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Civil Justice Report
No. 7 April 2003


One Small Step for a County Court . . . One Giant Calamity for the National Legal System, continued

John H. Beisner, Jessica Davidson Miller, and Matthew M. Shors

II. CASE STUDY: THE MASS ACTION PHENOMENON IN JEFFERSON COUNTY, MISSISSIPPI

Jefferson County, a rural, economically distressed county in southwestern Mississippi, is home to fewer than 10,000 people[86] and just 22 retail businesses.[87] For many years, Jefferson County was more notable for what it lacked than for what it had. But in 1999, that changed when it began to have a lot of one thing—mass action lawsuits.

Over the next two years, the county attracted large numbers of mass actions, and its juries doled out astounding awards, leading one newspaper to suggest that it was the “best place to sue” in the country,[88] and another newspaper to call it “ground zero for the largest legal attack on the pharmaceutical industry.”[89] Amazingly, the total number of plaintiffs who have filed lawsuits in the county since 1999 outnumbers the total number of residents.[90] The federal judge in the Southern District of Mississippi who is responsible for the Jefferson County area, Judge David Bramlette, is reputed to have the heaviest removal docket of any judge in the U.S. Court of Appeals for the Fifth Circuit, since defendants sued in Jefferson County will try any means to remove a case to federal court. Indeed, it is not uncommon to find a case in which defendants sought to remove a case two or three times.

In addition to its reputation for large jury verdicts, another key reason that Jefferson County attracted so many mass actions beginning in 1999 was that its only civil judge—Judge Lamar Pickard—was perceived as receptive to these cases. As a result of the court’s reputation for treating mass actions favorably, the number of mass actions filed annually grew more than four-fold in one year—from 17 in 1999 to 73 in 2000.

For reasons that are not entirely clear (though it was reported that “the change came only because of the practical challenge of having so much litigation tried in a tiny town”),[91] Judge Pickard appeared to reverse course in July 2001, announcing from the bench:

    [T]his court is taking a much, much different view as to joinder in this district not because I’ve had a change of heart or anything like that, but it’s because I’ve been trained. I’ve had some very fine lawyers training me on what joinder is, and I think I’m probably in a better position to know whether joinder is proper and whether it’s not in a case, such as in an asbestos case where you have different work sites, different defendants, different exposures, plaintiffs from different places and different injuries. I don’t think joinder is proper in those cases . . .

    Joinder rules, like discovery rules or like any other rules are subject to some abuse. And the joinder rule was never intended to be a class rule in Mississippi. . . .

    And we have very—we have some very, very fine legal talent, legal minds in Mississippi that have crafted a class action rule into our joinder rule and that’s not what it was intended for.[92]

Since then, Judge Pickard has reportedly allowed new mass actions to proceed in his court only if all the plaintiffs were from Jefferson County and has transferred claims involving non-resident plaintiffs to other counties.

In an effort to better understand the mass joinder phenomenon, the Center For Legal Policy commissioned Stateside Associates, a Virginia-based research organization, to conduct a study of the 1999, 2000 and 2001 civil dockets in Jefferson County, Mississippi. The resulting data identified several disturbing trends:

  • First, the frequency of filing of mass joinder actions in Jefferson County, Mississippi, was vastly disproportionate to the county’s population and the overall volume of the court’s civil docket.[93]
  • Second, the vast majority of these cases had little (if any) relationship to Jefferson County.
  • Third, plaintiffs’ counsel consistently included one local defendant to insulate their cases from federal jurisdiction.
  • Fourth, the complaints were brought by counsel from all over the country, who clearly went to great pains to sue in this county—not because of its convenience or the presence of luxury hotels (in fact, there are no hotels in Jefferson County), but because they clearly thought they would find a receptive audience for their mass joinder actions.
  • And fifth, plaintiffs’ counsel made little (if any) effort to explain in their complaints exactly what the plaintiffs were alleging or why their claims should be litigated jointly; to the contrary, many of these complaints simply included long lists of plaintiffs with no facts regarding their allegations (and often, no addresses), and thus were clearly intended to intimidate defendants into settlement negotiations, rather than actually give notice of legal claims.

A. Research Study Findings

    1.During The Survey Period, Mass Actions Were Filed In Jefferson County At Rates That Were Disproportionate To The County’s Population And The Remainder Of The Docket

In order to fully appreciate the magnitude of the mass joinder phenomenon in Jefferson County courts during the survey period, it is necessary to understand the diminutive size of the rest of the county’s civil court docket. In 1999, only 178 civil lawsuits were filed in Jefferson County. Thirteen of those 178 cases were brought by individual plaintiffs against out-of-state defendants. Seventeen of the 178 cases (ten percent) were mass actions against at least one out-of-state defendant. Amazingly, a single mass action filed during 1999 included more plaintiffs than all of the individual civil cases filed in the county in the whole year combined. Put another way, only thirteen people brought product liability, insurance, tobacco and other tort and negligence cases individually in 1999—but 1,382 people participated in seventeen mass joinder actions involving those issues that year. Of course, the size of the individual civil case docket is not surprising, since Jefferson County has fewer than 10,000 residents. However, the fact that such cases are outnumbered by mass actions evidences the disproportionate nature of mass action filings in the county and the heavy involvement of non-Jefferson County plaintiffs in these cases.

The 1999 trends continued in 2000 and 2001—until Judge Pickard’s mid-year announcement that he would henceforth view joinder cases with more skepticism. In 2000, the heyday of mass joinder cases in Jefferson County, the number of mass actions jumped more than four-fold—to 73—involving 3,322 plaintiffs.[94] In 2001, there were 39 mass joinder actions filed in the county, accounting for more than 18 percent of the docket—and once again, significantly surpassing the number of individual cases filed against out-of-state defendants. Despite the decline in mass actions, the number of plaintiffs involved in these 39 cases was 1,079—a figure greater than ten percent of the county’s entire population. Moreover, given that almost all of these cases were filed before Judge Pickard’s mid-year announcement that he would no longer employ such a loose standard for permitting joinder, it is safe to assume that absent that milestone, the number of such cases filed in 2001 would have been even higher than in 2000—and would still be continuing to grow.

