Justice Souter To Resign -- A Mass Tort Perspective

Justice David Souter plans to retire from the Supreme Court when the current term ends in June. This announcement, and the inevitable speculation about the identity and judicial philosophy of his replacement, makes one wonder about the impact of the impending change on those of us in the mass tort and products liability field.

What jumps to mind? In the field of mass torts, Justice Souter authored the majority opinion in Ortiz v. Fibreboard Corp., 527 U.S. 815 (1999), the decision rejecting a Rule 23(b)(1)(B) limited fund settlement class action in the asbestos mass tort litigation. After Ortiz, non-opt-out settlement class actions became difficult as a potential mass tort settlement mechanism, particularly as a potential vehicle for resolving future claims in mass torts.

Justice Souter, writing for a 5-3 majority, also authored the landmark ruling limiting punitive damages in the long-running Exxon Valdez saga. The Supreme Court overturned a $2.5 billion punitive damages award assessed against Exxon for the 1989 Valdez oil spill, holding that the award was excessive under (maritime) common law. See Exxon Shipping Co. v. Baker, 128 S.Ct. 2605 (2008). Justice Souter stated that, under maritime law, the upper limit for punitive damages is a 1:1 ratio to compensatory damages. Although the Court’s ruling was limited to maritime cases, its reasoning was not.

According to Souter, punitive damage awards, along with runaway juries and a lack of legislative standards, have led to unpredictable outcomes and outlier awards. The Court found that the best way to cure the defect was to impose a 1:1 ratio of punitive to compensatory damages as the upper limit for punitive damages. His infamous footnote 17, however, referenced “a body of literature” that documented the unpredictability of punitive damages. But then, somewhat puzzlingly noted that: “Because this research was funded in part by Exxon, we decline to rely on it.”  Court observers have speculated on why he bothered to refer to the literature if he wasn't going to rely on it. Of course, there are times – particularly in long running mass torts -- when litigants pay for relevant empirical studies that are used in litigation, in part because often the litigants are the only ones with enough at stake to pay for expensive research studies.  And both sides do it.


In the area of preemption, Justice Souter joined the majority in Riegel v. Medtronic, Inc., 128 S.Ct. 999 (2008), holding that the preemption clause of the Medical Device Amendments of 1976 (21 U.S.C. § 360k(a)) bars common-law claims challenging the safety or efficacy of a medical device marketed in a form that has received pre-market approval from the FDA. However, he sided with the anti-preemption forces in Altria v. Good, 129 S.Ct. 538 (2008), to form a narrow 5-4 majority holding that federal law doesn't preempt cigarette makers from state law suits accusing them of deceiving consumers by marketing "light" or "low tar" cigarette brands. This despite extensive regulation of the “lights” area by the Federal Trade Commission, dating to the 1960’s, and the Congressional mandates on labeling in the Federal Cigarette Labeling and Advertising Act of 1965. Similarly, Justice Souter sided with the majority in the recent Levine v. Wyeth, 129 S.Ct.  1187 (2009) decision, finding that FDA actions had not preempted a state law claim concerning warnings about the side effects of the drug Phenergan.  The effects of that decision are yet to be felt, but the majority risked creating a hodge-podge of inconsistent state-based regulation of drugs (through jury verdicts) that need a consistent, national regulatory approach.