Supreme Court Takes CAFA Parens Patriae Issue

The U.S. Supreme Court granted cert last week to address whether a state attorney general's parens patriae antitrust action is removable as a mass action under the Class Action Fairness Act of 2005.  See Mississippi v. AU Optronics Corp., No. 12-1036 (U.S., certiorari granted 05/28/13).

As noted in the respondents' papers, CAFA expands federal diversity jurisdiction for both “class actions” and “mass actions.” A “mass action” is defined as any civil action in which monetary relief claims of 100 or more persons are proposed to be tried jointly.  The definitions of “class actions” and “mass actions” are connected, as a mass action is deemed to be a class action removable to federal court if it otherwise meets the provisions of a “class action,” including CAFA’s unique minimal diversity.

Determining whether the 100 person level is satisfied requires consideration of whose claims are actually being asserted, as the Court has held that diversity  jurisdiction must be based upon the citizenship of
real parties to the controversy. E.g.,  Navarro Sav. Ass’n v. Lee, 446 U.S. 458, 461 (1980).  Where the action filed by the State seeks monetary relief claims on behalf of more than 100 unnamed persons who are among the real parties in interest and any one of them is diverse from any defendant, CAFA applies.  This was the approach of the 5th Circuit here, 701 F.3d 796, 800 (5th Cir. 2012), under the so-called “claim-by-claim" approach.  In contrast other courts look to the "state’s complaint as a whole." E.g., AU Optronics Corp. v. South Carolina, 699 F.3d 385, 394 (4th Cir. 2012).

It will be interesting to see if the Court applies the notion from the unanimous CAFA decision in Standard Fire that treating a nonbinding stipulation (on damages) from the class rep before a class is even certified as if it were binding on the later class would “exalt form over substance, and run directly counter to CAFA's primary objective: ensuring federal court consideration of interstate cases of national importance.”

 

 

JPML Releases MDL Stats

 The U.S. Judicial Panel on Multidistrict Litigation recently released the data on requests for coordination and dispositions in 2012, and some interesting trends can be detected.

Specifically, the Panel has shown an increasingly strict view of MDL requests.  In the early years of the last decade, the Panel routinely granted most requests, and even as recently as 2007-09 the Panel was granting 4 out every 5 requests.  Since then, however, the panel has denied more than 40% of the MDL requests.

One theory for the change is the increase over time in the number of petitions made, but that trend has actually started to level off in recent years.  And the Panel has always maintained it has sufficient able federal judges to mange the MDL's.

Another theory has to do with the feedback received by the Panel from judges and practitioners in a 2010 survey of MDL practice.  Much of that feedback discussed the Panel's ostensible preference for centralization.  The Panel now may have a deeper appreciation for the costs and economics of creating an MDL.

A third theory is that CAFA and federal court scrutiny of class actions has pushed more cases into the MDL stream, and sooner, although it is hard to confirm any rampant prematurity phenomenon.

Another is a possible change in the mix of cases proposed for MDL status.  Recent cases may have smaller numbers of parties, more varied filing dates, differing defendants, and different subject matters -- fewer antitrust matters and more consumer fraud claims, for example.  

 

 

House Committee Approves Asbestos Bill

Quick note for our readers who follow asbestos mass tort issues:  the House Judiciary Committee decided in a 17–14 party-line vote this week to reject  various proposed amendments to the Furthering Asbestos Claim Transparency Act of 2013 (H.R. 982).  The FACT Act would require the various asbestos settlement trusts to make public disclosures detailing the claims to the trust and to provide certain information about claims on request (but not confidential medical records).  The amendments were proposed by Democrats opposing the bill.

The Full Committee Markup of H.R. 982 is here.  Hearing information regarding the 3/13 hearing on the bill is here

Passage of the Fact Act would allow defendants to properly assess a plaintiff’s complete exposure history. As it stands, plaintiffs often hide behind trust confidentiality to make solvent defendants believe that their products were far more responsible for the plaintiff’s disease than the true picture.  As asbestos liabilities force more and more companies to file for bankruptcy, legislators need to preserve assets for appropriate claimants; the secrecy and abuse associated with the trusts undermines this as well.

 

Two Recent "Climate Change" Cases Ended

Two recent decisions continue the trend against plaintiffs in the climate change/public nuisance area. The U.S. Supreme Court earlier this week declined the request by an Alaskan fishing village to overturn a lower court ruling that the Clean Air Act preempts a federal common law claim of public nuisance attributed to so-called global warming and climate change.  See Native Village of Kivalina v. ExxonMobil Corp., No. 12—1072 (cert. denied 5/20/13).

We have posted on this case before.  The U.S. Court of Appeals for the Ninth Circuit held in 2012 that the Clean Air Act, and Environmental Protection Agency regulatory actions taken under the statute, displace the common law claim that various energy producing companies should be liable for the cost of relocating the village to avoid flooding and coastal erosion.  The Ninth Circuit ruling relied on the Supreme Court's prior decision in American Electric Power Co. Inc. v. Connecticut, 131 S.Ct 2527 (2011), dealing with the possibility of injunctive relief; plaintiffs here failed in their petition to the Supreme Court seeking a ruling that the federal statute does not displace common law claims for damages.

