Case Management in 2004: Practical Guide for Mass Tort Practitioners
October 27, 2004
Introduction: Little is written about case management of mass torts at the state court trial level and that route to trial. The purpose of this article is to use our case as a teaching example of effective case management tools and techniques, and suggest a practical guide for mass tort practitioners in 2005 and beyond. We recently concluded seven years of litigation, to the California Supreme Court and back, with detours to the California Public Utilities Commission (“PUC”), before the complaints were even answered and in the end, the cases settled, or are in the process of doing so, due to the perceptive case management of a judge interested in handling these complex cases and willing to tackle the difficult issues. We were successful in preventing what easily could have become serial litigation, reaffirmed and made some case law on doctrines of pre-emption and primary jurisdiction--which should be new focal point areas for toxic tort practitioners—but regrettably never made it to a Daubert hearing or trial. It has been a little over 10 years since I wrote for this publication[1]
and not much has changed in the practice of toxic torts at the state court level. At the federal level, there have been a few suggested amendments to Federal Rule of Civil Procedure 23 in light of Amchem[2], Ortiz[3] and other proposed settlement classes. I hope this article will suggest a “pathway” for companies in case management of mass torts at the state court level.
Background: So a little background about our cases to put things in perspective. We were immersed as liaison counsel in seven arduous years of litigation in a group of toxic tort cases predicated on alleged drinking water contamination. These 13 separately filed mass tort state cases involved over 1100 plaintiffs, 100 defendants and were brought by two well financed and experienced plaintiffs law firms. The defendants were multi-layered, consisting of industrial businesses, municipalities, water purveyors regulated by the PUC and water purveyors not regulated by the PUC. Given the location of the alleged groundwater contamination, our first move, which was successful, was to seek a change of venue in the lead case. We argued and won that motion, which resulted in the lead case, Santamaria, being transferred to Ventura County from Los Angeles County, site of the San Gabriel Valley where the alleged drinking water contamination occurred and home to over million potential plaintiffs. While the motion to change venue was pending, the PUC regulated water purveyors convinced the PUC to begin an investigation into the quality of the drinking water in the San Gabriel Valley. Once that investigation was opened, the PUC regulated water purveyors filed demurrers, joined in by the industrial defendants, in Santamaria and the other lead case, asserting that the trial court’s jurisdiction was pre-empted by the PUC’s investigation into the quality of the water served in the San Gabriel Basin.
The trial courts’ mixed rulings on these demurrers—we won one and the plaintiffs won one—resulted in virtually all of the parties filing appeals or writ petitions. The Court of Appeal, sided with the PUC regulated water purveyors, finding that the trial court lacked jurisdiction over them due to the pending PUC investigation, but retained jurisdiction over the other water purveyors and the industrial defendants. We filed a petition for review with the California Supreme Court, which accepts less than 1% of such petitions filed, which was accepted. The case was in the Supreme Court for at least 2 years, the entire appellate process consumed three and a half years.
The decision, based on pre-emption ground and primary jurisdiction grounds, may be found at Hartwell v. Superior Court (2002) 27 Cal. 4th 256. It is worth reading. In Hartwell, the California Supreme Court held, in pertinent part, as follows:
An award of damages on the theory that the public utilities provided unhealthy water, even if the water met DHS standards, “would plainly undermine the (Public Utility) commission’s policy by holding the utility liable for not doing what the commission has repeatedly determined that it and all similarly situated utilities were not required to do.” (citation). Thus, such damage action are barred.
On the other hand, damage claims based on the theory that the water failed to meet federal and state drinking water standards are not preempted by (Public Utilities Code) section 1759. A jury award based on a finding that a public water utility violated DHS standards would not interfere with the PUC regulatory policy requiring water utility compliance with those standards. Hartwell Supra, 27 Cal. 4th at 276.
The Strategy: While ultimately the California Supreme Court did not rule entirely in our favor on the demurrers, the delay engendered by the appellate process and concomitant stay “took the wind” out of the plaintiffs sails. Any attempt to file new lawsuits on behalf of new plaintiffs would face stiff opposition on statute of limitation grounds. Because the cases originally filed in 1997 alleged drinking water and groundwater contamination in the San Gabriel Basin from 1979, there were glaring statute of limitations issues presented on the face of the complaints themselves, at the time of filing, and well before the cases traveled to the Supreme Court. Moreover, there was enough publicity surrounding the filing of these cases in 1997 that any new case filed in 2002, after the Hartwell decision, would in all likelihood never survive a statute challenge—the effect of the Supreme Court delay on any new case filings and a decision point considered in the defendants’ initiation of the appellate process. From our perspective, the defense was engineered to “shut down” potential serial litigation in the San Gabriel Basin and in the end--although seven years later-- it apparently has stopped the litigation.
