Court Opinion

ID: 11567
Source: CourtListenerOpinion
Date Created: 2010-04-25 06:05:51+00
Date Added: 2024-06-11T12:23:13.935752
License: Public Domain

UNITED STATES COURT OF APPEALS

                           FOR THE FIFTH CIRCUIT

                               No. 97-20042

In re: CHEVRON U.S.A., INC.,

                         Petitioner.

               Petition for Writ of Mandamus to the
                United States District Court for the
                     Southern District of Texas

                              March 26, 1997

Before JONES, DeMOSS, and PARKER, Circuit Judges.

Robert M. Parker, Circuit Judge:

     Chevron U.S.A., Inc. (“Chevron”) petitions this Court for a

Writ of Mandamus seeking relief from an order of the district court

dated   December   19,    1996,   containing   a   trial   plan   for   this

litigation.   We DENY the petition as it relates to the scheduled

trial of the thirty selected plaintiffs referenced in the district

court’s order, but GRANT the petition as it relates to utilization

of the results of such trial for the purpose of issue or claim

preclusion.

              UNDERLYING FACTS AND PROCEDURAL HISTORY
      This controversy arose out of the alleged injuries suffered by

over 3,000 plaintiffs and intervenors ("Plaintiffs"), who claim

damages    for   personal    injuries,      wrongful   death,   and    property

contamination allegedly caused by Chevron's acts and omissions.

The   Plaintiffs    and    their    allegedly   contaminated       property   are

located in the Kennedy Heights section of Houston, Texas.                     The

Plaintiffs contend that their subdivision was constructed on land

used in the 1920's by Chevron for a crude oil storage waste pit.1

According to the Plaintiffs, when Chevron ceased using the property

as a tank farm, it failed to take appropriate measures to secure

the site, thereby allowing other waste to be deposited on the land.

Later,    Chevron   sold    the    property   for    residential    development

knowing that the land was contaminated.             Various developers filled

these waste pits without remediating the land.             Plaintiffs assert

that the hazardous substances which were stored in the waste pits

have migrated into the environment, including the drinking water

supply for the Kennedy Heights section.              As a result, Plaintiffs

claim personal injuries and property damage.

      The Plaintiffs brought suit against Chevron in both state and

federal court. Subsequent to the federal suit being filed, Chevron

removed the state court cause of action to federal court, which was

      1
          Chevron allegedly stored oil and brine water from the
Pierce Junction field where Chevron was producing oil during the
1920's.

                                        2
consolidated into this case.2    On December 19, 1996, the district

court approved a trial plan.    The trial plan provided for a unitary

trial on the issues of "general liability or causation" on behalf

of the remaining plaintiffs, as well as the individual causation

and damage issues of the selected plaintiffs, and ordered the

selection of a bellwether group of thirty (30) claimants, fifteen

(15) to be chosen by the plaintiffs and fifteen (15) to be chosen

by Chevron.   Chevron contends that the goal of the "unitary trial"

was to determine its liability, or lack thereof, in a single trial

and to establish bellwether verdicts to which the remaining claims

could be matched for settlement purposes.      It is this selection

process which Chevron argues will not result in a representative

group of bellwether plaintiffs.

     Chevron filed with the district court the affidavit of Ronald

G. Frankiewicz, Ph.D. which evaluated the district court's trial

plan for selecting the thirty plaintiffs, concluding that such a

plan was "not representative."     Instead, Frankiewicz detailed the

"stratified selection process" which should be used by the district

court in selecting the bellwether group which would result in a

representative group of plaintiffs.      The district court however

struck Frankiewicz's affidavit as untimely filed and redundant in

    2
          John R. Simmons, et al. v. Chevron U.S.A., et al., Civil
No. 96-1858, consolidated under Dorothy Adams, et al. v. Chevron
U.S.A., et al., Civil No. 96-1462.

                                   3
substance. On January 7, 1997, the district court denied Chevron's

request to certify an interlocutory appeal. This Petition for Writ

of Mandamus ensued.

