Federal Court Refuses Class Certification for Lack of Proof on Numerosity and Adequacy of Representation
A recent decision denying class certification in two putative class actions brought over a coal ash spill reminds us that numerosity is not a throw-away element of class certification and it cannot be satisfied merely by spouting a number of claimants who "may" be affected by the challenged conduct. The decision was first reported by Law 360 (subscription required).
In Mays v. Tennessee Valley Authority, No. 3:09-CV-06 (Varlan/Guyton) (E.D. Tenn. May 10, 2011), the plaintiffs asserted a number of causes of action against the defendants because the defendant's dike failed and allowed coal ash to spill into rivers and allegedly harm properties downstream. The cases were consolidated before a single judge. One of the classes was defined as all people who owned property on the adjoining the TVA's property or downstream from the plant on the Emory or Clinch rivers on Dec. 22, 2008. It asserted a private nuisance claim only. The other class actions originally had asserted claims for personal injury, medical monitoring and property damage, although the class certification motion only sought certification of property damage claims. The motion originally had been heard by a magistrate judge who issued a report and recommendation against class certification. The District Court adopted the report and recommendation.
Interestingly, the court stressed that it was required to give "rigorous analysis" to class certification motions and look beyond the pleadings to the merits of the case, if necessary. Slip op. at 29-30. Of course, the rigorous analysis standard -- which rejects the misreading of Eisen that some courts have used to justify turning a blind eye to anything related to the merits of the case -- came into play in the Wal-Mart v. Dukes case and may receive further explanation by the Supreme Court in the next six weeks.
The Mays court began its class certification analysis with the numerosity requirement. As I have lamented in this space before, too many people (courts, lawyers, litigants) treat numerosity as a throw-away requirement. If there are potentially more than some magic number of claimants (often 40 or 100), some treat numerosity as "established" and can get very upset if a defendant won't concede it.
A word of advice: don't.
As the Mays court explained, numerosity requires much more than simply counting how many people might have claims. Rather, the proponent of class certification has the burden of establishing the actual impracticability of joinder. Slip op. at 11 (citation omitted). Thus, the court can consider a number of factors, including the ease of identifying and locating class members, their geographical dispersion, and ease of service if they were joined. As the court explained:
. . . The joinder inquiry, like that required for the entire class certification inquiry, requires a fact-specific analysis that turns on the unique circumstances of each case and not on a single factor, such as the number of potential claimants. . . .
Plaintiffs argue . . . that there are a number of properties within the proposed class definitions where coal ash may be present and that these property owners may want to bring claims against TVA. However, beyond providing the Court with estimates of the number of potential claimants, plaintiffs have not shown what make joinder impracticable given the large number of individual cases that have been filed and are proceeding to trial, the relatively small geographic area in which potential claimants reside or are located, the publicity surrounding the coal ash spill and this litigation, the close proximity of this Court to the location of the potential claimants, the number of attorneys willing to take these cases, the Court's familiarity with this litigation, the Court's ability to resolve broad legal questions and pre-trial discovery issues, and the procedures put in place for moving these cases forward and toward trial.
Slip op. at 12-13 (citations omitted). The court also rejected the plaintiffs' argument that some claimants may not be able to afford bringing suit, reasoning that such speculation "is not specific evidence showing or indicating that there are indeed barriers to filing suit that would weigh towards a finding of class certification." Id. at 13.
The Mays court concluded that although plaintiffs had identified a large number of people who might have been affected by the coal ash spill, they had not met their burden to prove "that joinder of these potential claimants is impracticable, or that potential claimants could not bring suit on their own." Id. at 14.
The court also found that the plaintiffs were inadequate class representatives because they did not seek certification of (and thus risked losing, through res judicata and issue preclusion) personal injury and medical monitoring claims like the ones they had asserted on behalf of many of the named plaintiffs in their complaints. The Mays court concluded that claim-splitting matters:
. . . [T]he Court finds that it cannot conclusively determine the res judicata effect of a decision yet to be handed down by this Court. Such a decision is for the forum presented with the issue if and when it arises. The Court believes that it can, however, assess the risks of such a determination and weigh it in the Court's consideration of class certification. Accordingly, given the potential effect of res judicata, the application of which may preclude subsequent litigation under certain conditions, along with the application of the single injury rule, which Tennessee courts appear to follow, the Court finds that whether putative class members could bring these claims in a subsequent suit is, at best, undeterminable.
Id. at 16-17 (citations omitted). Because claims that had once been asserted by the putative class representatives have now been abandoned without any indication that the absent class members have willingly abandoned those claims, the court concluded that plaintiffs failed to adequately represent the class under Rule 23(a)(4).
The Mays court also determined that the commonality and typicality requirements were not satisfied because "the ultimate determination of each plaintiff's claim will turn primarily on individualized inquiries into how the coal ash affected each plaintiff's specific property interest. Given the unique location of each plaintiff's individual property, and the unique situation of each plaintiff and his or her use and enjoyment of the property, individualized inquiries will apply to both the property damage and nuisance claims." Id. at 22-23.
For similar reasons, the court concluded that the proposed class failed the predominance inquiry of Rule 23(b)(3):
[T]he Court agrees with Judge Guyton that these individualized inquiries, such as whether coal ash is or was present on a specific property, the proximate causation inquiry as to whether nondiscretionary conduct for which TVA can be sued caused coal ash to be present on a specific property, how each plaintiff's property interest and use and enjoyment of property has been impacted by the coal ash, and the extent of each plaintiff's damages, will predominate.
Id. at 26.
The Mays opinion is a strong, workmanlike analysis of each element of the class certification inquiry and what issues will have to be tried. It is notable because -- even though it arose out of a common incident (a coal ash spill) -- the court recognized that the individual issues involved in establishing liability and damages would make the case unmanageable to be tried as a class action.