Fracking Meets Medical Monitoring

We have posted before about medical monitoring claims, and recently noted how plaintiff attorneys have cast their eyes on hydraulic fracturing operations as a new source of revenue.

Now let's see how they combine: some Pennsylvania residents are suing various drilling companies over hydraulic fracturing operations, alleging that such operations have increased their risk of future disease such that they need medical monitoring.  Fiorentino v. Cabot Oil & Gas Co., et al., No. 3:09-cv-02284 (M.D. Pa.).  Plaintiffs seek a medical monitoring trust fund, paid for by the drillers.

The case is in the discovery stages, and defendants, logically, are seeking medical records of the plaintiffs.  Those not familiar with medical monitoring may wonder why medical records would be relevant regarding those plaintiffs who do not allege a traditional present physical injury but only the risk of future injury.  Indeed, plaintiffs earlier this month filed a motion seeking to block defendants from obtaining the medical records.  

However, defendants correctly point out in response that, in Pennsylvania, plaintiffs must prove all of the following elements to succeed on a claim for medical monitoring:
(1) exposure greater than the 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 reasonable necessary according to contemporary scientific
principles.
Redland Soccer Club, Inc. v. Dep’t of Army & Dep’t of Def. of U.S., 696 A.2d 137, 195-96 (Pa. 1997).

At the least, medical records are relevant to the sixth element, namely that “the prescribed monitoring regime is different from that normally recommended in the absence of the exposure.” For example, a plaintiff might already be undergoing testing because of an existing medical condition, or already be a candidate for screening because of other risk factors in his life, such as occupational exposure to toxins or a family history of disease or genetic risk factors, all
requiring their own medical monitoring regime which may overlap the claimed monitoring regime for the alleged exposure in this case. Without medical records, a medical monitoring defendant is denied a fair opportunity to attack plaintiff's proof on this element and to show a plaintiff is not able to satisfy the sixth element of the Redland test -- and, therefore, not prove a claim for medical monitoring. See, e.g., Barnes v. American Tobacco Co., 984 F. Supp. 842, 871-72 (E.D. Pa. 1997).

While arising here in a discovery context, this issue also is relevant to class certification claims in medical monitoring cases, as the individualized nature of the medical monitoring remedy demands that each plaintiff be evaluated to determine whether the medical monitoring on account of the alleged exposure to the class called for by plaintiff experts is any different from the medical monitoring a plaintiff is or should be receiving because of the separate and existing risk factors currently facing an individual proposed class member.  Such an individual issue weighs heavily against class certification.

In any event, several courts have found that a defendant is entitled to the records. See O’Connor v. Boeing North American, Inc., 185 F.R.D. 272, 283 (C.D. Cal. 1999);  Cook v. Rockwell Int’l Corp., 147 F.R.D. 237, 242 (D. Colo. 1993).

Happy (Belated) Birthday!

To us.  We recently passed the third anniversary of the MassTortDefense blog. In that time, I have posted nearly 800 stories from a defense counsel perspective, on product liability, toxic tort, tort reform, and mass tort issues ranging from asbestos to zinc.

Almost 170,000 folks have dropped by to read a posting. I am very grateful for our readership, which continues to rival the readership of "A Brief History of Time" in intellect and the readership of "Harry Potter" in loyalty.

As always, comments and feedback are appreciated.

 

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Why We Can't Sue Our Way to Prosperity

The House Judiciary Committee's Subcommittee on the Constitution held a hearing earlier this week on "Can We Sue Our Way to Prosperity?: Litigation's Effect on America's Global  Competitiveness."

Speakers included a public policy expert from NERA; a law school professor; and my friend, esteemed litigator John Beisner.

Paul Hinton testified that the direct cost of the U.S. tort system is estimated to be approximately $250 billion in 2009 or about 2 percent of GDP.  The U.S. costs are the highest as a percent of GDP amongst those reported for other industrialized countries and more than double the estimates for countries such as the U.K, France, and Japan.  Small businesses bear a relatively larger share of tort costs than larger businesses.

Professor Silver from Texas tried to make the case that the civil justice systems contributes greatly to the prosperity of the U.S.  He seemed to think that litigation is the only thing that deters doctors from committing widespread medical malpractice.

John Beisner noted that given the lucrative potential of private lawsuits in the U.S., it is not surprising that fraud has crept into the system. One notable example is the fraud that may have  occurred with respect to asbestos bankruptcy trusts. In addition, some lawyers have engaged in questionable tactics to recruit clients – tactics that have encouraged the filing of frivolous or fraudulent claims. The most notorious of these efforts, he observed, have been the massive screening programs undertaken in the silica and welding-fume litigation, both of which resulted in the mass filing of meritless and even fraudulent claims – and forced defendants to spend huge sums of money defending themselves against groundless allegations. In addition, Beisner pointed out, more and more plaintiff lawyers are using the internet to troll for clients and sow dissatisfaction with products in advance, in the hopes of generating large bodies of claims against targeted defendants. "These efforts have contributed to the deluge of meritless lawsuits that clog the civil justice system."