                               DISCUSSION

1.   Standard of Review

     Our review of a trial court’s plan for proceeding in a complex

case is a deferential one that recognizes the fact that the trial

judge is in a much better position than an appellate court to

formulate   an   appropriate   methodology   for   a   trial.   We   have

consistently noted that a writ of mandamus is an extraordinary

remedy and is available in only limited circumstances. See Allied

Chemical Corp. v. Daiflon, Inc., 449 U.S. 33, 101 S. Ct. 188, 66 L.

Ed. 2d 193 (1980).    We have historically reserved the issuance of

the writ for “extraordinary” cases, Southern Pacific Transp. Co. v.

San Antonio, Tex., 748 F.2d 266, 270 (5th Cir. 1984) (citing Ex

parte Fahey, 332 U.S. 258, 67 S. Ct. 1558, 91 L. Ed. 2041 (1947)),

and will issue the writ where the petitioner has met its burden of

proving a clear and indisputable abuse of discretion or usurpation

of judicial power by a trial judge.    In re First South Sav. Assoc.,

820 F.2d 700, 706 (5th Cir. 1987) (citing Schlagenhauf v. Holder,

379 U.S. 104, 85 S. Ct. 234, 13 L. Ed. 2d 152 (1964)).

     Our traditional reluctance to meddle in the formulation of a

district court’s trial plan is tempered by the demands placed upon

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judicial resources and the extraordinary expense to litigants that

typically accompanies mass tort litigation.          We, therefore, as we

proceed, do so mindful of the admonition contained in Rule 1 --

that what we do should serve the compelling interests of justice,

speed, and cost-containment.        See FED. R. CIV. P. 1.

       We now turn to the focus of Chevron’s petition, the December

19 trial plan.

2.   The Plan

       The trial court has in our view quite properly categorized

this   litigation   as   complex.      The   mere   fact   that   there   are

potentially some 3,000 claimants in and of itself complicates

traditional dispute resolution.        Additionally, when large numbers

of claimants assert both property damage claims and claims for

personal injury as well as claims for injunctive relief, it removes

any question that may linger regarding the complexity of the task

visited upon the lawyers and the trial court.

       This case is a classic example of a non-elastic mass tort,

that is, the universe of potential claimants are either known or

are capable of ascertainment and the event or course of conduct

alleged to constitute the tort involved occurred over a known time

period and is traceable to an identified entity or entities.              When

compared to an elastic mass tort where the universe of potential

plaintiffs is unknown and many times is seemingly unlimited and the

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number of potential tortfeasors is equally obtuse, the task of

managing the non-elastic mass tort is infinitely less complex.               In

the non-elastic context, the necessity for the obtainment of

maturity as reflected by a series of verdicts over time is not

required in order to test the viability of plaintiffs’ claims or

the defendant’s defenses.

     The district court, after designating the case as complex,

then articulated the goals of its trial plan as seeking to achieve

the greatest efficiency and expedition in the resolution of all

issues    involved   in   the   case.       Pursuant   to   those   goals,   it

structured the trial as follows:

     1.     Composed of thirty (30) plaintiffs, fifteen
            (15) chosen by the plaintiffs and fifteen (15)
            chosen by the defendants.     The thirty (30)
            plaintiffs chosen shall come from the lists
            submitted by the parties to the state court in
            April of 1996.       However, each side is
            permitted to substitute or replace not more
            than   five   (5)   plaintiffs,   within   its
            discretion, on or before January 1, 1997.

     2.     All chosen plaintiffs shall be adults, to the
            exclusion of minor children, unless the
            children are part of a household represented
            by at least one adult.

     3.     Each individual shall be counted as a single
            plaintiff, as opposed to a household as a
            single plaintiff.

     4.     The trial shall focus on the individual claims
            of each of the selected plaintiffs and on the
            issue of the existence or nonexistence of
            liability on the part of Chevron for the
            pollutants that, allegedly, give rise to all

                                        6
          of the plaintiffs’ claims.

          Thus, a unitary trial on the issues of general
          liability or causation as well as the
          individual causation and damage issues of the
          selected plaintiff shall occur.

     5.   The Court reserves the right to: (a) place a
          time limit on the length of the trial, limit
          the testimony of certain witnesses, limit the
          number of witnesses to be called on a
          particular issue, amend this Order, and issue
          additional orders.

