This is an interlocutory appeal from a district court order under Fed.R.Civ.P. 23 conditionally certifying a nationwide plaintiff class and subclass in a products liability case against the manufacturer of a drug used for the treatment of epilepsy. The jurisdiction of the district court was grounded on diversity, and our jurisdiction is pursuant to certification under 28 U.S.C. § 1292(b).
The drug in question, known as Felbatol, is manufactured by defendants Carter-Wallace, Inc. and Wallace Laboratories (Carter-Wallace). Carter-Wallace began marketing the drug in August 1993 without giving any special warning of serious side effects. Between January 1994 and July 1994, Carter-Wallace received reports that some patients had developed aplastic anemia following use of the
The district court determined that the prerequisites of Fed.R.Civ.P. 23(a) had been met.
Pursuant to Fed.R.Civ.P. 23(c)(4)(A), the district court limited class certification to the issues of strict liability, negligence, failure to warn, breach of implied and express warranty, causation in fact, and liability for punitive damages. The district court stated that “[w]ith respect to these particular issues, common questions of law and/or fact predominate over any questions affecting only individual members and a class action is superior to other available methods for adjudication of the controversy.” The court’s order thus echoed the preponderance and superiority requirements of Fed.R.Civ.P. 23(b)(3).
In its certification order, the court did not discuss whether the adjudication of the certified issues would significantly advance the resolution of the underlying case, thereby achieving judicial economy and efficiency. Nor did the court discuss any alternative methods for adjudicating these claims.
According to the named plaintiffs, during the brief period involved in this litigation the drug was prescribed to over 100,000 patients, who were told that the drug was unlike other anti-epilepsy drugs in that this one had few adverse side effects. Plaintiffs claim that over 3,000 people have reported some adverse reactions from the drug to the United States Food & Drug Administration, and there have been over seventy reported cases of aplastic anemia or liver damage, including nearly twenty reported deaths. Withdrawal from the drug has also been difficult for many patients.
Plaintiffs contend, with considerable justification, that because the case involves only one manufacturer, only one product, only one marketing program, and a relatively short period of time, the ease is more manageable for class action purposes than cases that involve multiple manufacturers, multiple products, multiple marketing programs, and a long period of time. It appears undisputed that the claims of all members of the class will raise some common issues concerning the knowledge and conduct of Carter-Wallace. Apparently, in recognition of these common issues, the Judicial Panel on Multi-district Litigation (JPML) has consolidated pretrial proceedings in all federal Felbatol cases and transferred them to the Northern District of California.
Carter-Wallaee argues, with at least equal justification, that the existence of common issues of law or fact is a necessary but not
Carter-Wallace’s threshold contention in this appeal is, however, even more sweeping. It is that, regardless of any specific problems with this particular certification, class certification is never appropriate for multi-state plaintiffs asserting personal injury claims against manufacturers of drugs and medical devices. Carter-Wallace cites this circuit’s opinion in In re Northern Dist. of California, Daikon Shield IUD Prods. Liab. Litig. (Daikon Shield),
We hold that the law of this circuit, and more specifically our leading decision in Daikon Shield, does not create any absolute bar to the certification of a multi-state plaintiff class action in the medical products liability context. We decline to hold, at least at this early stage of the litigation, that there can never be a plaintiff class certification in this particular case. We do hold, however, on the basis of the record before us, that we must vacate this class certification order, because there has been no demonstration of how this class satisfies important Rule 23 requirements, including the predominance of common issues over individual issues and the superiority of class adjudication over other litigation alternatives.
ANALYSIS
I. Class Actions in Products Liability Litigation
The history of class action certifications and products liability eases in this circuit and elsewhere has not been luminous. Indeed the Advisory Committee on Civil Rules for the 1966 revision to Rule 23 cast doubt on the availability of class actions in mass tort cases. See Fed.R.Civ.P. 23, advisory committee’s notes to 1966 amendment, Subdivision (b)(3) (“[a] ‘mass accident’ resulting in injuries to numerous persons is ordinarily not appropriate for a class action”). Nevertheless, courts have generally proceeded on a case-by-case basis and considered the appropriateness of class action treatment under the particular circumstances presented. See 7B Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure: Civil 2d, § 1783 at 74-75 (2d ed.1986); see also 3 Herbert B. Newberg & Alba Conte, Newberg on Class Actions, § 17.05 (3d ed.1992) (noting modern trend has been to expand use of class action litigation in mass tort context). The lead decision in this circuit was handed down in 1982 and vacated a nationwide punitive damages class and a statewide compensatory liability class of persons who had used allegedly defective intrauterine contraceptive devices. In re Northern Dist. of California, Daikon Shield IUD Prods. Liab. Litig.,
In rejecting the nationwide class certification under Rule 23(b)(1)(B), we were clearly-troubled in Daikon Shield by the problems that would arise in endeavoring to apply the varying punitive damage standards of fifty different jurisdictions. We did not, however, hold this commonality obstacle fatal. Id. at 850. There was in Daikon Shield the added problem that no plaintiff, and no plaintiffs lawyer, had agreed to represent the class so that the requirements of typicality and adequacy of representation could not be satisfied. Id. at 850-51.
