In re Asbestos School Litigation
MEMORANDUM AND ORDER
Prеsently before the Court is plaintiffs’ motion for class certification pursuant to
The initial complaints in these matters were filed on January 17, 1983, and March 23, 1983, respectively. The representative plaintiffs are four public school districts: the School District of Lancaster, the Manheim Township School District, and Lampeter-Strasburg School District, which reside in the Eastern District of Pennsylvania; and the School District of Barnwell,
The defendants in these companion actions are members of the asbestos industry. Asbestos products have been used in the construction of schools and other public buildings in the form of spray or trowel-applied coating material for building surfaces, including ceilings, as well as for insulation on pipes, and boilers. With the exception of Johns-Manville Corporation, against whom legal process is stayed because of the pending bankruptcy proceedings, the defendants represent, for the time period alleged in the complaints, all of the major producers of friable asbestos construction and insulation products of the type found in public and private schools throughout the nation, along with their principal suppliers of raw asbestos.
The complaints are grounded in state law, and federal jurisdiction is based upon
I. FACTUAL BACKGROUND
This litigation was triggered by action of the United States Environmental Protection Agency (“EPA”) and the Congress. In 1980, the EPA investigated the presence of asbestos in the nation’s schools and determined that it constituted a serious hazard to the health of school children and school employees. As a result of the EPA’s investigation and findings, the agency promulgated proposed regulations, pursuant to the Toxic Substances Control Act,
At approximately the same time the EPA promulgated the above proposed regulations, Congress considered and enacted the Asbestos School Hazard Detection and Control Act of 1980,
In August, 1981, the Attorney General issued his report finding that important federal environmental policies mandated abatement of the school asbestos problem, and that the asbestos industry should be held responsible. Land and Natural Re
II. PROCEDURAL BACKGROUND
Subsequent to the filing of the complaints in the four companion cases, plaintiffs moved, on March 30, 1984, for class certification. Shortly after, plaintiffs filed an additional motion for immediate class certification against certain defendants, including United States Gypsum Co., National Gypsum Company and W.R. Grace & Co. These three defendants agreed not to oppose a nationwide mandatory class certified under
As a result of the April 13 Order, the alignment of various parties to the litigation shifted. Rather than the usual “plaintiffs) for” and “defendant(s) against” structure, the school asbestos case divided along the following lines:
1. Plaintiffs Supporting Mandatory Class Action Certification.
This group has, throughout these proceedings, argued for a nationwide mandatory class of plaintiff school districts.
2. Defendants Supporting Mandatory Class Action Certification.
This group of three defendants, United States Gypsum Co., National Gypsum Company and W.R. Grace & Co., also referred to in papers and at oral argument as the nonopposing or stipulating defendants, likewise seeks to have a mandatory class certified.
3. Plaintiffs Opposing Mandatory Class Certification and Supporting an Opt-Out Class Pursuant to
This group’s principal representative is the Barnwell School District of South Carolina,
4. Defendants Opposing Class Certification Under Any Provision of
This group opposes any class certification whether mandatory or opt-out.
Oral argument was held on a motion to vacate the April 13 Order on May 11, 1984. On July 16, 1984, the Court vacated its April 13th Order to the extent that the injunction restraining the prosecution of any case filed prior to April 13, 1984 was lifted.
On July 30, 1984 the Court heard oral argument on the merits of the class certification issue. At that time, the Court invited counsel to submit proposals on how a class could be structured so as to maximize the economies accruing to a class action while avoiding the pitfalls associated therewith. The Court further advised counsel that with that last submission, the “paper chase will have ended,” Tr. at 9, and no further obstacle would remain to the decision of the case. It is to that decision I now turn.
III. LEGAL DISCUSSION
In order for a suit to be maintained as a class action under
The named plaintiffs must then show that the action qualifies for class action treatment under at least one of the subsections of
Finally, it is well established that “the central issue raised in a motion for certification is whether a class action is appropriate, not the probability of plain
Having carefully considered the arguments presented by counsel in both their oral and written presentations,
A.