     Initially, we note the obvious. The trial plan, while clearly

designed to resolve the issue of liability on the part of Chevron

to all the plaintiffs by referring to a unitary trial on the issues

of general liability or causation, does not identify any common

issues or explain how the verdicts in the thirty (30) selected

cases are supposed to resolve liability for the remaining 2970

plaintiffs.   It is impossible to discern from the district court’s

order what variables may exist that will impact on both the

property and personal injury claims in this litigation.    Similar

litigation typically contains property issue variables that are

related to time, proximity, and contamination levels of exposure to

any pollutants that may be present, and personal injury claims that

contain a mix of alleged exposure- related maladies that also may

be affected by time, proximity, and exposure levels.   We, however,

may not speculate on the homogeneity of the mix of claims, the

uniformity of any exposure that may have existed and what diseases,

                                 7
if any, may be related to that exposure.        Instead our review is

restricted to the record and to an examination of the district

court’s order.

3.   A Bellwether Trial

     The term bellwether is derived from the ancient practice of

belling a wether (a male sheep) selected to lead his flock.        The

ultimate success of the wether selected to wear the bell was

determined by whether the flock had confidence that the wether

would not lead them astray, and so it is in the mass tort context.

     The notion that the trial of some members of a large group of

claimants may provide a basis for enhancing prospects of settlement

or for resolving common issues or claims is a sound one that has

achieved general acceptance by both bench and bar.       References to

bellwether trials have long been included in the Manual for Complex

Litigation.   See MANUAL   FOR   COMPLEX LITIGATION § 33.27-.28 (3d ed.

1995).   The reasons for acceptance by bench and bar are apparent.

If a representative group of claimants are tried to verdict, the

results of such trials can be beneficial for litigants who desire

to settle such claims by providing information on the value of the

cases as reflected by the jury verdicts.        Common issues or even

general liability may also be resolved in a bellwether context in

appropriate cases.

     Whatever may be said about the trial contemplated by the

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district court’s December 19, 1996 order, one thing is clear.                  It

is not a bellwether trial.        It is simply a trial of fifteen (15) of

the “best” and fifteen (15) of the “worst” cases contained in the

universe of claims involved in this litigation.                      There is no

pretense that the thirty (30) cases selected are representative of

the 3,000 member group of plaintiffs.

      A bellwether trial designed to achieve its value ascertainment

function for settlement purposes or to answer troubling causation

or liability issues common to the universe of claimants has as a

core element representativeness -- that is, the sample must be a

randomly   selected    one   of    sufficient    size      so   as   to   achieve

statistical significance to the desired level of confidence in the

result obtained.      Such samples are selected by the application of

the science of inferential statistics.          The essence of the science

of   inferential   statistics      is   that   one   may    confidently      draw

inferences about the whole from a representative sample of the

whole.   The applicability of inferential statistics have long been

recognized by the courts.         See, e.g., Castaneda v. Partida, 430
U.S. 482, 97 S. Ct. 1272, 51 L. Ed. 2d 498 (1977)(using statistical

data to prove discrimination in jury selection); Capaci v. Katz &

Besthoff, Inc., 711 F.2d 647, 653-57 (5th Cir. 1983)(using census

data in gender discrimination case); Exxon Corp. v. Texas Motor

Exchange, Inc., 628 F.2d 500 (5th Cir. 1980)(using statistical

                                        9
sampling    in    trademark   infringement    suit);   Ageloff    v.   Delta

Airlines, Inc., 860 F.2d 379 (11th Cir. 1988)(using evidence of

life-expectancy tables to determine damages); G.M. Brod & Co., Inc.

v. U.S. Home Corp., 759 F.2d 1526, 1538-40 (11th Cir. 1985)(using

expert testimony as to profit projections based on industry norms);

United States v. 449 Cases Containing Tomato Paste, 212 F.2d 567

(2nd Cir. 1954)(approving inspector’s testing of samples, rather

than requiring the opening of all cases).

