State Supreme Court Applies Net Opinion Rule

When you are a parent, you are often tempted to answer the question "why?" with "because I say so." Experts shouldn't get away with that in court.

The New Jersey Supreme Court recently addressed the scope of the so-called “Net Opinion Rule,” which precludes expert testimony that does not have a sufficient basis. See Townsend v. Pierre, 221 N.J. 36, 110 A.3d 52 (March 12, 2015).  The case involved a motorcycle vs. auto collision, so let's get right to the analysis.

When a New Jersey court determines the admissibility of expert testimony, N.J.R.E. 702 and N.J.R.E. 703 frame its analysis. N.J.R.E. 702 imposes three core requirements for the admission of expert testimony: (1) the intended testimony must concern a subject matter that is beyond the ken of the average juror; (2) the field testified to must be at a state of the art such that an expert’s testimony could be sufficiently reliable; and (3) the witness must have sufficient expertise to offer the intended testimony.  Creanga v. Jardal, 185 N.J. 345, 886 A.2d 633 (2005) (quoting Kemp ex rel. Wright v. State, 174 N.J. 412, 424, 809 A.2d 77 (2002)).

N.J.R.E. 703 addresses the foundation for expert testimony. It mandates that expert opinion be grounded in facts or data derived from (1) the expert’s personal observations, or (2) evidence admitted at the trial, or (3) data relied upon by the expert which is not necessarily admissible in evidence but which is the type of data normally relied upon by experts. State v. Townsend, 186 N.J. 473, 494, 897 A.2d 316 (2006).  The net opinion rule is a corollary of  N.J.R.E. 703, which forbids the admission into evidence of an expert’s conclusions that are not supported by factual evidence or other data. The rule requires that an expert give the why and wherefore that supports the opinion, rather than a mere conclusion.  Borough of Saddle River v. 66 E. Allendale, LLC, 216 N.J. 115, 144, 77 A.3d 1161 (2013) (quoting Pomerantz Paper Corp., supra, 207 N.J. at 372, 25 A.3d 221).

The net opinion rule, said the court, is not a standard of perfection. The rule does not mandate that an expert organize or support an opinion in a particular manner that opposing counsel deems preferable. An expert’s proposed testimony should not be excluded merely because it fails to account for some particular condition or fact which the adversary considers relevant. Creanga, supra, 185 N.J. at 360, 886 A.2d 633 (quoting State v. Freeman, 223 N.J.Super. 92, 116, 538 A.2d 371 (App.Div.1988), certif. denied, 114 N.J. 525, 555 A.2d 637 (1989)). The expert’s failure to give weight to a factor thought important by an adverse party does not reduce his testimony to an inadmissible net opinion if he otherwise offers sufficient reasons which logically support his opinion. Rosenberg v. Tavorath, 352 N.J.Super. 385, 402, 800 A.2d 216 (App.Div.2002). Such omissions may be a proper subject of exploration and cross-examination at a trial. Rubanick v. Witco Chem. Corp., 242 N.J.Super. 36, 55, 576 A.2d 4 (App.Div.1990), modified on other grounds, 125 N.J. 421, 593 A.2d 733 (1991).

The net opinion rule, however, mandates that experts be able to identify the factual bases for their conclusions, explain their methodology, and demonstrate that both the factual bases and the methodology are reliable. An expert’s conclusion must be excluded if it is based merely on unfounded speculation and unquantified possibilities.  So, when an expert speculates, he ceases to be an aid to the trier of fact and becomes nothing more than an additional juror. By definition, unsubstantiated expert testimony cannot provide to the factfinder the benefit that N.J.R.E. 702 envisions: a qualified specialist’s reliable analysis of an issue “beyond the ken of the average juror.” Given the weight that a jury may accord to expert testimony, a trial court must ensure that an expert is not permitted to express speculative opinions or personal views that are unfounded in the record. 
And a party’s burden of proof on an element of a claim may not be satisfied by an expert opinion that is unsupported by the factual record or by an expert’s speculation that contradicts that record.