Mass Actions Comprise a Lion’s Share of the Jefferson County Docket

 

1999

2000

2001

Total Civil Complaints Filed

178

646[95]

213

Mass Actions Filed Against Out-of-State Defendants

17

73[96]

39[97]

Percentage of Civil Litigation Filed against Out-of-State Defendants

9.56%

11.3%

18.3%

    2. The Vast Majority Of The Plaintiffs In These Cases Reside Outside Of Jefferson County

While some of the mass actions brought in Jefferson County during the survey period did involve significant numbers of Jefferson County plaintiffs, those cases were in the distinct minority. Most cases in the survey included only a few Jefferson County plaintiffs. Some examples of plaintiff distribution include the following:

  • In a case alleging that Ford Explorer vehicles and Firestone tires are defective, just one of the forty plaintiffs was from Jefferson County; twenty-eight were from other Mississippi counties, and twenty-one were from other states.[98]
  • In a case alleging that certain diet drugs were dangerous, none of the 380 plaintiffs were from Jefferson County.[99]
  • In a tobacco case brought against several tobacco manufacturers, just two of the seventeen plaintiffs were from Jefferson County.[100]
  • In a case alleging fraud in the sale of insurance policies, just four of the forty-two plaintiffs were from Jefferson County.[101]

All told, of the 108 cases in the survey in which the complaints actually provided address information for plaintiffs, just 539 of the 3,011 plaintiffs were from Jefferson County. [102]

    3. The Mass Action Business In Jefferson County Is Dominated By Out-Of-County And Out-Of-State Plaintiffs’ Lawyers

There is only one practicing lawyer in Jefferson County, Mississippi. He did not bring any of the mass joinder actions during the survey period. Rather, all of these cases were brought by plaintiffs’ attorneys from outside Jefferson County—most of whom practice in Jackson, Mississippi; Birmingham, Alabama; and Texas. Indeed, 63 of the 129 cases we reviewed listed at least one law firm outside Mississippi. As Mrs. Bankston noted in her Congressional testimony, these law firms advertise relentlessly for clients:

    Jefferson is a poor county, and the attorneys handling these claims have aggressively marketed their actions as the same as winning the lottery. Some days I can’t open the newspaper without seeing ad after ad recruiting potential plaintiffs with a warning that “time is of the essence” if folks want the promise of big payouts. Nor are their efforts hurt by rumors that five plaintiffs in the first Fen-Phen case split $150 million. Plus it is well-known in the community that trial lawyers point to multi-million homes that are built by successful lead plaintiffs as an inducement for signing on.[103]

One Texas firm that was involved in five of the mass joinder cases in 2000 advertises for diet drug users on its website, which includes an on-line application form, stressing that “Time is of the Essence!” and asking would-be plaintiffs multiple choice questions such as: “Have you ever taken any of the following drugs: ¨Fen-Phen, ¨ Pondimin, ¨ Redux? Have you experienced the following: ¨ Shortness of breath, ¨ Heart Valve Surgery, ¨ An Echocardiogram?”[104] Another firm from Jackson, Mississippi that appeared in three complaints in 2001 advertises its success in Jefferson County, noting that they “brought the first Rezulin-related cases in the country to trial in November 2001, which settled on the courthouse steps.”[105]

    4. In Every Case, Plaintiffs Named At Least One Non-Diverse Defendant To Defeat
    Federal Diversity Jurisdiction

Plaintiffs’ efforts to avoid diversity jurisdiction are quite transparent in these cases. Indeed, many of the paragraphs include an allegation specifically stating that federal jurisdiction does not exist over the case because diversity is lacking and because plaintiffs disavow any federal claims. A typical disclaimer states: “[t]o the extent that the Defendants will contend that the plaintiffs are seeking relief under federal laws or federal questions, the Plaintiffs expressly deny said contentions, and the Plaintiffs expressly waive any and all relief under any federal laws or any federal question concerning the allegations of this Complaint.”[106]

As noted above, plaintiffs in pharmaceutical cases typically named Bankston Drugstore and/or a prescribing physician to prevent their cases from being removed to federal court on the grounds of diversity jurisdiction. In other cases, plaintiffs named local wholesalers, retailers or salespeople who clearly had been involved in only a small portion of the claims at issue. Moreover, the facts in the complaints are inevitably aimed at the manufacturers (as are, of course, the six- and seven-figure damages requests). For example:

  • In a typical insurance case alleging insurance packing, plaintiffs named as defendants five out-of-state companies and three salespersons who reside in Mississippi, even though the plaintiffs’ allegations center on the conduct of the corporations.[107] Plaintiffs allege that defendant corporations practiced “predatory lending . . . the Defendants strip, flip and pack their way to profit at the expense of trusting and unknowing consumers.”[108]
  • In a typical tobacco case alleging personal injury and wrongful death, plaintiffs named eleven major out-of-state tobacco companies as well as three in-state wholesalers and two local convenience stores or supermarkets.[109] The gravamen of their complaint makes clear that this case was not aimed at the stores. After all, the basis of plaintiffs’ claims is that there was a “tobacco industry-wide conspiracy by the Defendants” to “mislead, deceive, and confuse the government, and the public, including Plaintiffs, concerning the harmful and debilitating effects [of] smoking.”[110] Obviously, two convenience stores in Mississippi did not play substantial roles in this alleged conspiracy.
  • In an asbestos case brought against an Illinois corporation, the plaintiffs joined one plaintiff from Illinois in order to defeat diversity.[111]
  • In a case involving an out-of-state automobile manufacturer and out-of-state tire manufacturer, plaintiffs also named fourteen local car and tire dealerships; however, plaintiffs failed to even allege that any of the plaintiffs acquired their tires or vehicles from any of the named dealerships. Moreover, as with other cases, plaintiffs’ allegations center on design and manufacturing issues, which obviously are not aimed at the dealers and for which the dealers could not be found culpable.[112]

B. A Sampling Of Mass Action Cases Filed In Jefferson County During The Survey Period

Of the 129 mass actions included in the survey, the vast majority (108) fell into one of the following categories: insurance, asbestos, tobacco or pharmaceuticals. The remaining actions included other product liability and personal injury cases.