In considering the certification of the California liability class under Rule 23(b)(3), we commented in Daikon Shield on the problems presented by products liability actions where, unlike the mass tort involving a single catastrophic event such as an airplane crash or cruise ship food poisoning, “[n]o single happening or accident occurs to cause similar types of physical harm or property damage.” Id. at 853. We also discussed the inherent difficulties of proving proximate cause and a breach of a duty of care under a negligence theory, where there are different types of injuries and multiple defendants. Id. at 854-55. We were further troubled by the requirement that common issues predominate over individual issues in a certification of an entire case for class treatment; it appeared that only the underlying facts raised a common nucleus of issues, while the liability questions included highly individualized issues of damages and proximate cause. Id. at 856. Finally, we held that class adjudication would not be superior to individualized litigation given: first, the lack of any showing that class adjudication would save time or expense, and second, the management difficulties caused by the complexity and multiplicity of issues as well as the plaintiffs’ hostility to the class action. Id.
We were careful in Daikon Shield, however, not to preclude the future certification of more limited classes or subclasses pursuant to Rule 23(b)(3), or to rule out the possibility of broader class action certification in other products liability cases. See id. at 852-54, 856. Although Daikon Shield pointed out many of the problems common to products liability litigation in meeting Rule 23’s class certification requirements, we cannot conclude that Daikon Shield creates an absolute bar to such certification in this circuit. As leading commentators have pointed out, the case was unusual in that there was simply no plaintiff or plaintiffs counsel ready, willing, and able to represent the class. See, e.g., 3 Newberg & Conte, supra, § 17.12 at 17-31. In addition, Daikon Shield involved multiple defendants and multiple marketing schemes, unlike the present case where a single manufacturer marketed one drug over a limited period of time. Compare Daikon Shield,
The leading cases in other circuits in which class certifications have been approved are the “Agent Orange” litigation in the Second Circuit and the “School Asbestos” litigation in the Third Circuit. See In re Agent Orange Prod. Liab. Litig.,
In Agent Orange, the Second Circuit made it quite clear that the common issue in that ease that caused class litigation to be both appropriate and superior to other forms of litigation was the common existence of a government contractor defense.
In our view, class certification was justified under Rule 23(b)(3) due to the centrality of the military contractor defense. First, this defense is common to all of the plaintiffs’ cases, and thus satisfies the commonality requirement of Rule 23(a)(2). Second, because the military contractor defense is of central importance ... this issue is governed by federal law, and a*1232 class trial in a federal court is a method of adjudication superior to the alternatives. If the defense succeeds, the entire litigation is disposed of. If it fails, it will not be an issue in the subsequent individual trials. In that event, moreover, the ground for its rejection, such as a failure to warn the government of a known hazard, might well be dispositive of relevant factual issues in those trials.
Agent Orange,
In School Asbestos, the plaintiffs were school districts seeking compensation for property damages, not for personal injuries. The Third Circuit viewed that class action as much more manageable than a personal injury case would have been because, in essence, the effect of asbestos in different buildings is the same and the effect of asbestos on different people is not. See School Asbestos,
A leading decision in the Seventh Circuit has recently cast a pall on the future of class action certifications in products liability cases in that circuit. See In re Rhone-Poulenc Rorer, Inc.,
First, the majority expressed a general distaste for requiring defendants to place high economic stakes in the hands of a single jury. See Rhone-Poulenc,
Second, the Rhone-Poulenc majority found that the class action would require a jury to determine “the negligence of the defendants under a legal standard that does not actually exist anywhere in the world.” Id. at 1300. The court expressed concern with the ability of the district court to condense the law of the fifty states and the District of Columbia into a single jury instruction on negligence. See id. at 1300-02. The court thus focused on the district court’s decision to create a hypothetical negligence standard. The district court in this case did not create such a hypothetical standard.
Third, the Rhone-Poulenc court perceived Seventh Amendment problems in the district court’s bifurcation of class issues from individual issues, such as comparative negligence and proximate causation. See id. at 1302-03. The court determined that the district court’s plan was inconsistent with the principle that the findings of one jury are not to be reexamined by a different jury. See id. at 1303. This constitutional concern of the Rhone-Poulenc court may not be fully in line with the law of this circuit, and constitutional issues were never squarely presented to the district court. See Arthur Young,
We therefore do not accept Carter-Wallace’s invitation in this case to adopt the principles of Rhone-Poulenc as the law of this circuit.
