Opinion ID: 727387
Heading Depth: 2
Heading Rank: 1

Heading: Class Actions in Products Liability Litigation

Text: 12 The history of class action certifications and products liability cases in this circuit and elsewhere has not been luminous. Indeed the Advisory Committee on Civil Rules for the 1966 revision to Rule 23 cast doubt on the availability of class actions in mass tort cases. See Fed.R.Civ.P. 23, advisory committee's notes to 1966 amendment, Subdivision (b)(3) ([a] 'mass accident' resulting in injuries to numerous persons is ordinarily not appropriate for a class action). Nevertheless, courts have generally proceeded on a case-by-case basis and considered the appropriateness of class action treatment under the particular circumstances presented. See 7B Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure: Civil 2d, § 1783 at 74-75 (2d ed.1986); see also 3 Herbert B. Newberg & Alba Conte, Newberg on Class Actions, § 17.05 (3d ed.1992) (noting modern trend has been to expand use of class action litigation in mass tort context). The lead decision in this circuit was handed down in 1982 and vacated a nationwide punitive damages class and a statewide compensatory liability class of persons who had used allegedly defective intrauterine contraceptive devices. In re Northern Dist. of California, Dalkon Shield IUD Prods. Liab. Litig., 693 F.2d 847 (9th Cir.1982), cert. denied, 459 U.S. 1171, 103 S.Ct. 817, 74 L.Ed.2d 1015 (1983). 13 In rejecting the nationwide class certification under Rule 23(b)(1)(B), we were clearly troubled in Dalkon Shield by the problems that would arise in endeavoring to apply the varying punitive damage standards of fifty different jurisdictions. We did not, however, hold this commonality obstacle fatal. Id. at 850. There was in Dalkon Shield the added problem that no plaintiff, and no plaintiff's lawyer, had agreed to represent the class so that the requirements of typicality and adequacy of representation could not be satisfied. Id. at 850-51. 14 In considering the certification of the California liability class under Rule 23(b)(3), we commented in Dalkon Shield on the problems presented by products liability actions where, unlike the mass tort involving a single catastrophic event such as an airplane crash or cruise ship food poisoning, [n]o single happening or accident occurs to cause similar types of physical harm or property damage. Id. at 853. We also discussed the inherent difficulties of proving proximate cause and a breach of a duty of care under a negligence theory, where there are different types of injuries and multiple defendants. Id. at 854-55. We were further troubled by the requirement that common issues predominate over individual issues in a certification of an entire case for class treatment; it appeared that only the underlying facts raised a common nucleus of issues, while the liability questions included highly individualized issues of damages and proximate cause. Id. at 856. Finally, we held that class adjudication would not be superior to individualized litigation given: first, the lack of any showing that class adjudication would save time or expense, and second, the management difficulties caused by the complexity and multiplicity of issues as well as the plaintiffs' hostility to the class action. Id. 15 We were careful in Dalkon Shield, however, not to preclude the future certification of more limited classes or subclasses pursuant to Rule 23(b)(3), or to rule out the possibility of broader class action certification in other products liability cases. See id. at 852-54, 856. Although Dalkon Shield pointed out many of the problems common to products liability litigation in meeting Rule 23's class certification requirements, we cannot conclude that Dalkon Shield creates an absolute bar to such certification in this circuit. As leading commentators have pointed out, the case was unusual in that there was simply no plaintiff or plaintiff's counsel ready, willing, and able to represent the class. See, e.g., 3 Newberg & Conte, supra, § 17.12 at 17-31. In addition, Dalkon Shield involved multiple defendants and multiple marketing schemes, unlike the present case where a single manufacturer marketed one drug over a limited period of time. Compare Dalkon Shield, 693 F.2d at 856 (holding district court erroneously certified class where manufacturer advertised in various medical journals and trade-show advertisements to different doctors), with In re Copley Pharmaceutical, 158 F.R.D. 485, 487, 491-93 (D.Wyo.1994) (certifying class where one manufacturer marketed four contaminated batches of one prescription drug). 