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Fifth Circuit Strikes Down Mass Trial Plan Based On Extrapolation Of Jury Verdicts

November 1998

Author: Robert L. Willmore.

One of the more vexing problems of mass tort litigation is how to try hundreds and even thousands of individual personal injury claims that may be pending in one jurisdiction, but that arise from the exposure to or use of the same allegedly harmful substance during different time periods, under different circumstances, and with different consequences. While some courts have — with varying degrees of success — used class action trials or "common issues" trials of consolidated cases to resolve certain key liability issues, few courts have been willing to use such procedural mechanisms to resolve the specific causation and damages claims of individual plaintiffs.

Among the best known efforts to extend such procedural mechanisms to individual causation and damages determinations is the Cimino asbestos personal injury litigation in federal court in Beaumont, Texas. There, the district court, through a handful of trials involving plaintiffs which the court found to be statistically representative of a much larger population of asbestos plaintiffs, sought to resolve the causation and damages claims of all plaintiffs by extrapolating the jury verdicts to the entire plaintiff population.

In August, the Fifth Circuit issued its long awaited opinion in Cimino v. Raymark Industries, Inc., 151 F.3d 297 (5th Cir. 1998). In its opinion, the Court of Appeals struck down the district court’s trial plan on the basis of both Texas law and the U.S. Constitution. Had the Court of Appeals upheld the district court, it was widely speculated that one of the defendants, Pittsburgh Corning Corporation, would have been forced into bankruptcy.

The Original Trial Plan

Cimino began in the mid-1980s when the federal district court sitting in Beaumont consolidated what was then over 3,000 asbestos cases for trial of certain "common issues," and also certified a class under Rule 23(b)(3). Initially, the district court adopted a three-phase trial plan. In the first phase, the jury was to decide which of defendants’ asbestos-containing products were defective and unreasonably dangerous, and make a number of other liability determinations including the defendants’ liability for punitive damages. In the second phase, the jury was to make a number of class-wide damages determinations, and was to try the cases of eleven class representatives as well as hear evidence regarding another thirty "illustrative plaintiffs." In the third phase, the jury was to distribute the awarded damages among all the class members.

In its 1990 decision in In re Fibreboard, 893 F.2d 706, the Fifth Circuit struck down the second and third phases of this trial plan on the grounds that it did not comport with Texas law. The Court of Appeals held that, under Texas law, each individual plaintiff must prove both causation and damages; that is, that the plaintiff was in fact injured by the specific product, and the amount of damages suffered by the plaintiff due to his or her injury. The Court of Appeals concluded that the trial plan impermissibly sought to use the causation and damages findings for a small group of plaintiffs to determine causation and damages for all plaintiffs.

The New Trial Plan

After the Fifth Circuit’s decision in Fibreboard, the district court kept the original first phase trial plan, but devised a trial plan with a new phase two and three. In the new phase two, the jury was to be asked to make findings as to exposure with regard to 22 work sites for specific crafts and time periods. After hearing evidence regarding the 22 selected work sites, the jury was to determine which crafts were exposed to which of defendants’ products for a sufficient time period to cause injury. These determinations were to be made by the jury on a craft-by-craft basis for each decade at issue. The court would then decide which plaintiffs qualified as a member of a particular craft that worked at a particular site during the pertinent time period. The jury would also apportion responsibility among all defendants during phase two.

In the new phase three, the jury would be presented with 160 "sample" cases, but would only make two determinations: whether the plaintiffs suffered of an asbestos-related disease, and, if so, the amount of their damages. For purposes of these trials, the court divided the entire plaintiff population into five disease categories. Except for the 160 trial plaintiffs submitted to the jury (who would receive the sum awarded to them by the jury), each plaintiff would then be assigned by the court to a disease category, and would receive the average of the amount of damages awarded by the jury to the trial plaintiffs in that disease category.

The Jury Verdicts

The first phase jury trial, which was tried with 10 class representatives, resulted in liability determinations against each of the four corporate defendants who went to trial (a fifth defendant had its case tried to the court). Each defendant also was assessed with a punitive damages multiplier. Pittsburgh Corning, for example, was assessed a punitive damages multiplier of $3 for every $1 in actual damages.

The phase two trial never took place, however. Instead, the plaintiffs and the then three remaining defendants entered into a stipulation. Under this stipulation, the defendants stipulated that some of the individuals working in various listed crafts during a four-decade period were exposed to asbestos during the course of their employment at the 22 specified work sites, and that the exposure of some of these persons was of sufficient length and intensity to cause asbestos-related disease. The plaintiffs and the defendants also stipulated to the percentage share of liability to be allocated to each defendant. Importantly, however, the stipulating defendants did not by way of the stipulation agree to the district court’s new trial plan. Rather, they expressly stated their objection to the trial plan, and indicated that they were stipulating to their percentage share of liability only to the extent that the trial plan was upheld on appeal.

The phase three trials, however, went forward. Of the 160 plaintiffs, there were 148 plaintiff verdicts and 12 defense verdicts. The district court then held a hearing, after which it found that the 160 plaintiffs were statistically representative of the approximately still remaining 2,100 plaintiffs. Pursuant to this extrapolation, Pittsburgh Corning was liable for approximately $1.3 billion — an amount many felt would force Pittsburgh Corning into bankruptcy.

The Fifth Circuit’s Decision

The Fifth Circuit struck down the revised trial plan. As with the first trial plan, the Court of Appeals found that it contravened Texas substantive law. But the Court of Appeals also found that the revised plan violated the defendants’ Seventh Amendment rights to a jury trial. With regard to Texas law, the Court of Appeals reiterated its holding from Fibreboard that causation and damages must be determined as to "individuals, not groups."

With regard to the 160 phase three plaintiffs who had their damages determined by juries, the Court of Appeals found that those verdicts did not comport with Texas law or the strictures of the Seventh Amendment because they were based purely on damages determinations. That is, as to none of the 160 phase three plaintiffs did a jury determine that one of the defendants’ products actually caused those damages. In this regard, the court observed that such proof of causation would, at a minimum, require evidence that a particular plaintiff would have to show "frequent and regular work . . . in proximity to . . . defendants’ asbestos containing product."

As to the over two thousand plaintiffs to which the average disease category damage awards were to have been to be extrapolated, the Court of Appeals held that such extrapolations were invalid because there was no jury determination of causation as to any one of the extrapolation plaintiffs, and because there was no jury determination of the actual damages suffered by any extrapolation plaintiff. In this regard, the court specifically rejected as dicta certain language from one of its earlier decisions, In re Chevron U.S.A., Inc., 109 F.3d 1016 (5th Cir. 1997), which had been read by some as approving the use of bellwether trials to determine "common issues" relating to causation and damages.