Appendix — A. H. Robins Co. v. Abed
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Supreme Court of the United States
OCTOBER TERM, 1982
A. H. ROBINS COMPANY, INCORPORATED,
Petitioner,
V.
JANICE ABED, ET. XL.,
Respondents.
APPENDIX TO PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
CHARLES ALAN WRIGHT
727 East 26th Street
Austin, Texas 78705
WILLIAM R. CoGar*
CLIFFORD W. PERRIN, JR.
STEPHEN W. BREWER
Mays, VALENTINE, DAVENPORT & MooRE
23rd Floor, F&M Center
P.O. Box 1122
Richmond, Virginia 23208
(804) 644-6011
Attorneys for Petitioner
*Counsel of Record
Page
STE cdcecoesnednnesneedeelds seeGntensoecse A-l
Opinion and Judgment of the Court of Appeals for the Ninth
Circuit, June 18, 1982, as amended July 15, 1982 ...... A-1
Order of the Court of Appeals for the Ninth Circuit, Denying
Petitioner's Motions for Rehearing and Suggestion for Re-
hearing En Banc, August 26, 1982ꝶꝶ 2222 A-22
Memorandum of Opinion and Order of the District Court for
the Northern District of California Conditionally Certifying
Order of the District Court for the Northern District of Cali-
fornia Conditionally Certifying Class Actions, June 25, 1981 A-86
Federal Rule of Civil Procedure 333 A-99
App. 1
Anited States Court of Appeals
FOR THE NINTH CIRCUIT
Nos. 81-4648, 81-4649, 81-4650, 81-4651, 81-4652,
81-4653, 81-4654, 81-4655, 81-4656
In re: Northern District of California,
DALKON SHIELD IUD PRODUCTS LIABILITY
LITIGATION
JANICE ABED, et al.,
Plaintiffs-A ppellants,
V.
A. H. ROBINS COMPANY, et al.,
a Virginia corporation, HUGH J. DAVIS, M. D.,
and IRWIN S. LERNER,
Defendants-A ppellees.
Appeal from the United States District Court for the
Northern District of California
Spencer Williams, District Judge, Presiding
Argued and Submitted March 10, 1982
Decided June 18, 1982, as amended July 15, 1982
Before: GOODWIN, ANDERSON and SCHROEDER,
Circuit Judges
GOODWIN, Circuit Judge
Plaintiffs appeal from a district court order conditionally
certifying their claims as: (1) a nationwide class action on
App. 2
the issue of punitive damages pursuant to Federal Rule of
Civil Procedure 23 (b) (1) (B); and (2) a statewide (Cali-
fornia) class action on the issue of liability pursuant to
Rule 23 (b) (3). In re Northern District of California
“Dalkon Shield” 1UD Products Liability Litigation, 521 F
Supp. 1188 (N.D. Calif. 1981); 526 F. Supp. 887 (N.D.
Calif. 1981).
All plaintiffs claim to have been injured by the Dalkon
Shield intrauterine device. All of those plaintiffs who have
joined in this appeal challenge class certification. Defend-
ant A. H. Robins also opposes certification of the California
23(b)(3) class. Defendant Hugh J. Davis opposes cer-
tification of both classes.
Between June 1970 and June 1974, approximately 2.2
million Dalkon Shields were inserted in women in the
United States. Many users sustained injuries. Complaints
include uterine perforations, infections, ectopic and uter-
ine pregnancies, spontaneous abortions, fetal injuries and
birth defects, sterility, and hysterectomies. Several deaths
also were reported. On June 28, 1974, Robins withdrew the
Dalkon Shield from the market.
By May 31, 1981, approximately 3,258 actions relating
to the Dalkon Shield had been filed and 1,573 claims were
pending. The claims are based on various theories: negli-
gence and negligent design, strict products liability, breach
of express and implied warranty, wanton and reckless con-
duct, conspiracy, and fraud. Most plaintiffs seek both com-
pensatory and punitive damages.