Another troubling development he noted in the American civil justice system has been the rise in
foreign lawsuits with virtually no nexus to the United States. In addition to transnational tort cases, the American civil justice system has also seen an uptick in efforts to enforce foreign judgments in U.S. courts.

Although the enactment of the Class Action Fairness Act of 2005 dramatically reduced class-action abuse, several serious problems remain in the aggregate litigation arena, including (1) state attorney general actions; (2) the routine deprivation of due process in class actions that remain in state courts; and (3) mass joinder actions.

The hearing comes as the Judiciary Committee considers the Lawsuit Abuse Reduction
Act
, which would call for greater sanctions for Rule 11 violations to deal with frivolous claims. 
 

Appeals Court Upholds Summary Judgment Based on Daubert in Benzene Case

The Sixth Circuit last week upheld the dismissal of a plaintiff''s claim that benzene exposure caused her cancer. Pluck v. BP Oil Pipeline Co., No. 09-4572 (6th Cir.,  5/12/11).  The central issue was the exclusion of plaintiff's causation expert's opinion based on a "differential diagnosis" that failed to reliably rule in benzene exposure as a potential cause of plaintiff's cancer, and to rule out some other potential exposures.

This case arose from benzene contamination allegedly caused by gas-pipeline releases allegedly resulting in the seepage of gasoline into the surrounding soil and groundwater. Benzene, a component of gasoline, is a known carcinogen in sufficient doses under certain exposure circumstances, and is also ubiquitous in the ambient air and is a component or constituent of vehicle exhaust and cigarette smoke, said the court. Plaintiffs purchased a home in the area,  and used well water to drink, wash, shower, and irrigate their yard and garden. In October,  1996, plaintiffs say they noticed a gasoline odor in their home and water, and benzene was first detected in the well on their property in the amount of 3.6 parts per billion (“ppb”).  They began drinking bottled water in lieu of tap water, although they claim to have resumed drinking tap water upon the drilling of a new, deeper well. Between 1997 and May 2002, the new well tested negative for benzene twenty-two times.

Mrs. Pluck was diagnosed with Non-Hodgkins lymphoma (“NHL”) in 2002 at age forty-eight. She filed suit, alleging claims of strict liability for hazardous activity, negligence, and loss of consortium. To support their claims, plaintiff and spouse retained Drs. Joseph Landolph and James Dahlgren as experts on causation to demonstrate that benzene is generally capable of causing NHL and specifically caused Mrs. Pluck’s NHL. Defendant filed motions in limine to exclude the testimony of Dahlgren and Landolph on the grounds that their testimony failed to satisfy the standard for reliability set forth in Daubert. In particular, BP argued that Dr. Dahlgren’s testimony on specific causation was unreliable because he formulated a specific causation opinion without evidence of dose, and subsequently performed an unreliable dose reconstruction in an attempt to support his opinion.  Dahlgren then submitted a supplemental declaration in which he evaluated Mrs. Pluck’s illness under a "differential-diagnosis" methodology. The district court granted the motions, and plaintiff appealed.

In a toxic tort case, as here, the plaintiff must establish both general and specific causation through proof that the toxic substance is capable of causing, and did cause, the plaintiff’s alleged injury.  As to specific causation, the plaintiff must show that she was exposed to the toxic substance and that the level of exposure was sufficient to induce the complained-of medical condition (based on a dose-response relationship). Both causation inquiries involve scientific assessments that must be established through the testimony of a medical expert. Without this testimony, a plaintiff’s toxic tort claim will fail.

The Plucks had to concede that the expert Dr. Dahlgren did not establish dose; they instead argued that Dahlgren used differential diagnosis to determine specific causation. Defendant argued that Dr. Dahlgren did not apply differential diagnosis in either his expert opinion or his deposition, but did so only in an untimely supplemental declaration filed five months after the deadline for expert reports. And in any event, his approach was flawed. The Sixth Circuit has recognized differential diagnosis, properly done, as an appropriate method for making a determination of causation for an individual instance of disease. Differential diagnosis -- originally a standard technique for determining what disease caused a patient's symptoms -- has been adapted in some courts as an acceptable scientific technique for identifying the cause of a medical problem by eliminating the likely causes until the most probable one is isolated. A physician who applies differential diagnosis to determine causation considers all ("rules in") relevant potential causes of the symptoms and then eliminates ("rules out") alternative causes based on a physical examination, clinical tests, and a thorough case history.

Even in courts that accept this adapted method, not every opinion that is reached via a differential-diagnosis method will meet the standard of reliability required by Daubert.  Calling something a “differential diagnosis” or “differential etiology” does not by itself answer the reliability question but prompts at least three more:

(1) Did the expert make an accurate diagnosis of the nature of the disease?

(2) Did the expert reliably rule in the possible causes of it?

(3) Did the expert reliably rule out the rejected causes?

If the court answers “no” to any of these questions, the court must exclude the ultimate conclusion reached.