The plaintiffs had their own strategy during the appellate process, and succeeded, despite the stay, in altering the landscape of the trial court actions. They did this by filing a new case while the Supreme Court matter was pending and used this new case filing as a reason to coordinate all of the cases, those in Los Angeles and the one in Ventura plus another mass tort water case filed from an adjacent groundwater basin—in the Central Civil West district of Los Angeles, affectionately known by plaintiff’s bar as “the Bank.” The basis for coordination was interesting, that one of the two plaintiffs firms had these two large mass tort water cases from adjacent basins and since all these cases involved “water”, all three groups of cases should be coordinated. This third group of cases from the adjacent basin itself numbered 1000 plaintiffs and is not included in the other 1100 plaintiffs number from the other two groups of cases. The defendants resisted this maneuver on the grounds that coordination was not appropriate and that the cases should not be coordinated in Los Angeles. The petition to coordinate was granted, defendants took a writ, which was denied, and all water cases by all plaintiffs firms in both basins were sited now in CCW. The first ‘‘coordination trial judge” appointed by the California Judicial Council was challenged by the defendants (since there is only one challenge per side, all layers of defendants needed to agree) pursuant to California Code of Civil Procedure Section 170.6. The second coordination trial judge requested the parties prepare briefs on the meaning and implications of the Hartwell decision. But six months later, that judge retired to join a private dispute resolution firm. Ultimately, Judge Carl West was appointed to preside over what by then had come to be referred to as the “Water Cases.”
Management: The size and complexity of the Water Cases created administrative challenges for all involved. The industrial defendants organized themselves into a joint defense group which had a cooperative, somewhat friendly working relationship with the water purveyor defendants, who organized their own defense group. We drafted the initial case management order governing the proceedings which, importantly for the industrial defendants, stayed all cross-actions pending case resolution. This order enabled the defendants to put aside their differences—that water purveyors had been threatening to file cross-complaints against the industrial defendants—so that they could present a united front against the plaintiffs’ claims. In order to alleviate the tremendous burden of serving 100 parties with case pleadings, another case management order was entered authorizing the retention of a vendor to establish a court ordered website through which service would be accomplished.
a. Master Set of Pleadings:
In order to clean up the pleadings, the court ordered the plaintiffs to file a “Master Complaint” asserting all of their causes of action against the defendants. In response, the defendants filed a “Master List of Affirmative Defenses” containing all of the possible affirmative defenses that could be asserted by the defendants. In order to provide certainty regarding the claims of each individual plaintiff, the Court ordered each plaintiff to file a “Notice of Adoption” identifying the causes of action asserted by that plaintiff, and the defendants against whom they were asserted.
b. Demurrer Rounds:
The Court then ordered four rounds of demurrer hearings, with set causes of action to be addressed in each round, to be briefed over a period of four months. Rulings after each round could not be challenged until completion of the fourth round, and thereafter, all interim demurrer rulings could the subject of writ petitions filed with the Court of Appeal. These court scheduled demurrer hearings proved to be a very intelligent case management tool.
The first demurrer addressed plaintiffs’ claims for trespass, nuisance, and violation of Proposition 65[4]. The Court sustained the demurrer, without leave to amend, as to public nuisance, real property “stigma”, and Proposition 65 claims, as well as all claims based upon alleged injury from air-borne contaminants. In the second demurrer hearing, the Court sustained the demurrer, with leave to amend on a proper evidentiary showing, as to claims for strict liability, absolute liability, fraudulent concealment and civil conspiracy. The third demurrer related to causes of action for negligence, survival and wrongful death and battery, as well as claims for fear of cancer and medical monitoring. The Court sustained the demurrer as to battery, with leave to amend on a proper evidentiary showing and also struck claims for fear of cancer, to the extent they were asserted by plaintiffs who did not suffer from any physical injury. The fourth demurrer addressed claims for negligence per se, breach of mandatory duty, and violation of California Business & Professions Code Section 17200 et seq (the “Unfair Competition Law”). The demurrer was sustained with leave to amend as to negligence per se and breach of mandatory duty, and without leave to amend as to five out of the twelve Unfair Competition Law claims.[5] After these demurrer hearings, the number of causes of action were reduced from thirty-one to twenty (only nine of which were asserted against our industrial business clients) and all claims for punitive damages were struck.
c. The Hartwell Hearings: In order to address the preemption issues raised by the Hartwell decision, the Court, after reviewing the briefs submitted on the meaning of the Hartwell decision, scheduled a series of three hearings spread over the course of a year.