 

1999

2000

2001

Mass Actions Filed Against Out-of-State Defendants

17

73

39

Tobacco

1

10

3

Asbestos

5

18

8

Drugs

3

17

6

Insurance

7

15

16

General Products Liability

0

3

2

Other

1

10

4

A brief summary of some of the mass actions brought in Jefferson County during the survey period provides a window on the breadth of these lawsuits and reflects the concerns discussed above about the propriety of combining disparate claims from all over the country for resolution in a single county court in Mississippi:

    1. Insurance

By far, the largest part of Jefferson County’s mass action docket during the period surveyed (38 of the 129 cases) involved insurance claims. For the most part, these cases were brought against out-of-state insurance companies, though plaintiffs often joined an in-state insurance agent as a defendant in an effort to defeat diversity jurisdiction. Some examples of insurance mass actions filed in Jefferson County during the survey period include:

  • Carter v. American General Finance Inc.[113]—This is one of the thirteen cases filed in Jefferson County during the survey period alleging that numerous defendants improperly required collateral protection insurance for loans, a practice referred to by plaintiffs as “packing.” The plaintiffs in these cases seek to join their claims even though they procured their loans and insurance products from different lending offices, purchased different types of insurance, and had different loan terms, and even though they allege fraud, an allegation that requires a jury to determine whether an individual relied on the alleged misrepresentations at issue in a case. Obviously, a jury cannot keep the facts straight as to each plaintiff and defendant and fairly determine which, if any, plaintiffs have made convincing claims against which defendants, when a case involves so many different plaintiffs and defendants and numerous different alleged representations.
    In the Carter case, twenty-two plaintiffs (just half of whom were Jefferson County residents), sued American General Corporation, an Indiana corporation; Merit Life Insurance Company, an Indiana corporation; Yosemite Insurance Company, an Indiana corporation; and USLIFE Credit Life Insurance Company, an Illinois corporation. Once again, plaintiffs joined local defendants—in this case, eight agents for the defendant corporations—in order to prevent removal to federal court. In addition, plaintiffs waived “any and all relief under any federal laws or any federal question concerning the allegations of this Complaint.”[114] Defendants filed three notices of removal in this case. The court rejected the first two;[115] plaintiffs’ remand motion regarding the third removal effort, in which defendants argued that many of the plaintiffs were members of a settlement class in separate federal litigation, is now pending before the federal district court. As with the other alleged “packing” cases in the survey, this case involved different transactions that took place at different times in different places in a range of different circumstances; according to defendants’ motion to sever, the loans at issue were made over the course of several years for different amounts of money by different loan officers with different collateral and different types of credit insurance.[116]
  • Cruel v. American General Life and Accident Insurance Co.[117]—Twenty-two plaintiffs (fifteen of whom were from Jefferson County), sued American General Life and Accident Insurance Company (“AG”), a Tennessee corporation, for allegedly defrauding customers by failing to disclose the risks and costs of insurance purchases, mislabeling documents, allowing agents to downplay certain information about the policies, and improperly passing taxes onto policy owners.[118] In order to avoid federal court, the plaintiffs joined the local agents that sold the policies.[119] AG attempted to remove the case, arguing that none of the plaintiffs ever had any contact with the local agents joined in the action,[120] but the district court remanded it to Jefferson County.[121] Predictably, the case settled after remand.[122]
  • Smith v. Union National Life Insurance[123]—This case was brought by eighteen in-state plaintiffs (less than half of whom were from Jefferson County), against Union National Life Insurance (and, as is typical, its local salespersons to avoid diversity jurisdiction), for allegedly misrepresenting the benefits that individuals would receive under “hospital policies,”[124] if they were Medicaid recipients. According to the Complaint, some of the plaintiffs told defendants they were Medicaid recipients, and some did not.[125] In either case, plaintiffs allege, defendants acted fraudulently. However, this distinction among the plaintiffs highlights the very problem with mass actions. After all, a jury could very likely find that plaintiffs who informed the sales representative that they received Medicaid would be differently situated in terms of their fraud claims from plaintiffs who did not mention this information. By joining all these varying claims together, of course, plaintiffs’ counsel typically seek to paper over these differences and, as discussed above, “hide” behind the most compelling plaintiffs.
  • 2. Asbestos

Asbestos cases also formed a substantial portion of Jefferson County’s mass action docket during the period surveyed, accounting for 31 of the 129 cases—and more than 4,500 plaintiffs combined (a number equal to approximately half the population of Jefferson County). The presence of so many asbestos cases in a county where just 137 people are employed in construction jobs might be surprising—however, the vast majority of plaintiffs come from outside Jefferson County. Moreover, most of these cases involved far more tenuous exposure to asbestos than construction, and in many instances, plaintiffs simply fail to specify where and how their alleged asbestos exposure occurred.

As noted above, the asbestos cases raise the same concerns as the other mass joinder cases in the survey because they typically involve plaintiffs who were allegedly exposed to asbestos in different places, for different periods of time, and by different employers or defendants, and who allegedly suffered different injuries. (Indeed, it was in the context of an asbestos case that Judge Pickard ultimately decided to apply stricter rules to joinder cases in the future).

