Although most mass tort actions are aggregated through multidistrict litigation procedures rather than class action lawsuits, there are still many ways in which class actions and the tools developed by class actions can be used to help resolve mass tort cases. Most importantly, the settlement class, in which cases are consolidated in a class action solely to approve a group settlement, has undergone a revival in recent years.
The Rise, Fall and Partial New Rise of Class Actions
When mass tort cases first began to appear, the most obvious way to handle these large-scale cases was to use class actions. Thus, in one of the most widely known mass torts, the asbestos cases, the trial courts at first attempted to use class actions to resolve them. In those cases, first filed in the 1980s but which continue to be filed today, the claimants had worked with asbestos-containing materials in fields such as construction and shipbuilding. These claimants had contracted or feared they might contract diseases like asbestosis and mesothelioma.
The huge numbers of asbestos disease cases that were filed in the 1980s were not aggregated using MDL procedures or any other formal consolidation process, and were clogging up courts all over the country, both state and federal. At first, some courts experimented with trying to organize committees of lawyers for plaintiffs and defendants to negotiate an acceptable global settlement, and then seek to certify a class of all the asbestos claimants to receive that settlement. Of course, the potential class members would be able to opt out of the class and pursue individual relief, but the courts hoped few would do so.
In the late 1990s, the Supreme Court’s decisions in Amchem Products, Inc. v. Windsor[1] and Ortiz v. Fibreboard Corp.,[2] rejected these attempts to certify these classes of large groups of victims of asbestos-related injuries and diseases. These decisions held that proposed classes of present and future asbestos claimants could not be certified, because the claims were too disparate and “sprawling” to be joined in a single representative class action. After these decisions, commentators predicted that product-liability plaintiffs would file fewer class actions in federal court, perhaps moving such cases to state courts whenever possible.[3] After all, although the Supreme Court’s decisions in Amchem and Ortiz made it harder to use class actions in federal court, many states also provide for class actions under their state law.
Quite a few mass tort class actions were then filed in the state courts. It was impossible for defendants to remove these cases to federal court, as they did not rely on federal law, and so there was no basis for federal jurisdiction. Diversity jurisdiction, which allows federal jurisdiction where the parties are from different states, arises only when there is complete diversity, which means that all the plaintiffs must be citizens of different states than any of the defendants.[4] As long as one plaintiff in a putative class and one defendant are citizens of the same state, the case could not be removed to federal court. Because mass tort actions often included plaintiffs in all states, there was no diversity jurisdiction. That is, this was the case until the enactment of the Class Action Fairness Act of 2005.[5]
The Class Action Fairness Act of 2005
That Act grants federal jurisdiction in any class action where at least one defendant and one member of the plaintiff class are from different states, as long as the potential damages for all the class members, added together, is at least $5 million. Therefore, one of the primary results of the Act was to make mass torts that have interstate or even nationwide impact extremely easy to move to federal court. For example, if the class action concerns the alleged harms caused by a medicine, then members of the injured class will usually live all over the country. Unless more than two-thirds of the class live in the state where the action is filed, there is federal “diversity” jurisdiction.[6]
The class need not be certified before the federal court takes jurisdiction over the action.[7] A state complaint that is filed purporting to be a class action can be removed to federal court. Then the federal court can decide at leisure, under federal class action procedure, whether the class should be certified. If the federal standard for certifying classes is tougher to meet than the state standard, the removed case might not meet the class certification requirements after removal even though it would have been certified in the state courts. Perhaps even more importantly, even if the state court certified the class, the federal court can decertify it if the class does not meet federal standards.[8] That would mean instead of a class action, the case would simply devolve into an action by the named plaintiff or plaintiffs in the original complaint. It would be an individual claim, not a mass tort claim.
In addition to expanding federal jurisdiction over traditional class actions, the Class Action in Fairness Act also allows federal courts to exercise jurisdiction over “mass actions.”[9] The Act defines a mass action as any civil action in which the claims of 100 or more people are proposed to be tried jointly on the ground that the plaintiffs’ claims involve common questions of law or fact. Like class actions, as long as a mass action has been proposed, the Act’s mass action provisions will apply, regardless of whether the case is ultimately tried as a mass action.[10] If it does go forward, the mass action will almost surely be aggregated in a multidistrict litigation.
