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In this column we consider how the Class Action Fairness Law, which we analyzed generally in a column on March 3, 2005, may apply to tort suits, with an emphasis on mass tort litigation. Our conclusion is that, although major sections of the new law are aimed at making rather sweeping changes in the handling of groups of tort cases, it may have little practical effect. Three parts of the act deal with tort litigation. The first provides a means to remove a true class action from a state court to a federal court, under spelled-out requirements and limits. The second brings mass tort actions within the ambit of class actions for removal purposes, but also with numerous limitations. Third, if one considers a suits for economic loss (“coupon suits”) as torts, these too are regulated. Class Actions As to the class action provisions, class actions started in state court, including those for tort, are removable under the minimal diversity requirement if the amount in controversy in the aggregate is $5 million or more. Such a provision will mean little to the parties in New York class actions, however, since the courts have refused to apply CPLR Article 9 to allow tort-based class actions. 1 A number of states, however, have been amenable to certifying class actions for tort cases, sometimes for citizens of that state and sometimes creating a nationwide class actions. Some of these classes have been for personal injuries arising out of the use of or exposure to a common product, such as asbestos, tobacco, and pharmaceuticals (such as Baycol or OxyContin). Supporters of the new law saw as an abuse the practice of plaintiffs filing nationwide class actions in state courts after being denied such classes by federal courts. Under the new law, removal of these actions to the federal court will presumably lead to their dismissal again. (This result has already been achieved, in any case, by federal courts enjoining state court class actions under the All Writs Act. 2) A cause of action for medical monitoring (the creation of a fund to pay for periodic testing of persons exposed to a toxic substance) is a hybrid, involving aspects both of personal injury and of the creation of an equitable fund. 3 Many states recognize a cause of action for medical monitoring, provided its requirements are met of course. These actions are usually only for citizens of that state, but some have been nationwide in scope, as for example the diet drug fen phen settlement. A limit under the act on removal might well apply to medical monitoring suits where both the defendant and the plaintiffs are citizens of the state. Therefore, an action brought based upon the conduct of a local polluter would not be removable, whereas one against a prescription drug manufacturer located in another state would be. Mass Actions The new definition of civil actions for which federal courts have original jurisdiction � and therefore removal jurisdiction exists � includes a “mass action,” which is defined as one in which “monetary relief claims of 100 or more persons are proposed to be tried jointly on the ground that the plaintiffs’ claims involve common questions of law or fact.” As an aside, we make the comment that this language will lead to years of litigation. Concentrating on the phrase “proposed to be tried jointly,” the questions are who has proposed it and how has it been proposed to be done. Class actions by their inherent representative nature are one way to try the cases of all claimants together, but that is already covered in another section of the new law as discussed. Other procedural mechanisms by which 100 or more cases may be tried together are consolidation (as for example under state laws which track Federal Rules of Civil Procedure 42); joinder (as for example under state laws which track the Federal Rules 20); or special state rules, or just by court order. Past experience in mass torts aggregations indicates that it is only rarely that a large number of cases have been brought together for trial purposes by either joinder or consolidation. These devices are not expansive enough to round up hundreds of cases. However, it has been asserted that one of the abuses aimed at under the new law was the practice in Mississippi which allowed the joinder of claims for injuries from the same product under almost any condition. Plaintiffs living in various venues in that state could sue an out of state defendant in the county of their choice even if their claims had little in common. But to the extent this situation was abuse, it had been largely terminated before the act went into effect. The Supreme Court of Mississippi had changed its official comments for the joinder procedure to require a “distinct litigatable vent linking the parties” and on that basis had ordered the severance of cases of such recent mass torts as Propulsid and fen phen diet pills. 