  • Anderson v. Owens-Illinois, Inc.[126]—In this case, 314 plaintiffs sued 90 companies, alleging that they suffered health problems from exposure to products containing asbestos, manufactured or distributed by the defendant companies, while they “worked at or in close proximity to such plants and equipment in Claiborne County.”[127] Notably, the Complaint does not provide residency or citizenship information for the plaintiffs. Instead, the Complaint simply states that plaintiffs are “adult resident[s] . . . of the State of Mississippi, or other states of the United States.”[128] Thus, from the face of the Complaint, it is impossible to determine which (if any) of the plaintiffs were Jefferson County residents. Moreover, plaintiffs’ counsel do not even attempt to justify their choice of venue in Jefferson County; rather, plaintiffs merely allege that the products at issue were used “in and around Jefferson County, Mississippi and various locations throughout Mississippi and other States.”[129] Defendants sought to remove the case to federal court, but they were unsuccessful because four of the ninety defendants were Mississippi companies, thereby destroying diversity.[130]
  • Arceneaux v. Garlock[131]—In this case, seventy-eight plaintiffs sued forty-six defendant companies seeking $10 million in punitive damages and $5 million in compensatory damages on behalf of each plaintiff for alleged asbestos injuries.[132] As with other asbestos cases, the connection with Jefferson County is tenuous—just six of the seventy-eight plaintiffs are from Jefferson County (sixty-four were from other counties in Mississippi, and the remaining eight are from Louisiana, Oklahoma, and Illinois).[133] Plaintiffs’ counsel argue that venue is appropriate because “[o]ne or more of the Plaintiffs cause of action in whole or in part occurred and or accrued in Jefferson County,”[134] but they do not say which one. General Motors, one of the defendants in the case, attempted to remove to federal court—but because three of the forty-six defendants were Jackson, Mississippi companies, the federal court found that the parties were not completely diverse, and the case was remanded to Jefferson County.[135]
    As is typical in mass action cases, plaintiffs in this case do not allege specific injuries; instead, they simply claim broadly that “Plaintiffs and Plaintiffs’ Decedents have developed and/or are at an increased risk of developing the following asbestos related diseases and conditions: asbestosis, asbestos pleural disease (pleural plaques and/or pleural thickening), asbestos-induced pleural effusion, lung cancer, mesothelioma, colon cancer, rectal cancer, gastrointestinal cancer, laryngeal, pharyngeal and esophageal cancer, stomach cancer, throat cancer, leukemia and lymphoma.”[136] Thus, this is another example of a case in which plaintiffs’ counsel sought to lump together disparate claims—including people who are alive and people who are dead; people who claim they have developed one in a long list of diseases and people who simply claim they are at risk of developing one of these diseases. As in the other mass actions filed in Jefferson County, no jury could methodically sort through all these different claims in one case.
  • Ross v. General Electric Co.[137]—In this matter, 105 plaintiffs from Mississippi, Alabama, and Florida sued sixty-seven companies, alleging that they were injured by exposure to asbestos-containing products over a period of seventy years. Once again, the relationship of this litigation to Jefferson County is tenuous at best—plaintiffs allege that they were exposed to products containing asbestos at work but do not provide any information regarding their places of employment. Nor do plaintiffs identify the types of injuries they allegedly sustained as a result of exposure.[138] In fact, no individual information is provided about plaintiffs, except their names and social security numbers.[139] And once again, the Complaint does not contain specific allegations supporting plaintiffs’ choice of Jefferson County as the venue for adjudication of their claims.
  • Anderson v. Pittsburgh Corning Corp.[140]—In this matter, 1,056 plaintiffs from Mississippi and Alabama, sued seventy-four defendant companies, alleging that they were injured by their work at “construction and various other work sites” by asbestos containing products during a forty year period.[141] Plaintiffs sought $4 million from each defendant ($2 million in compensatory damages and $2 million in punitive damages). As in other asbestos cases, no specific information regarding when or where the plaintiffs’ exposure took place or the plaintiffs’ alleged injuries is provided in the Complaint. Instead, the plaintiffs broadly allege that they suffer from “one or more” of a laundry-list of conditions including: asbestosis; pulmonary or bronchogenic carcinoma; mesothelioma; digestive tract, respiratory tract or other cancers; impaired pulmonary capacity; reduced lung volume; pleural plaques; interstitial lung fibrosis; cardiac and circulatory disease; increased susceptibility to one of the foregoing diseases and other illnesses; physical and mental anguish associated with one or more of the preceding conditions; and death.[142] Once again, plaintiffs fail to explain the relationship of the case to Jefferson County. No information regarding plaintiffs’ residence is included; nor do plaintiffs make any allegations that tie the location of their exposures to Jefferson County.
  • Eakins v. Illinois Central Railroad Co.[143]—In this case, 171 plaintiffs (just eighteen of whom were from Jefferson County), sued Illinois Central Railroad Company, an Illinois railroad company that operates north-south rail lines between Canada and New Orleans, alleging that they were exposed to asbestos on the job. Plaintiffs avoided federal court by including just one Illinois plaintiff, James Ira Bowling of McClain County, Illinois.[144] Again, plaintiffs make no individual allegations regarding where exposure allegedly took place. The Complaint contains only a general allegation connecting the plaintiffs’ cause of action with Jefferson County “Plaintiffs’ causes of action, or some of them, occurred and/or accrued in Jefferson County, Mississippi. During some or all of the time during which Plaintiffs were exposed to asbestos in their job duties . . . Defendant was doing business in Jefferson County.”[145]
  • 3. Prescription Drugs

Of the 129 mass actions brought in Jefferson County between 1999 and 2001, twenty-six involved prescription drugs. These cases, which typically include 100 to 600 plaintiffs, seek a variety of damages on behalf of separate individuals, all of whom allegedly took the drugs at issue and suffered various medical consequences. The prescription drug cases further highlight the due process concerns raised by mass actions; in most of these cases, the plaintiffs took different drugs for different periods of time and allegedly suffered different problems. Moreover, many of the plaintiffs allege injuries such as chest pains, headaches, and shortness of breath that could have been caused by numerous factors. Once again, mass joinder of such disparate allegations denies defendants the ability to adequately defend themselves on these grounds. Rather, by throwing in numerous claims involving similar drugs, plaintiffs can often evade causation requirements and force settlements for questionable claims.