The overall effect of the Act on mass torts, then, in light of the Supreme Court’s toughened stance on class actions, was to make it harder to use class actions to resolve them, and to increase the importance of MDLs. As it turned out, though, various class action procedures are becoming increasingly important within those multidistrict litigations.
Constituent Class Actions Within an MDL
Multidistrict litigations can contain, within the aggregated set of proceedings, several constituent class actions. In other words, different class actions can be made part of an MDL or can later be created to handle certain issues that arise in the MDL proceedings. Many of these constituent class actions are based on the Federal Rule that allows that “. . . an action may be brought or maintained as a class action with respect to particular issues.” Courts have begun to use this provision to allow classes to be formed to resolve some issues common to all victims of a mass tort, even though other more individual issues are resolved on a case-by-case basis.
One closely watched 2018 decision allowing limited classes in a mass tort case was the United States Court of Appeals for the Sixth Circuit’s decision in Martin v. Behr Dayton Thermal Products, LLC, a mass tort of the sort that arises from a localized but widespread catastrophe.[12] That case originally was filed as a class action in Ohio state court. The plaintiffs alleged that 540 properties were contaminated with carcinogenic compounds that the defendants had released into the groundwater near its factories. Although this did not affect anyone’s drinking water because the source of the drinking water was not the local groundwater, plaintiffs claimed that the contaminated groundwater created the risk of toxic vapor that would seep into buildings. The defendants used the Class Action Fairness Act[13] to remove the case to federal court. The federal trial court then identified seven issues that could be certified as class issues. These were issues about the defendants’ knowledge and actions in creating the contamination, and the locations of the contaminated groundwater. There were two different plumes of underground contamination and each seemed to have a different toxic chemicals content, so different areas of groundwater had different amounts of contamination.
The Sixth Circuit Court of Appeals ruled that these issue classes could be certified even though the entire mass tort could not be treated as a single class action. There were highly individualized issues in the dispute, because it was far from clear whether the vapors invaded each building and there were questions about the extent of the invasion that varied building by building. However, the Court of Appeals affirmed the district court’s decision to certify the seven issue classes.
Once each of these issues is resolved in the class actions, that result would be binding on all members of the class. That, however, would still leave individual issues to be resolved on a case by case basis, particularly the issue of the effect of the toxic vapor on each individual property. Though it is possible for the classes to proceed without otherwise consolidating all the plaintiffs’ cases, it is clearly more efficient to fold these classes into a multidistrict litigation.
It also has now become common that plaintiffs’ counsel seeks to certify much smaller classes within the umbrella of the MDL. Rather than one large nationwide class, for example, counsel can seek to certify different classes for plaintiffs from particular states, and thus avoid the problem that a nationwide class might be faced with different states’ legal standards being applied to the actions brought by different plaintiffs. This is especially true since the 2005 act causes many class actions to move from state to federal court.
Also, when a mass tort allegedly causes different sorts of harms, the plaintiffs can seek to certify classes for each of the alleged harms (or categories of harms). Each of these smaller class actions is treated as a constituent case within the MDL. In effect, rather than attempting one big class for all victims of the mass tort, these victims are all grouped together in an MDL and then the MDL is grouped together into classes.
Aggregation into an MDL can occur after the constituent classes are certified or while the question of certification is still pending. Sometimes the idea for a class will arise after the MDL already has been created. Where classes are certified within an MDL, it will be the MDL judge’s responsibility to appoint the class counsel for any of the different classes that the judge certifies and to appoint the various lead counsels for the MDL overall.
Even when the MDL judge does not certify a proposed class, that judge often will take the proposed class into account in managing the MDL. A subgroup of plaintiffs may not meet the standards for a class, but still have enough in common to be grouped together for purposes of discovery or motions practice.