Here, the accident occurred when defendant turned left at an intersection controlled by a stop sign. The plaintiffs argued that the proximate cause of the accident was negligently maintained overgrown shrubbery, which blocked the view of oncoming traffic.  Their expert was well qualified in engineering, and could have opined as to the design of the intersection. But, said the court, with respect to the issue of causation, the opinion diverged from the only record evidence. He did not apply his engineering expertise to present empirical evidence undermining the undisputed and corroborated testimony that when the driver turned left, her view of traffic was unimpeded. He took no measurements to demonstrate the line of vision of a driver located at the point at which she recalled making her left turn. Instead, the expert analyzed the impact of the shrubbery on the line of vision of a driver stopped behind the stop sign, explaining that placement of a stop sign and negligent property maintenance proximately caused the accident. In an attempt to reconcile his opinion with the testimony, the expert simply reconstituted the facts. He asserted that the driver's testimony about her accident was simply wrong. In this crucial respect, the expert's proposed expert testimony was indeed an inadmissible net opinion.

 

MDL Defendant Moves for Coordination with State Court Proceedings

General Motors recently moved in Pennsylvania state court to to have discovery in an ignition defect lawsuit coordinated with the discovery in the 150+ cases in a federal multi-district litigation. In re General Motors LLC Ignition Switch Litigation, MDL No. 2543 (JPML June 9, 2014).

In many mass torts, plaintiffs have tactical options about choice of forum, including state vs. federal court.  Defendants have limited ability to impact these choices, including through removal to federal court of appropriate cases, and enforcement of venue rules and the forum non conveniens doctrine. It is not unusual for a federal MDL to be operating in parallel to a number of suits progressing in state courts, raising the same essential issues.

Such a posture raises a number of challenges regarding judicial administration, economy of judicial resources, efficiency for the parties, cost, and consistency (such as on protective orders).  While there is no mechanism for mandatory coordination of state and federal cases in this context, voluntary coordination is often utilized to reduce costs, delay, and the duplication of efforts. E.g., Dunlavey v. Takeda Pharm. Am., Inc., 2012 U.S. Dist. Lexis 120897 (W.D. La. Aug. 23, 2012). Many commentators encourage such coordination and cooperation.  E.g., Manual for Complex Litigation §§20.31, 22.4 (4th ed. 2004); The Judicial Panel on Multidistrict Litigation & The Federal Judicial Center, Ten Steps to Better Case Management: A Guide for Multidistrict Litigation Transferee Judges (2009); See the Multi-jurisdiction Litigation Guide.  

The defense motion here does a nice job of explaining why such coordination is essential and wise in the context of a product liability dispute. The MDL court had entered a Joint Coordination Order to prevent duplication of discovery, avoid undue burden on the courts and parties, save costs, and conserve judicial resources.  Some 13 state courts already adopted a similar order to govern the overlapping issues. 

Such coordination does not prevent a plaintiff from seeking necessary case-specific discovery, either through consent or through a motion. But more than 4 million pages of documents have already been produced in this MDL and it makes no sense to ignore that fact and have state court plaintiffs start discovery afresh. And it is impractical and unfair to expect a defendant to produce key company witnesses for deposition hundreds of time for every individual case, as opposed to allowing state court plaintiffs, through the coordination Orders, to meaningfully participate in the master MDL deposition of the key witnesses. 

Plaintiffs oppose the motion.

 

 

Snack Bar Class Action Dismissed

An Illinois federal judge recently dismissed a proposed class action alleging the defendant somehow misled consumers about sugar in its snack bars despite the ingredient label.  See Rochelle Ibarrola v. Kind LLC, No. 3:13-cv-50377, 2015 WL 1188498 (N.D. Ill. 3/12/15).

Plaintiff brought a putative class action against a maker of food products, alleging she purchased its Vanilla Blueberry Clusters with Flax Seeds (“Vanilla Blueberry Clusters”)—on two occasions in 2013. Citing the Illinois Consumer Fraud and Deceptive Business Practices Act (“ICFA”), 815 Ill. Comp. Stat. 505/1 et seq., she alleged that the packaging of Vanilla Blueberry Clusters was deceptive in that it claimed that the product contained “no refined sugars.” Specifically, she asserted that evaporated cane juice and molasses, identified on the products’ ingredient lists, are refined sugars. She proposed both a statewide and nationwide class of individuals who purchased any of defendant's four identified Healthy Grains products.

Defendant moved to dismiss, and the Court agreed that plaintiff had not plausibly alleged that a reasonable consumer would be deceived by the statements in light of the label information (and the express warranty claim was dismissed because she did not notify Kind of the alleged breach of warranty as required by Illinois law.)