As noted above, although the damages sought in these matters are quite extensive, plaintiffs’ counsel almost always manage to stay out of federal court by naming at least one Mississippi defendant—which turned out, more often than not, to be the one and only drugstore in Jefferson County. At a recent congressional hearing, Hilda Bankston, the pharmacy’s previous owner, testified that mass actions transformed her life from “the American dream” to a “legal nightmare.” In Ms. Bankston’s words:

    No small business should have to endure the nightmares I have experienced. Class action attorneys have caused me to spend countless hours retrieving information for potential plaintiffs. I’ve searched record after record and made copy after copy for use against me. I’ve had to hire personnel to watch the store while I was dragged into court on numerous occasions to testify. I have endured the whispers and questions of my customers and neighbors wondering what we did to end up in court so often. And, I have spent many sleepless nights wondering if my business would survive the tidal wave of lawsuits cresting over it.[146]

The drugstore has not actually been found liable in any of these cases and has thus paid nothing in verdicts or settlements.[147]

Some examples of pharmaceutical mass joinder actions brought in Jefferson County during the survey period include:

  • Washington v. American Home Products Corp.[148]; Jefferson v. American Home Products Corp.[149]—These are two of the ten mass action cases filed in Jefferson County during the survey period alleging injuries from diet drugs. In the Washington case, 872 plaintiffs from seventeen states (less than half of whom were Mississippi residents) sued a number of out-of-state drug manufacturers, alleging that their use of certain appetite suppressants caused shortness of breath, chest pain, swelling, or other heart conditions. In order to avoid federal jurisdiction, plaintiffs named Bankston Drugs as a defendant. The extent of the alleged relationship between the plaintiffs’ claims and Jefferson County is tenuously asserted in the complaint: “some of the Plaintiffs reside in this Judicial District.”[150] In fact, just twenty-two of the 872 plaintiffs are residents of Jefferson County; the remaining 850 plaintiffs were from twenty-one different states, including Colorado, Delaware, Illinois and Michigan. Defendants asked the court to hold separate trials for the plaintiffs, arguing that “[t]he plaintiffs made no attempt in the complaint to identify which pharmaceutical products their physicians prescribed for them, but they alleged as a group that they took any one or more of 11 different medications for the treatment of obesity.”[151] Defendants also argued that the plaintiffs consumed the drugs at issue for different periods and that they alleged a “panoply of disparate injuries, including chest pain, peripheral swelling, heart valve damage, and brain injury.”[152] After a trial of just five plaintiffs’ claims, in which a jury awarded $150 million in compensatory damages, and before the punitive damages phase, the case settled for an undisclosed amount.[153]
    In the Jefferson case, 380 plaintiffs sued the manufacturer of diet medications Fenfluramine/Pondimin and Defenfluramine/Redux, 137 physicians, and fifty-six drug stores and pharmacists (including some from Mississippi, of course, to destroy diversity). Remarkably, none of the 380 plaintiffs are residents of Jefferson County. The only party with a connection to Jefferson County is one of the 127 defendant physicians, whose office is located in Fayette,[154] and who prescribed Redux to one out-of-county plaintiff.[155] Though defendants attempted to remove the case, the federal court remanded it to Jefferson County.[156]
  • Ryan v. Janssen Pharmaceutica, Inc.[157]; Rankin v. Janssen Pharmaceutica, Inc.[158]—These are two of the six mass action cases involving Propulsid, a reflux drug, that were filed in Jefferson County during the survey period. In the Ryan case, sixteen plaintiffs from Mississippi, Louisiana and Georgia (only two of whom were Jefferson County residents), sued the makers of Propulsid for allegedly failing to adequately warn patients about the alleged risks of heart rhythm abnormalities associated with the drug, and for breaching an express warranty regarding the safety of the drug. Plaintiffs sought compensation for economic loss, pain and suffering and medical care and monitoring as well as punitive damages. In order to prevent removal to federal court, plaintiffs’ counsel destroyed diversity by naming as defendants Bankston Drugs and individual pharmacists and physicians who are residents of Mississippi. In seeking to explain why plaintiffs’ counsel (Silvestri & Massicot and Armstrong & Guy, both of New Orleans, Louisiana), brought a complex products liability suit in circuit court in Jefferson County, the Complaint simply states that two of the sixteen plaintiffs reside in the county and purchased Propulsid there.[159] Given that plaintiffs in this suit allege that they suffered “pain and suffering” from the drug and required medical care as a result (allegations that involve highly individualized inquiries), this type of suit highlights the problems raised by mass joinder cases.
    In Rankin, 155 plaintiffs, thirty-nine of whom were not from Jefferson County, sued to recover compensatory damages of $200 million and punitive damages of $1 billion for injuries they allegedly suffered as a result of taking Propulsid.[160] In addition to naming the drug manufacturers, Janssen and Johnson & Johnson, as defendants, the plaintiffs’ counsel also joined three Mississippi pharmacies (including Bankston Drug Store) in order to avoid federal jurisdiction. Defendants sought to remove the case to federal court, arguing that “no cause of action exists against a pharmacy for correctly filling a physician’s prescription for a lawful drug, thus there is no possibility of recovery against the pharmacies.”[161] Although it remanded the case for lack of complete diversity, the district court expressed skepticism regarding the joinder of the local pharmacies, noting: “the court considers it doubtful that a state court would conclude that a viable cause of action has been asserted against any of the pharmacy defendants.”[162] Nevertheless, after the case was remanded to Jefferson County, Judge Pickard denied Janssen’s motion to sever, which would have enabled some of the parties to remove to federal court again.[163] On the eve of trial, defendants moved for a change of venue because seventy percent of the jury pool consisted of plaintiffs in the case or relatives of plaintiffs in the case.[164] Judge Pickard moved the trial to an adjacent county, where he is also the presiding judge, even though defendants argued that the same problems existed there as well. A Claiborne County jury heard the claims of the first ten plaintiffs together and awarded them $100 million ($10 million each), though Judge Pickard later reduced that award to $48 million.[165] Defendants have appealed the case, arguing that there was no basis for the award and that the plaintiffs alleged varied medical histories, ages and damages claims, resulting in an unfair trial.[166] A second trial, scheduled to begin in September 2002, was postponed due to the Legislature’s special section.[167]
  • Johnson v. Glaxo Smith Kline[168]—This case was brought by six plaintiffs who sued Glaxo Smith Kline, a North Carolina pharmaceutical company that manufactured Latronex, a drug for Irritable Bowel Syndrome, which was removed from U.S. markets after it was linked to gastrointestinal-related injuries. In order to avoid federal jurisdiction, plaintiffs joined four local defendants (including the ubiquitous Bankston Drug Store, at which just one of the plaintiffs had allegedly purchased Latronex), and three doctors who had prescribed the drug. Plaintiffs sought to remove this case alleging fraudulent joinder, but it was remanded by the district court because of the presence of the in-state defendants.[169]
  • 4. Tobacco

