Source: https://pingpdf.com/pdf-larry-southern-carolinas-class-action.html
Timestamp: 2019-04-23 08:15:03+00:00

Document:
Asbestos Processing, LLC; Richard H. Bishoff, PC; Richard H. Bishoff; John M. Deakle; A. Joel Bentley; A. Joel Bentley Law Office; William R. Couch; Couch Law Firm; David O. McCormick; Cumbest, Cumbest, Hunter & McCormick; Crymes G. Pittman; Pittman, Germany, Roberts & Welsh, LLP; John Michael Simms; and Lawyer John Doe and Jane Doe, Defendants.
Plaintiffs’ refer to the claims asserted by Bishoff and Deakle as “asbestos trust” claims because ultimately the claims were made against various trusts that the asbestos manufacturers had created in bankruptcy. The claims were, however, tort claims and the court will thus refer to them as such.
According to the Plaintiffs, there existed as many as 28, and possibly 42, separate joint ventures the attorneys representing the Plaintiffs.
added attorneys. The addition of these new attorneys made what was already a complex case even more so, and, ultimately, made a class action vehicle less viable. Finally, it should be noted that at least some of the potential class members are still represented by some of the Defendants who are attorneys. This adds a significant procedural impediment to certifying a class that would include those plaintiffs who still maintain an attorney-client relationship with some of the Defendants in this case. In the legal malpractice and breach of fiduciary duty action before this Court, Plaintiffs allege that Defendants failed to advise Plaintiffs to take steps to protect their potential workers’ compensation claims against their employers. For example, Plaintiffs allege that Defendants did not advise their clients about the legal alternatives available under South Carolina law, that is, (1) proceed solely with a claim against the asbestos trusts; (2) proceed solely with a workers’ compensation claim; or (3) proceed with both claims simultaneously. Further, Plaintiffs allege that Defendants failed to advise them of the consequences under South Carolina law of proceeding with only asbestos tort claims. Defendants adamantly deny any misconduct or breach of any duty. In short, Defendants maintain that Plaintiffs were given unambiguous disclosures and advisories which stated that Defendants were not representing them in any workers’ compensation claims. In particular, Defendants contend that a clause in the contract of representation made it clear that the attorneys were being employed to bring asbestos tort claims only—not workers’ compensation claims.
Distilled to its essence, Plaintiffs contend in this lawsuit that it was not enough for the contract of representation to simply disclaim representation for workers’ compensation purposes. Rather, it is argued, the attorneys in the Mississippi actions had an affirmative duty to tell their clients that, by going forward solely with tort claims, they were forever waiving the right to assert any South Carolina workers’ compensation claims they might have had at the time. II.
Whether Defendant lawyers had an attorney-client relationship creating professional duties owed by them to South Carolina asbestos trust claimants.
Whether Defendant lawyers had an attorney-client relationship creating fiduciary duties, including duties of loyalty and disclosure, owed by them in favor of South Carolina asbestos trust claimants.
Whether Defendant lawyers used uniform Contracts of Representation in signing up their South Carolina clients.
If so, whether the uniform Contracts of Representation included (a) reasonably adequate information and explanation to the South Carolina clients about the material risks of proceeding with an asbestos bankruptcy trust claim; and (b) reasonably available alternatives to proceeding with an asbestos bankruptcy trust claim.
Whether Defendant lawyers used a uniform “Information Regarding Your Asbestos Claim” form when signing up South Carolina clients.
If so, whether the uniform “Information Regarding Your Asbestos Claim” form included (a) reasonably adequate information and explanation to the South Carolina clients about the material risks of proceeding with an asbestos bankruptcy trust claim; and (b) reasonably available alternatives to proceeding with an asbestos bankruptcy trust claim.
Whether Defendant lawyers uniformly failed to provide their South Carolina clients with candid advice based on their exercise of independent professional judgment on their clients’ behalf.
Whether during the uniform intake process the Defendant lawyers failed to explain the matter to their South Carolina clients to the extent reasonably necessary to permit the clients to make informed decisions regarding the scope of their representation.
Whether the Defendant lawyers failed to obtain their South Carolina clients’ informed consent to limiting the scope of the lawyers’ representation of them, to exclude legal advice and representation in connection with workers’ compensation laws.
Whether the failure to provide informed consent was a breach of the Defendant lawyers’ professional duties owed to the South Carolina clients.
Whether the failure to provide informed consent was a breach of the Defendant lawyers’ fiduciary duties, including duties of loyalty and disclosure, owed to the South Carolina clients.