Some plaintiffs joined Robins, Davis, and Irwin S. Lerner
as defendants, as well as their own doctors or medical
practitioners who recommended and inserted the Dalkon
Shield, and local suppliers. Many piaintiffs sued fewer
defendants.
App. 3
In 1975 all actions then pending in federal district
courts alleging damages from the use of the Dalkon Shield
were transferred by the Judicial Panel on Multidistrict
Litigation to the District of Kansas for consolidated pre-
trial proceedings. In re A. H. Robins Co., Inc., “Dalkon
Shield” Liability Litigation, 406 F Supp. 540 (J.P.M.D.L.
1975), 419 F. Supp. 710 (J.P.M.D.L. 1976), 438 F. Supp.
942 (J.P.M.D.L. 1977). After four years of consolidated
discovery, the Judicial Panel began vacating its conditional
transfer orders and remanding the cases to their respective
transferor courts. In re A. H. Robins Co. Inc., “Dalkon
Shield” IUD Products Liability Litigation, 453 F. Supp.
108 (J.P.M.D.L. 1978), 505 F. Supp. 221 (J.P.M.D.L.
1981).
State courts have also received a number of Dalkon
Shield cases. The results have been mixed. Some plaintiffs
have recovered substantial verdicts. Others have recovered
nothing. Many cases have been settled.
Approximately 166 Dalkon Shield cases were pending in
the Northern District of California. After one jury trial that
lasted nine weeks, Judge Williams consolidated all Dalkon
Shield cases pending in that district and ordered briefing
on the feasibility of a class action. All but one of California
plaintiffs’ counsel opposed class certification. Out-of-state
plaintiffs were not notified of the briefing request and did
not participate in the status conferences held to discuss the
class action proposal. All defendants at that time opposed
class certification.
On June 25, 1981, Judge Williams entered an order
conditionally certifying a nationwide class, under Fed. R.
Civ. P. 23(b)(1)(B),’ consisting of all persons who filed
Fed. R. Civ. P. 23(b)(1)(B) provides:
“(b) Class Actions Maintainable. An action may be main-
App. 4
actions for punitive damages against Robins.* The court
asserted jurisdiction on the basis of diversity of citizenship,
28 U.S.C. § 1332. One stated purpose of certification was
to insure the rights of all plaintiffs to a proportionate share
of any punitive damages recovery from the “limited fund”
of Robins’ assets. Judge Williams stated:
“At the present time, some 1,573 suits involving
claims for compensatory damages well over $500 mil-
lion and claimed punitive damages in excess of $2.3
billion, are pending against A. H. Robins. The po-
tential for the constructive bankruptcy of A. H. Robins,
a company whose net worth is $280,394,000.00,
raises the unconscionable possiblity that large num-
bers of plaintiffs who are not first in line at the court-
house door will be deprived of a practical means of
redress.”
No testimony was taken and the way in which the “fund”
was limited was not specified,
tained as a class action if the prerequisites of subdivision (a
28 17 and in „ bw
1 tion te actions or inst indi
Ir. isk of _—
interests of the other members not to the adjudications
323 ability to protect their
terests :
The prerequisites of subdivision (a) are:
App. 5
Judge Williams also conditionally certified a California
statewide subclass under Rule 23(b) (3) consisting of plain-
tiffs who have filed actions against Robins in California.’
This California class is limited to the question of Robins’
liability arising from the manufacture and sale of the Dalkon
Shield. Any plaintiff may opt out of this class, whereas all
plaintiffs in the nation would be bound by the determina-
tion on punitive damages.
Plaintiffs from California, Oregon, Ohio, Florida, and
Kansas moved to decertify the punitive damages class. The
district court denied the motion and certified the issues for
an interlocutory appeal, pursuant to 28 U.S.C. § 1292(b).