To prevail on her ICFA claim, plaintiff had to allege and ultimately prove: (1) a deceptive act or practice by Kind, (2) that the deceptive act or practice occurred in the course of conduct involving trade or commerce, (3) that Kind intended that plaintiff rely on the deception, and (4) that the deception caused her actual damages. Oshana v. Coca–Cola Co., 472 F.3d 506, 513 (7th  Cir. 2006). In addition to these elements, common law fraud requires plaintiffs to allege that the plaintiff actually relied on the contested statement and that the defendant acted with scienter. Thacker v. Menard, Inc., 105 F.3d 382, 386 (7th Cir.1997).

Ibarrola claimed, somewhat obliquely, that she understood “no refined sugars” to mean that the Vanilla Blueberry Clusters contained only “naturally occurring” sugars that had not been refined at all.  But, said the Court, this is not plausible. The Court noted it must view the allegedly misleading statement in light of the information available to plaintiff at the time of her purchase.  Plaintiff stated that she read the entire product label before purchasing the Vanilla Blueberry Clusters. In doing so, she learned that the product contained evaporated cane juice and molasses—sweeteners that she alleged are at least partially refined.  That is, because she admitted reading the entire product label she thus saw that the product contained evaporated cane juice, and must have recognized that at least one of the sweeteners in the Vanilla Blueberry Clusters was derived from sugar cane. Thus, taken at her word, plaintiff alleged that she thought that Vanilla Blueberry Clusters contained sugar cane in its natural state, not having gone through any process to refine it.  But sugar cane in its natural state is a grass that contains jointed stalks resembling bamboo. The stalks are made up of fibrous flesh surrounded by bark!

Given this reality, no reasonable consumer would think—as plaintiff alleged that she did—that the sugar contained in the products was still in its natural, completely unrefined state.  Even though a reasonable consumer may not understand everything that happens to sugar cane before its derivative can be added as an ingredient, a reasonable consumer would know that all sugar cane-derived sweeteners suitable for human consumption must be at least partially refined. Reasonable consumers do not believe that they are eating straight sugar cane in Vanilla Blueberry Clusters or any other food product because sugar cane in its natural, unprocessed state is indigestible. That is, a reasonable consumer would recognize that, at the least, impurities or unwanted material must be removed from sugar cane before it can be used as an ingredient in Vanilla Blueberry Clusters, and thus, that all sugar cane-derived sweeteners require some form of  “refining,” as the dictionary defines the term.

Thus, the Court found that the only reasonable conclusion after reading the entire Vanilla Blueberry Clusters label is that defendant used the word “refined” as a term of art to distinguish only partially refined sugars like evaporated cane juice and molasses from fully refined sugars like table sugar.

 

Courts have dismissed other complaints premised on such logical inconsistencies. E.g., Rooney v. Cumberland Packaging Corp.,  No. 12–CV–0033–H DHB, 2012 WL 1512106, at *4 (S.D.Cal. Apr. 16, 2012). See also Kane v. Chobani, Inc., No. 12–CV–02425–LHK, 2013 WL 5289253, at *6 (N.D.Cal. Sept. 19, 2013).

Here, because plaintiff already had an opportunity to amend, the dismissal was with prejudice.

 

Product Liability Law360 Board

Just a quick note that your humble blogger was pleased to be named one of the members of the 2015 Product Liability Law360 editorial advisory board. Board members try to provide insights into current trends in their practice areas to help shape future editorial coverage and focus.

This valuable newsletter covers breaking news in mass torts and products liability law, tracking litigation, as well as covering regulatory and legislative developments. In addition to class actions and multidistrict litigation, it also focuses on product recalls and government enforcement actions. Content includes personnel moves at law firms, profiles of product-liability practices, coverage of conferences, reports and studies, and offers guest expert commentary.

 

 

 

State Passes Mandatory Cy Pres Law

Oregon has enacted controversial legislation affecting damages in class actions in the state.  House Bill 2700 was recently signed into law by Gov. Brown, following passage on largely party lines.

The law addresses the not uncommon situation of leftover class action funds.  Sometimes unclaimed funds will revert to the defendant, which makes sense given the purpose of compensatory damages is to compensate persons injured by wrongful conduct. Sometimes the unclaimed funds are allocated in a form of "cy pres," which we have posted about before.