Whether Defendants’ uniform conduct was a breach of the professional duties of care owed to the South Carolina Clients.
Whether the breach of the fiduciary duties, including duties of loyalty and disclosure, was clear and willful.
Whether there is sufficient, uniform evidence to support the equitable remedy of disgorgement.
Assuming the Plaintiffs received nothing more than the disclaimer mentioned above regarding workers’ compensation, whether the attorneys committed malpractice or breached any fiduciary duties because of their failure to fully inform the Plaintiffs of their rights.
Attached to Plaintiffs’ motion is a proposed plan to take this matter to trial. In Phase I, Plaintiffs intend to prove the Commons Issues.5 In Phase II, Plaintiffs propose that if the jury decides the Common Issues in favor of the Plaintiffs, the same jury would decide the compensatory damages to be awarded to the named Plaintiffs for the legal malpractice action. The Plaintiffs also request that the jury determine whether there is sufficient, uniform evidence to support the equitable remedy of disgorgement of the attorneys fees received by the Defendants. Finally, in Phase III, the Plaintiffs propose individual proximate cause and damages trials for class members, before separate juries. Necessarily included in the proximate cause and damages inquiry is the critical—and fact dependent—question of whether a class member had, at the time, a viable workers compensation claim. Plaintiffs suggest that this Phase III would also resolve individual defenses raised by Defendants. Additionally, the Plaintiffs propose that the Phase III juries would be instructed that they are bound by the results of the Phase I trial on the Common Issues.
The elements of a South Carolina legal malpractice claim are (1) the existence of an attorney-client relationship; (2) breach of a duty by the attorney; (3) proximate causation; and (4) damage to the client. Holy Loch Distributors, Inc. v. Hitchcock, 531 S.E.2d 282, 285 (S.C. 2000). The Court observes that the parties occasionally shorthand Phase I as the phase for proving liability. However, it is important to note that under the trial plan, proximate causation and damages are to be tried in Phase III, the individual trials. Thus, Phase I would not prove Defendants’ liability, but only “common issues” as to liability.
Essentially, Plaintiffs are advocating a partial class action concept whereby common issues are adjudicated, followed by adjudication of the named Plaintiffs’ claims, and then a third stage wherein close to 16,000 individual juries would determine proximate cause and damages for the individual class members. III.
REQUIREMENTS FOR CLASS CERTIFICATION A.
construction, adopting a standard of flexibility in application which will in the particular case ‘best serve the ends of justice for the affected parties and ... promote judicial efficiency.’” Gunnells v. Healthplan Servs., Inc., 348 F.3d 417, 424 (4th Cir. 2003) (citing In re A.H. Robins, 880 F.2d 709, 740 (4th Cir. 1989) abrogated on other grounds by Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (1997)). B.
the representative parties will fairly and adequately protect the interests of the class [Adequacy].
Defendants also argue that the determination of the Common Issues does not drive the resolution of the litigation. The court intends to address this argument under the superiority requirement found in Rule 23(b)(3).
Defendants assert that Plaintiffs’ Common Issues are not amenable to class treatment and preclude finding typicality within the proposed class. Defendants argue that individual findings must be undertaken to determine whether Plaintiffs are disabled. They also contend that dissimilarities exist among Plaintiffs concerning their understanding of the intake process documents. Defendants assert that individualized findings would be necessary to pursue their statute of repose defenses, which would also prevent a finding of typicality. Under Plaintiffs’ proposed trifurcated trial plan, whether or not each Plaintiff is disabled would be determined during the individual trials in Phase III.
proposed trial plan, Plaintiffs acknowledge that certain questions within the entire legal malpractice claim and breach of fiduciary duty claim are not typical among class members. Therefore, Plaintiffs have attempted to carve out atypical questions to be addressed in individual trials, after the partial class action portion (Phase I) was complete. Notwithstanding this, Defendants remaining arguments are better suited to be analyzed under the predominance analysis of Rule 23(b)(3). Returning to the typicality requirement, the named Plaintiffs allege that they and the purported class members all suffered damages because of uniform misconduct by the Defendants, that is, enlisting class members en masse to claim money against the asbestos trusts. If a jury determined that this course of conduct breached a duty owed to the Plaintiffs, the court would necessarily find that other class members would have suffered the same knew it.” Id. Ultimately, the Fourth Circuit held that the trial court had improperly allowed plaintiffs “the practical advantage of being able to litigate not on behalf of themselves but on behalf of a ‘perfect plaintiff’ pieced together for litigation.” Id. at 344.