This court granted the interlocutory appeals and ordered
them expedited.
The Rule 23(b)(1)(B)
Nationwide Punitive Damages Class
A. RULE 23(a) PREREQUISITES
1. Commonality.
The district court held that the punitive damages class
presented common questions about Robins’ knowledge of
the safety of its product at material times while the Shield
was on the market. What Davis, Lerner and Robins knew
App. 6
about the Dalkon Shield, when they knew it, what infor-
mation they withheld from the public, and what they stated
in their advertising to doctors and in their product instruc-
tions during various time periods may all be common ques-
tions. These questions are not entirely common, however,
to all plaintiffs.
Moreover, as the plaintiffs correct'y argue, the 50 juris-
dictions in which these cases arise do not apply the same
punitive damages standards. Punitive damages standards
can range from gross negligence to reckless disregard to
various levels of willfulness and wantonness. If common-
ality were the only problem in this case, it might be pos-
sible to sustain some kind of a punitive damage class. But
difficulties remain with other certification requirements.
2. Typicality.
Typicality, while it may not be insurmountable, remains a
significant problem. The district court order recites that
representative parties have been selected. In re Northern
District of California “Dalkon Shield” IUD Products Lia-
bility Litigation, 526 F. Supp. at 919. However, all of the
appealing plaintiffs assert that no plaintiff has accepted the
role, and that no single plaintiff or group of plaintiffs could
be typical of the numerous persons who might have claims.
No plaintiff has appeared in this appeal in support of class
certification. Again, while typicality alone might not be
an insurmountable problem, it helps make the overall situa-
tion difficult to rationalize as proper for class treatment.
actions; (B) the extent and nature of any litigation concerning
the controversy already commenced by or against members of
the litigation of the claims in the particular — Of Oe
difficulties likely to be encountered in the management of a class
action.”
App. 7
3. Adequacy of Representation.
The court designated lead counsel for the nationwide
class, but he has resigned. New counsel has been designated
but has not yet started to represent the class. Apparently
none of the attorneys already involved in the case is willing
to serve as class counsel. The district judge may well be
better able to choose a good lawyer than some of the
plaintiffs may be, but the right of litigants to choose their
own counsel is a right not lightly to be brushed aside.
The plaintiffs argue that newly appointed, even if expert
counsel, may not litigate the action as vigorously as counsel
selected by plaintiffs. This court is hesitant to force un-
wanted counsel upon plaintiffs on the assumption that ap-
pointed counsel will be adequate. Even if the class were
otherwise acceptable, it would have to be decertified if ade-
quate lead counsel turned out to be unavailable.
We are not necessarily ruling out the class action tool
as a means for expediting multi-party product liability ac-
tions in appropriate cases, but the combined difficulties
overlapping from each of the elements of Rule 23(a) pre-
clude certification in this case.
B. Tue Rute 23(b)(1)(B) REQUIREMENTS
1. Applicability of McDonnell Douglas.
The Ninth Circuit has expressly barred class certification
under 23(b)(1)(B) for independent tort claims seeking
compensatory damages, unless separate actions “inescap-
ably will alter the substance of the rights of others having
similar claims.” McDonnell Douglas Corp. v. U. S. Dist. Ct.,
C.D. of Cal., 523 F.2d 1083, 1086 (9th Cir, 1975), cert
denied, 425 U.S. 911 (1976), quoting LaMar v. H & B
Novelty & Loan Company, 489 F.2d 461, 467 (9th Cir.
App. 8
1973). In McDonnell Douglas, this court found that “[a]t
worst individual actions (for air crash damages) would
leave unnamed members of the class with the same com-
plexity and expense as if no prior actions had been brought.”