Hartwell 1: In Hartwell I the court addressed the following two legal issues: 1) what standards should apply to the PUC Regulated defendants under Hartwell; and 2) the applicable mandatory duties of the Public Entity Defendants under Government Code Section 815.6. With respect to issue one, the court ruled:
The numerical standards the Court will recognize in applying the Hartwell decision will be those adopted by the Department of Health Services (DHS) as “maximum contaminant levels” (MCLs) and “action levels” (ALs) and prior to the adoption of the MCLs/ALs, those numerical standards adopted by the DHS or any predecessor similar agency, whether state or federal, to the extent the numerical standards adopted by such agency were properly incorporated in California’s regulatory scheme. The court will not apply any qualitative standard, such as “potable, healthful, or wholesome” for any period of time, as to do so would prospectively undermine the regulatory scheme.”[6]
With respect to issue two, the Court found “the general provisions of the Federal and State Safe Drinking Water Acts….do not create a mandatory duty within the meaning of Government Code Section 815.6. The Court also stated in applicable part:
Notwithstanding the forgoing, the DHS regulations may create a mandatory duty with respect to MCL’s and AL’s to the extent that plaintiffs are able to make a showing of “violations” by the Public Entity Defendants. The determination of what constitutes a “violation” will be made on the same grounds as necessary for imposition of liability on the PUC regulated Defendants under Hartwell. The mandatory duty, if any, is compliance with the regulatory scheme embodied in the DHS regulations….[7]
Hartwell 2: In Hartwell II, the issue was what constitutes a violation of the water quality standards applicable to the PUC regulated water purveyors. On that point, the Court held “that to constitute a violation of DHS water quality standards, Plaintiffs must establish that the PUC Regulated Defendants and the Public Entity Defendants violated the regulatory requirements of the PUC and DHS. It ruled it would be insufficient for Plaintiffs to merely demonstrate isolated exceedances of Maximum Contaminant Levels(MCLs) or Action Levels (ALs).[8]
Hartwell 3: In Hartwell III, the issue was whether the plaintiffs had any evidence that the PUC regulated water purveyors violated the applicable water quality standards. The court decided this issue was best addressed through discovery. Each PUC-Regulated Defendant propounded a Request for Admissions upon Plaintiffs which asked:
Admit that YOU have no evidence that (PUC regulated Defendant) VIOLATED any STANDARD for any CONTAMINANT (within a specified date range), with respect to any water at any POINT OF ENTRY to the (PUC –Regulated Defendant’s)system.
The Request for Admissions propounded by the public entity defendants were essentially the same as those propounded by the PUC-Regulated Defendants.[9] The Plaintiff’s response to each request was identical, and stated:
“Based exclusively on the Court’s definition of ‘Violations’ and ‘Standards’ ruled upon and fully defined in its August 25, 2003 and April 28, 2003 Statements of Decision, respectively, Plaintiffs respond as follows: Admit.[10]”
Armed with this admission the PUC regulated defendants and the public entity defendants filed motions to dismiss. The PUC Regulated Defendants asserted that a Superior Court has no subject matter jurisdiction under Public Utilities Code Section 1759[11] because the Plaintiffs’ claims against the PUC-Regulated Defendants are not founded on violations of standards(under this Court’s interpretation of “violations” per Hartwell II and “standards” per Hartwell I).
The Public Entity defendants asserted that given the Court’s legal determinations in Phases I and II, the Court lacks subject matter jurisdiction over claims made against a public entity that fail to comply with the California Tort Claims Act (Government Code Section 815, et seq.) because a claim against a public entity on a non-statutory cause of action is subject to “the defense of sovereign immunity” under State of California v. Superior Court (1968) 263 Cal. App. 2d 396, 398. The Public Entity Defendants argued that each of the remaining claims against them—breach of mandatory duty, wrongful death and negligence—must be dismissed for lack of subject matter jurisdiction because Plaintiffs have admitted by their admissions that they have no evidence of any violations of standards that would support the allegations of breach of a mandatory duty.
The Court granted the motion to dismiss on the grounds that Plaintiffs have admitted their inability to provide evidentiary support for (1) their claims against the PUC-Regulated Defendants under this Court’s interpretation of the Hartwell decision; and (2) their claims against the Public Entity Defendants, to the extent that they have no evidence to establish breach of mandatory duty based on the violation of an applicable statue or regulation.
“It is the absence of evidence, and Plaintiffs’ acknowledgment of that lack of evidence, that deprives the Court of subject matter jurisdiction as to the PUC–Regulated Defendants and precludes the claims against the Public Entity Defendants based on the alleged breach of a mandatory duty… Plaintiffs’ admissions in these cases acknowledge that they cannot establish subject matter jurisdiction under the holding of the California Supreme Court in the Hartwell decision or under the statutory scheme that governs claims against public entities. The motion to dismiss is granted.”[12]
Judicial Wisdom: Like channel gates channeling the water in the case, these judicial management decisions, the four rounds of demurrers and the three rounds of Hartwell hearings for the PUC regulated defendants and the Public Entity defendants did effectively control the flow of these cases by slicing the Water Cases into working manageable pieces.
Discovery was another piece of judicial management which the Court made clear it from the outset that it would control. This also was written into the first case management order. It is noteworthy that Judge West did have prior experience presiding over mass tort cases, particularly a recent case in Burbank, so he was very comfortable with this playing field. Because of his prior experience, he had a vision of where the case was headed, was familiar from the outset of what plaintiffs would ultimately need to prove and what defendants would “contest”, knew that these cases would involve bellwether and preference plaintiffs[13], trial groups, motion practice (various motions such as collateral estoppel of PUC findings, statute of limitations, Bockrath[14] and Cottle[15]: what this author calls “paring down” motions), ultimately leading to a battle of the experts in a Daubert hearing. Intelligent case management based on experience is the only way for the Court to control a case of this breadth (sheer size) and depth (multilayered complexity from all different defendants and layers of different issues). At the first appearance in the trial court post-remand from the Supreme Court, there was standing room only after every available chair from every courtroom on the floor was in use -- there were over ninety plus lawyers in court. In a case of this size, cooperation of all lawyers is required or else the case will never “move forward.”
d. The First Round of Discovery: The court permitted all defendants to submit one questionnaire to each named plaintiff in all cases. Prior to propounding the questionnaire, the defendants submitted it to the plaintiffs for comment and objections, and to the Court for approval after resolving all issues raised by the plaintiffs. Thereafter, the plaintiffs had no reason for not responding to the “court approved” questionnaire. The Court gave all plaintiffs one year to answer the questionnaire and thereafter also granted extensions for some plaintiffs to respond. Ultimately those plaintiffs who failed to file answers to the questionnaire were first sanctioned and ultimately dismissed from the case.