16 The leading cases in other circuits in which class certifications have been approved are the Agent Orange litigation in the Second Circuit and the School Asbestos litigation in the Third Circuit. See In re Agent Orange Prod. Liab. Litig., 818 F.2d 145 (2d Cir.1987), cert. denied, 484 U.S. 1004, 108 S.Ct. 695, 98 L.Ed.2d 648 (1988); In re School Asbestos Litig., 789 F.2d 996 (3d Cir.), cert. denied, 479 U.S. 852, 107 S.Ct. 182, 93 L.Ed.2d 117, and cert. denied, 479 U.S. 915, 107 S.Ct. 318, 93 L.Ed.2d 291 (1986). Those cases also had some unique features. 17 In Agent Orange, the Second Circuit made it quite clear that the common issue in that case that caused class litigation to be both appropriate and superior to other forms of litigation was the common existence of a government contractor defense. 18 In our view, class certification was justified under Rule 23(b)(3) due to the centrality of the military contractor defense. First, this defense is common to all of the plaintiffs' cases, and thus satisfies the commonality requirement of Rule 23(a)(2). Second, because the military contractor defense is of central importance ... this issue is governed by federal law, and a class trial in a federal court is a method of adjudication superior to the alternatives. If the defense succeeds, the entire litigation is disposed of. If it fails, it will not be an issue in the subsequent individual trials. In that event, moreover, the ground for its rejection, such as a failure to warn the government of a known hazard, might well be dispositive of relevant factual issues in those trials. 19 Agent Orange, 818 F.2d at 166-67 (citations omitted). 20 In School Asbestos, the plaintiffs were school districts seeking compensation for property damages, not for personal injuries. The Third Circuit viewed that class action as much more manageable than a personal injury case would have been because, in essence, the effect of asbestos in different buildings is the same and the effect of asbestos on different people is not. See School Asbestos, 789 F.2d at 1010-11. 21 A leading decision in the Seventh Circuit has recently cast a pall on the future of class action certifications in products liability cases in that circuit. See In re Rhone-Poulenc Rorer, Inc., 51 F.3d 1293 (7th Cir.), cert. denied, --- U.S. ----, 116 S.Ct. 184, 133 L.Ed.2d 122 (1995); see also Castano v. American Tobacco Co., 84 F.3d 734 (5th Cir.1996) (decertifying national class of all nicotine-dependent persons, and expressing approval of Rhone-Poulenc ). The Seventh Circuit in Rhone-Poulenc issued a writ of mandamus ordering the district court to decertify a class of plaintiff hemophiliacs who were allegedly infected by the human immunodeficiency virus (HIV) as a result of using blood solids manufactured by the defendants. The Seventh Circuit majority was heavily influenced by at least three factors. 22 First, the majority expressed a general distaste for requiring defendants to place high economic stakes in the hands of a single jury. See Rhone-Poulenc, 51 F.3d at 1299. The majority also noted that there was a great likelihood that plaintiffs' legal claims lacked merit, given that twelve of thirteen individual suits had resulted in verdicts favorable to the defendants. See id. at 1299-1300. This concern does not appear to be in line with the law of this circuit that has not looked favorably upon granting extraordinary relief to vacate a class certification. See, e.g., Arthur Young & Co. v. United States Dist. Court, 549 F.2d 686, 698 (9th Cir.), cert. denied, 434 U.S. 829, 98 S.Ct. 109, 54 L.Ed.2d 88 (1977). There is also authority disapproving a separate hearing to consider the merits of the plaintiffs' claims when determining class certification. See Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 177-78, 94 S.Ct. 2140, 2152-53, 40 L.Ed.2d 732 (1974); Blackie v. Barrack, 524 F.2d 891, 901 (9th Cir.1975), cert. denied, 429 U.S. 816, 97 S.Ct. 57, 50 L.Ed.2d 75 (1976); see also 7B Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, supra, § 1785 at 125 (discussing Eisen and the Court's express rejection of a preliminary hearing to determine the merits of the litigation). 23 Second, the Rhone-Poulenc majority found that the class action would require a jury to determine the negligence of the defendants under a legal standard that does not actually exist anywhere in the world. Id. at 1300. The court expressed concern with the ability of the district court to condense the law of the fifty states and the District of Columbia into a single jury instruction on negligence. See id. at 1300-02. The court thus focused on the district court's decision to create a hypothetical negligence standard. The district court in this case did not create such a hypothetical standard. 