523 F.2d at 1086.
Robins argues that McDonnell Douglas does not pre-
clude the 23(b)(1)(B) certification of a nationwide puni-
tive damage class because that case treated only individual
compensatory damage claims, and punitive damages were
not at issue, The district judge did not discuss McDonnell
Douglas but stated that certification under 23(b)(1)(B)
is appropriate if individual actions “may” affect the claims
of parties not before the court. Because total claims, if
successful, might exceed Robins’ current assets, the judge
noted that the earliest individual actions tried could exhaust
Robins’ assets and thus adversely affect the claims of plain-
tiffs who sued later and who might not be able to collect
on their judgments. The judge cited Green v. Occidental
Petroleum Corp., 541 F.2d 1335, 1340 n.9 (9th Cir.
1976), in which the court stated that Rule 23 (b) (1) (B)
applied “where the claims of all plaintiffs exceeded the
assets of the defendant and hence to allow any group of
individuals to be fully compensated would impair the rights
of those not in court.” Green, however, was a 10b-5 action
and did not involve mass personal injury claims. The
quoted dictum did not discuss whether Rule 23(b) (1) (B)
would apply in a tort case. One reason for certification ob-
viously was to avoid any detrimental effect of earlier in-
dividual claims upon later claims.
McDonnell Douglas, however, appears to prohibit Rule
23(b)(1)(B) certification of mass tort actions for com-
pensatory or punitive damages unless the record establishes
that separate punitive awards inescapably will affect later
App. 9
awards. The detrimental effect of earlier claims upon later
claims commends itself to this court as worthy of future
judicial and legislative consideration. As plaintiffs in this
case correctly argue, though, not every plaintiff will pre-
vail and not every plaintiff will receive a jury award in the
amount requested. Thus on the present state of the record,
the detrimental effect of separate punitive damages awards
is not clearly inescapable.
2. The Limited Fund Concept.
The drafters of Rule 23 intended 23 (b) (1) (B) to apply
to “limited fund“ cases where numerous plaintiffs claim
“against a fund insufficient to satisfy all claims.” Advisory
Committee Note to the 1966 Revision of Rule 23, 39
F.R.D. 69, 101 (1966).
The district court certified the “limited fund” punitive
damage class before requesting or receiving adequate evi-
dence of Robins’ net worth, earnings or available insurance
coverage. The judge received Robins’ attorrey’s affidavit
showing the total claims against Robins and Robins’ fund
of assets but did not reopen discovery to permit plaintiffs
to challenge these affidavits. The record does not show how
many cases have been settled.
Similarly, the court in In re Agent Orange Product Lia-
bility Litigation, 506 F. Supp. 762, 789-90 (E.D.N.Y.
1980), refused to certify “Agent Orange” claims under
Rule 23(b)(1)(B) because the plaintiffs offered no evi-
dence of the likely insolvency of defendants. See also Payton
. Abbott Labs, 83 F.R.D. 382, 389 (D. Mass. 1979)
(class certification granted under Rule 23(b) (3) but denied
under 23 (b) (1) (B) because the plaintiffs offered no evi-
dence of the likely insolvency of the defendants and, “with-
App. 10
out more, numerous plaintiffs and a large ad damnum
clause should [not] guarantee (b)(1)(B) certification.”).
Rule 23(b)(1)(B) certification is proper only when
separate punitive damage claims necessarily will affect later
claims. The district court erred by ordering certification
without sufficient evidence of, or even a preliminary fact-
finding inquiry concerning Robins’ actual assets, insurance,
settlement experience and continuing exposure.
The court’s other consideration for certifying the punitive
damage issue as a nationwide class action was to ensure
that Robins would be punished only once. The court cor-
rectly notes, and appellants agree, that no rule of law limits
the amount of punitive damages a jury may award. A class
action, however, is not the only way to protect a defendant
from unreasonable punitive damages. Given the difficulties
in complying with the requirements of Rule 23 (b) (1) (B)
in this case, it was error to certify a nationwide class of
punitive damages claimants.