1. Numerosity
The first prerequisite of
There is, of course, no geographical or numerical limit exрressed by
2. Commonality
A common question is one which arises from a “common nucleus of operative facts” regardless of whether “the underlying facts fluctuate over the class period and vary as to individual claimants.” Cohen v. Uniroyal, Inc.,
Plaintiffs allege a number of claims involving both legal and equitable relief. The predicate of each claim is a violation of law, or breach of a legal duty, which, in conjunction with a showing of injury causally linked to defendants’ wrongful conduct, creates liability to the members of the class. Although each claim is grounded in the breach of a separate, independent duty owed the individual members of the class, the underlying “common core of questions,” Cohen v. Uniroyal, Inc.,
(a) the general health hazards of asbestos;
(b) defendants’ knowledge or reason to know of the health hazards of asbestos;
(c) defendants’ failure to warn/test; and
(d) defendants’ concert of action and/or conspiracy involving formation of and adherence to industry practices.
All of these elements can be established by common proof, which, although it may be complex, does not vary from class-member school to class-member school. Plaintiffs have demonstrated common questions sufficient to satisfy
3. Typicality
The typicality requirement functions as a safeguard against interclass conflicts and an assurance that the plaintiff’s interests are more or less co-extensive with those of the class. In other words, ... the class representative’s claims must be typical in that his or her litigative posture must be sufficiently coextensive with those of the class such that the class members’ causes of action are fully, fairly and vigorously prosecuted.
Id. at 394 (citations omitted). Accord Cohen v. Uniroyal, Inc.,
The commonality and typicality requirements ofRule 23(a) tend to merge. Both serve as guideposts for determining whether under the particular circumstances maintenance of a class action is economical and whether the named plaintiffs claim and the class claims are so interrelated that the interests of the class members will be fairly and adequately protected in their absence.
While the focus is on the relatedness of the named plaintiffs’ claims and those of the class members, the harm suffered by the named plaintiffs may differ in degree from that suffered by other members of the class so long as the harm suffered is of the same type. McQuilken v. A. & R. Development Corp.,
As previously demonstrated, the plaintiffs’ claims raise issues harmonious with all class members as to the common issues of liability upon theories of negligence, strict liability, breach of warranty, intentional tort, concert of action and civil conspiracy. As a consequence, the named plaintiffs stand in a similar position as all other members of the class, in satisfaction of this subdivision.
4. Adequacy of Representation
The final requirement of
The named plaintiffs are represented by counsel who are very experienced with class action litigation and thoroughly familiar with property damage and mass disaster litigation.
B.
In determining whether the relevant criteria of
The predominance finding requires at a minimum the identification of the legal and factual issues, common and diverse, and an identification of the class members to which those relate.... The superiority finding requires at a minimum (1) an informed consideration of alternative available methods of adjudication of each issue, (2) a comparison of fairness to all whose interests may be involved between such alternative methods and a class action, and (3) a comparison of the efficiency of adjudication of each method.
Katz v. Carte Blanche Corporation,
1. Predominance
In assessing whether common questions predominate, most courts have adopted a pragmatic approach which emphasizes how efficient class treatment will be, the significance of the common questions, and whether class certification would result in the serious distortion of the lawsuit. 3B J. Moore, Moore’s Federal Practice ¶ 23.45[2] (1978). Professors Wright and Miller state that when “common questions represent a significant aspect of the case and they can be resolved for all members of the class in a single adjudication, there is a clear justification for handling the dispute on a representative rather than on an individual basis.” 7A C. Wright and A. Miller, Federal Practice and Procedure, § 1778, at 53 (1972). Several courts have found class certification to be appropriate “where common issues important to the litigation can be resolved on a class-wide basis even though the common issues may not be dispositive.” McQuilken v. A & R Development Corp.,
This pragmatic approach is implicit in the analytical framework utilized in Bogosian v. Gulf Oil Corp. Under Bogosian, the determination of the appropriateness of class certification of damаge claims under
The first element to be analyzed to determine whether common questions of law or fact predominate over individual ones pursuant to
These claims, as nоted, arise out of the same common nucleus of operative facts relating to defendants’ conduct and the nature of asbestos products. Common questions relating to the hazards of asbestos, the knowledge of the defendants of the hazards, industry policies and practices and defendants’ failure to warn and to test are at the core of all the damage claims for relief, and will dominate other issues at trial, regardless of how defendants’ conduct is characterized in terms of a specific tort.