The effect of the stay: The stay, which we asked for concomitantly with the petition for review, practically had the effect of causing plaintiffs to lose track of their clients. The numbers dropped precipitously from 1000 when the appellate process began to approximately 570 when our clients settled the cases.[16]
The discovery directed from plaintiffs to defendants was in the form of interrogatories and request for production of documents, aimed at obtaining information and documents from each defendant regarding the nature of each defendants’ business, history of chemical usage, storage and disposal at the site as well as insurance information.
e. Bellwether Selection: Once this initial round of discovery was completed, the court on its own, after briefing by counsel on the issue, randomly selected approximately 50 bellwether plaintiffs per case group from the remaining plaintiffs who had responded to the questionnaire. To these plaintiffs, the Court added those plaintiffs who were potentially entitled to trial setting preference. It was upon this group of bellwethers and preference plaintiffs that the Court permitted Round II of discovery -- such as depositions and limited written discovery to be produced immediately prior to their depositions. From this group of bellwethers and preference plaintiffs trial groups would ultimately be selected.
e. Third Party Discovery: The Court also controlled third party discovery; it permitted issuance of third party subpoenas to the other non-defendant water purveyors who either served water directly to the plaintiffs or indirectly by supplying water to the water purveyor defendants.
f. Motion Practice: From the plaintiffs perspective, these cases are very expensive for counsel to undertake and are also difficult to prove--causation is the key. In California, plaintiffs must be prepared to withstand a so-called Bockrath challenge to the complaint. The defendants will insist that you tell them not only what toxins caused which specific illness in your plaintiff, but also that you show a causal nexus either in pleading per Bockrath or closer to trial in a so-called Cottle hearing. In terms of main motions to be made in the typical toxic tort case, they are: Lone Pine/Cottle; Bockrath (California); statute of limitations, and ultimately Daubert/Kelly Frye.
In order to prevail in this kind of litigation, plaintiffs must prove the existence of a poisonous substance that was toxic when introduced into human tissues. This is known as dose, which is the amount of the substance that actually penetrated the plaintiff’s body by either inhalation, ingestion or through dermal contact. Secondly, plaintiffs must prove that a specific toxin belonged to a particular defendant and that it caused the injury alleged in the complaint. Experts will be needed in such areas as water distribution—above and below ground—toxicology, industrial hygiene, epidemiology, along with all the attendant medical specialties and subspecialties. Plaintiffs’ counsel must be sure they can survive a Daubert-KellyFrye[17] challenge if they hope to pursue their case to trial.
g. Lawyer Organization: For defense counsel organization and cooperation are key. The court will encourage defendants to join joint defense groups because it is the only way a judge can effectively manage so many defendants. The court will also insist on liaison counsel in order to control the “chatter” in court, funneling speaking roles through the liaison counsel designees. There are cost savings associated with participation in a joint defense group in terms of expert retention and division of labor to reduce redundancy. If you are not a member of such a group, you could be left out in the cold if everyone settles out of the case around you-one of the dangers and risks of coat-tailing. In terms of other caveats, it is best not to have other cases pending paralleling the mass tort case, that means no pending EPA administrative proceedings nor declaratory relief insurance coverage actions. Both such actions can produce evidence and testimony damaging to the toxic tort case defense since the interests and objectives of those proceedings are so very different.
Wisdom and Energy: Judge West knew “the big picture” from the Burbank litigation and entered our case insisting on liaison counsel, on no parallel actions, on meet and confers to avoid motion practice—the management technique was quite effective. All counsel were ordered to meet monthly and prepare joint status conference statements, highlighting the pending case issues and positions taken. He then would make tentative rulings, posting these rulings on the website prior to the status conference. At the status conference, counsel would appear and argue whatever issue they wanted, as well as highlight upcoming issues and problems for the court. Thereafter, the Court would order more meet and confers among liaison counsel before the next month’s status conference. After each status conference, a minute order would be posted on the court’s website reflecting the court’s final ruling on all issues presented by the parties at that month’s status conference. It is an amazing technique. The case was essentially run by status conferences, with all sides participating and forced joint participation on a monthly basis in meets and confers prior to the preparation of these status conference statements.