     The selected thirty (30) cases included in the district

court’s “unitary trial” are not cases calculated to represent the

group of 3,000 claimants. Thus, the results that would be obtained

from a trial of these thirty (30) cases lack the requisite level of

representativeness so that the results could permit a court to draw

sufficiently reliable inferences about the whole that could, in

turn, form the basis for a judgment affecting cases other than the

selected thirty.      While this particular sample of thirty cases is

lacking    in    representativeness,     statistical   sampling    with   an

appropriate level of representativeness has been utilized and

approved.        As recognized by the Ninth Circuit, “[i]nferential

statistics with random sampling produces an acceptable due process

solution to the troublesome area of mass tort litigation.”             In re

Estate of Marcos Human Rights Litigation, 910 F. Supp. 1460, 1467

(D.Haw. 1995), aff’d sub. nom. Hilao v. Estate of Marcos, 103 F.3d
10
767 (9th Cir. 1996) (holding that the random sampling procedures

used by the district court do not violate due process).

     We, therefore, hold that before a trial court may utilize

results from a bellwether trial for a purpose that extends 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.         Typically, such a

finding   must   be   based   on   competent,   scientific,   statistical

evidence that identifies the variables involved and that provides

a sample of sufficient size so as to permit a finding that there is

a sufficient level of confidence that the results obtained reflect

results that would be obtained from trials of the whole.              See

Hilao, 103 F.3d at 786; Michael J. Saks & Peter David Blanck,

Justice Improved: The Unrecognized Benefits of Aggregation and

Sampling in Mass Torts, 44 STAN. L. REV. 815 (1992).          It is such

findings that provide the foundation for any inferences that may be

drawn from the trial of sample cases.       Without a sufficient level

of confidence in the sample results, no inferences may be drawn

from such results that would form the basis for applying such

results to cases or claims that have not been actually tried.

     We recognize that in appropriate cases common issues impacting

upon general liability or causation may be tried standing alone.

However, when such a common issue trial is presented through or

                                     11
along with selected individuals’ cases, concerns arise that are

founded upon considerations of due process. Specifically, our

procedural    due    process   concerns        focus   on   the    fact    that   the

procedure embodied in the district court’s trial plan is devoid of

safeguards designed to ensure that the claims against Chevron of

the non-represented plaintiffs as they relate to liability or

causation    are    determined   in   a       proceeding    that   is     reasonably

calculated to reflect the results that would be obtained if those

claims were actually tried.           Conversely, the procedure subjects

Chevron to potential liability to 3,000 plaintiffs by a procedure

that is completely lacking in the minimal level of reliability

necessary for the imposition of such liability.

     Our substantive due process concerns are based on the lack of

fundamental    fairness      contained    in     a   system   that    permits     the

extinguishment of claims or the imposition of liability in nearly

3,000 cases based upon results of a trial of a non-representative

sample of plaintiffs.        Such a procedure is inherently unfair when

the substantive rights of both plaintiffs and the defendant are

resolved in a manner that lacks the requisite level of confidence

in the reliability of its result.

     We recognize that our due process concerns seem to blur

distinctions       between   procedural       and    substantive     due    process.

However, our difficulty in compartmentalization does not detract

                                         12
from the validity of our concern that is ultimately based on

fundamental fairness.

     The elements of basic fairness contained in our historical

understanding   of   both   procedural   and   substantive   due   process

therefore dictate that when a unitary trial is conducted where

common issues, issues of general liability, or issues of causation

are coupled with a sample of individual claims or cases, the sample

must be one that is a randomly selected, statistically significant

sample.   See Hilao, 103 F.3d at 782-84, 786.

     We express no opinion on whether the mix of claims that

collectively make up the consolidated case lend themselves to the

sampling techniques required to conduct a bellwether trial or

whether this is an appropriate case for a stand-alone, common-issue

trial.

     We are sympathetic to the efforts of the district court to

control its docket and to move this case along.         We also are not

without appreciation for the concerns a district court might have

when it concludes that some of the issues raised may be motivated

by delay tactics. However, our sympathies and our appreciation for

the efforts of the district court in this case do not outweigh our

due process concerns.

                               CONCLUSION

     The petition, therefore, for mandamus as it relates to the

                                   13
trial of the thirty (30) selected cases is DENIED.            Whether the

district court wishes to proceed with that trial, to secure thirty

(30) individual judgments, is a matter within the discretion of the

trial court.   Likewise, whether the trial judge wishes to attempt

to structure a common-issues trial or conduct a bellwether trial

based on a properly selected sample are matters also within the

discretion of the district court.         The results of any such trials

and appropriateness of the requisite findings necessary to so

proceed will then be matters for another panel to consider in the

event those decisions are subject to appellate review.

