Class Certification Denied In Peanut Butter MDL Litigation

A federal court last week refused to certify two different classes of plaintiffs in multidistrict litigation that accuses ConAgra Foods Inc. of selling salmonella-contaminated peanut butter. In Re ConAgra Peanut Butter Products Liability Litigation, MDL-1845, 2008 WL 2885951 (N.D.Ga., July 22, 2008). 

The MDL transferee court ruled that the plaintiffs' economic claims (unjust enrichment) and personal injury claims were not suitable for class certification on predominance, manageability (choice of law), and superiority grounds (alternative means for resolution).

The litigation arises from the illness of several hundred people in numerous states; plaintiff class action lawyers allege the clients became ill from salmonella poisoning after eating ConAgra's peanut butter manufactured at its Sylvester, Ga., plant.

The plaintiffs had asked the court to certify two classes: a class of purchasers of the peanut butter, which was allegedly rendered “unusable and valueless” when the product was recalled; and a class of plaintiffs who consumed the peanut butter and claimed personal injury.

The court first rejected the plaintiffs' argument that it should apply Georgia's choice of law rules in the case. In multidistrict litigation, under 28 U.S.C. § 1407, the transferee court applies the state law that the transferor court would have applied. Murphy v. F.D.I.C., 208 F.3d 959, 965 (11th Cir. 2000). When this action was consolidated, separate actions had been filed in 10 different states. Thus, the MDL court needed to apply choice of law rules from each of the transferor courts, the court said. The obvious inference from that situation alone is that the class would be unmanageable.  Even if a class is not ipso facto unmanageable due to the application of different choice of law rules, there is substantial conflict between Georgia substantive law and other jurisdictions on the issues raised. On unjust enrichment, some states have a common law claim; others have a preemptive statute.  Privity is required in some; some but not all states require a direct benefit conferred by the plaintiff upon the defendant as a prerequisite; some but not all states have a state of mind requirement for recovery, etc. The court also found that proving damages under the unjust enrichment claim would require individualized determinations.

The un-manageability arsing from the choice of law issue also impacted the absence of superiority, what the court called the “inferiority of classwide resolution due to discerning the many differing legal standards.” Moreover, the defendant's refund program provided an alternate way of addressing the claim.

The court also declined to certify the class pursuing a personal injury claim, even a  limited "issues" class. The court found that such an issues class would not promote judicial economy or materially advance the litigation. “Although the defendant has not formally admitted liability, it is highly unlikely that it will deny that salmonella-contaminated peanut butter is a defective product and makes people sick who eat it,” the court said.

The importance of this reasoning to readers of MassTortDefense is that it points out that in balancing predominance, and assessing superiority and manageability, the court needs to take a realistic view of what issues will actually be litigated. The trial plan proposed by the parties has to reflect the real issues to be litigated.  The allegedly predominant common issue of defect or defendant negligence is immaterial if that is not an issue on which the parties will spend considerable time and effort.

Moreover, although the court focused on the predominance issue in denying the personal injury class, it made an important observation about the constitutional implications of an issue class or a bifurcated class proceeding. Denying the common issues personal injury class here also avoided "potential constitutional problems." Rule 23(c)(4) issues classes can violate the parties' Seventh Amendment jury trial rights, especially in personal injury cases. Many jurisdictions differ on the details of even a negligence claim.  Such nuances "can be important, and its significant is suggested by a comparison of differing state pattern instructions on negligence and differing judicial formulations of the meaning of negligence and the subordinate concepts.” In re Rhone-Poulenc Rorer, Inc ., 51 F.3d 1293, 1300 (7th Cir.1995).  And there is the very real risk that a second jury (even if just on damages) would have to reconsider some of the liability issues decided by the first jury: too substantial a risk to certify the issues class. The Court thus heeded the "binding authority" which cautions that separate trials of liability and damages must be approached "with trepidation” to avoid offending the Seventh Amendment. State of Alabama v. Blue Bird Body Co., Inc., 573 F.2d 309, 318 (5th Cir.1978).

Yet another important observation by the court was that the plaintiffs' case for class certification collapses when it confronts the fact that certification of a common issues class will not dispose of a single case or eliminate the need for a single trial. Any saving in judicial resources is speculative at best. See Castano v. American Tobacco Co., 84 F.3d 734, 749 (5th Cir.1996). Under the plaintiffs' trial plan, at least 6,000 individual trials on exposure, injury, causation, damages and other individual issues would have to be prosecuted whether or not a class is certified, presumably by the lawyers already retained by the personal injury claimants. The lesson here is the court was willing to "look down the road" to how the case would go.

Finally, another gem on the issue of superiority: While it would be possible, said the court, to have a common issues trial on the issue of, “Can eating peanut butter that is contaminated with the bacteria listed above cause illness?” (i.e. the general causation issue), "why bother having a trial on issues of such abstract generality?"  And a class trial of issues such as what the defendant allegedly knew or should have known and the adequacy of its general plant sanitation practices in relation to the onset of illness for thousands of people -- plaintiffs' quintessential "common" issues -- would require special interrogatories and a verdict form "of unimaginable complexity. I cannot imagine how to fashion a verdict form that would provide meaningful answers...."  

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