Court Permits Plaintiffs to Evade CAFA Mass Action Reach

Readers know that one of the effects of the Class Action Fairness Act has been to encourage plaintiff counsel to get creative in ways to defeat federal jurisdiction and keep mass torts and class actions in state courts.  Last week, a federal court remanded several cases brought by individuals who claimed that they developed non-Hodgkins lymphoma as a result of exposure to PCBs, despite the “mass action” provisions of CAFA.  Nunn v. Monsanto Co., No, 4:11-CV-1657(CEJ) (E.D. Mo. 11/7/11).

Under CAFA, federal courts have jurisdiction over class actions in which the amount in controversy exceeds $5,000,000 in the aggregate; there is minimal diversity among the parties; and there are at least 100 members in the class. 28 U.S.C. §1332(d). CAFA also provides federal jurisdiction over a “mass action,” which is defined as “any civil action . . . in which monetary relief claims of 100 or more persons are proposed to be tried jointly on the ground that the plaintiffs’ claims involve common questions of law or fact . . .” 28 U.S.C. § 1332(d)(11)(B)(i).

The district court stated that for it to have jurisdiction under the mass action provisions, defendants must demonstrate that there really are 100 plaintiffs. Defendants made a clever and powerful argument, pointing out that in addition to the cases and these plaintiffs subject to the remand motion,  plaintiffs’ counsel filed two separate, largely identical, cases in the state court (St. Louis City Circuit Court), one with 95 plaintiffs and one with 96 plaintiffs. This clearly evidenced plaintiffs’ counsel purposeful efforts to “splinter” a single mass tort case for the purpose of evading federal jurisdiction. That kind of rigging was rejected in cases like Freeman v. Blue Ridge Paper Prods., Inc., 551 F.3d 405 (6th Cir. 2008), and Westerfeld v. Independent Processing, LLC, 621 F.3d 819 (8th Cir. 2010), argued defendants.

The court felt obligated to disregard such manipulations, however.  Defendants’ contention that plaintiffs had deliberately divided their cases in order to avoid the mass action threshold was somehow "irrelevant."  Reference to the other identical cases was, the court thought, akin to defendant "consolidating" the cases; by excluding cases in which the claims were consolidated on
a defendant’s motion, Congress appears to have contemplated that some cases which could have been brought as a mass action would, because of the way in which the plaintiffs chose to structure their claims, remain outside of CAFA’s grant of jurisdiction. Citing Anderson v. Bayer Corp., 610 F.3d 390, 393 (7th Cir. 2010); see also Tanoh v. Dow Chem. Co., 561 F.3d 945 (9th Cir. 2009). 

So, another example of the numerical loophole to removal of mass actions, evading the Congressional intent. Plaintiffs' attorneys continue to resort to dividing their clients into groups of 99 or fewer plaintiffs to try to avoid federal court.


State Supreme Court Upholds Verdict For Chemical Defendant In PCB Case

The Pennsylvania Supreme Court last week affirmed a jury's finding that a manufacturer of chemical-containing building materials was not liable for contaminating a building with polychlorinated biphenyls (PCBs) because the alleged pollutants were spread by fire and not by any intended use of the materials. See Commonwealth of Pennsylvania v. U.S. Mineral Products Co., 2008 WL 4368569 (Pa., September 26, 2008).

The case was a product liability action arising out of alleged chemical contamination at the former Transportation and Safety Building in the Capitol Complex in Harrisburg, PA, following a fire. Plaintiff had initially secured a $90 million verdict at the conclusion of a lengthy jury trial, a decision reversed, in part, because an erroneous jury charge as to whether PCBs were distributed to surfaces throughout the T & S Building in the ordinary use of PCB-containing products, or whether the chemical was spread in smoke and soot during the severe fire. The court ruled that strict liability is available only for harm that occurs in connection with a product's intended use by an intended user, and that the incineration of building materials is not an intended use.

The second trial culminated in a defense verdict, upon a jury finding that Monsanto's product was not defective. Appeal ensued.

The court reaffirmed its ruling on strict liability and intended use. At the second trial there was substantial evidence to the effect that the PCBs found on surfaces within the T & S Building were not from the intended use of the building materials, but were spread by smoke and soot during the fire. For example, tests commissioned by defendant’s expert on pre-fire building materials showed only nominal PCB bulk-sample levels (measured in parts per million) that were many times lower than those found in similar building materials after the fire; Monsanto also offered evidence contradicting appellants' experts' theories of dissemination through ductwork operation and fabrication.

Based on this and other items of Monsanto's evidence, the jurors reasonably may have concluded that it was the fire, and not any intended use of PCBs, that was the vehicle by which PCBs were distributed to surfaces throughout the Building.

On a second issue, plaintiff below challenged the admission of evidence of its own conduct with respect to the building before the fire. Although evidence of negligence has no place in strict liability actions, Kimco Development Corp. v. Michael D.'s Carpet Outlets, 536 Pa. 1, 7-9, 637 A.2d 603, 608 (1993), evidence which is inadmissible for one purpose may be admissible for another. In this regard, the court determined that the contested evidence was relevant primarily to rebut appellants' damage claims. According to the court, the evidence of lack of a sprinkler system and other safety features was admitted to show the condition of the Building prior to the 1994 fire and detection of PCBs. The trial court had discretion to admit evidence of a lack of fire-safety features as relevant to market value.

Defense verdict affirmed.