II
The Rule 23(b)(3)
California Liabil'ty Class
A. SUITABILITY OF CLASS ACTION LITIGATION OF
Mass Propucts LiaBiLity CAsEs
The Advisory Committee Note to the 1966 Revision of
Rule 23(b)(3) (39 F.R.D. 69, 103) states:
“A ‘mass accident’ resulting in injuries to numerous
persons is ordinarily not appropriate for a class action
because of the likelihood that significant questions,
not only of damages but of liability and defenses to
liability, would be present, affecting the individuals in
different ways. In these circumstances an action con-
ducted nominally as a class action would degenerate in
practice into multiple lawsuits separately tried.
App. 11
Relying in part on that note and on the inherent ob-
stacles to personal injury class actions, many courts have
denied plaintiffs’ motions for class certification in mass tort
personal injury actions, especially those alleging negli-
gence by one or more defendants over extended periods.
See Ryan v. Eli Lilly and Co., 84 F.R.D. 230 (D.S.C.
1979) (“DES” action); Mink v. University of Chicago,
460 F.Supp. 713 (N.D. III. 1978) (“DES” action); Harri-
gan v. United States, 63 F.R.D. 402 (E.D. Penn. 1974)
(action for negligent surgery in veterans’ hospital); Snyder
v. Hooker Chemicals & Plastics Corp., 429 N. V. S. 2d 153
(1980) (Love Canal toxic waste action); Rosenfeld v.
A. H. Robins Co., 407 N. V. S. 2d 196 (1978) (Dalkon
Shield case) (discussed below); Hobbs v. Northeast Air
lines, Inc., 50 F.R.D. 76 (E.D. Penn. 1970) (Rule
23(b)(3) certification of airplane crash cases denied be-
cause individual plaintiffs in tort actions have an interest
in controlling their own lawsuits; many other suits already
might not be available to out-of-state claimants); Daye v.
Commonwealth of Pennsylvania, 344 F. Supp. 1337,
1342-43 (E.D. Penn. 1972), cert. denied, 416 U.S, 946
(1974) (Rule 23(b)(3) certification of school bus acci-
dent cases denied because some plaintiffs would bring per-
sonal injury claims while other plaintiffs would bring wrong-
ful death claims); Marchesi v. Eastern Airlines, Inc., 68
F. R. D. 500, 501 (E.D.N.Y. 1975) (class certification under
any Rule 23 subsection denied).
In Causey v. Pan American World Airways, inc., 66
F.R.D. 392 (E.D. Va. 1975), the court denied the plaintiffs’
motion for class certification of airplane crash cases under
Rule 2b) (1) (A) and (B) and under Rule 23 (b) (2) or
App. 12
(3) because most prospective plaintiffs were not United
States citizens. The court noted, however, that mass acci-
dent litigation “may and probably ought to be maintained
as a class action” where: (!) the class action is limited to
the issue of liability; (2) class members support the action;
(3) choice of law problems are minimized because the
accident occurred or substantially all plaintiffs reside in the
same jurisdiction; and (4) the 23(b)(3) requirement of
“superiority” also is met. Id. at 397. But see Petition of
Gabel, 350 F. Supp. 624 (C.D. Cal. 1972) (fifty deaths
in airplane crash) (overruled by McDonnell Douglas);
Hernandez v. Motor Vessel Skyward, 61 F.R.D. 558 (S.D.
Fla. 1973), affirmed, 507 F.2d 1279 (Sth Cir. 1975) (dis-
approved in McDonnell Douglas) (Rule 23(b)(1)(A)
certification on issue of defendants’ negligence in preparing
or making available contaminated food in suits for food
poisoning on cruise ship); Bentkowski v. Marfuerza Com-
pania Maritima, S. A., 70 F.R.D. 401 (E.D, Penn. 1976)
(Rule 23(b)(3) class certification in cruise ship food
poisoning cases on negligence issue); Ouellette v. Inter-
national Paper Co., 86 F.R.D. 476 (D. Vt. 1980) (class
certification in lake pollution cases); American Trading and
Pro. Corp. v. Fischbach & Moore, Inc., 47 F.R.D. 155
(N.D. Ill. 1969) (fire at Chicago trade center).