     The petition for mandamus is GRANTED insofar as it relates to

utilization of the results obtained from the trial of the thirty

(30) selected cases for any purpose affecting issues or claims of,

or defenses to, the remaining untried cases.

EDITH H. JONES, Circuit Judge, Specially Concurring:

          I agree with Judge Parker’s conclusions that mandamus

must be granted in this case, that the district judge’s method of

selecting “bellwether” cases is fatally flawed, and that the most

expeditious remedy is, without interfering with the setting of

these cases,   to   deprive   them   of    preclusive   consequences.   I

believe, however, that we must elaborate further the basis for the

grant of mandamus, lest we risk being consumed by petitions for

similar relief and routine trial management problems.         I also have

                                     14
serious doubts about the major premise of Judge Parker’s opinion,

i.e., his confidence that a bellwether trial of representative

cases is permissible to extrapolate findings relevant to and

somehow preclusive upon a larger group of cases.

           This court has a duty not only to encant the proper

standard of review applicable to the extraordinary remedy of

mandamus, but also to show why that remedy is appropriate in the

circumstances before us.       The explanation must demonstrate why the

facts here are so unique as to warrant mandamus and must reinforce

that the remedy is only to be used sparingly and with utmost care.

Mandamus   is   not    a   substitute         for   appeal    in   due     course;

consequently, the writ should only be invoked if the challenged

district court order is not effectively reviewable on appeal.                   As

the Seventh Circuit cautioned, the challenged order must inflict

irreparable harm.      Matter of Rhone-Poulenc Rorer Inc., 51 F.3d
1293, 1295 (7th Cir. 1995).              Moreover, the order “must so far

exceed the proper bounds of discretion as to be legitimately

considered usurpative in character, or in violation of a clear and

indisputable legal right.”         Id.    See also In re: Fibreboard Corp.,

893 F.2d 706, 707-08 (5th Cir. 1990).

           In   this   case,   I    am    persuaded    that   these      stringent

criteria are satisfied.        First, this is not one case but 3,000

cases filed individually, not as a class action, and aggregated for

trial management.      The number of cases in which there are 3,000

                                         15
plaintiffs is, even in these days of frenzied tort litigation,

extremely     rare.    Further,         because     the   cases     concern   alleged

exposure over long periods of time to varying quantities of toxics,

the individual circumstances of each plaintiff’s claim defy easy

aggregated     treatment.         The    district     court’s     selection    of   30

“bellwether” cases, whose results would bind all 3,000 plaintiffs

on the issues of general liability or causation, is probably not

effectively reviewable after trial. The pressure on the parties to

settle   in    fear   of    the    result      of    a    perhaps    all-or-nothing

“bellwether” trial is enormous.

              Second, as Judge Parker’s opinion notes, this is an

“immature” mass tort action, in which the defendant’s liability has

not even been tested, much yet firmly established.                       The use of

innovative judicial techniques particularly to resolve immature

mass tort actions has been disfavored.              For instance, this Court in

Castano v. American Tobacco Company, 84 F.3d 734 (5th Cir. 1996),

refused to certify an immature tort class action brought on behalf

of tobacco users.          Likewise, in Matter of Rhone-Poulenc Rorer,

Inc., the Seventh Circuit granted mandamus to vacate the class

certification of hemophiliacs who had contracted the AIDS virus

through contaminated blood transfusions.                  Both opinions note the

potentially devastating impact of a class certification decision

and its tendency to force defendants to settle even when they might

have meritorious defenses.              Conducting an imperfect bellwether

                                          16
trial in this case threatens a similar effect.                      An imperfectly

designed bellwether group cannot yield a statistically reliable set

of verdicts.      Nevertheless, once in place, the verdicts would

create enormous momentum for settlement.                   There would then be

nothing to review on appeal and no realistic opportunity for

Chevron to appeal.

           The lack of correlation here between the bellwether

plaintiffs selected and the need for a representative verdict

suggests why the court’s order represents a usurpation of power.