24 Third, the Rhone-Poulenc court perceived Seventh Amendment problems in the district court's bifurcation of class issues from individual issues, such as comparative negligence and proximate causation. See id. at 1302-03. The court determined that the district court's plan was inconsistent with the principle that the findings of one jury are not to be reexamined by a different jury. See id. at 1303. This constitutional concern of the Rhone-Poulenc court may not be fully in line with the law of this circuit, and constitutional issues were never squarely presented to the district court. See Arthur Young, 549 F.2d at 696. 25 We therefore do not accept Carter-Wallace's invitation in this case to adopt the principles of Rhone-Poulenc as the law of this circuit. 26 We are more sympathetic to the approach taken by the Sixth Circuit in In re American Medical Sys., 75 F.3d 1069 (6th Cir.1996). American Medical rejected class certification involving ten different models of penile implants that were implanted over a twenty-two year period. The court granted mandamus to decertify a nationwide class where the district court failed to identify common issues, explain why common issues predominate over individual issues, or make a finding of superiority. The court held that district courts must conduct a rigorous analysis into whether the prerequisites of Rule 23 are met before certifying a class. See id. at 1078-79. The Sixth Circuit has also recognized, however, that in the mass tort context, class adjudication of certain issues may be more efficient and expeditious than individualized litigation. See Sterling v. Velsicol Chem. Corp., 855 F.2d 1188 (6th Cir.1988). 27 Our reluctance to close the door on class action litigation in products liability cases is reinforced by current legal developments that could make class litigation more manageable. There has, for example, been discussion of federal class action legislation. See, e.g., Thomas D. Rowe, Jr., Beyond the Class Action Rule: An Inventory of Statutory Possibilities to Improve the Federal Class Action, 71 N.Y.U.L.Rev. 186 (1996) (discussing several areas in which legislation might enhance federal class actions); William W. Schwarzer et al., Judicial Federalism: A Proposal to Amend the Multidistrict Litigation Statute to Permit Discovery Coordination of Large-Scale Litigation Pending in State and Federal Courts, 73 Tex.L.Rev. 1529 (1995) (proposing amendments to the multidistrict litigation statute, 28 U.S.C. § 1407(a), to include state court cases). Further, the American Law Institute is now concluding its work on products liability in the Restatement of the Law of Torts. See Restatement (Third) of Torts: Products Liability (Tent. Draft No. 3, 1996); see also James A. Henderson, Jr. et al., Optimal Issue Separation in Modern Products Liability Litigation, 73 Tex.L.Rev. 1653, 1661-67 (1995) (discussing new Restatement as a reflection of current state of products liability law). 28 In addition, the Advisory Committee on Civil Rules is in the process of modifying Rule 23, and has proposed authorizing the possible certification of settlement classes that need not meet the requirements of Rule 23(b)(3). See Fed.R.Civ.P. 23(b)(4) (Draft Aug. 15, 1996); see also Samuel Estreicher, Foreword, Federal Class Actions After 30 Years, 71 N.Y.U.L.Rev. 1, 6 & n.26 (1996) (noting that proposed (b)(4) category would allow trial courts to certify class actions for purposes of settlement, even though the requirements of subdivision (b)(3) might not be met for trial); Edward H. Cooper, Rule 23: Challenges to the Rulemaking Process, 71 N.Y.U.L.Rev. 13 (1996) (discussing proposed changes to Rule 23). We observe that this idea has met with substantial opposition from a number of quarters. See, e.g., In re General Motors Corp. Pick-Up Truck Fuel Tank Prods. Liab. Litig., 55 F.3d 768, 786-94 (3d Cir.) (holding that under present rule settlement class must meet all Rule 23 requirements and expressing concern about dangers of overrewarding attorneys and undercompensating class members), cert. denied, --- U.S. ----, 116 S.Ct. 88, 133 L.Ed.2d 45 (1995); see also Georgine v. Amchem Prods., 83 F.3d 610, 624-25 (3d Cir.1996), cert. granted, --- U.S. ----, 117 S.Ct. 379, --- L.Ed.2d ----(1996); John C. Coffee, Jr., Class Wars: The Dilemma of the Mass Tort Class Action, 95 Colum.L.Rev. 1343 (1995); John C. Coffee, Jr., Understanding the Plaintiff's Attorney: The Implications of Economic Theory for Private Enforcement of Law Through Class and Derivative Actions, 86 Colum.L.Rev. 669 (1986). It is to be hoped that the debate on the proposed rule modification will add to our understanding of the appropriate role of class litigation in tort litigation. 29 For these reasons, we reject Carter-Wallace's position that the law of this circuit should prohibit any class certifications in products liability litigation. We therefore turn to the appropriateness of this particular certification order. 30