The Roadmap From This Case: Lessons Learned: The court imposed stay, requested by defendants during the appellate process, effectively prevented more lawsuits from being filed in the intervening three and one half years that the case traveled down the appellate road. The stay and appellate filings eliminated a serious threat to defendants who otherwise envisioned serial litigation on behalf of a pool of potential plaintiffs numbering over one million. It was calculated to stop the serial litigation in its tracks; it was successful. Our clients lead this effort with the filing of the first writ petition, culminating in the Hartwell decision, cited above. The PUC regulated water purveyor’s strategy to request the PUC open parallel proceedings was a brilliant one; the plaintiffs intervened in those PUC proceedings as did other industrial defendants. It was this parallel investigation that was the basis of our stay request accompanying the writ petition requesting that all judicial proceedings be stayed pending the PUC investigation into the quality of the water served by the investor owned regulated utilities. Ultimately, the PUC found the water served by the PUC regulated water purveyors “was not ‘harmful or dangerous to health,’” that they “satisfactorily complied with past and present drinking water quality requirements,” and that California Department of Health Services “requirements governing drinking water quality adequately protect the public health and safety.’”[18] In the end, the investor owned and municipal water utilities were dismissed from the case, the conclusion of the Hartwell 3 hearing.
Where is the Road Leading Now? Settlements began in the spring, seven years after the first case was filed; until then, plaintiffs had collected nothing. The leaders of the defense “were taken out” as a catalyst for other defendants settling. The court scheduled good faith settlement motions and hearings and required detailed statements of each defendant’s activity at the various sites before the settlements were approved. Discovery started and the depositions of plaintiffs began. In the middle of the settlements, the Hartwell 3 hearings was conducted and a decision rendered, letting all water companies out of the case. Meanwhile, the other Basin settled, with one municipal defendant being dismissal under Hartwell 3 while the other remaining industrial defendants settling for what is rumored to be a nominal amount. To date, no expert depositions have been taken and the remaining industrial defendants number less than five. There is no Daubert hearing scheduled as of this writing. The court talks about selecting trial groups as the number of defendants continues to dwindle; the case is winding down after 7+ years.
It is a testament to the size and complexity of these cases that after seven years, discovery was just beginning. The court often remarked, during the monthly status conferences, that this was the largest, most complex toxic tort case he had presided over—and this is from a jurist with a reputation for effectively handling large, complex matters. If you are plaintiff’s counsel, you should either file smaller cases or be prepared to fund the litigation at least through the causation/Daubert stage. If you are defense counsel, you will need to organize the defense group, in order to efficiently and effectively move the case forward toward those Bockrath, Cottle and Daubert and the case issue hearings. If you are the court, you will need patience, experience, skill, initiative and plain energy to manage the case and all these lawyers in your courtroom.
Conclusion--A Road for Other Cases:
A review of all articles in this reporter since 1996 reveal that Judge West may have “caught on” to something in his management of this monster mass tort case filed at the state court level. Most of the articles in this Reporter discuss attempts to reform the federal class action statute, Rule 23(f), to permit settlement classes post Amchem. Few, if any, discuss practical management of mass tort cases at the state court trial level. Recognizing that the complex and multifaceted nature of mass torts defy a cookie-cutter approach to mass tort case management, nevertheless this author would like to offer some practical suggestions.
In addition to adopting the case management techniques utilized by Judge West and discussed in this article, there are some “end of the story” ideas that I would like to share with you—the case management procedural ending, for these water cases and similar mass tort cases, envisioned by this author: bellwether selection, motion practice, Daubert hearings, bellwether bifurcated trials and ADR
First, I will briefly discuss the selection and advantage of bellwethers. Then, with bellwethers selected and the discovery of bellwethers and experts conducted, you move the case to the motion phase, initially bringing the case specific motions, the “pare down” motions (in the Water cases it would be motions based on the collateral use of the PUC findings and conclusions on the quality of the water served, motions based on the statute of limitations for the remaining plaintiffs) and motions based on Bockrath and failure to follow the court’s rulings on Lone Pine/Cottle. Finally, you are ready for your Daubert hearing. The legal issues are isolated. The court may wish to appoint an expert to assist it in conducting the Daubert hearing. Finally, you conduct a bifurcated trial of bellwethers on issues of causation and damages[19], with the understanding that the results will be used thereafter in an ADR process for settlement of the remaining cases. So as not to divide the defendants, the issue of liability is not tried to the jury-- which specific defendant’s product caused the injury but is later adjudicated in a post trial mediation among defendants. The only issue tried in the bellwether trial is whether this product/toxin generally and specifically caused the injury alleged by plaintiffs, and if so, what are their damages for each type of injury so caused.
Bellwether Selection: Bellwether selection is one method of case management to resolve mass tort cases. Bellwether trials are useful in the mass tort context because if a representative group of claims is tried to verdict, the result can act as a barometer to calculate the value of, and settle, the remaining claims. The same proceeding can resolve common issues—such as general liability or causation—affecting all plaintiffs
As the Fifth Circuit held in In re Chevron U.S.A. Inc.[20]
(“Chevron”), the results of a bellwether trial can be extrapolated to untried, individual cases only if the judge uses “a randomly selected, statistically significant sample” to ensure that the selected plaintiffs are representative of the entire group. “Due process concerns require the trial judge to make findings based on “competent, scientific statistical evidence” that the selected plaintiffs and claims represent the rest of the plaintiffs. “A trial of representative plaintiffs chosen without such sampling technique will have no collateral estoppel effect on the non-bellwether plaintiffs’ claims.”