(D.S.C. 1991) (quoting Falcon v. General Tel. Co., 626 F.2d 369, 376 n.8 (5th Cir. 1980), vacated on other grounds, 450 U.S. 1036 (1981)).
“employment of counsel assures vigorous prosecution.” Id. Rule 23(g) requires courts to assess (1) the work counsel has done in identifying or investigating potential claims; (2) counsel’s experience in handling class actions or other complex litigation; (3) counsel’s knowledge of the applicable law; and (4) the resources that counsel will commit to representing the class. The named Plaintiffs have retained experienced and knowledgeable lawyers who have already committed substantial resources to the case. Plaintiffs’ counsel have appeared in this Court on numerous occasions and have always proved to be well-prepared, knowledgeable, and vigorous in representing their clients and have discharged their professional obligations in an exemplary manner. In summary, for purposes of the Rule 23(a) analysis, the Court finds that the Plaintiffs have met the requirements of commonality and typicality. And, assuming the adequacy prong could be satisfied by re-defining the class, adequacy of representation is satisfied as well. C.
As the Plaintiffs have requested certification under Rule 23(c)(4), the Court must address the relationship between the predominance requirement under Rule 23(b)(3) and issue certification under Rule 23(c)(4).
Other courts have employed Rule 23(c)(4) to certify a class on a particular issue even if the action as a whole does not satisfy Rule 23(b)(3)’s predominance requirement. In re Nassau Cnty. Strip Search Cases, 461 F.3d 219, 225 (2d Cir. 2006). Courts use Rule 23(c)(4) to permit a class action to be maintained “with respect to particular issues,” even though each class member may need to separately litigate other issues in the case, under the theory that “the advantages and economies of adjudicating issues that are common to the entire class on a representative basis may be secured.” Wright & Miller § 1790. Thus, “some courts have concluded that even if only one common issue can be identified as appropriate for class treatment, that is enough to justify the application of the provision as long as the other Rule 23 requirements are met.” Id. (internal citations omitted). Likewise, courts have applied Rule 23(c)(4) to allow a partial class action to go forward, leaving questions of reliance, damages, and other issues to be adjudicated on an individual basis whenever “the court can profitably isolate the class issues under Rule 23(c)(4). Id. (internal citations omitted).
Refusing to “join either camp in the circuit disagreement” the Third Circuit has instead attempted to reframe the issue by avoiding any discussion of predominance and instead adopting the multifactor approach in the ALI’s Principles of Aggregate Litigation. Gates v. Rohm & Haas Co., 655 F.3d 255, 273 (3d Cir. 2011). Plaintiffs argue that by adopting a test that does not include predominance as an element, the Third Circuit has necessarily aligned itself with the circuits rejecting the proposition that predominance of common issues as to the entire lawsuit is a prerequisite for certification of an issue class.
23(c)(4) could be used when common issues did not predominate in the case as a whole because “the result would be automatic certification in every case where there is a common issue.” Id. Although the Fourth Circuit has not directly addressed this dispute and the relationship between Rule 23(b)(3) and Rule 23(c)(4), it has encouraged courts to “promote the use of the class device and to reduce the range of disputed issues” by taking “full advantage of the provision in subsection (c)(4) permitting class treatment of separate issues in the case and, if such separate issues predominate sufficiently, to certify the entire controversy.” In re A.H. Robins, 880 F.2d at 740. Moreover, the Fourth Circuit has addressed the interplay between Rule 23(c)(4) and the predominance requirements of 23(b)(3) in cases in which a plaintiff seeks to certify some, but not all of the “causes of action” that make up the lawsuit. Gunnells, 348 F.3d at 438. In Gunnells,10 the Fourth Circuit held that a plaintiff who seeks to certify only certain causes of action need not demonstrate that common issues predominate as to the entire lawsuit. Id.
Many commentators and a few courts have regarded Gunnells as positioning the Fourth Circuit in line with the Second, Seventh, and Ninth Circuits. See Gates, 655 F.3d at 272 (citing to Gunnells to support the statement that other courts “have allowed certification of issue classes even if common questions do not predominate for the cause of action as a whole); see also Jenna C. Smith, "Carving at the Joints": Using Issue Classes to Reframe Consumer Class Actions, 88 WASH. L. REV. 1187, 1213 (2013); Jenna G. Farleigh, Splitting the Baby: Standardizing Issue Class Certification, 64 VAND. L. REV. 1585, 1614 (2011); Michael J. Wylie, In the Ongoing Debate Between the Expansive and Limited Interpretations of Fed. R. Civ. P. 23(c)(4)(a), Advantage Expansivists!, 76 U. CIN. L. REV. 349, 370 (2007). But cf. Farrar & Farrar Dairy, Inc. v. Miller-St. Nazianz, Inc., 254 F.R.D. 68, 77 (E.D.N.C. 2008) (“Although the Fourth Circuit appeared to address this issue in Gunnells, its analysis is unclear. Specifically, the Gunnells court appeared to hold that a district court may certify individual causes of action, not individual issues, for class treatment.”) (emphasis in original).