Even if a bellwether trial is an appropriate vehicle for the

resolution of mass tort cases, a point I question below, the

results cannot serve their function of guaranteeing reliability

unless the cases selected are statistically representative of the

group of 3,000 plaintiffs.          The court made no effort here to assure

representativeness. Moreover, as Judge Parker’s opinion notes, the

determination of reliable representative plaintiffs is difficult in

a toxic exposure case.          The process involves such questions as

quantity, geographic proximity, and temporal exposure to the toxic

substance, comparative lifestyles, and physical manifestations of

exposure, none of which were explored by the trial judge.                         The

judge   allowed   the      parties    to    pick   faces    from    the   crowd    of

plaintiffs,    and   his    order    forces     the   parties      to   expend   huge

resources preparing for a trial whose results cannot possibly

fairly be extrapolated to cover the rest of the crowd.                           As a

“bellwether”, the exercise is pointless.                   Appellate courts can

                                           17
surely    remedy   the   misdirection     of   resources   and   the   almost

guaranteed unfair outcome of a nonrepresentative bellwether trial.

For these reasons, I think the compelling circumstances surrounding

this extraordinarily large and complex case permit our considering

the grant of mandamus relief.

            Mandamus relief would also and more emphatically be

compelled if the federal courts are not authorized to permit

binding verdicts to be rendered against non-parties to bellwether

trials or against a defendant with respect to plaintiffs whose

cases were not tried in the bellwether group.               Although Judge

Parker need not have reached this larger question, he appears to

have done so, asserting that the notion of a bellwether trial              “is

a sound one that has achieved general acceptance by both bench and

bar.”     He further asserts that common issues or even general

liability may be resolved in a bellwether context in appropriate

cases.    I have serious doubts about the procedure even where, as

here, Chevron agreed to use of a statistically sound bellwether

trial process.

            The only case cited in the Manual for Complex Litigation

concerning a bellwether strategy was tried by Judge Parker when he

sat on the district court.        Cimino v. Raymark, 751 F. Supp. 649,

653,    664-65   (E.D.   Tex.   1990),    cited   in   Manual    for   Complex

Litigation § 33.27-.28 (3d Ed. 1995).             One other recent case,

affirmed in a      split verdict of the Ninth Circuit, also used a

                                     18
bellwether technique.      Hilao v. Estate of Marcos, 103 F.3d 767 (9th

Cir. 1996).       These are not necessarily the only examples of

bellwether trials, but they appear to be most unusual.

            The use of statistical sampling as a means to identify

and resolve common issues in tort litigation has, however, been

severely criticized.       See In re: Fibreboard Corp., supra; Hilao,

supra at 787-88 (Rymer, Judge, concurring in part and dissenting in

part). Among other things, the technique may deprive nonparties of

their Seventh Amendment jury trial right.                 In Matter of Rhone-

Poulenc   Rorer    Inc.,    Judge    Posner        observed    that    bifurcating

liability and causation questions may require the same issue to be

reexamined by different juries.                That is, even if the bellwether

jury found liability on the part of Chevron, later juries could be

called upon to reassess that decision when faced with questions of

comparative causation or comparative negligence.                      That all the

plaintiffs are here represented by a single set of attorneys does

not, in my view, alleviate Seventh Amendment concerns; to the

contrary,   it    compounds   them    with       potential     ethical   problems.

Additionally, as Judge Higginbotham cautioned in In re Fibreboard

Corp., there is a fine line between deriving results from trials

based on statistical sampling and pure legislation. Judges must be

sensitive   to    stay   within     our    proper     bounds    of    adjudicating

individual disputes.       We are not authorized by the Constitution or

statutes to legislate solutions to cases in pursuit of efficiency

                                          19
and expeditiousness.    Essential to due process for litigants,

including both the plaintiffs and Chevron in this non-class action

context, is their right to the opportunity for an individual

assessment of liability and damages in each case.   Nowhere did the

district court explain how it was authorized to make the results of

this bellwether trial unitary for any purposes concerning the 2,970

other plaintiffs’ cases pending before him.    In sum, I simply do

not share Judge Parker’s confidence that bellwether trials can be

used to resolve mass tort controversies.

          On the narrow basis that the court’s adoption of non-

bellwether methods for conducting a bellwether trial is uniquely

harmful and unauthorized, I concur with the majority’s award of

mandamus relief.

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