Our reluctance to close the door on class action litigation in products liability cases is reinforced by current legal developments that could make class litigation more manageable. There has, for example, been discussion of federal class action legislation. See, e.g., Thomas D. Rowe, Jr., Beyond the Class Action Rule: An Inventory of Statutory Possibilities to Improve the Federal Class Action, 71 N.Y.U.L.Rev. 186 (1996) (discussing several areas in which legislation might enhance federal class actions); William W. Sehwarzer et al., Judicial Federalism: A Proposal to Amend the Multidistrict Litigation Statute to Permit Discovery Coordination of Large-Scale Litigation Pending in State and Federal Courts, 73 Tex.L.Rev. 1529 (1995) (proposing amendments to the multidistrict litigation statute, 28 U.S.C. § 1407(a), to include state court cases). Further, the American Law Institute is now concluding its work on products liability in the Restatement of the Law of Torts. See Restatement (Third) of Torts: Products Liability (Tent. Draft No. 3, 1996); see also James A. Henderson, Jr. et al., Optimal Issue Separation in Modem Products Liability Litigation, 73 Tex.L.Rev. 1653, 1661-67 (1995) (discussing new Restatement as a reflection of current state of products liability law).
In addition, the Advisory Committee on Civil Rules is in the process of modifying Rule 23, and has proposed authorizing the possible certification of settlement classes that need not meet the requirements of Rule 23(b)(3). See Fed.R.Civ.P. 23(b)(4) (Draft Aug. 15, 1996); see also Samuel Estreicher, Foreword, Federal Class Actions After 30 Years, 71 N.Y.U.L.Rev. 1, 6 & n.26 (1996) (noting that proposed (b)(4) category would allow trial courts to certify class actions for purposes of settlement, even though the requirements of subdivision (b)(3) might not be met for trial); Edward H. Cooper, Rule 23: Challenges to the Rulemaking Process, 71 N.Y.U.L.Rev. 13 (1996) (discussing proposed changes to Rule 23). We observe that this idea has met with substantial opposition from a number of quarters. See, e.g., In re General Motors Corp. Pick-Up Truck Fuel Tank Prods. Liab. Litig.,
For these reasons, we reject Carter-Wal-laee’s position that the law of this circuit should prohibit any class certifications in products liability litigation. We therefore turn to the appropriateness of this particular certification order.
II. The Class Certification Order in This Case
This court reviews a district court’s decision to grant class certification for abuse
The certification order which we review is brief and conclusory. The record reflects that it was entered with the express hope on the part of the district judge of encouraging settlement, and to trigger a ruling from this court on the more general issue of the viability of class certification in this circuit. The order is provisional and contemplates the possibility of future modifications, additions, or refinements of subclasses. The order was entered at an early stage in the proceedings, and the record simply does not reflect any basis for us to conclude that some key requirements of Rule 23 have been satisfied.
It is not clear that Plaintiffs have met either the typicality or adequacy of representation requirement. See Fed.R.Civ.P. 23(a)(3) and (4). The plaintiff-class representatives include two individuals who have had difficulty withdrawing from Felbatol and returning to prior medications, one alleging liver failure and one some unspecified type of fiver damage. No named plaintiff has experienced aplastic anemia as a result of taking the drug, even though this condition is one of the most serious of the alleged adverse consequences. The named plaintiffs thus may not be able to provide adequate representation for those who have suffered different injuries. See Dalkon Shield,
Additionally, notice may be problematic. The number of known users who have reportedly suffered actual injuries from the drug is relatively small in comparison with all the users of the drug, so that many potential members of the classes cannot yet know if they are part of the class. We therefore have serious due process concerns about whether adequate notice under Rule 23(c)(2) can be given to all class members to enable them to make an intelligent choice as to whether to opt out. See 7B Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, supra, § 1786 at 197-98.
The first requirement of Rule 23(b)(3) is predominance of common questions over individual ones. Implicit in the satisfaction of the predominance test is the notion that the adjudication of common issues will help achieve judicial economy. See 1 Newberg & Conte, supra, § 4.25 at 4-86. Even if the common questions do not predominate over the individual questions so that class certification of the entire action is warranted, Rule 23 authorizes the district court in appropriate cases to isolate the common issues under Rule 23(c)(4)(A) and proceed with class treatment of these particular issues. See Dalkon Shield,
Here, the certification order merely reiterates Rule 23(b)(3)’s predominance requirement and is otherwise silent as to any reason why common issues predominate over individual issues certified under Rule 23(c)(4)(A). There has been no showing by Plaintiffs of how the class trial could be conducted. See e.g., Castano,
Last, but certainly not least, the district court must find that a class action is superior to other methods of adjudication. Fed.R.Civ.P. 23(b). Where classwide litigation of common issues will reduce litigation costs and promote greater efficiency, a class action may be superior to other methods of litigation. See Dalkon Shield,
The deficiencies in this certification are quite like those that caused the Sixth Circuit to reject the certification in American Medical,
VACATED AND REMANDED.
Notes
. Aplastic anemia is a disease which interferes with the bone marrow's ability to produce blood cells, resulting in a decrease in blood cell counts.
. Rule 23(a) states:
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.
.Rule 23(b)(3) states, in pertinent part, that a class action may be maintained if:
... 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.
Rule 23(c)(4)(A) states that when appropriate:
an action may be brought or maintained as a class action with respect to particular issues