Here the court agreed that Dahlgren could not reliably “rule in” benzene exposure as the cause of Mrs. Pluck’s NHL. In recognition of the fact that benzene poses a health concern at certain levels of exposure, the EPA has stated that the maximum permissible contaminant level for benzene in
drinking water is 5 ppb. 40 C.F.R. § 141.61(a)(2). Dahlgren, however, did not ascertain Mrs. Pluck’s level of benzene exposure, nor did he determine even whether she was exposed to quantities of benzene exceeding the EPA’s safety regulations. The levels of benzene in the Plucks’ wells never exceeded the maximum permissible contaminant level of 5 ppb designated by the EPA.

Dahlgren’s opinion that Mrs. Pluck’s “low-level exposure” to benzene caused her NHL was thus not grounded in “sufficient facts or data,”  nor did it reflect the “reliable principles and methods” required by Rule 702. It was, instead, pure conjecture.  Although the Plucks argued that the district court required too much specificity regarding Mrs. Pluck’s dose, this argument was also without merit. The mere existence of a toxin in the environment is insufficient to establish causation without proof that the level of exposure incurred could cause the plaintiff’s symptoms. See also McClain v. Metabolife Int’l, Inc., 401 F.3d 1233, 1242 (11th Cir. 2005) (causation “requires not simply proof of exposure to the substance, but proof of enough exposure to cause the plaintiff’s specific illness”).

Finally, even if Dr. Dahlgren had properly “ruled in” benzene exposure as the cause plaintiff's NHL, he failed to “rule out” alternative causes of her illness, as is required under the differential-diagnosis methodology. See also Wills v. Amerada Hess Corp., 379 F.3d 32, 50 (2d Cir. 2004) (expert’s opinion suffered from a “fatal flaw” when he acknowledged that cigarettes and alcohol were risk factors for developing squamous-cell carcinoma but failed to account for these variables in concluding that decedent’s cancer was caused by exposure to toxic chemicals such as benzene and PAHs).  In this case, Dahlgren acknowledged in his deposition that Mrs. Pluck was
exposed to other sources of benzene, from her extensive smoking habit and from other organic solvents.  Yet, Dr. Dahlgren neither identified these other solvents nor determined Mrs. Pluck’s potential level of exposure to these other possible sources of benzene.Thus, Dahlgren failed to “rule out” alternative causes of Mrs. Pluck’s NHL.

The court of appeals determined that the district court did not abuse its discretion in concluding that the expert did not perform a reliable differential diagnosis.  And summary judgment properly followed.

 

Senate Judiciary Committee Approves "Sunshine" Bill That Clouds Up Settlements

Here at MassTortDefense we know that while not the "sexy" part of litigation, the nuts and bolts of settlement agreements are crucial to clients.  That is why it caught our eye that the U.S. Senate Judiciary Committee last week approved a bill that would require courts to consider so-called public health and safety concerns before approving the sealing of certain legal agreements and settlements in product liability suits.

The committee voted 12-6 to pass S. 623, the so-called Sunshine in Litigation Act. The bill would  prohibit a federal court, in any civil action in which the pleadings state facts relevant to the "protection of public health or safety," from entering an order restricting the disclosure of information obtained through discovery, or from approving a settlement agreement that would restrict such disclosure, or restricting access to court records, unless in connection with that order the court has first made certain findings of fact.  Specifically, the bill requires the court to find that: (1) the order would not restrict the disclosure of information relevant to the protection of public health or safety; or (2) the public interest in the disclosure of past, present, or potential health or safety hazards is outweighed by a specific and substantial interest in maintaining the confidentiality of the information, and the requested protective order is no broader than necessary to protect the confidentiality interest asserted.

The bill similarly would prohibit the court from enforcing any provision of a settlement agreement that prohibits a party from disclosing that a settlement was reached or the terms of the settlement, other than the amount paid, or from discussing the civil action, or evidence produced in it, that involves matters relevant to the protection of public health or safety -- unless, again, the court finds that the public interest in the disclosure of past, present, or potential health or safety hazards is outweighed by a specific and substantial interest in maintaining the confidentiality of the information or records in question, and the requested order is no broader than necessary to protect the confidentiality interest asserted.

Surprisingly Republican Senators. Orrin Hatch, R-Utah, and Chuck Grassley, R.-Iowa, joined all 10 Democrat committee members in support. But the bill seems ill-conceived and even unnecessary. As pointed out by the American College of Trial Lawyers' Federal Rules of Civil Procedure Committee, the bill would establish an undesirable precedent by circumventing the procedure set out in the Rules Enabling Act that Congress established for amending the Federal Rules of Civil Procedure. These kind of ad hoc legislative initiatives that address specific parts of the Federal Rules contradict the careful, open, deliberative, rigorous ways that the rules have been amended from time to time.

Moreover, the bill would would unduly restrict the discretion of trial judges to regulate civil litigation and would impose substantial new fact-finding burdens on the courts, without a demonstrated need for those changes.  There is no compelling evidence that protective orders governing discovery or confidentiality provisions in settlement agreements are frequently abused. Nor is there evidence that federal courts do not currently have the power to regulate those agreements. 

Moreover, as written, the bill would lead to more confusion, not less, regarding what information has to be released, and when.  As pointed out by Steve Zack, President of the ABA, the language is is vague and indefinite, threatening to sweep up many cases having little to do with true public health or safety.  And it certainly would  require the parties and courts to spend extensive time and resources litigating whether and how the statute applies.  The politicians seem to forget  that protective orders are critical to both plaintiffs and defendants, including by helping to safeguard against dissemination of highly personal sensitive information or trade secrets.  