The battle lines may now shift to state common law claims against various entities over greenhouse gas emissions.  Even in state court, plaintiffs will likely have difficulty showing that a defendant's actions caused any alleged climate changes, and that the changes somehow were the proximate cause of the damages alleged -- and then how to apportion damages in light of any others who might be similarly situated to named defendants.  Any such battle at the state level risks creation of a hodgepodge of decisions throughout the country about what constitutes a nuisance in this area and about what gas emission levels are or are not tortious.  All readers ought to have profound reservations about the notion, inherent in all private climate change litigation, that the tort system is capable of adjudicating rights and responsibilities on the subject of global warming.

In the other recent climate change suit, the Fifth Circuit affirmed earlier this month that the doctrine of res judicata barred a proposed class action claim for alleged global warming-related damage to property after Hurricane Katrina. See Comer v. Murphy Oil USA Inc., No. 12-60291 (5th Cir. 5/14/13). We had posted on this one before also.  Plaintiffs alleged that the defendants' emissions had contributed to global warming, which somehow raised the temperature of the ocean, which somehow made hurricanes more powerful, which caused Hurricane Katrina to be more destructive to plaintiffs' property. After exhausting various unsuccessful complex appeals, the plaintiffs filed a new case with many of the same allegations. The lower court had earlier held that plaintiffs lacked standing, which barred this case. The district court also noted issues (again) with the statute of limitations; the political question doctrine; and on the merits. The Fifth Circuit heard oral arguments on the appeal of the dismissal of the second case, and affirmed that the earlier decision was final for the purposes of res judicata.


 

EnBanc Oral Argument Set in 9th Circuit Asbestos Case

We have posted before about Henry Barabin, et al. v. AstenJohnson Inc. and Scapa Dryer Fabrics Inc., as a case to watch.  Interested readers should note that the 9th Circuit has now set the en banc oral argument in this case for June 25th.

You may recall that plaintiff sued alleging that his 2006 diagnosis of mesothelioma was caused by occupational exposure to asbestos during the more than 30 years he worked at the Crown-Zellerbach paper mill. The trial court originally excluded one of the plaintiffs’ expert witnesses, because of his “dubious credentials and his lack of expertise with regard to dryer felts and paper mills.” But the court later reversed that ruling, after the plaintiff supplemented the record on the expert's credentials, including that he had testified in other cases (in Frye jurisdictions though). The jury found in favor of plaintiffs.


On appeal, the Ninth Circuit panel determined that the lower court had not properly considered all the Daubert factors, and instead had allowed the plaintiff to submit the expert’s "unfiltered testimony" to the jury. “Once presented with the additional information in the Barabins’ response to the motion in limine, at a minimum the district court was required to assess the scientific reliability of the proffered expert testimony ... In failing to do so, the district court neglected to perform its gatekeeping role.”

Our guess is that in setting the case for rehearing, the court is thinking more about the fact that the panel remanded the case for a new trial in light of the court’s 2003 decision in Mukhtar v. California State University, 299 F.3d 1053 (9th Cir. 2002), amended by 319 F.3d 1073 (9th Cir. 2003).

(Note that my partner Mark Behrens was asked to submit an amicus brief on behalf of the Coalition For Litigation Justice, Inc., Chamber Of Commerce Of The United States Of America, NFIB Small Business Legal Center, American Insurance Association, Property Casualty Insurers Association Of America, American Chemistry Council,
And National Association Of Manufacturers.)

New Partner Joins SHB in Philly

Very excited to note for readers the arrival this week of a brand new partner in Shook Hardy's office in Philadelphia (your humble bloggers home base).

Debra S. Dunne, Esq. brings to SHB significant expertise in counseling companies regulated by the Food and Drug Administration.  Areas of expertise include everything from compliance and risk-management issues to labeling and marketing to clinical trials, due diligence, training programs, and product recalls. With experience addressing the intersection of unique litigation risks with government safety and regulatory oversight, Debra can provide exceptional strategic guidance and legal counsel to her drug, medical device, food, and cosmetics industry clients.

She has also defended complex product liability claims and has served as science counsel and coordinating counsel in mass tort litigation. Dunne has also written and spoken extensively on prescription-drug marketing and off-label issues, which is where I first met her as co-presenters at a CLE in 2007.

Welcome!

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Prop 65 Reforms Proposed

Our readers know how Prop 65 has created numerous issues for product sellers and created much litigation mischief in the hands of overzealous plaintiffs. Interesting that earlier this week, California Gov. Jerry Brown (D) said he now advocates reforms to California's law to frivolous lawsuits that do nothing to protect consumers.

The administration, through the California Environmental Protection Agency, wants to work closely with the state Legislature to revamp Proposition 65 by ending frivolous “shake-down” lawsuits. 