The second element of the Bogosian analysis relevant to determining whether common questions of law or fact predominate over individual ones under
Since, as we have indicated, the second aspect of fact of damage is a simple concept of causation, any evidence which is logically probative of a loss attributable to the violation will advance plaintiff’s case. There is absolutely no requirement that the loss be personal or unique to plaintiff, so long as the plaintiff has suffered loss in his business or property, for as we have noted, this second aspect of fact of damage is not concerned with any policy of limiting liability. Thus, when [a] ... violation impacts upon a class of persons who do have standing, there is no reason in doctrine why proof of the impact cannot be made on a common basis so long as the common proof adequately demonstrates some damage to each individual.
Bogosian v. Gulf Oil Corp.,
In the instant case, defendants’ alleged misconduct has had broad, pervasive effects on the school class. Plaintiffs allege that as a result of defendants’ failure to warn the nation’s elementary and secondary schools of the hazards of asbestos and asbestos-containing products, the school class installed large quantities of friable asbestos material in school buildings. Because of the alleged grave health hazard posed by asbestos, schools have undertaken asbestos abatement remedial action to eliminate the hazard and have incurred enormous financial costs as a result. Thus, plaintiffs’ proposed proof of impact under the above formulation, that is, demonstration of a general effect in the form of the creation of the hazard and specific proof of expenditures, falls within the Bogosian guidelines.
The second element of causation, proximate or legal cause raises primarily a question of law relating to the ambit or scope of legal liability under the law of torts. W. Prosser, Law of Torts, § 42, at 244 (4th ed. 1971). This legal issue can be resolved on a classwide basis without involving individualized, class-member by class-member proof.
Finally, “the ‘overwhelming weight of authority’ holds that the need for individual damages calculations does not diminish the appropriateness of class action certification where common questions as to liability predominate.” Wolgin v. Magic Marker Corp.,
The concept of superiority essentially involves a value judgment which takes into account a number of competing interests. As the Third Circuit stated in Katz v. Carte Blanche Corporation:
Superiority must be looked at from the point of view (1) of the judicial system, (2) of the potential class members, (3) of the present plaintiff, (4) of the attorneys for the litigants, (5) of the public at large and (6) of the defendant. The listing is not necessarily in order of importance of the respective interests. Superiority must also be looked at from the point of view of the issues.
In my view, the school asbestos litigation is uniquely suitable to class action treatment. The bench, bar and public at large are only too well aware of the staggering costs that the asbestos personal injury litigation has generated. Clearly, classwide disposition of at least sоme of the issues in this litigation, instead of case-by-case adjudication, would realize great savings in litigation costs. Instead of hundreds or thousands of school asbestos cases in separate forums, the litigation would be concentrated in a single forum, thereby economizing litigation expenses. Moreover, there would be one set of attorneys for both sidés resulting in significant savings in attorneys’ fees. In this case, “with the presence of a common core which predominates, considerations of judicial efficiency and economy, overall expense and uniformity will be furthered by permitting this case to proceed as a class action.” Sharp v. Coopers & Lybrand,
While the Advisory Committee Notes caution against certifying mass tort cases under
3. 28(b)(3)(A-D)
Having carefully considered the factors which are set forth in
The disposition of this litigation under a
To date, there are approximately 50 eases filed in state and federal courts. Only one has proceeded to judgment. Thus, the certification of this action comes at a time when the vast majority of the class members can make a meaningful decision to participate or to opt out.
One matter, bearing on the manageability of this litigation, which defendants raise in opposition to any type of class certification, is the applicability of the state law of 54 jurisdictions. At first blush, this aspect of the litigation would seemingly prevent nationwide class certification. See Brummett v. Skyline Corp., No. C 81-0103(B), slip op. at 9-10 (W.D.Ky. April 11, 1984); Harrigan v. United States,
This is not to suggest that I believe that managing this litigation is wholly without difficulty, as it most assuredly is not. But, at this point, I believe that the management problems can be overcome.
C.