Oregon's new plan is for half of unclaimed or unpaid damages in Oregon class actions to be paid to the state bar's Legal Services Program and the other half to a court-determined entity that benefits the "interests" of class members -- so partly a tax, and partly a cy pres distribution.

The law says it is effective immediately, including for pending actions.  Any amount awarded as damages or to be paid in settlement that the court finds either hasn’t been timely claimed by class members, or when it is simply “not practicable” to pay the full amount to class members, must be distributed in the following fashion:  “At least 50 percent of the amount not paid to class members" must be paid “to the Oregon State Bar for the funding of legal services provided through the Legal Services Program.”  The "remainder of the amount not paid to class members” must be handed over to an entity chosen by the court for purposes that are “directly related to the class action or directly beneficial to the interests of class members.”

Class action observers have noted that cy pres awards are often used by class counsel to enhance the appearance of benefit recovered in the case in order to justify a higher fee award. Another huge problem is that use of cy pres can eliminate the incentive for class counsel to ensure that all absent class members, the allegedly injured parties,  get the compensation they have been awarded or earned in settlement.  Trying to enhance funding for Legal Services programs seems like a great goal, but this does not seem like a wise way to do it. 

Upcoming Seminar of Interest

Our readers may be interested in the upcoming seminar: Chemical Products Liability and Environmental Litigation.  

It's scheduled for April 22-23 in New Orleans, and includes topics such as Recent Developments In Fracking Litigation, and Navigating the Litigation Threat Stemming from Potentially Disruptive Regulatory Changes.

Your humble blogger is on the faculty.  I have the privilege of moderating a panel on In-House Perspectives: Thinking like Litigation Counsel, Analyzing Litigation Trends, and Sharing Insight about Docket Management.  The panel features Jennifer L. Ferratt, Esquire, of Chevron USA; Scott A. King, Esquire, from Occidental Chemical Corporation, and Eric S. Sarner, Esquire, of Praxair, Inc.

This is the 6th Annual conference and the prior years' drew great reviews from litigators in the toxic tort and environmental fields. 

Worth checking out.

Federal Court Denies Certification in Groundwater Class Case

A federal judge in Oklahoma earlier this week denied class certification to homeowners living near a research facility, holding that individual issues outweighed allegedly common issues among the class claiming injury from contamination from the site. See Mitchell McCormick, et al. v. Halliburton Co. et al., No. 5:11-cv-01272 (W.D. Ok. 3/3/15).

For several decades, Halliburton performed a variety of important tasks on the Site at issue, including work for the United States Department of Defense cleaning out missile motor casings. This work involved removing solid rocket propellant, consisting primarily of ammonium perchlorate, from the missile casings using a high pressure water jet. As the missile motor casings were  cleaned, water from the hydrojet and the dislodged propellant was run through screens to separate the solid materials from the cleaning water. The solid propellant was collected and periodically burned in pits on the Site, and the cleaning water was ultimately discharged into evaporation ponds. Over time, plaintiffs alleged, perchlorate from these operations reached the groundwater under the Site and migrated off-site.

So in 2011, plaintiffs filed the instant action, asserting causes of action for private nuisance, public nuisance, negligence, trespass, strict liability, and unjust enrichment. Plaintiffs then moved the Court to certify a class with respect to Halliburton’s alleged liability to the class for damages to their properties.

The Court began its analysis by noting that the class action is an exception to the usual rule that litigation is conducted by and on behalf of the individual named parties only.  Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2550 (2011). “To come within the exception, a party seeking to maintain a class action must affirmatively demonstrate his compliance with Rule 23.” Comcast Corp. v. Behrend, 133 S. Ct. 1426, 1432 (2013). Further, plaintiff ultimately bears the burden of showing that the Rule 23 requirements are met, and the district court must engage in its own “rigorous analysis” to ensure that certification is appropriate. See Shook v. El Paso Cnty., 386 F.3d 963, 968 (10th Cir. 2004).

Here, that analysis revealed that plaintiffs had not shown that questions of law or fact common to class members predominate over any questions affecting only individual members and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.
“Considering whether ‘questions of law or fact common to class members predominate’
begins, of course, with the elements of the underlying cause of action.” Erica P. John Fund, Inc.
v. Halliburton Co., 131 S. Ct. 2179, 2184 (2011). Halliburton’s liability as to any of plaintiffs’ causes of action could not  be determined on a class wide basis because certain elements of plaintiffs’ causes of action require significant individualized evidence.