The old method of “you pick 15”, “we’ll pick 15,” is “out” per the Fifth Circuit in Chevron. In Chevron, the U.S. Court of Appeals for the Fifth Circuit endorsed the use of bellwether trials with properly chosen representative plaintiffs as a viable mechanism for trying toxic tort cases. Stratified random sampling is how to select the bellwether group--stratified random sampling is a technique that classifies the alleged injuries by nature and severity and then randomly samples each classification to achieve a truly representative bellwether group. Before a trial court can use the results of a bellwether trial beyond the individual cases tried, it must, prior to any extrapolation, find that the cases tried are representative of the larger group of cases or claims from which they are selected. The concept is that the combined unitary and bellwether trial will have a preclusive effect on the general liability or causation issues. The goal of the unitary trial is to determine defendants’ liability or lack thereof, in a single trial and to establish bellwether verdicts to which the remaining claims can be matched for settlement purposes-- enter ADR to be discussed infra..
The Manual for Complex Litigation (Fourth) suggests that the sample be representative with respect to several factors, including the types of injury and the circumstances of the exposure.[21] The Manual for Complex Litigation (Fourth) recommends partial consolidation of representative clusters of cases as the preferred management technique for toxic tort cases.[22] The key to judicial oversight, as described by the Louisiana Supreme Court in Murphy Oil, Ford v. Murphy Oil U.S.A.,, 703 So. 2d 542 (1997) must be the guarantee of substantive fairness to all parties in the process of aggregation.
Lone Pine/Cottle: This is a viable option in mass tort case management, in California it is called Cottle and filed closer to trial. The point is the plaintiff is required to show through expert affidavit or otherwise that there is a prima facie basis for this toxic being capable of causing this injury in this plaintiff, a nexus, before proceeding further with this massive case through the court system, due to the desire to preserve judicial time and resources owing to the massiveness and complexity of the( mass tort) case. If you don’t comply with these orders, your case can be dismissed. To be useful, defendants need to push to get this ordered entered as early as possible in the case. Similar to Bockrath, which demands the complaint identify what injury is allegedly caused by which defendant’s specific product, Cottle forces plaintiffs to show by expert affidavit a causation nexus between the alleged injury, the toxin and the exposure to defendants’ products.
Recently, the Texas Appeals court, Eighth District, held that failure to comply with a trial court’s Lone Pine order is grounds for dismissal of a toxic tort suit (Adjemian v. American Smelting and Refining Co., Tex App Ct., 8th District., No. 08-00-00336-CV, 3/7/02).[23] The Court upheld the trial court’s dismissal sanction as just and appropriate rejecting an appeal by plaintiffs who contended the trial court wrongly dismissed their suit over their failure to submit causation evidence supporting their toxic exposure claims.[24] The court ruled that plaintiffs affidavits provided virtually no information indicating their injuries were caused by a substance emitted by one of the defendants and upheld dismissal as the appropriate sanction for failure to comply with the CMO. The Court of Appeal affirmed the dismissal.
Court appointed experts: Court appointed experts[25] can provide a benefit, as an adviser to the court prior to a Daubert hearing, by performing an independent evaluation of existing and relevant scientific data on a single issue in the litigation or on a few or all issues before the court; or to evaluate the parties’ expert witnesses, to comment on the opinions proffered by the parties’ expert witnesses and to evaluate the claims of the parties. Court appointed expert witnesses are generally helpful when the evidence proffered by the parties’ experts is highly technical, and the parties’ experts have opposing reliable opinions and the evidence requires inferences to be drawn from technical knowledge that the trier of fact does not possess.
[26] For large mass tort cases where one will extrapolate bellwether verdicts to settle other cases, the trial judge may wish to appoint an expert to advise the court on general causation issues. This is an available option. Please note that are pros and cons to this suggestion-- space does not permit discussion here, but just note that this is a possible option.
ADR: Alternative Dispute Resolution (“ADR”) has been extended to every other area of litigation and undoubtedly it will eventually be used more with more prevalence in mass tort cases. But ADR is only a possible solution AFTER the bellwether trial, that presumes the proper selection of bellwethers for later extrapolation plus the Daubert findings of the court. There must be some reliability in the bellwether trial findings, some trustworthiness, the foundation of all evidence admissibility, before this process can be useful as a settlement device for the remaining cases. And it needs to be done in two steps with possible different mediators. The first Step is resolving the value and worth of plaintiffs claims in which all defendants remain united; the second Step is dividing up the funding of the settlements among the payors/defendants decided in the first phase. You will need to have some general idea of phase 2 before going into phase 1, but the point is the defendants will remain united in their mediation with plaintiffs in phase 1.
Given the major risks mass tort lawsuits pose to defendants/companies, the strains placed on the judicial system and the fact that it may take years for plaintiffs to get their cases to trial, ADR can provide a reasonable solution. As shown by the Water Cases, these cases involve multiple plaintiffs, numerous defendants, are intensely technical in nature, intertwining complicated areas of science, engineering and medicine. What is different about mass torts, whether chemical or drug, from other litigation, is that these cases do become embroiled in general and specific causation issues that are often at the forefront of scientific understanding about both the product or substance at issue and the disease process itself and this occurs well before reaching a defendant’s individual liability question.