Plaintiffs contend that this action meets the requirements of a
On the other hand, plaintiffs assert that there is a substantial possibility that early awards of punitive damages will impair or impede the ability of future claimants to obtain punitive damages. Under this theory, it is not the total assets of the defendants that places a limitation on future plaintiffs’ ability to obtain awards of such damages; rather, it is the very real possibility that subsequent plaintiffs will find themselves in litigation in which defendants “will have been found [by the courts] to have been sufficiently punished,” Williams, J., Mass Tort Class Actions: Going, Going, Gone?,
Two circuit courts which have considered
The most recent analysis of (b)(1)(B) certification is contained in Chief Judge Jack Weinstein’s opinion in Agent Orange. In formulating a standard against which to evaluate limited fund class certifications, Judge Weinstein adopted a “substantial probability” criteria, i.e., “less than a preponderance but more than a mere possibility.” Agent Orange,
Having so found, Judge Weinstein nonetheless went on to conclude that a limited fund mandatory class should be established on the issue of punitive damages. Judge Weinstein reasoned as follows:
[T]here is a substantial probability that limited punitive damagеs may be allowed. If they are, it would be equitable to share this portion of the possible award among all plaintiffs who ultimately recover compensatory damages. Yet, if no class is certified under Rule (b)(1)(B), non-class members who opt out underRule 23(b)(3) would conceivably receive all of the punitive damages or, if their cases are not completed first, none at all.
It is axiomatic that the purpose of punitive damages is not to compensate plaintiffs for their injury, but to punish defendants for their wrongdoing. In theory, therefore, when a plaintiff recovers punitive damages against a defendant, that represents a finding by the jury that the defendant was sufficiently punished for the wrongful conduct. There must, therefore, be some limit, either as a matter of policy or as a matter of due process, to the amount of times defendants may be punished for a single transaction.... There is, therefore, a substantial probability that ‘adjudication with respect to individual members of the clаss ... would as a practical matter be dispositive of the interests of the other members not parties to the adjudication.’
Id. at 728 (citations omitted).
Judge Weinstein’s analysis of
Apart from the defendants’ capacity to pay punitive damages, there is surely some limit imposed by law on the amount for which they can be held liable for a single wrongful act or course of conduct. Unlimited multiple punishment for the same act determined in a succession of individual lawsuits and bearing no relation to the defendants’ culpability or the actual injuries suffered by victims, would violate the sense of ‘fundamental fairness’ that is essential to constitutional due process.
While the issue concerning the Anti-Injunction Act did not arise in Agent Orange, see
A mandatory class action, of course, has a restrictive effect on related proceedings in any other court—state or federal. This is because, by definition, members of such a class cannot pursue independent litigation of class claims....
Here, the necessary restrictive effects of the mandatory class action are twofold. The first restrictive effect is that class members would not be able to pursue a punitive damage claim in an independent action. Such a restriction is absolutely necessary to the district court’s jurisdiction over this class issue due to the applicable state law on punitive damages.
In addition to their reliance on the deck sions of the Eighth and Ninth Circuit Courts of Appeal, parties to this litigation have also raised constitutional and policy considerations in opposition to a mandatory class. First, it is argued that this Court is bound, under Erie R. Co. v. Tompkins,
Defendants conclude that since Pennsylvania does not purport to assert jurisdiction over non-residents in a mandatory class, the federal court is, therеfore, precluded from doing so. Apart from the fact that the parties cite no case decided on the basis of Erie and Klemow, their .argument fails to account for the Supreme Court’s holding in Hanna v. Plumer,
[Defendant] ... suggests that the Erie doctrine acts as a check on the Federal Rules of Civil Procedure, that despite the clear command ofRule 4(d)(1) , Erie and its progeny demand the application of the Massachusetts rule. Reduced to essentials, the argument is: (1) Erie, as refined in [Guaranty Trust Co. of New York v.] York, [326 U.S. 99 ,65 S.Ct. 1464 ,89 L.Ed. 2079 (1945)], demands that federal courts apply state law whenever application of federal law in its stead will alter the outcome of the case. (2) In this case, a determination that the Massachusetts service requirements obtain will result in immediate victory for respondent. If, on the other hand, it should be held thatRule 4(d)(1) is applicable, the litigation will continue, with possible victory for petitioner. (3) There*437 fore, Erie demands application of the Massachusetts rule. The syllogism possesses an appealing simplicity, but is for several reasons invalid.