In reaching its decision, the court focused on the language and structure of the rule, explaining that if Rule 23(c)(4) could only be used when the lawsuit as a whole already satisfied the predominance requirements, Rule 23(c)(4) would be “without any practical application, thereby rendering it superfluous.” Id. at 439 (citing In re Tetracycline Cases, 107 F.R.D. 719, 726–27 (W.D. Mo. 1985) (“If the requirement under Rule 23(c)(4)(A) was that ... one or more issues ‘predominate’ in the usual Rule 23(b) sense, when compared with all the issues in the case, there would obviously be no need or place for Rule 23(c)(4)(A).”)) A contrary interpretation “would require a court considering the manageability of a class action—a requirement for predominance under Rule 23(b)(3)(D)—to pretend that subsection (c)(4)—a provision specifically included to make a class action more manageable—does not exist until after the manageability determination is made.” Id. This same reasoning applies to whether common issues could be certified under 23(c)(4) without demonstrating predominance as to the case as a whole. There is no textual basis for treating individual causes of action differently than common issues given that the rule makes no such distinction: “When appropriate, an action may be brought or maintained as a class action with respect to particular issues.” FED. R. CIV. P. 23(c)(4) (emphasis added). Under Gunnells, which appears to follow the practice of the Second, Seventh, and Ninth Circuits, this Court holds that it may use Rule 23(c)(4) to certify a class as to an issue regardless of whether the claim as a whole satisfies the predominance test in Rule 23(b)(3). D.
Rule 407, SCACR (“In any exercise of the disciplinary authority of this jurisdiction, the rules of professional conduct . . . shall be[,] ... for conduct in connection with a matter pending before a tribunal, the rules of the jurisdiction in which the tribunal sits, unless the rules of the tribunal provide otherwise. . . .”))]. In the present case, damages are the last event necessary to make the Defendants liable under the legal malpractice claim.
Whether the plaintiff “contracted” asbestosis within two years of the last exposure as required by South Carolina law.
To use the vernacular, to allow this case to proceed as a class action for certain simple and relatively straightforward common threshold issues would be to allow the tail to wag the dog. The prospect of litigating, in one case, nearly 16,000 claims of workers’ compensation disability issues, as well as damages, with only minimal advantage gained from the resolution of the threshold common issues, leads this Court to conclude, under Rule 23(b)(3)(D) that the “likely difficulties in managing a class action” render the class action device inferior to other available methods in this case. The present case illustrates, perhaps, why issue certification authorized by Rule 23(c)(4) is little used. As the common issues are narrowed down to make them sufficiently “common,” the desirability of issue certification is diminished because, as indicated above, the relatively simple threshold issues can quickly be disposed of in individual trials. This means that the superiority component of Rule 23(b)(3) frequently comes into play to defeat issue certification.
(“Even courts that have approved ‘issue certification’ have declined to certify such classes where the predominance of individual issues is such that limited class certification would do little to increase the efficiency of the litigation.”); Chicago Teachers Union, Local 1 v. Board of Education of City of Chicago, 2014 WL 2198449, *10 (N.D. Ill. 2014) (declining to certify issue class in employment case because individual issues would predominate over common ones); Kinney v. Siouxland Urology Associates P.C., 2011 WL 796237, *6 (D.S.D. 2011) (“Because of the many individual issues surrounding the numerous theories for relief as are currently pleaded in the second amended complaint, the court finds that certifying various issue classes would not increase the efficiency of the litigation.”). In sum, resolution of these Common Issues will not bring Plaintiffs significantly closer to their goal of recovery, because the core issue as to Plaintiffs claims is whether or not he or she had a viable workers’ compensation claim. Certification as to the Common Issues will not materially advance the litigation and will not result in a significant gain of efficiencies; therefore, class certification on the Common Issues is not superior to other available methods for fairly and efficiently adjudicating the controversy. IV.
In light of the fact that this case has been pending for more than three years, the parties shall continue with discovery for the claims of the named Plaintiffs in accordance with the scheduling order issued contemporaneously with this Order, notwithstanding any motion for reconsideration or appeal that may be filed subsequent to this Order. IT IS SO ORDERED.
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