v. Medline Indus. Inc., 716 F.3d 510, 514 (9th Cir. 2013) (citing Comcast, 133 S.Ct. at 1435). It was not clear whether Plaintiffs could modify their method of calculations in order to capture only the alleged effects from the states in which they contend Defendants violated antitrust laws. But, the Court directed Plaintiffs to file an additional brief to address whether they have a reasonable method for determining, on a class-wide basis, the alleged antitrust violations’ impact on class members.