In the typical mass tort situation, such as an airplane
crash or a cruise ship food poisoning, proximate cause
can be determined on a class-wide basis because the cause
of the common disaster is the same for each of the plain-
tiffs.
In products liability actions, however, individual issues
may outnumber common issues. No single happening or
accident occurs to cause similar types of physical harm or
property damage. No one set of operative facts establishes
App. 13
liability. No single proximate cause applies equally to each
potential class member and each defendant. Furthermore,
the alleged tortfeasor’s affirmative defenses (such as failure
to follow directions, assumption of the risk, contributory
negligence, and the statute of limitations) may depend on
facts peculiar to each plaintiff's case. See Rosenfeld v. A. H.
Robins Co., 407 N.Y.S. 2d 196 (1978) (class certifica-
tion denied under New York statute patterned after Rule
23(b)(3)).
A federal district court also denied Rule 23 (b) (3) class
certification of asbestoeis cases for these reasons. Yandle v.
PPG Industries Inc., 65 F.R.D. 566, 569 (E.D. Tex. 1974).
The Yandle court also suggested that when personal in-
juries are involved, each plaintiff should have the right to
prosecute his own claim and to be represented by the lawyer
of his choice.
Federal district courts recently have conditionally certi-
fied two “mass tort” class actions that involve products
liability and numerous injuries caused by individual prod-
ucts over a long period of time. In re Agent Orange Product
Liability Litigation, supra, 506 F. Supp. 762, and Payton
v. Abbott Labs, supra, 83 F.R.D. 382 (“DES” case). In
both cases, the plaintiffs sought class status. Both cases were
certified under Rule 23(b) (3).
The Agent Orange court found that Rule 23 (b) (3) re-
quirements were met because: (1) the litigation was at
such an early stage that resolution of preliminary issues
Agent Orange manufacturer would affect every plaintiff's
claim; (2) discovery and proof in such “untested areas of
law” would be so expensive and complicated that no single
attorney would be likely to succeed; (3) all cases currently
pending already were before that same court under multi-
App. 14
district litigation procedures; and (4) facts and issues in all
pending and future cases were identical or parallel. 506 F.
Supp. at 790-91.
The Payton court, without distinguishing the cases pro-
hibiting class action litigation of mass torts, certified a plain-
tiff class of all women who were exposed to DES in utero
in Massachusetts. The court found that “over 90% of the
trial time” in two individual DES suits had been devoted
to “whether and when defendants knew or should have
known of the dangers of DES exposure.” 83 F.R.D. at 391-
92. The class action was limited to resolving those issues
and issues of what injuries Massachusetts law would recog-
nize. Id. at 386-87. The Payton court partially relied upon
the nonavailability in Massachusetts of offensive collateral
estoppel, which in some states would prevent relitigation of
decided issues. Jd. at 392. Both the Payton and Agent
Orange courts have recognized that neither causation nor
damages may be determined in class proceedings. 83 F.R.D.
at 394, 506 F. Supp. at 790.
B. Rute 23(a) PREREQUISITES
Before a class action may be maintained under Rule 23,
the action must meet the prerequisites of Rule 23(a) and
one set of the alternate requirements of Rule 23(b).
1. Commonality.
Rule 23(a)(2) requires that “there are questions of law
or fact common to the class. The district court cor-
rectly held that each California case contains common
issues “of design, testing, manufacturing, labeling and in-
spection of the Dalkon Shields.” But on the issues of negli-
gence, strict products liability, adequacy of warnings at
relevant time periods, breach of warranty, fraud and con-
App. 15
spiracy, commonality begins to be obscured by individual
case histories.