Perhaps Congress should spend less time on restricting judicial discretion and more on seeing that federal judges are paid a market-competitive wage.  A district court judge on the bench since 1993 failed to receive a total of $283,100 in statutorily authorized but then-denied pay. Appellate court judges have lost even more.
 

Tort Reform Battle in PA

We have posted from time to time on the important issue of tort reform, and the need for it in many jurisdictions.

Now in our home state, the Pennsylvania’s General Assembly is currently considering tort reform of the joint and several liability rules.  The Pennsylvania Comparative Negligence Act, 42 Pa.C.S.A. § 7102, establishes that a civil litigant may recover damages provided his negligence is not greater than the negligence of the defendants. The Act permits the plaintiff to recover damages as long as the negligence of the plaintiff is not greater than the causal negligence of the defendants.Thus, Pennsylvania employs the 51% rule. With respect to the liability of defendants, the Act mandates a form of joint and several liability under which a plaintiff is allowed to recover damages from multiple defendants collectively or from each defendant individually. Currently, when the case involves more than one defendant, each defendant found to be at least 1% negligent is responsible for the entire verdict. The plaintiff can collect from one defendant and force that defendant to try to go against the others for recovery.

These kinds of rules obviously affect how lawsuits are defended, tried and settled. Plaintiffs have an incentive to name a defendant with minimal liability but sufficient assets in an attempt to essentially extort settlement proceeds under the 1% rule. The right of recovery against the co-defendant is often worthless, especially in settings like the asbestos mass tort. Of course the minimally liable defendant may incur large litigation costs before being able to settle the claim at that inflated amount.

The Pennsylvania House of Representatives passed HB 1 in April. The bill is similar to the "Fair Share" Law enacted in the state in 2004 but later found unconstitutional on narrow procedural grounds. It is also similar to fair share legislation passed in 2006 but vetoed by then-Governor Rendell.  HB 1 would replace joint and several liability with proportional liability. Each defendant who is less than 60% negligent would be responsible only for his share of a verdict resulting from his negligence, i.e., his “fair share”. Joint and several liability would continue to apply to any tortfeasor who is more than 60% liable.

After passage, HB 1 was sent to the Pennsylvania Senate for consideration as SB 2. It is now before the Senate Judiciary Committee for consideration. There is also consideration of a much watered-down version of “fair share” legislation that would apply proportional liability to a defendant only if the plaintiff’s negligence in causing his own injuries exceeds the liability of the defendant. Hearings on these bills were held by the Judiciary Committee earlier this month.

More info on this battle can be found at PDI, which supports the reform.  Not surprisingly, the Pennsylvania Association for Justice, formerly the Pennsylvania Trial lawyers Association, opposes SB 2.  

Several states have abolished  the rule of joint and several liability, and several others have have enacted reform efforts which contain a threshold of liability which a defendant must meet prior to the imposition of joint and several liability.
 

ALI Annual Meeting Continues

Another report from the annual meeting of the American Law Institute. (Readers likely know that ALI is the leading independent organization in the United States producing scholarly work to clarify, modernize, and otherwise improve the law. It publishes the Restatements and other works, including, notably for our readers, the Principles of the Law of Aggregate Litigation.)

Day 2 highlights included an address by the still-new Chief Justice of the California Supreme Court, the Honorable Tani Cantil-Sakayue.  Her remarks focused on the issues of access to justice in these challenging economic times.  She talked about the looming issues in her first 5 months as Chief Justice, presiding over a judicial branch with 2000 judges, 21,000 employees, and 500 facilities.

She noted how over the past 14 years the California judicial system has evolved from a loose confederation to a more unitary system, having more control over where the courts will be situated. The use of court fees is a primary mechanism funding 60 major construction projects to bring the California judicial system into the 21st century.

Another interesting session concerned the recently completed Restatement Third of Restitution and Unjust Enrichment.  Starting about a generation ago, many law schools stopped having courses on these doctrines, which had been a staple of law school curricula. For the younger ALI members, the Reporter, Prof. Kull noted that restitution is like in the game of Monopoly;  you land on Community Chest and get a card "Bank error in your favor, collect $20", and then the next day the bank wants that money back.

But even if the classes have, the claims have not vanished -- ask Mets fans about the Madoff-related litigation. Indeed, along with torts, contracts, equity, and statutory claims, restitution provides one of the fundamental sources of economic harm claims.  Restitution is a distinct form of liability, not necessarily based on a tort or a contract, and its remedies can be distinct as well.

The First Restatement from the 30's and the leading treatises from the early 70's had been outdated and out paced -- hence this project.  The new restatement strives for plain English, and does not rely on arcane pleading doctrines. It attempts to fit the cases into a set of General Principles, and then discusses the rules governing liability, remedies, and defenses. Publication is expected by summer 2011.