Fourteen of the mass actions filed in Jefferson County between 1999 and 2000 involved tobacco allegations. In these cases, plaintiffs typically sued manufacturers and local cigarette distributors seeking damages for illness or wrongful death. Once again, these cases sought to bring together plaintiffs with disparate experiences and injuries for one massive trial. Examples include:

  • McGee v. Philip Morris Inc.[170]—Seventeen plaintiffs (only two of whom were from Jefferson County), sued eight out-of-state tobacco companies, a local supermarket, and a convenience store owner, alleging that they “sustained personal injuries such as emphysema, lung cancer, throat (esophagus) cancer, etc. including deaths resulting from lung cancer.”[171] Allegations regarding the suit’s connection to Jefferson County are similarly vague. In support of their venue allegations, plaintiffs merely state that “Jefferson County, Mississippi, is the county where one or more of the defendants can be found and the county where the cause of action occurred and/or accrued.”[172] Like the other cases reviewed in the survey, the personal circumstances of the plaintiffs would make it impossible for a jury to fairly adjudicate each plaintiff’s claims. As defendants noted in their motion to sever, “[p]laintiffs have nothing in common other than they all smoked and claim to have developed disease as a result. Each plaintiff has both a unique smoking history and medical history that will bear on the outcome of the matter. . . . A jury could never be expected to determine the claims of one plaintiff without being influenced by hundreds of facts relating to the other plaintiffs’ claims.”[173]
  • Colenberg v. R.J. Reynolds[174]—In this case, nineteen plaintiffs (all of whom were from Jefferson County) represented by nine law firms from three states (Texas, North Carolina and Mississippi), sued ten tobacco companies and several retailers, alleging that they “are all persons who have developed debilitating diseases as a result of cigarette smoking or whose wrongful death decedents developed debilitating diseases as a result of cigarette smoking.”[175] Based on these allegations, plaintiffs sought $5 billion in compensatory damages and a “reasonable” amount in punitive damages.[176] Again, the Complaint fails to identify the specifics of each plaintiff’s allegations—how long he or she smoked, what symptoms he or she alleges, etc. Moreover, because all the plaintiffs are from Jefferson County, Judge Pickard is still allowing plaintiffs’ counsel to bring these types of cases in Jefferson County despite his 2001 announcement. The case settled in August 2001.[177]
  • 5. Other Cases

  • Banks v. Illinois Central Railroad Company[178]—Thirty former Illinois Central Railroad employees sued Illinois Central, an Illinois corporation, for hearing losses they allegedly sustained from exposure to “constant extremely loud levels of noises throughout their daily work.”[179] Based on these allegations, plaintiffs sought one million dollars each in compensatory damages.[180] Once again, the connection of the claims in this case to Jefferson County is minimal—just four of the thirty plaintiffs are residents of Jefferson County. Though Illinois Central Railroad operates a railroad between Chicago and New Orleans that passes through part of Jefferson County, the complaint contains no specific factual allegation tying the plaintiffs’ alleged hearing loss to work performed in Jefferson County. Moreover, although there was no Mississippi defendant in this case, plaintiffs’ counsel joined one plaintiff from Champaign, Illinois in order to destroy diversity.[181]
  • Ames v. Ford Motor Company;[182] King v. Ford Motor Company[183]—These are two of a number of mass joinder actions brought in Jefferson County against Ford Motor Company and Bridgestone/Firestone, Inc., in the wake of the August 2000 recall of certain Firestone tires.[184] The Ames case was brought on behalf of thirty-eight people, only two of whom are from Jefferson County.[185] The remaining plaintiffs are from places as distant as Illinois, Arizona, California and Maryland.[186] Although plaintiffs allege in the Complaint that their claims involve “common issues of fact and/or law,” they allege numerous different injuries, ranging from “tread separation/rollover” to “blow outs” to simply having purchased the Firestone tires at issue.[187] Similarly, in the King case, none of the seventy-three plaintiffs (who reside in six different states), lists a Jefferson County address,[188] although the Complaint alleges that “[v]enue is exclusive in this Judicial District, as one or more of the Plaintiffs reside in the Judicial District and/or one or more of the Defendants can be found in this Judicial District and at least one of the accidents referred to in the Complaint occurred in Jefferson County, Mississippi.”[189] Moreover, in this Complaint, the plaintiffs do not even provide the minimal three-word descriptions that the Ames plaintiffs provided in an appendix to the Complaint regarding their claims; rather, the King Complaint simply states generally that the plaintiffs experienced “accidents and/or incidents,” including “rollovers, tread separations, blow outs, and other similar occurrences,” resulting from “tire tread separation and/or defective tires.”[190] Plaintiffs’ proclivity for filing such cases in state court is not surprising. It is hard to imagine that any federal court would allow plaintiffs’ counsel to baldly allege that venue for a large number of disparate claims from six states is “exclusive” in one jurisdiction and pursue joinder based on a complaint that does not even bother to set forth exactly what injuries plaintiffs allege.[191]

CONCLUSION

Magnet courts that uncritically facilitate mass actions pose a serious threat to the judicial system. That threat occurs through an unfortunately familiar cycle:

