While the contours of class action jurisprudence relating to personal injury product liability actions are well known, the record is somewhat less so for property contamination cases. A recent decision from the Southern District of Florida – Jacobs v. Osmose, ___ F. Supp.2d ___, 2003 WL 1060155 (S.D. Fla. February 25, 2003) – is a significant contribution to that record and helps further define the line of demarcation for proposed classes that satisfy Rule 23 and those that do not. In Jacobs, the court rejected class action status to a case challenging the safety of wood pressure treated with chromated copper arsenate ("CCA") wood preservative. CCA is a chemical compound that, when impregnated in wood through a vacuum pressure process, protects wood from insects and the elements.
Trail Blazing Litigation
In the past two years, plaintiffs' lawyers began bringing a handful of putative class actions against formulators of CCA, as well as the manufacturers and retailers of CCA-treated wood products. Although the class definitions, legal theories, and remedies may somewhat vary, the cases share the same fundamental claim: Chemical compounds containing arsenic migrate or "leach" from treated wood and contaminate property, allegedly putting human health at risk. Plaintiffs have cried out about a "national health crisis," and press coverage in periodicals like Time, The Wall Street Journal, Barrons, The New York Times, and even People Magazine has often been sensational and one-sided. Plaintiffs have rushed to shepherd their cases through the class certification process before any actual evidence is developed to substantiate or refute their claims. Despite the talk of a crisis, however, plaintiffs have attempted to facially omit personal injury claims in all but one of these actions, recasting their products liability claims as if they sounded in contract or consumer fraud. Presumably, they believe that strategy might increase their odds of achieving certification. It has not worked so far.
In broad terms, the Jacobs decision holds that, among other reasons, where the source of alleged contamination cannot be established with common or representative proof – in this case, because the products at issue were unique and not fungible commodities – a class ordinarily cannot be certified. In other words, the case is distinguishable from "single-incident" cases, where the source of the asserted claim, as well as possibly the evidence of alleged negligence and causation, are the subjects of proof common to all class members. "[T]here are few factual questions in this matter," the Jacobs court concluded from the extensive scientific evidence presented by the defense, "that lend themselves to classwide treatment." For example, the threshold question of leaching is not common. As the court found, "a great number of factors can contribute to whether (and to what extent) the CCA in treated wood can escape." Defendants showed that the variations arising from these factors meant that no two pieces of treated wood were alike. Moreover, the many differing "uses of treated wood and the diversity of climates to which the wood is exposed create great differences among the various Plaintiffs in [the Jacobs] matter."
The Issues
The individual issues in Jacobs, however, went beyond product variations and whether treated wood might leach. For example, because arsenic occurs naturally in soil, the source of these constituents must be identified before they can be attributed to any migration from treated wood. And on top of that, many man-made factors impact the levels of arsenic occurring in soil, including the use of pesticides, herbicides, and fertilizers. But the individual issues only continue from there, according to the Jacobs opinion. Even assuming that a plaintiff proves that specific pieces of treated wood leached, there is no way to show on a class-wide basis whether that matters at all to the core claim that human health is somehow being put at risk. Rather, that question can only be answered by assessing whether, and to what extent, people are exposed to the leached material. That means looking at the uses of the wood and of the property in question.
The Jacobs decision also elaborates on other novel individual issues of proof that preclude class certification. For example, the opinion addresses how individual issues of knowledge preclude certification in the mass tort context, even where common law fraud and reliance are not at issue. Determining what information a purchaser had regarding treated wood's properties, use, and care, would be critical to adjudicating claims, such as failure to warn and breach of warranty, as well as defenses like assumption of risk, contributory negligence, and statute of limitations. The opinion also points out the critical role that issues of product identification and intervening acts by nonparties can have on the certification analysis.
And fashioning a class-wide remedy for alleged property contamination – assuming the need for one ever could be shown – also proved impossible. Even where plaintiffs choose to split their claims to focus their damage requests – such as seeking a form of relief like soil remediation – individual issues still predominate. Remediation levels for substances such as arsenic range dramatically, and no two sites are the same. Variations result from differences among sites and the way people use the land, background levels of arsenic in the soil and the chemical form of that arsenic. Thus, a formulaic approach to remediation damages was unavailable in Jacobs, and probably would be unavailable in many other similar settings.