 

ALI Annual Meeting This Week

Your humble blogger is a member of the American Law Institute, attending the annual ALI meeting in San Francisco this week.  Readers likely know that ALI is the leading independent organization in the United States producing scholarly work to clarify, modernize, and otherwise improve the law.  It publishes the Restatements and other works, including, notably for our readers, the Principles of the Law of Aggregate Litigation.

Highlights of Day 1 included an address by Steve Zack, President of the ABA.  We have been privileged to know and work with this excellent lawyer for about 15 years.  His tenure as head of the ABA has been marked by a number of important initiatives, and at ALI he spoke of assaults on the important principle of equal justice under law.  The down economy, falling tax revenues, etc. have severely impacted access to justice, including to the degree that civil jury trials are indefinitely postponed or excessively delayed in some jurisdictions. Courts are closed, judicial staff let go.  Steve closed with a moving story about his grandparents fleeing from the communists in Cuba, heartened by the freedoms and rule of law in the U.S., and noting that they would never be refugees again because if the U.S. legal system collapsed, there would really be no place else to go.

Mush of the afternoon was devoted to the final chapter of the Restatement Third of Torts. Volume 1 of the Restatement was published in 2009, and covers the most basic topics of the law of torts: liability for intentional physical harm and for negligence causing physical harm, duty, strict liability, factual cause, and scope of liability (traditionally called proximate cause).  A second volume, dealing with affirmative duties, emotional harm, landowner liability, and liability of actors who retain independent contractors, will complete this work and is expected to be published in 2011.  Yesterday's session dealt with the final chapter, the liability of actors who retain independent contractors.

Professor Pryor of SMU was the leader for this final chapter, which deals both with direct liability of those who hire, and vicarious liability for the contractor's tortious conduct.  Students of the Restatements may recall that Dean Prosser himself once said that this topic was "the worst mess of any chapter" in the Restatement.  But Prof. Pryor has done great work to improve that situation.

A number of tweaks were suggested by the membership, including by my colleague Jim Beck, who noted that an illustration regarding the asbestos context would be helpful, given the search for new defendants that is a constant feature of that mass tort, and a clarification of the Reporter's sense that the references to public nuisance in the section referred to traditionally land-based public nuisance claims, and were not expressing any opinion on the recent attempts to apply the doctrine to non-traditional settings, such as climate change.

Class Certification Denied in YAZ MDL

The federal judge managing the multidistrict litigation over the birth control pill Yaz last week declined to certify a proposed national class of users allegedly harmed by the contraceptive, and struck the class action allegations from the complaint.  In re: Yasmin and Yaz (Drospirenone) Marketing, Sales Practices and Products Liability Litigation, No. 3:09-md-02100 (S.D. Ill.).

In the opinion, Judge Herndon noted that named plaintiff Plaisance was a 44-year-old citizen of the State of Louisiana who was prescribed YAZ in May of 2006 by her physician. During the summer of 2006, plaintiff was hospitalized due to a deep vein thrombosis (“DVT”) in her left leg.  She alleged that the DVT, as well as other adverse effects, were caused by her ingestion of YAZ.  Plaintiff sought class certification of a nationwide class of YAZ purchasers who contracted DVT, but in the alternative proposed separate state-wide classes.

Plaintiff asserted claims for negligence, strict product liability, breach of express warranty, breach of implied warranty, fraudulent misrepresentation, fraudulent concealment, negligent misrepresentation, medical monitoring, and fraud and deceit.

Plaintiff maintained that the putative nationwide and state wide classes met the requirements of Rule 23(a) and 23(b)(3). In addition, plaintiff contended that the unitary application of the law of Louisiana was appropriate and somehow resolved issues related to the application of the substantive laws of multiple jurisdictions.

Here, the Court’s analysis began and ended with Rule 23(b)(3); it was "evident" to the court that individual questions of law and fact predominated, and therefore the case was not manageable as a nationwide or statewide class action.  Rule 23(b)(3)’s predominance and manageability  requirements also precluded any proposed “issue” certification under Rule 23(c)(4).

To satisfy the requirements of Rule 23(b)(3), a plaintiff must show that common questions of factor law predominate over individual questions and that class treatment is superior to other available methods of adjudication.Fed. R. Civ. P. 23(b)(3). Assessing the predominance factor requires consideration of the substantive elements of a plaintiff’s claims and the proof necessary to establish those elements. See Szabo v. Bridgeport Machines, Inc., 249 F.3d 672, 673-74, 677-78 (7th Cir. 2001); In re Bridgestone/Firestone, Inc., 288 F.3d 1012, 1015-19 (7th Cir. 2002). In addition, a court must consider issues pertaining to manageability and choice of law.