Id. at 466,
The Hanna Court refused to apply the Erie “outcome determinative” test, noting that the fundamental flaw in the defendant’s “syllogism” was “the incorrect assumption that the rule of Erie R. Co. v. Tompkins constitutes the appropriate test of the validity and therefore the applicability of a Federal Rule of Civil Procedure”.
When a situation is covered by one of the Federal Rules; the question facing the court is a far cry from the typical, relatively unguided Erie choice: the court has been instructed to apply the Federal Rule, and can refuse to do so only if the Advisory Committee, this Court, and Congress erred in their prima facie judgment that the Rule in question transgresses neither the terms of the Enabling Act nor constitutional restrictions.
Id. at 471,
In addition to the Erie argument, various parties maintain that a mandatory class raises concerns related to the tenth amendment.
It, of course, goes- without saying that a federal court should be extremely circumspect when the facts of the case before it arguably implicate the tenth amendment. However, in the present case, I have concluded that the prohibited line has not been crossed. Firstly, the tenth amendment concern, as expressed in National League of Cities v. Usery,
It is apparent that there is a substantial possibility that early awards of punitive damages in individual cases will impair or impede the ability of future claimants to obtain punitive damages. The reality of such impairment has been recognized by commentators and courts. See Wright, The Successful Use of the Class Action Device, 52 UMKC L.Rev. 141, 144-45 (1984); Seltzer, Mass Tort Punitive Damages, 52 Fordham L.Rev. 37, 61, 72-73 (1983); Note, Mass Accident Class Actions, 96 Harv.L.Rev. 1143, 1157 (1983); Mass Tort Class Actions,
“A fundamental aspect of justice is parity of treatment. Persons similarly situated
While the question is not without difficulty, I conclude that a mandatory class on the issue of punitive damages should be conditiоnally certified under
D.
Three forms of mandatory injunctive relief are requested. First, the complaints seek direct abatement action, including any necessary testing, inspection, analysis, removal of friable asbestos, and containment and/or replacement action warranted under the circumstances. Second, where containment action has already been taken by the schools, plaintiffs seek containment monitoring services consisting of maintenance of contained asbestos materials which remain in the schools under appropriate abatement practices. Third, the complaints seek medical detection/surveillance and monitoring services to identify and monitor children and school employees who may have been exposed to school asbestos.
In addition, plaintiffs seek equitable restitution for the costs of asbestos abatement remedial action already undertaken. They seek reimbursement under this theory for the monies expended performing a duty which they claim was the responsibility of the defendants.
Despite the ingenuity of plaintiffs’ claims for equitable remedies, this case remains at bottom, one for legal damages. The Advisory Committee Notes to
Plaintiffs’ attempt to sidestep this requirement of
The damages recovery is to compensate the plaintiff, and it pays him, theoretically, for his losses. The restitution claim, on the other hand, is not aimed at compensating the plaintiff, but at forcing the defendant to disgorge benefits that it would be unjust for him to keep.
D. Dobbs, Remedies, § 4.1, at 224 (1973).
The plaintiffs’ argument that a request for a payment of future remedial expenses is equitable in nature has been rejected by the Court of Appeals for the Third Circuit. “A plaintiff cannot transform a claim for damages into an еquitable action simply by asking for an injunction
Whether some type of equitable relief may be required in specific cases cannot at this stage of the litigation be clearly ascertained. It is, however, well settled that certification under 23(b)(3) does not preclude the granting of appropriate equitable relief. 7A C. Wright and A. Miller, Federal Practice and Procedure, § 1784, at 127 (1972) (“a federal court should [be] free to experiment in awarding relief under
E. Class Notice
The final consideration for the Court concerns the subject of notice to the class.
(2) In any class action maintained under subdivision (b)(3), the court-shall direct to the members of the class the best notice practicable under the circumstances, including individual notice to all members who can be identified through reasonable effort. The notice shall advise each members that (A) the court will exclude him from the class if he so requests by a specified date; (B) the judgment, whether favorable or not, will include all members who do not request exclusion; and (C) any member who does not request exclusion may, if he desires, enter an appearance through his counsel.