Voters approved Proposition 65 in 1986. The measure requires the Governor to annually publish a list of chemicals allegedly "known to the state to cause cancer or reproductive toxicity." If a business in California sells a product containing such chemicals listed by the state in excess of certain levels, the business must provide warnings to users or in the workplace.

The Governor wants reforms to:
• Cap or limit attorney’s fees in Proposition 65 cases.
• Require stronger demonstration by plaintiffs that they have information to support claims before litigation begins.
• Require greater disclosure of plaintiff’s information.
• Set limits on the amount of money in an enforcement case that can go into settlement funds in lieu of penalties.

The administration is worried about "lawyers who bring nuisance lawsuits to extract settlements from businesses with little or no benefit to the public or the environment." Since 2008, nearly 2,000 complaints have been filed by so-called “citizen enforcers.” Goofy suits include litigation against banks for failing to prevent second-hand smoke near their ATM machines.

The devil is always in the details, so it will be important to keep an eye on this.

 

Drug and Device Seminar Approaches

It is spring time -- although you might not know it from the weather -- and it is time for one of the premier educational and networking conferences for the pharmaceutical and medical device defense bar – the DRI Drug and Medical Device Seminar.  Your hosts this year include my partner and Drug and Medical Device Committee Chair Scott Sayler, and my old pal Jeffrey A. Holmstrand, Flaherty Sensabaugh Bonasso PLLC, Wheeling, West Virginia.

The 2013 DRI Drug and Medical Device Seminar  will be held May 16-17 in New York City at the Sheraton Hotel in Midtown. Most of my readers are familiar with the Seminar and many routinely attend. Here are just a few highlights of the program this year.


• Judge Arnold New of the Philadelphia Court of Common Pleas will present on recent changes in that busy Court.
•  Judge Raymond Lohier of the Second Circuit will speak at the Diversity Luncheon.
• A presentation on how to get the most from Comment K in a medical device case.
• A discussion of  the conflict between free speech and off-label promotion.

  • Observations from the American Tort Reform Association on tough venues.
     

Other benefits-  I am told in-house counsel can attend for FREE, either as a member of DRI or via sponsorship by an outside counsel. FREE wi-fi in the conference room (so, yes, you can multi-task and read this blog.)  All of the usual networking events will be in full swing. 

For more information or to register, go to http://www.dri.org/Event/20130070.

Federal Court Reaffirms Summary Judgment in NORM Case

A federal court recently reaffirmed its prior ruling that a plaintiff's expert failed to establish causation in a suit alleging increased risk of cancer from radioactive scale deposited inside pipes.  See Hill v. Exxon Mobil Corp., No. 11-2786 (E.D. La. 4/30/13).

Plaintiff worked at Tuboscope Vetco International. He alleged he was exposed to radioactive scale
(naturally occuring radioactive materials or "NORM") when he cleaned pipes at work. Hill sued Shell Oil
Co. and Chevron U.S.A. Inc. alleging that these companies sent used pipes containing radioactive scale to Tuboscope to be processed and that he was exposed to the radioactive scale in these pipes.

Earlier this year, the court granted defendants' motion for summary judgment on the grounds that Hill could not prove that he was exposed to radiation attributable to Shell or Chevron.  A fundamental cause in fact issue. His evidence only supported general inferences about radiation at Tuboscope but nothing that showed (1) he actually cleaned used pipe containing scale with NORM or (2) that these pipes were attributable to Shell or Chevron. Hill's evidence required an impermissible chain of speculation to find that he was exposed to radiation in these defendants' pipes.

Plaintiff then moved to alter and amend the summary judgment arguing that the court should amend or reconsider its judgment because of new evidence. The court concluded that the new evidence, largely depositions taken after the motion was pending but before it was ruled on, was not grounds for altering the court's judgment. 
 
Defendants argued that these depositions were not the proper basis for a Rule 59(e) motion to amend because the evidence was available before the judgment issued. See Rosenzweig v. Azurix Corp., 332 F.3d 854, 863-864 (5th Cir. 2003).  Hill deposed these witnesses before the court issued its judgment, and he apparently made no attempt to supplement the record. Accordingly, this evidence was not "newly discovered." See Russ v. Int'l Paper Co., 943 F.2d 589, 593 (5th Cir. 1991).

Even if this evidence was considered, however, the court noted that plaintiff's motion still would fail.  For example, one expert testimony did not establish that Hill was exposed to radioactive scale attributable to Shell and Chevron. No party disputed that new pipe does not have scale, and not all used pipe has scale. Further, not all used pipe with scale contains NORM.  The later expert's calculation of the average radiation dose of pipes that do have scale containing NORM does not provide any proof that Hill was actually exposed to (1) used pipes that have scale containing NORM or (2) that these pipes were attributable to defendants. Accordingly, this kind of "new" testimony was irrelevant to proving Hill's exposure to NORM attributable to Shell and Chevron. The evidence did not show that Hill handled defendants' NORM-containing pipes and did not create an issue of material fact. Motion denied.