Judicial Reluctance
The lack of a litigation track record for the Jacobs claims was also a significant barrier to class certification. This likely is another fertile ground for attacking many property contamination theories. See also In re Methyl Tertiary Butyl Ether ("MTBE") Prods. Liab. Litig., 209 F.R.D. 323 (S.D.N.Y. 2002). Courts are reluctant to certify mass tort cases to begin with, and especially reluctant where claims are based on "immature torts." In such circumstances, courts can only speculate about how a trial would proceed. As the Jacobs court found, any "savings in judicial resources in this case is speculative, and any imagined savings would be overwhelmed by the procedural problems that certification of a sui generis cause of action brings with it." In short, "[c]ertification of an 'immature' tort results in a higher than normal risk that the class action may not be superior to individual adjudication." Courts also disfavor certification of immature torts because they place undue pressure on defendants to settle, even where they are not liable or the chances of being found liable are small.
In Jacobs, the products at issue have been on the market for over 70 years, and scientific studies have confirmed their safety. At best, plaintiffs' claims are subject to serious scientific debate. Thus far, potential plaintiffs have voted with their feet. There have been relatively few individual personal injury claims brought during the seventy-year history of these products. In fact, in a survey commissioned by the Jacobs defendants, over 80% of treated wood users surveyed said they were not likely to tear down their structures or ask for their money back, even when told about the arsenic associated with the wood. And the few personal injury cases that have been brought do not reveal even a claimed signature illness, which normally ought to be the death knell even for individual tort claims. Questions are now being asked in the media and elsewhere about whether these claims really have any teeth. See David Hechler, The Poisoned Wood Mystery: Is it Unsafe? Is it "the Next Asbestos?", Nat'l. L.J. March 17, 2003. "'Not every mass tort is asbestos,'" wrote the Jacobs court and quoting the Fifth Circuit's Castano decision. "'[A]nd not every mass tort will result in the same judicial crisis.'"
Left unresolved in Jacobs, however, is whether plaintiffs' tactic of splitting-out personal injury claims to make class certification seem more feasible actually betrays the interests of the class and renders the putative representatives inadequate. Though the crux of plaintiffs' complaints in these cases is alleged health risks, they have facially sought to carve out any personal injury claims, undoubtedly aware of the barrier such claims pose to class certification. Choosing to ignore these potentially more lucrative claims for the sake of certification itself, however, raises serious res judicata implications for the putative class. Class members who pursue property damage claims and ignore personal injury claims arising out of the same transaction run the risk of forever being barred from asserting those claims. Moreover, because the court deciding class certification will not be the same court determining the effects of res judicata, any court certifying a property-only class would simply be guessing as to how a subsequent court would rule on personal injury claims. The potential risk to putative class members is simply too great for any court to engage in such guesswork, and such reasoning has prompted many courts in similar circumstances to find that plaintiffs who choose to waive such claims are inadequate representatives.
Cases like Jacobs point out the critical need for defendants to develop a thorough evidentiary record of how a case actually would be tried on the merits. Defendants should not take comfort in the fact that obtaining class certification is strictly the plaintiffs' burden. Rather, as we did in Jacobs, they should develop a record affirmatively showing that a class cannot be certified. That was particularly important in Jacobs, where the products at issue had been subjected to a great deal of one-sided publicity; the products were widely (but incorrectly) regarded as fungible commodities; the plaintiffs were attempting to cast their tort claims to look like simple, and certifiable, breach of contract actions; and the plaintiffs were encouraging the court to look just at the proof plaintiffs said they would put on at trial, and to ignore the rebuttal evidence that defendants would introduce. Any combination of these factors, if not aggressively attacked, made the prospect for an erroneous class certification more likely. The Jacobs defendants overcame these hurdles, however, by developing an extensive record through the use of fact witness testimony and scientific and other experts.
*article courtesy of Brent Austin and Rebecca Alfert of Wildman Harrod, austin@wildmanharrold.com / alfert@wildmanharrold.com