On that last point, this action was transferred from the United States District Court for the Eastern District of Louisiana. Therefore, Louisiana choice of law rules governed the complaint. See Chang v. Baxter Healthcare Corp., 599 F.3d 728, 732 (7th Cir. 2010). Under Louisiana’s codified choice of law rules, the substantive law of each plaintiff’s home state would govern the merits of the case. Accordingly, the laws of all fifty states plus the District of Columbia would be applicable to the putative nationwide class members’ claims. Amongst the states, there are differences in the law of product liability as well as in the applicable theories of recovery and their subsidiary concepts. These differences, said the court, "are not insignificant." See e.g., Rhone-Poulenc Rorer Inc., 51 F.3d 1293, 1300-1301 (7th Cir. 1995). Indeed, “such differences have led [the Seventh Circuit] to hold that other warranty, fraud, or products-liability suits may not proceed as nationwide classes”). In re Bridgestone/Firestone, Inc., 288 F.3d at 1015.See also Isaacs v. Sprint Corp., 261 F.3d 679 (7th Cir.2001); Szabo v. Bridgeport Machines, Inc., 249 F.3d 672 (7th Cir.2001); In re Rhone-Poulenc Rorer Inc., 51 F.3d 1293 (7th Cir.1995).  In the class action context differences in state law cannot be swept away by electing to apply the law of a single state to all class members’ claims. See Id. at 1017-1020. Although the unitary application of a single state’s law might promote  efficiency, it would also constitute an unacceptable violation of principles of federalism.   Differences across states may be costly for courts and litigants alike, but they are a fundamental aspect of our federal republic and must not be overridden in a quest to clear the queue in court.

The court went on to correctly note that mass product liability suits are rarely sustainable as class actions. Establishing the requisite elements of product liability claims sounding in strict liability, negligence, warranty, and/or fraud generally requires fact intensive inquiries unique to each plaintiff(such as questions related to causation, injury, affirmative defenses, and damages). In the instant case, almost every element of the asserted claims would have required highly individualized factual inquiries unique not only to each class member but also to each class member’s  prescribing physician. For example, establishing causation would require (1) an examination
of each class member’s medical history, including pre-existing conditions and use of other medications; (2) an evaluation of potential alternate causes for the alleged injury; and (3) an assessment of individualized issues pertaining to each class member’s prescriber, including how the doctor balances the risks and benefits of the medicine for that particular patient, the particular doctor’s prescribing practices, the doctor’s knowledge about the subject drug, and the doctor’s sources of information with regard to the subject drug. Establishing elements of the fraud and warranty claims would also turn on facts unique to each plaintiff, particularly with regard to questions of materiality and reliance.

On the (c)(4) issue, the court recognized that Seventh Circuit jurisprudence indicates that Rule 23(b)(3)’s requirements of predominance and manageability are applicable to “issue” certification under Rule 23(c)(4).  There is disagreement amongst district courts with regard to whether, under Rule 23(c)(4), the predominance evaluation is a limited inquiry, focusing only on the individual issue for which class treatment is sought, or requires consideration of the cause of action as a whole. See e.g., In re Fedex Ground Package System, Inc., Employment Practices Litigation, 2010 WL 1652863, *1-2 (N.D. Ind. Apr. 21, 2010); In re General Motors Corp. Dex-Cool Prods., 241 F.R.D. 305, 313-314 (S.D.Ill.2007).  The Fifth Circuit Court of Appeals in particular has been critical of district courts that fail to consider the case as a whole when evaluating predominance under Rule 23(c)(4). See Castano v. Am. Tobacco Co., 84 F.3d 734, 745 n. 21 (5th Cir. 1996). 

Here, the court felt no need to choose a side, because In the instant case, the putative common issues, including matters such as whether the subject drugs were defective or whether these defendants failed to give adequate warnings,  were enmeshed with the same individual issues of law and fact as affected certification of the putative class as a whole. The allegedly common issues had subsidiary concepts (such as causation, duty of care, and reliance) which would present questions that can only be answered by considering facts that are unique to each putative class member and her prescribing physician.

In addition, many – if not all – of the proposed common issues could not be certified without triggering the Seventh Amendment concerns discussed in Rhone-Poulenc Rorer. See Rhone-Poulenc Rorer, 51 F.3d at 1303. A trial court must divide issues between separate trials in such a way that the same issue is reexamined by different juries. Here, multiple juries in follow-up trials would have to examine such issues as comparative negligence and proximate cause after a first jury examined the alleged negligence.

New Theory Emerges in Climate Change Litigation

Just as many eyes are focused on the climate change/global warming cases pending in the appellate courts, a group of activist environmentalists have enrolled new plaintiffs to bring an old legal theory into the climate change litigation mix. A case filed last week alleges that the atmosphere is a "public trust resource" and, as such, the government has a duty to act to protect it. See Loorz v. Jackson, No. CV11-2203 (N.D. Cal., 5/4/11).

Plaintiffs are youths, alleged to be "beneficiaries" of the "public trust," including the teenage head of the group, Kids v. Global Warming, which is also a named plaintiff. Defendants are the EPA and numerous federal agencies who allegedly could act to curb greenhouse gas emissions allegedly linked to global warming.

Plaintiffs' complaint contains the well-known litany of alleged effects of global warming, including rising seas, melting glaciers, warming oceans, changing precipitation, all as an alleged result of increasing CO2 levels.  It takes short term readings and phenomena and raises them to the level of global climactic changes, hypotheses into alleged scientific proof.

The plaintiffs seek declaratory and injunctive relief, on the theory that the atmosphere is a public trust; that under the public trust doctrine, the federal government has a fiduciary duty as trustee to protect the trust for the benefit of the benficiaries (plaintiffs); and that therefore the agencies should be ordered to act to reduce CO2 emissions by 6% a year beginning in 2013.