  • A state court begins to facilitate the use of mass actions.
  • As a result, more mass action claims (including those with tenuous connections to that forum) are filed.
  • As the court becomes increasingly overrun by increased filings, it deems it necessary to embrace even more sweeping mass actions to clear the docket.
  • In approving sweeping mass actions that make it very difficult to defend against particular claims (or to dismiss claims for improper venue, or to challenge the application of the forum’s law), defendants are forced to settle many cases, regardless of merit.
  • Those settlements eliminate any post-trial appeals that might otherwise test the limits of the court’s interlocutory decision to aggregate large numbers of disparate tort cases.
  • When a record finally develops showing that a court has a proven history of ignoring, among other things, the due process limits on aggregations, severe damage to the national economy has already been inflicted (through, among other things, declines in shareholder value, bankruptcies, and business relocations), and it is difficult for policy-makers at the macro level to adopt well-targeted reforms based on the micro decisions of particular courts; and, if policy-makers are able to adopt appropriate legislation, plaintiffs’ counsel begin looking for the next state court that would be willing to embrace mass actions. The unfortunate cycle then begins again.

The recent experience of Mississippi is an excellent example of this cycle. While the number of mass joinder actions in Jefferson County, Mississippi, receded somewhat following Judge Pickard’s mid-2001 announcement, the party reportedly has moved elsewhere—to other Mississippi counties (like Holmes, Jones, and Jasper), where some judges reportedly have seemed willing to allow such cases to proceed on an aggregated basis. For example, in one Holmes County asbestos case, a jury awarded $25 million each—or a total of $150 million—to six plaintiffs who alleged that they were exposed to asbestos at several workplaces in Mississippi, including schools, shipyards and industrial boiler rooms.[192] Thus, the problem appears to be getting worse, and Judge Pickard’s announcement had only a minor salutary effect, even in Jefferson County itself.[193]

More recently, in December 2002, at the macro level, the Mississippi legislature—partly in response to a recognition that the state’s overall receptiveness to mass actions was exacting a staggering toll on Mississippi’s economy—enacted tort reform legislation. That legislation, among other things, adopts a system of graduated caps on punitive damages awards, and places an outer limit on such awards at $20 million (for companies whose net worth exceeds $50 million).[194] The legislation also tightens Mississippi’s venue requirements,[195] limits a defendant’s liability to its proportional share of blame for non-economic damages,[196] and protects local retailers from being held liable for selling allegedly defective products that they neither designed nor produced.[197]

Although very significant, that legislation does not eliminate the threat of mass actions in Mississippi. In the first place, the new statute does not eliminate the good-for-one, good-for-all provision of the Mississippi rules of civil procedure which permits mass actions to be venued in any district in which any single plaintiffs resides.[198] Moreover, it remains to be seen how the legislature’s efforts will play out in courthouses like those in Holmes and Jefferson Counties.

The experience of Madison County, Illinois is similarly instructive. Perhaps no court has earned more of a reputation for being a magnet for class actions than the one located in Madison County, Illinois. Madison County is “famously hospitable, in a Will Rogers sort of way. They have, their critics say, never met a class-action lawsuit they did not like.”[199] Indeed, Madison County experienced an 1,850 percent increase in class action filings during the period 1998 to 2001, making it an “outlier among outlier[] [magnet courts].”[200] In response to significant criticism concerning the application of its civil procedural rules, the Illinois Supreme Court recently changed the rules governing civil appeals to facilitate the interlocutory appeal of class certification orders. Again, this reactive enactment, which took effect on January 1, 2003, did not occur until millions of dollars had been spent on settlements and judgments in nationwide or multi-state class actions that should have been rejected at the outset. And the Illinois Supreme Court has already changed that rule to water it down significantly.[201]

Finally, the West Virginia experience follows in the magnet court mold. Even today, the courts of West Virginia have shown no signs of tightening up the aggregation standards required by Trial Court Rule 26.01. To the contrary, as explained above, the West Virginia Supreme Court recently approved the standardless, ad hoc aggregation of 8,000 plaintiffs’ claims against over 250 defendants simply because every complaint subject to the mass action contained the word “asbestos” in it. That case also involved as many as 5,000 claims with no connection to the state, as even one concurring justice on the West Virginia Supreme Court of Appeals, as well as the trial court, acknowledged. On the other hand, the state’s Senate Judiciary Committee, in February 2003, endorsed legislation that would prohibit non-residents from suing in state court unless “a substantial part” of the lawsuit occurred in West Virginia.[202] The endorsed legislation would also require each plaintiff in a civil action to “independently establish proper venue.”[203] Taken together, these provisions, if enacted, would be enormously helpful in easing West Virginia’s burden as a magnet court. Yet, it has taken several mass trials involving thousands of claims of individuals with no connection to the forum, intense media coverage, and the threat of serious business relocations even to get this legislation out of committee. And, if it is ultimately enacted, plaintiffs’ counsel presumably will look to other nascent magnet courts to begin the cycle again.

None of this should suggest that the enacted Mississippi legislation, the proposed West Virginia legislation, or the Illinois Supreme Court rulemaking effort, are unwelcome developments. To the contrary, state legislation, such as Mississippi’s and, even more so, West Virginia’s proposed legislation, that makes it harder—and less profitable—for plaintiffs’ counsel to bring and sustain these suits definitely reacts to the problem of mass actions in a sensible manner. Stricter laws regarding the award of non-economic damages against defendants, the awards of punitive damages, and the limits of venue rules will reduce the incentives for filing mass actions. Hopefully, Mississippi, West Virginia, and Illinois’ efforts will also make it much more difficult to lump geographically disparate claims into one receptive court.