4 Mississippi practice aside, we are aware of very few state court mass tort actions which have been tried jointly. More often they are prepared jointly and then tried one by one or in small groups. The new law makes it clear that the mere coordination of cases for preparation purposes, which is common in states which see much mass tort litigation such as California, New York, New Jersey or Pennsylvania, does not make the cases removable. As to who may propose the joint trial, the new law has a clause which prohibits the defendant(s) from making such a motion. And, assuming that the plaintiffs would not so move (after all they filed their cases in state court to begin with), this leaves the court sua sponte to so move, although nowhere is that stated explicitly in the law. Thus one can hypothesize a situation where a state court judge finds herself overwhelmed by a hundred or more cases involving the same product filed in her court. Could she divest herself of this load by proposing that the cases be tried jointly (to track the words of the new law)? A further issue arises if a state judge sua sponte declares that he will try all of the cases jointly. If the judge professes to take this step under a procedural rule which is misapplied, or if he merely enters such an order without premising it on any recognized procedural device, what remedy would the plaintiffs have? Normally they might take an appeal from such an order, but the defendant would be expected to move quickly to attempt to remove the case to federal court under the new law. If removed, the plaintiffs might seek to remand on the basis that no procedure exists to support the order of joint trial. There are other limits on the removal of mass actions. The law does not apply to individual cases which do not seek the current federal jurisdictional minimum of $75,000. Nor would it apply to civil actions commenced before the law went into effect on Feb. 18, 2005. Hence, using as an example the Vioxx cases pending in state court in New Jersey, even assuming they were removable, one would need 100 new cases, seeking damages of $75,000 or greater. Another major limitation on the new law is that it does not apply to claims arising out of an event in the state which result in injuries in that state or ones contiguous to it. Thus, a local pollution disaster case would not be removable. If a mass tort action is removed from a statewide coordination to the district court, it is not clear to which district within a state it will be removed where there are multiple districts. And there is a strange provision in the law which says that even if all of the cases in the federal system have been assigned to one judge under multi-district litigation provisions (28 USC sec.1407), which is a common development, the ones involving the same product which are removed under the new law are not to be transferred from the district court where they were taken to the multi-district litigation proceeding, unless a majority of the plaintiffs so demand. If they did not, there would be two federal proceedings going over the same ground. There is no provision in the act for the situation of a new personal injury case being filed after an initial batch has been removed. It appears that one could still file in the state court, if there was a tactical advantage (such as to get the law of that state to apply), but that the defendant could remove it without another 100 accumulating. There is also no provision in the new law as to what the federal judge is to do after the batch of mass tort cases have been removed to its court, and the same is true for a removed class action or one of permissive joinder as had been the situation in Mississippi. It would seem that the court would be free to handle the litigation as it chose. It could decide, for example, to try to the cases individually, in waves or however it wanted. There might even be a potential for remand, since the law has a strange provision in it that for the time when the cases are removed, the statute of limitations is tolled. ‘Coupon Settlements’ Suits for economic damages, such as return of the price paid for a product, might under a broad sense be considered tort based, especially if they are premised on a misrepresentation cause of action. An oft perceived abuse in this type of litigation is that attorneys; fees for the class work involved is computed on the theoretical full value of the settlement, as measured by the potential maximum cost to the defendant. In practical experience, however, many class members do not step forward and claim their benefit, especially if the settlement involves a coupon allowing money off the purchase price of a product. The new law seeks to control fees under these circumstances by limiting the fees to the actual value of the redeemed coupons or to use an hourly rate for the time counsel has spent. In conclusion, how much use will be made of the new act in the field of tort litigation? Where a state court class action has been filed, especially after a federal one involving the same product has been denied, predictably it will be almost inevitably used. That is that the new act was primarily aimed at. Realizing that, plaintiffs may be inhibited from even trying � producing the same result as far as defendants go. As to the use in “mass torts” as defined separately from class actions, time will tell about how often it will be used., but it would seem that the new law will not have a great amount of use. Indeed, knowing the inventiveness of the plaintiffs’ bar, another law may come into play: the law of unintended consequences. Paul D. Rheingold is a partner in Rheingold Valet Rheingold Shkolnik & McCartney. Linda S. Mullenix holds the Morris and Rita Atlas chair in advocacy at the University of Texas School of Law. Endnotes: 1. See Rheingold, Mass Tort Litigation (Thomson West 1996 with annual supplements), sec. 3:102; Mullenix, State Class Actions: Practice and Procedure (CCH 2002 with annual supplements); Mullenix, Mass Tort Litigation (West 1996) 2. Rheingold, supra, sec. 5:10. 3. Rheingold, supra, sec. 12:2 4. Wyeth-Ayerst v. Caldwell, Miss., 2003-IA-01390-SCT 1/27/05 Class Actions

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