Even though the MDL may contain a number of focused classes, there may well be a large number of individual actions outside the classes. If there is a trial for a class, the result only binds the members of that class, not those outside it. Furthermore, if the classes are limited issues classes, the resolution of the issues covered by these classes does not resolve the MDL cases entirely. There will be a residue of individual issues that must be resolved for all the individual plaintiffs in the MDL, either through motion, settlement or trial. However, the resolution of the issues covered by the class often makes the negotiation of settlements for the residual individual claims easier and more likely.
The Settlement Class
Now that mass torts are primarily encompassed within MDLs, the single most important use of class actions in handling mass torts is one very specific sort of limited issue class, “a class . . . certified for purposes of settlement.”[14] This class only arises well after litigation over the mass tort begins. It can only be proposed after the mass tort litigation has proceeded to a point where enough information is available to settle the case. After the MDL allows enough discovery on the issues common to all the plaintiffs to clarify the facts, and after the MDL judge handles all legal motions that might affect the resolution of the dispute, such as motions to dismiss, motions for summary judgment and evidentiary motions, it may be possible for the lead counsel for the plaintiffs and defendants to see what sort of settlement can be achieved that equitably compensates all plaintiffs. Of course, no defendant wants to accept a global settlement unless it’s truly global, which means not leaving large unresolved claims still pending. If such a settlement can be negotiated, the creation of the settlement class is a way to ensure that it is indeed effective and global.
Furthermore, it often becomes clear that the defendants only have a certain amount of money available to pay plaintiffs. An uncoordinated first-come, first-served resolution of the cases will deprive some of the less fortunate later plaintiffs of compensation. In the MDL, plaintiffs’ counsel can negotiate a global settlement that will compensate all the plaintiffs equitably and which will end the matter for defendants. At that point, the plaintiffs’ lead counsel, or the defense counsel, or both, will often then move to certify a class of all plaintiffs in the MDL, or all the plaintiffs in some identifiable segment of the MDL, to impose the global settlement on all of them. If the class is approved, the settlement already negotiated by the lead counsel would then bind every member of the class.
When the MDL judge is considering whether to certify the settlement class, the court will have the proposed terms of the settlement available for consideration, which terms are also available to all the MDL plaintiffs and their counsel. In contrast with a traditional class action, where it is unlikely that all members of the proposed class receive notice of the negotiation points, it is easy to provide notice to all potential class members for a class formed inside an MDL. Notice can simply be sent to all people on the MDL service list. This allows an opportunity for all potential class members and their counsel to respond to the certification motion, make any objections they might have and, of course, to opt out of the class as the rules allow.[15]
In the final module, we will look more completely at settlement and trial processes in mass tort actions.
[1] Anchem Prods. V. Windsor, 521 U.S. 591 (1997).
[2] Ortiz v. Fibreboard Corp., 527 U.S. 815 (1999).
[3] See, e.g., Linda S. Mullenix, Class Actions In the Gulf South Symposium: Abandoning the Federal Class Action Ship: Is There Smoother Sailing for Class Actions in Gulf Water? 74 Tul. L. Rev. 1709 (2000) (asserting that “many class counsel have abandoned the federal courts in favor of what are perceived to be more receptive state court forums”).
[4] 28 U.S.C. § 1332.
[5] 28 U.S.C. § 1332 (d).
[6] 28 U.S.C. § 1332(d)(4).
[7] 28 U.S.C. § 1332(d)(8).
[8] See, Levitt v. Fax.com, Civil No. WMN-05-949 (D. Md. Oct. 6, 2008), available at https://www.cafalawblog.com/Levitt.pdf.
[9] 28 U.S.C. § 1332 (d)(11).
[10] Bullard v. Burlington N. Santa Fe Ry. Co., 535 F.3d 759 (7th Cir. 2008)
[11] U.S.C.S. Fed Rules of Civ Proc R23(c)(4).
[12] Martin v. Behr Dayton Thermal Prods. LLC, 896 F.3d 405 (6th Cir. 2018), (petition for writ of certiorari pending to the United States Supreme Court).
[13] 28 U.S.C. § 1332.
[14]U.S.C.S. Fed Rules of Civ Proc R 23 (e).
[15] U.S.C.S. Fed Rules of Civ Proc R 23(c)(2).