In the present case, the best notice practicable would be obtained by a first class mailing. See Piel v. National Semiconductor Corp.,
An appropriate Order follows.
Notes
. Because this action is solely a diversity case, the Anchorage School District has challenged the standing of the named plaintiffs. It argues that these plaintiffs lack standing to assert claims on behalf of class members in jurisdictions other than their own. While this argument has some superficial appeal, upon closer analysis, it is apparent that standing requirements are satisfied. Standing, which derives from the article III case or controversy requirement, is met when the plaintiff can demonstrate "injury in fact.” Sierra Club v. Morton,
. Certification under
. The spokesperson for this group is plaintiffs’ co-lead counsel David Berger, Esquire. Mr. Berger has associated with, among other counsel, Professor Charles Alan Wright of the University of Texas. Professor Wright addressed the Court at a hearing held on July 30, 1984.
. Lawrence T. Hoyle, Jr., Esquire, counsel to National Gypsum Company and defendants' co-liaison counsel, has acted on behalf of these defendants.
. Barnwell School District is represented by the law firm of Blatt and Fales, Barnwell, SC. Having terminated David Berger as local counsel subsequent to the April 13th Order, Blatt and Fales associated with Herbert L. Newberg, Esquire, as local counsel. Mr. Newberg is the author of the multivolume treatise entitled New-berg on Class Actions (1977). Mr. Newberg was subsequently designated co-lead counsel by Order of the Court dated July 17, 1984. Blatt and
. Ralph W. Brenner, Esquire, counsel to the Celotex Corporation and Carey Canada, Inc. and defendants' co-liaison counsel, represented the position of this group of defendants.
.
(a) Prerequisites to a Class Action. One or more members of a class may sue or be sued as representative parties on behalf of all only if (1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class.
. For the text of
. In his presentation to the Court on July 30, 1984, counsel for Barnwell School District, Herbert L. Newberg, Esquire, observed that ‘‘[b]oth sides have cut down many trees, in filing their class action briefs, motions, their exhibits....If the class action is decided on the weight of the briefs filed, it would be a very close question, probably four gold medals to all of the adverse sides." Tr. at 88. While the Court does not wish to suggest that the scales of justice are to be applied literally, I do share Mr. Newberg’s assessment of the Olympian efforts contributed by counsel. The Court's role in deciding the difficult and important question before it has been greatly aided by the diligence, thoroughness and scholarship evidenced in the papers submitted and arguments presented. The Court wishes to express its special appreciation to Professor Miller whose views were particularly elucidating on the complex procedural issues raised by this class certification motion.
. See notes 3 & 5 supra. Indeed, the quality of all counsel associated with this case is a factor in the Court’s determination that this case can be properly managed as required by
.
(b) Class Actions Maintainable. An action may be maintained as a class action if the prerequisites of subdivision (a) are satisfied, and in addition:
*431 (1) the prosecution of separate actions by or against individual members of the class would create a risk of
(A) inconsistent or varying adjudications with respect to individual members of the class which would establish incompatible standards of conduct for, the party opposing the class, or
(B) adjudications with respect to individual members of the class' which would as a practical matter be dispositive of the interests of the other members not parties to the adjudications or substantially impair or impede their ability to protect their interests; or
(2) the party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole; or
(3) the court finds that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy.
.
.
(4) When appropriate (A) an action may be brought or maintained as a class action with respеct to particular issues, or (B) a class may be divided into subclasses and each subclass treated as a class, and the provisions of this rule shall then be construed and applied accordingly.
. See note 10 supra.
. While plaintiffs have advanced this argument, they have not seriously pursued it, hence the Court declines to address it on the merits. In addition, no substantive evidence is before the Court which demonstrates that the combined assets of the defendants would be insufficient to meet the plaintiffs’ claims.
. The Anti-Injunction Act provides that "[a] court of the United States may not grant an injunction to stay proceedings in a State court except as expressly authorized by Act of Congress, or where necessary in aid of its jurisdiction, or to protect or effectuate its judgment.”
. Under the applicable law of Missouri, it was unclear whether state law permitted more than one award of punitive damages. Skywalk,
. The tenth amendment provides that: "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”