Latency issues in these mass tort cases is a complicating factor for any settlement, whether through the ADR process or the court system. Latency leads plaintiffs to assert claims of risk of cancer, fear of cancer, medical monitoring plus creating issues of how to handle “futures” illness from those plaintiffs who have not yet manifested illness—“the two-bite issue”-will there be a fund now created through ADR or court settlement to address future plaintiffs? All defendant when settling cases want finality-period. These unique issues of the mass tort case favor resolution of all issues through ADR rather than through a jury trial.
And, there is just the practicality of trying these cases, in groups of 6-10, to juries. Unless there is some initial agreement that the result of the first bellwether trial will have a collateral estoppel effect, there is no end in sight to the mini-group trials. It will take years to complete the first100 plaintiff trials, let alone 900 more plaintiffs to go. And there are the practical issues-- of who can sit as jurors in lengthy trials and of just the difficulty inherent in presenting highly technical expert intensive issues to lay jurors. As a trial lawyer for 30 years and firm believer in the jury trial system, the problem is not that a defendant cannot try these mini-group trials and obtain a defense verdict, but unless you adopt some effective case management techniques to resolve all 1000 cases, the trials of these small case groups could extend for years and years, with no end in sight, and with vast sums of clients’ money spent on bellwether trial after bellwether trial.
[27]
In this author’s opinion, ADR, at the right time in the process, is a reasonable alternative to resolving mass tort lawsuits filed in state court, but only after the first bellwether trial has been completed. Each side gives up something to go to ADR. Plaintiffs must give up punitive damages. If plaintiffs have proved general causation, defendants must participate and look at specific causation for each plaintiff. Before ADR, the parties should engage in mini-discovery as to the remaining plaintiffs. Medical, exposure and claimed damage information should be exchanged. If there are any post-bellwether trial critical legal issues, these should be ruled upon before the ADR process begins. The findings of the bellwether trial should be extended the remaining group. If there is a finding of general and also specific causation, then the bellwether findings are applied to the remaining trial groups with the assistance of perhaps the trial judge or perhaps a special master/mediator appointed by the Judge for this purpose. A special master can be appointed to make detailed allocation of settlement amounts among the bellwether “extrapolated” group to deal with differing positions of different types of plaintiffs—such as those with differing degrees of exposure or injury.
Kathleen Strickland is a partner at Holland & Knight LLP, where she practices in Mass Torts. She can be reached at kathleen.strickland@hklaw.com. Ms. Strickland would like to thank Mr. Devin Courteau, a Senior Associate at Holland & Knight, for his assistance.
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[1] N. Kathleen Strickland, “Reducing Costs in Toxic Tort Litigation with Case Management and Defense Cooperation”, 7 Toxic Law Reporter 1189, March 10, 1993 (Part I) and March 17, 1993 (Part II).
[2] Amchem Products v. Windsor, 521 U.S. 591(1997).
[3] Ortiz v. Fibreboard Corp., 527 U.S. 815 (1999).
[4] Proposition 65 is codified in California Health and Safety Code Section 25249.5 et seq.
[5]
As to all of these claims, however, Judge West struck claims for disgorgement of profits. Only two of the remaining seven Unfair Competition Law claims were asserted against the industrial defendants.
[6] April 28, 2003 Statement of Decision re: Legal Issues Concerning: 1) Applicable Standards as to PUC Regulated Utilities and 2) Mandatory Duties of Public Entities at 5: 9-16.
[7]
April 28, 2003 Statement of Decision at 7:14-20.
[8] August 25, 2003 Statement of Decision Re: Phase II Hartwell “Violations” Issue at 10:25-11:3.
[9] August 4, 2004 Ruling on Motion to Dismiss of Public Entity Defendants and PUC Regulated Defendants Based on Lack of Subject Matter Jurisdiction (Hearing Date: July 27, 2004), at 3: 6-12.
[10] Above, 3: 13-15.
[11] Public Utilities Code section 1759(a) provides that “no court of this state, except the Supreme Court and the court of appeal, to the extent specified in this article, shall have jurisdiction to review, reverse, correct, or annul any order or decision of the (Public Utilities) commission or to suspend or delay the execution or operation thereof, or to enjoin, restrain, or interfere with the commission in the performance of its official duties, as provided by law and the rules of court.
[12]
August 4, 2004 Ruling on Motion to Dismiss of Public Entity Defendants and PUC Regulated Defendants Based on Lack of Subject Matter Jurisdiction (Hearing Date: July 27, 2004), pages 6-7.
[13] California Code of Civil Procedure Section 36 is a motion for preference in a civil action by a party who is over age 70, a party who is unlikely to survive beyond six months from date of filing the motion or the party to wrongful death action is under age 14. The section gives preference to a trial date within 6 months of filing the motion and is an issue the plaintiffs counsel, court and defendants need to work with in the mass tort cases since none of these mass tort cases are ready to tried within 6 months of filing the complaint.
