Federal Court Refuses to Certify Class in Train Derailment Case

Posted on March 16, 2009 by Russell Jackson

In January I reported on a decision in which the Sixth Circuit Court of Appeals affirmed the denial of class certification in a case involving a train derailment which resulted in the release of sulfuric acid in a small community.  Recently a federal district court reached a similar result in a case involving the post-Christmas 2004 release of anhydrous ammonia from a railroad tank car in Lake Charles, Louisiana.  See Williams. v Union Pac. R.R. Co., 2009 WL 612339 (W.D. La. Jan. 19, 2009) (Rept. & Recc.), aff'd in part, rev'd in part, 2009 WL 604126 (W.D. La. Mar. 9, 2009).

In Williams, plaintiff sought to recover on behalf of a class of some 3,500 people exposed to the ammonia as property owners, residents, or holiday guests for personal injury, mental distress, property damage, and business interruption. 

The Magistrate Judge held a class certification hearing and issued a report and recommendation.  Plaintiff had submitted 14 affidavits from individuals claiming ammonia exposure, meteorological data establishing plumes, the names of 937 people alleging exposure, and census data suggesting there were 965 households within a one-mile radius of the exposure site.  The defendants challenged numerosity, typicality, commonality and adequacy.  In particular, they faulted the named plaintiff's ability as a 73-year-old retiree who had not worked since 1955 to represent the class and establish economic damages.  According to the Magistrate Judge, the prerequisites of Rule 23(a) all were met. 

The District Court, however, disagreed, examining the issues de novo.  It held that "there was a lack of appropriate definitive evidence in the record to support" the elements of numerosity and adequacy of representation.  2009 WL 604126 at *2.

The Magistrate Judge also had concluded that the case did not meet the predominance requirement of Rule 23(b)(3) for a number of reasons.  First, the damages calculation was not formulaic, but instead would require individual determinations, and "'where individual damages cannot be determined by reference to a mathematical or formulaic calculation, the damages issue may predominate over any common issues shared by the class.'"  2009 WL 612339 at *7 (citations omitted).

Plaintiff proposed, as an alternative, a phased trial plan, with a class trial to establish liability and a separate trial to determine individual causation and damages.  The Magistrate Judge rejected this approach because it would degenerate into a series of individual trials:

"Rarely, however, will a mass trial lead to the prompt entry of judgment in favor of a large group of plaintiffs against one or more defendants because even if the first jury finds, for example, that the defendant's product could have caused the plaintiff's injury, individual trials will still be necessary to determine specific causation, whether any affirmative defenses are available to the defendant, and the extent of the plaintiff's damages."

Id. at 9 (citation omitted).

The Magistrate Judge held that individual issues predominated, and that the predominance of individual issues detracted from the superiority of the class action device as a means of resolving the claims before it.  The District Court agreed, holding that the "diversity in the types and degrees of damages allegedly suffered by the prospective plaintiffs . . . is both evident and sufficient to deny certification."  2009 WL 604126 at *2.

Notably, in between the class certification hearing and the District Court's decision, a minor defendant -- the Calcasieu Parish Polce Jury -- had reached a settlement with the named plaintiff in which neither she nor any class member would receive a dime of compensation.  Instead, the police jury would pay money that would be applied solely to the costs of the litigation.

The District Court refused to approve the settlement, noting that under AmChem Prods., Inc. v. Windsor, 521 U.S. 591 (1997), a settlement class must at the very least meet the elements of Rule 23(a).  Because the Court concluded that plaintiff had not satisfied the numerosity and adequacy standards, it refused to engage in a fairness hearing for the settlement.  2009 WL 604126 at *1-*2.

Williams is yet another instructive opinion that reminds us that just because damages may flow from the same incident, the class action tool may not be the superior way to adjudicate those damages where they are not subject to a simple mathematical formula.

 

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A Numerosity Argument Defeats Class Certification

Posted on January 28, 2009 by Russell Jackson

The "numerosity" argument has become the bastard child of the defense arsenal, seldom seen and even less frequently mentioned.  And yet a recent Sixth Circuit decision reminds us that a well-crafted numerosity argument can carry the day, defeating class certification just as effectively as the tow-headed twins of predominance and superiority.

The dispute in Turnage v. Norfolk Southern Corp., Case No. 07-6033 (6th Cir. Jan. 22, 2009), arose out of a train derailment.  As the good folks of Knox County, Tennessee were at church on a September Sunday morning, a train derailed, causing a tanker leak that released a cloud of sulfuric acid and water over portions of Knox and Blount counties.  A mandatory evacuation was imposed on a 1.3-mile radius of the derailment site, along with a voluntary evacuation of residents living within a 3-mile radius of the site.  There were 963 households within the 1.3-mile radius, and an additional 6,047 households within the larger 3-mile radius.  Those who had evacuated were able to return to their homes between 34 and 45 hours later. 

The defendant acted quickly to assist those inconvenienced by the derailment, establishing claim centers where residents could receive immediate reimbursement for food, clothing, lodging, and other evacuation-related expenses.  Nearly 86% of the mandatory evacuees had received some sort of compensation from the defendant, and roughly 17% of the households within the larger voluntary evacuation zone had received some sort of compensation from the defendant.

Plaintiffs lived within the mandatory evacuation zone, and they brought their putative class action for compensatory and punitive damages on behalf of a class of "all persons who were evacuated from the surrounding area."  Slip op. at 3.  The trial court held a two-day class certification hearing, concluding that the plaintiffs had not satisfied their burden to demonstrate that the class was so numerous as to make joinder impracticable.  At a subsequent trial, plaintiffs were awarded $3,480 in damages.

The Sixth Circuit affirmed the holding that Rule 23(a)(1)'s numerosity requirement was not met.  As the court noted, the class members' "proximity to each other and the discrete and obvious nature of the harm make identifying and contacting them relatively easy."  Slip op. at 5.  "[T]he real issue," the court explained, "is whether the plaintiff seeking class certification has demonstrated the impracticability of joinder."  Id. (citing In re American Medical Systems, 75 F.3d 1069, 1079 (6th Cir. 1996)).

Thus, despite the fact that there were some large numbers of people -- particularly in the voluntary evacuation area -- who might (or might not) be eligible for membership in the class, the court focused on the fact that so many people in the mandatory evacuation area already had received compensation, and that plaintiffs had failed to provide evidence that there were many other people who actually relocated and suffered an inconvenience or expense that was not reimbursed by the defendant:

Given the close geographical proximity of supposedly thousands of class members, the task of gathering concrete evidence of numerosity should not have been difficult.  Yet [plaintiff] did not submit evidence to the district court of even one additional person who wished to seek a legal remedy against [the defendant].  Therefore the district court did not abuse its discretion when it found that the evidence of numerosity was too speculative to merit certification.

Slip op. at 9.

The Turnage decision should be a strong reminder to defense counsel to scrutinize more carefully whether plaintiffs have actually provided the court with evidence that there are sufficient numbers of people with real disputes against the defendant such that the joinder of all interested parties is truly impracticable.  Where joinder of all claimants in one suit is a possibility, a class action should not be certified.

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