Thus, the claim moves beyond environmental statutes, such as the Clean Air Act, and tort doctrines such as public nuisance, both of which have been recognized as not applicable by most courts, to an even less applicable theory, the so-called public trust doctrine. This notion has a far more limited reach, with lakes and navigable streams being maintained for drinking, commerce, and recreation purposes under a public-trust doctrine -- or tidal and submerged lands not being given over to private ownership.

Media reports that similar lawsuits are being filed in several other courts, and that petitions for rulemakings by state administrative agencies will be filed in other states.

The cynical use of youthful plaintiffs (aren't we all "beneficiaries"?) may illustrate how clearly the environmental activists sees the challenges of persuading courts on the science and the law, that human emissions of carbon dioxide which comprises less than 0.04 percent of the atmosphere is somehow responsible for hurricanes and every other weather event we experience. 

Whatever the theory alleged, it seems likley that these cases will run headlong into the same issues that derail so much of the global warming agenda, the fact that these cases raise political questions that should be reserved for the political branches of government, not an inidvidual judge. Indeed, the legislative branch, acting within the confines of the common law public trust doctrine, is recognized in the calse law as the ultimate administrator of the trust and often is described as the ultimate arbiter of permissible uses of trust lands.


 

A Comment on the EU's Working Paper: "Towards a Coherent European Approach to Collective Redress"

Earlier this year, the Commission Staff of the European Union issued a Staff Working Document seeking public comment on the topic "Towards a Coherent European Approach to Collective Redress."

In an individual capacity, your humble blogger joined some other lawyers in providing comments recently.

As readers of MassTortDefense may know, collective redress -- aggregate litigation -- is not a novel concept in the European Union. Existing EU legislation and international agreements require Member States to provide for collective injunctive relief in certain areas. All Member States have procedures in place which grant the possibility of certain injunctive relief to enjoin some allegedly illegal practices. In the area of consumer law, as a result of the Directive on Injunctions, consumer protection authorities and consumer organizations have standing to seek an injunction regarding practices that allegedly breach national and EU consumer protection rules in all Member States. In the area of environmental law, the Aarhus Convention requires Member States to ensure access to justice against infringements of environmental standards. All Member States have implemented this by introducing some form of collective injunctive relief, whereby non-governmental organizations are given standing to challenge certain environmental administrative decisions.

In our comments, we warned that experience with overly robust collective redress procedures in some jurisdictions (such as the class action procedures as implemented in some courts in the United States) reveals significant risks inherent in such actions. These risks include the ability of collective actions to result in lengthy and costly litigation; their ability to trample the right of the entity accused of unlawful practices to a fair adjudication of the allegations; and their ability to actually encourage abusive, spurious, and non-meritorious complaints because of the economic incentives they provide. [Readers in the U.S. are well aware of the "Field of Dreams" effect-  "if you build it they will come."]  In particular, the EU needs to guard against “lawyer-created” litigation that is fueled by the prospect of large fee awards rather than a significant injury.

Any proposal for a holistic European approach towards collective redress actions thus must be analyzed in the context of not only the potential utility of collective actions but also the substantial risks they create. Collective redress, if ever widely adopted, should be limited to where the same breach of EU law harms a large group of citizens and businesses, and individual lawsuits and other legal remedies are demonstrated not to be an effective means to end ongoing unlawful practices or to obtain compensation for the harm caused by these practices.

Any European approach to collective redress must, as paramount concerns, preserve the parties’ rights to a fair trial or adjudication of the factual and legal issues, and not create any untoward economic incentive for the bringing of abusive claims.  While various procedural and substantive safeguards might be adopted to help avoid abusive collective actions, including those inspired by some aspects of the existing national judicial redress systems in the EU Member States, those may not be sufficient to the task. That is, the unavailability of punitive damages or the unavailability of contingency fees for claimant attorneys, while extremely important, may not alone sufficiently decrease the risk of abusive litigation and unfairness to an extent compatible with the European legal tradition and fundamental justice.

What may also be required are clear limitations with regard to standing to bring a collective redress action, should the decision be made to move the proposal forward. The risk of abuses and unfairness can relate in some measure to the role of the sophisticated and entrepreneurial plaintiff’s class action bar. In many jurisdictions, they serve not as “gatekeepers” to screen out frivolous claims and pursue meritorious actions, but as the “promoters” of claims. Quite often, they create claims out of whole cloth, seek out the plaintiffs to nominally prosecute the class action, while they fund the litigation, and manage the cases. If the decision is made to move forward with European collective redress actions -- despite the substantial risks they present-- one important way to preserve the balance between preventing abusive and unfair litigation, and ensuring the effective access to justice for EU citizens and businesses, is to create a system that does not rely on the private bar in the first instance. Thus, any new EU collective redress system should be handled by public bodies exclusively. Individuals and private organizations representing those who are allegedly harmed by illegal conduct on a mass scale would have the ability to petition the public body to screen the allegations, bring the action, and obtain proper compensation for the damages they suffered following successful litigation.