[14] Bockrath v. Aldrich Chemical Co., 21 Cal. 4th 71, 80 (1999) (holding that a complaint filed in a multiple exposure action (toxic tort) case must “identify each product of each defendant that allegedly caused the injury”).
[15] Cottle v. Superior Court, 3 Cal. App. 4th 1367 (1992) (holding that plaintiffs who were unable to provide, prior to trial, prima facie evidence that they were exposed to a chemical that caused their injuries, were barred from presenting evidence of such exposure at trial). This was similar to the “Lone Pine Order” issued in Lore v. Lone Pine Corp., New Jersey Court Case No. L 33606-85 (November 18, 1986).
[16]
By the time depositions of the bellwether plaintiffs were to start, the plaintiffs started picking off leaders of the joint defense group—now more than 7 years into the case and virtually no money had been paid at all by any defendants to plaintiffs. The settlement window opened very quickly and after two intense days of negotiating, our three clients settled for approximately $156 per plaintiff, $330 per plaintiff and $380 per plaintiff. This is without incurring the cost of attending depositions for the 570 remaining plaintiffs in the case as well as any of the experts. In conclusion our clients are very pleased to have resolved these cases –which could last for several more years—for a small fraction of the cost of defending them on the merits through continuous bellwether trials.
[17] Daubert v. Merrell Dow Pharmaceuticals (1993) 509 U.S. 57; People v. Kelly (1976) 17 Cal.3d 24; Frye v. United States (D.C. Cir. 1923) 293 F. 1013; People v. Leahy (1994) 8 Cal.4th 587.
[18] Investigations on the Commission’s own motion into whether existing standards and policies of the Commission regarding drinking water quality adequately protect the public health and safety with respect to contaminants such as Volatile Organic Compounds, Percholorate, MTBE, and whether those standards and policies are being uniformly complied with by Commission regulated utilities, Decision No. 00-11-014 (2000 Cal. PUC LEXIS 722).
[19]
N. Kathleen Strickland, “How to Structure a Mass Toxic Tort Trial—Bifurcation, Trifurcation or Neither: Practical Considerations”, in PREPARING A TOXIC TORT CASE FOR TRIAL 1991, at 287 (PLI Litig. & Admin. Practice Course Handbook Series No. H4-5103, 1991)
[20] In re Chevron U.S.A. Inc. (5th Cir. 1997) 109 F.3d 1016.
[21] Manual for Complex Litigation §§ 22.315 – 22.316 (4th ed. 2004).
[22] Manual for Complex Litigation § 22.318 (4th ed. 2004).
[23] Approximately 396 individuals filed suit against six corporate defendants in May 1997, alleging personal injuries, illnesses and death as a result of what they claimed were defendants’ toxic emissions into the air, water and soil.
Defendants filed a motion for entry of a Lone Pine order requiring each plaintiff to submit evidence on causation for their injuries. Lone Pine orders originate from a New Jersey case—Lore v. Lone Pine Corp., No. L-33606-85 (N.J. Super. Ct. 1986) in which the trial court entered an order in a mass tort case requiring plaintiffs to provide affidavits with specific information about injury claims to ease the discovery burden on defendants and assist the court in managing the case.
[24]
At a January 1998 status conference, plaintiffs were asked by the court to submit a proposed order in response to defendants’ motion. The plaintiffs did not submit a response and the court made no ruling. At a second status conference in November 1999, defendants argued for dismissal of the case, noting that plaintiffs never complied with the court’s instruction to submit a proposed order. The court then entered a case management order requiring plaintiffs to submit detailed affidavits by June 2000 supporting their causation claims. On June 5, 2000, plaintiffs filed 37 affidavits on behalf of 61 plaintiffs and dropped more than 300 other plaintiffs from the suit. The case was dismissed on August 2000 due to the plaintiffs’ failure to comply with the CMO, plaintiffs appealed the dismissal. Federal Rule of Evidence706.
[26] An expert appointed pursuant to Rule 706 may be particularly useful in multi-district litigation cases, where a neutral expert’s testimony may lessen the probability of conflicting results on general causation issues in numerous jurisdictions when the cases are remanded to the district courts for trial. Judge Louis C. Bechtle, “Rule 706 Court Appointed Experts: The Rule or the Exception?”, Toxic Law Reporter Volume 18, Number 16 (April 17, 2003).
In re Silicone Breast Implant Products Liability Litigation, Judge Pointer recognized that due to the relative infancy of the tort, and the thousands of cases consolidated before him for pretrial activities, a panel of court appointed experts would assist the trier of fact once the cases were remanded to the district courts for trial. Judge Pointer appointed a panel of experts from various disciplines to consider the validity between silicone breast implants and the “various diseases, symptoms, conditions, or complaints’’ asserted by the plaintiffs.
[27] For further discussion of ADR in the toxic tort context, please see, D. Alan Rudlin, “Entropy or Opportunity? The Case for ADR in Mass Tort Cases”, Toxic Law Reporter Volume 18 Number 23 (June 12, 2003); and Dawn Davenport, “The Use of Alternative Dispute Resolution in Toxic Tort Disputes”, Toxic Law Reporter Volume 12 Number 40 (March 11, 1998).
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