Regarding plaintiffs’ nuisance causes of action, observed the court, “[a] nuisance consists in unlawfully doing an act, or omitting to perform a duty which act or omission either . . . annoys, injures, or endangers the comfort, repose, health, or safety of others; or . . . in any way renders the other persons insecure in life, or in the use of property. . . .” Okla. Stat. tit. 50, § 1. Further, “[i]n order to maintain a cause of action for nuisance, the plaintiff must prove an unlawful act or omission of duty which either injured or endangered his use of his property.” N.C. Corff P’ship, Ltd. v. OXY USA, Inc., 929 P.2d 288, 294 (Okla. Civ. App. 1996).  Thus, in order to establish Halliburton’s liability for nuisance, plaintiffs had to prove an injury to the use and/or the enjoyment of the property or that the use and/or the enjoyment of the property was endangered. This clearly required an individual plaintiff by plaintiff factual determination, i.e., did that particular plaintiff have a well on his property; did that particular plaintiff use the well for drinking water; was that particular plaintiff already on public water; what was the actual use of that particular property, etc. Additionally, regarding a cause of action for public nuisance, “before an individual can abate a public nuisance, it must be shown that the activity is specifically injurious to the person’s rights.” Smicklas v. Spitz, 846 P.2d 362, 369 (Okla. 1992). Further, in order to make this showing, a plaintiff must demonstrate that he sustained injuries “different in kind from that suffered by the public at large.” Schlirf v. Loosen, 232 P.2d 928, 930 (Okla. 1951). Thus, no class member could recover under a public nuisance theory without introducing individualized evidence of special harm different from other members of the public, which would necessarily include other members of the class.

Similarly, regarding plaintiffs’ negligence cause of action, while it is possible plaintiffs could establish duty on a class-wide basis in theory, plaintiffs could not show injury: establishing that defendant proximately caused an injury to a plaintiff is necessarily a highly individualized determination requiring each plaintiff to show that his property contains perchlorate and that the perchlorate came from the Site and not from some other source. Individual issues permeated the other causes of action as well.

The court concluded that "the vast number of important individualized issues" relating to defendant's alleged ultimate liability as to all of plaintiffs’ causes of action overwhelmed any common questions. The Court also found that a trial on whether defendant  released perchlorate into the groundwater, as well as the current and future scope and extent of that groundwater contamination, was unlikely to substantially aid resolution of the ultimate determination of liability. Proof of these allegedly class wide facts would neither establish liability to any class member nor fix the level of damages awarded to any plaintiff; the common facts would not establish a single plaintiff’s entitlement to recover on any theory of liability, or even show that a single plaintiff was injured. Simply put, the individual issues would dwarf whatever common issues there may be, such that a vast array of mini-trials would be required for each class member if certification were granted.

Accordingly, a class action in relation to Halliburton’s liability was not superior to other available methods for fairly and efficiently adjudicating the controversy. Even if the Court were to certify the allegedly common issues, the subsequent separate proceedings necessary for each plaintiff
would undo whatever efficiencies such a class proceeding would have been intended to promote.

 

 

Publication of my new Class Action & Mass Torts Answer Book

Just a quick note.  Your humble blogger is very pleased to announce the availability of my latest publication, the Class Action and Mass Tort Answer Book (PLI 2015).  It is available here.  (I don't spend all my time posting here.)

The book is designed to be a handy desk reference for the class action practitioner and others interested in class actions and mass torts, offering a comprehensive overview of the current law. Deeper than a mere introduction but not as bulky as a treatise, the goal was to give the reader the essentials, covering, inter alia:

-class action prerequisites
-injunctive relief, mandatory, and damages classes
-issues surrounding absent class members
-discovery of class issues

-CAFA

-class certification hearings and procedures

-appeal of a certification decision
-trial of a class action
-settlement of a class action

In addition, the book looks at MDLs and other coordinations of complex civil litigation, concluding with a decidedly un-Nostradamus-like look at the future of aggregate litigation. 

I would also thank the wonderful contributors and researchers, many colleagues at SHB, that helped make the book a reality, and they are listed in the preface and table of contents.

Alas, no book signings or appearances on Oprah yet, but will keep you posted.