Public bodies may be in the best position to overcome cross-border issues and coordinate the relevant actions. The alleged injuries that have arisen in an increasingly inter-connected European market are a primary reason an EU-wide collective redress system has become a focus of discussion. The use of public bodies would allow for consistent rules for choosing the appropriate venue in which to bring the collective redress actions.  The use of designated public entities is also one method of controlling the potentially crippling costs of discovery associated with class actions in some countries.  Should the decision be made to move forward with more systematic, broad collective redress, despite its many risks, this proposal may offer a way to address some of the specific concerns that cross-border collective redress actions present, while also adhering to the EU’s core legal principles.

Supreme Court Decides Class-wide Arbitration Issue

In recent years, corporate defendants facing consumer class actions in California and several other states have been unable to enforce arbitration agreements prohibiting class actions. Under the California Supreme Court’s ruling in Discover Bank v. Superior Court, 36 Cal. 4th 148, 162-63 (2005), class action waivers were unenforceable if the waivers were in “a consumer contract of adhesion,” in disputes that “predictably involve small amounts of damages,” when the “party with superior bargaining power" allegedly has harmed large numbers of consumers. 

Last week, the U.S. Supreme Court, in a 5-4 decision in AT&T Mobility LLC v. Concepcion, No. 09-893, held that the Federal Arbitration Act (“FAA”) preempted the Discover Bank rule. Significantly, the Supreme Court also held that “[r]equiring the availability of classwide arbitration interferes with fundamental attributes of arbitration and thus creates a scheme inconsistent with the FAA.” Slip Op. at 9. This decision will significantly enhance corporate defendants’ ability to enforce arbitration provisions in California and the many other states with similar limitations on class action waivers.

This decision may have a substantial impact in consumer product markets, enabling businesses to enforce contractual individual arbitration agreements and thereby very significantly narrow the occasions for certain consumer class actions. Many companies had changed their standard contracts to take the Discover Bank rule into account, and they may now want to consider modifying those standard agreements back to include class action waivers. Although the California rule was the only state law at issue in the case, Concepcion likely will impact other similar state law rules that have rendered class action waivers unenforceable and that similarly created impermissible “‘obstacle[s] to the accomplishment and execution of the full purposes and objectives of Congress,” in enacting the FAA. Id. at 18 (quoting Hines v. Davidowitz, 312 U.S. 52, 67 (1941)).

Medical Monitoring Class Actions

Last week I spoke at a CLE seminar on "Chemical Products Liability & Environmental Litigation."  The seminar was ably co-chaired by Ted Ray from ExxonMobil and Eric Sarner from Praxair.

My topic was Medical Monitoring Class Actions, with an emphasis on the trend by plaintiffs to seek (b)(2) certification, describing the money damages they want defendants to pay for future medical testing as some sort of court-supervised program and thus injunctive/equitable in nature.

By popular demand (ok, a handful of requests), I am making some slides on the topic available here.  Hope readers of MassTortDefense find them a useful resource.

DRI Class Action Seminar Worth A Look

This year's United States Supreme Court term promises to be a blockbuster for class action law. By the end of June, the Court will have released three important opinions in the class action arena, including Wal-Mart v. Dukes, Smith v. Bayer Corporation, and AT&T Mobility v. Concepcion -- just out in a 5-4 decision that holds that the FAA preempts state-law rules that stand as an obstacle to the accomplishment of the FAA's objectives, requiring the individual cases involved to be arbitrated as opposed to a class-wide arbitration.

DRI has put together a timely class action seminar for July 21-22 in Washington, D.C.

The seminar will bring together counsel of record from these Supreme Court cases, along with federal appellate judges and renowned class action specialists to address these and other cutting-edge issues of class action law. If you practice in the fields of complex litigation, mass torts or class actions, you will want to check out this outstanding seminar.

More info here.

 

Observations from Judges on Scientific Evidence

I spoke last week at a CLE seminar on "Chemical Products Liability and Environmental Litigation."  One of the panels included an array of federal and state court judges who offered their thoughts on a number of interesting topics, including Daubert/Frye issues.

No surprise for the savvy readers of MassTortDefense, but one clear takeaway is that judges have differing views and approaches on a variety of expert-related issues, including when they hold a hearing vs. deciding on the paper, and when they want the experts to appear live vs. argument.

There were a few areas of consensus. 

  • The panel agreed you need to know your judge, learn his or her preferences, and know how busy their docket is. 
  • In Daubert or Frye hearings, don't waste time on Rule 56 or Rule 702 black letter law.
  • In filings, always cite to the record so the judge or clerk can find the basis of factual assertions. This was called a "lost art."
  • A stipulated joint glossary of key terms is appreciated when possible.

The judges agreed that they are not overly impressed with arguments noting the expert was excluded by other courts on other cases.  If the facts are nearly identical, and they respect the other judge, and there is an opinion or order with some reasoning, they may give it some weight.  But if the expert opinion was also admitted in some other cases, this may cancel out the influence of prior exclusions.

Finally, while many lawyers talk about filing an iffy or uncertain motion to "educate" the court as to important science issues, the panel suggested this often doesn't help. There may be a time lag between the motion and trial; and the loss of momentum from losing a motion may have carry-over effects in the litigation.