At the same time, it is worth noting that because these state solutions are reactive to what is essentially a nationwide problem, it is important to consider other alternatives. One is for Congress to enact legislation that would allow at least some of these mass action cases to be heard in federal court. Congress could enact legislation that would permit mass actions to be removed to federal courts, where judges subject to fewer local political pressures have collectively applied far more consistent standards regarding aggregation. As noted above, Congress would not act outside the scope of its constitutional powers by amending the long-standing interpretation of federal jurisdiction laws (developed before the advent of these cases), that requires “complete” diversity between all plaintiffs and all defendants for federal diversity jurisdiction to exist. As a result of this current loophole, plaintiffs can easily insulate their cases from federal jurisdiction, and mass joinder actions are being heard by locally elected county judges, even though these cases raise the very issues that motivated the Framers to create federal diversity jurisdiction in the first place, and even though many state court judges have demonstrated a willingness to allow these cases to proceed to trial despite clear due process concerns.

As the Senate Judiciary Committee has concluded with regard to class actions, which raise similar jurisdictional issues:

    [U]nder the current jurisdictional rules, Federal courts can assert diversity jurisdiction over a run-of-the-mill State law-based tort claim arising out of an auto accident between a driver from one State and a driver from another, or a typical trespass claim involving a trespasser from one State and a property owner from another, but they cannot assert jurisdiction over claims encompassing large-scale, interstate class actions involving thousands of [claimants] from multiple States, and hundreds of millions of dollars—cases that have significant implications for the national economy.[204]

Congress is currently considering legislation that would address this problem (at least in part) by expanding federal diversity jurisdiction to include more interstate mass actions. Such legislation would fulfill the intentions of the Framers in establishing diversity jurisdiction by enabling defendants to remove more interstate mass actions to federal courts where judges have shown a more consistent regard for due process principles and there are no concerns of local bias.

Finally, defendants must continue to make efforts to demonstrate to would-be magnet courts that procedural shortcuts, however well-intended in particular cases, only exacerbate the problems confronting the court. Defendants should argue not only that the traditional limits imposed on aggregation are required as a matter of due process, but also that they benefit the court and society alike. If state court judges applied the same requirements and set the same limits for joinder and consolidation that are being applied in federal courts, plaintiffs’ counsel would no longer be able to use the mass action device to deny corporations the basic right to a fair trial. Similarly, if state courts rejected supposedly “innovative” approaches that remove a defendant’s right to weed out meritless suits, or that eliminate a defendant’s right to challenge venue or the application of the forum’s law, the system as a whole would benefit enormously. Courts should, for example, “strictly apply” aggregation rules and should use consolidations narrowly for “discovery and other pretrial matters” while at the same time “weed[ing] out non-meritorious cases that often accompany a mass case. While a daunting task in the face of thousands of joined claims, disaggregation of claims can make causation and damages issues easier to resolve. With disaggregation, claims that have survived by their ‘parasitic attachment’ to stronger claims can be seen for what they are and disposed of on summary judgment.”[205] To take a final example, if Mississippi courts (and other magnet courts) narrowed the permissible limits of the joinder rule, they could “sever” the claims of improperly joined plaintiffs and, in the case of improperly joined plaintiffs with no connection to the forum, dismiss or transfer those cases.[206] In the long run, conscientious attempts like these to confine the operation of mass action rules will promote respect for the rule of law, preserve the rights of defendants, improve the nation’s economic well-being, and reduce the mass filings of claims by plaintiffs lacking plausible claims.

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Center for Legal Policy.

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CJR 7 PDF (173 kb)

SUMMARY:
This report examines the “mass action” tort, which is being used by some local courts to join hundreds or even thousands of unrelated plaintiffs and defendants into a single massive proceeding, without the safeguards of class action litigation. Mass actions enable plaintiffs’ counsel to overwhelm a jury with evidence in a manner that makes it impossible to reach a fair verdict. To examine some mass action activity in detail, this study reports on mass action activity in Jefferson County, Mississippi from 1999 through 2001.

 

EXECUTIVE SUMMARY

ABOUT THE AUTHORS

ACKNOWLEDGMENTS

I. THE CONTOURS AND DANGERS OF THE MASS ACTION PHENOMENON

A. Available Mass Action Devices

1. Two Old Vehicles Used In New Ways

a. Joinder

b. Consolidation

2. A New Vehicle: Special State Court Mass Litigation Rules

B. Unregulated Mass Action Vehicles Pose Serious Due Process Concerns

1. Tainted Jury Pools, Loose Venue Rules, And Unimpaired Plaintiffs

2. The Illusion of the “Perfect” Plaintiff

3. Mass Actions Against Numerous Defendants Pose Even More Serious Due Process Concerns

4. Mass Actions As De Facto Class Actions—But Without The Procedural Protections Of The Class Action Rule

a. Mass Actions Typically Present Myriad Disparate, Serious Personal Injury Claims

b. Defendants Lack Adequate Notice Concerning The Unprecedented Application of Aggregation Rules in Mass Actions

c. Interlocutory Appellate Review is Less Likely to Be Permitted In Mass Actions Than in Class Actions

d. The Class Action Doctrine’s Concerns Over Unnamed Plaintiffs Also Apply To Mass Actions, Which Increasingly Pose Risks Of “Virtual” Representation

e. Special Litigation Rules: Unmoored to Traditional Practice

f. The Self-Fulfilling Magnet Court Effect

C. Why Most Mass Actions Cannot Be Heard In Federal Court

II. CASE STUDY: THE MASS ACTION PHENOMENON IN JEFFERSON COUNTY, MISSISSIPPI

A. Research Study Findings

1. During The Survey Period, Mass Actions Were Filed In Jefferson County At Rates That Were Disproportionate To The County’s Population And The Remainder Of The Docket

2. The Vast Majority Of The Plaintiffs In These Cases Reside Outside Of Jefferson County

3. The Mass Action Business In Jefferson County Is Dominated By Out-Of-County And Out-Of-State Plaintiffs’ Lawyers

4. In Every Case, Plaintiffs Named At Least One Non-Diverse Defendant To Defeat Federal Diversity Jurisdiction

B. A Sampling Of Mass Action Cases Filed In Jefferson County During The Survey Period

1. Insurance

2. Asbestos

3. Prescription Drugs

4. Tobacco

5. Other Cases

CONCLUSION

NOTES

 


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