Different questions of law and fact could apply to various
plaintiffs in the California class because of different repre-
sentations and warnings made to each woman, different in.
juries suffered, and different defenses available to Robins.
The commonality requirement of Rule 23(a)(2) is not, of
itself, insurmountable, but problems of commonality merge
into problems of management.
2. Typicality.
Rule 23(a)(3) requires that “claims or defenses of the
representative parties .. . [be] typical of the claims or de-
fenses of the class. |
Generally, in a class action, plaintiffs who bring the
action are the representative parties. They bear the burden
of showing that their claims are typical, as well as the
burden of demonstrating that the other Rule 23(a) ele-
ments are satisfied. Doninger v. Pacific Northwest Bell,
Inc., 564 F.2d 1304, 1308-09 (9th Cir. 1977).
Appellants assert that the trial court has not designated
representative parties. Named plaintiffs generally are desig-
nated parties before the class is certified and “typicality”
is determined on the basis of their claims. The trial court
stated in its order conditionally certifying class actions that
“representative parties have been selected covering the
broadest possible gamut of types of injuries....” In re
Northern District of California “Dalkon Shield” IUD Prod-
ucts Liability Litigation, 526 F.Supp. at 919-20. This desig-
nation may require a substantial subdivision of representa-
tive subclasses and appears to offer little advantage over
a few test trials that may produce more settlements than
App. 16
would a lengthy and complicated trial of consolidated
cases.
The Agent Orange court found the typicality requirement
was met: “[a]lthough the named plaintiffs for purposes of
the class action are yet to be designated, the court is satis-
fied that out of the extremely large pool available repre-
sentative plaintiffs can be named who will present claims
typical of those of the class.” In re Agent Orange, supra,
506 F.Supp. at 787.
From the large California class the court may be able to
find plaintiffs whose claims are fairly representative of the
varying injuries. In proving liability under a negligence
theory, however, the plaintiffs have to prove not only their
injuries, but that Robins and each defendant owed them a
duty of care and also what those different standards of care
were, if they were breached, and—most important—if the
breaches proximately caused the plaintiffs’ varying injuries.
See generally, W. Prosser, Law of Torts, §§ 41-42 (4th ed.
1971); Restatement (Second) of Torts, ch, 16, §§ 430-461
(1965). To prove liability under a breach of warranty
theory, representative plaintiffs must exist for each type of
warranty, assurance, or medical advice each plaintiff re-
ceived. The difficulty of meeting the typicality requirement
seems obvious.
While we recognize the many differences between this
case and LaMar, supra, 489 F.2d 461, the case is instruc-
tive. The district court believed that an exception could
be found within the LaMar doctrine for this particular case
because “plaintiffs have alleged a concerted scheme or
conspiracy between defendants in the marketing, design,
testing, and production of Dalkon Shields.” But this gen-
eralization, while partly true, loses sight of the fact that
some of the plaintiffs have not alleged that all of their de-
App. 17
fendants had so conspired. For example, some plaintiffs
sued their own doctors and the local suppliers of those
doctors, without planning to prove that those defendants
were part of a conspiracy.
The district court’s holding was inconsistent with LaMar.
The financial importance of common questions of law and
fact cannot be used to create a class of plaintiffs who have
claims against some common defendants and some separate
and uncommon defendants. The complexity of issues pe-
culiar to individual claims militates against grouping all
plaintiffs into a class for only part of their recovery.
We do not decide or suggest that the typicality require-
ment of Rule 23(a)(3) may never be met when multiple
plaintiffs sue different defendants. But the requirement is
not met in this case.
3. Adequacy of Representation.
Rule 23(a)(4) requires that “the representative parties
.. fairly and adequately protect the interests of the class.”
Adequacy of representation depends on the qualifications
of counsel for the representatives, an absence of antago-
nism, a sharing of interests between representatives and
absentees, and the unlikelihood that the suit is collusive. 7
Wright and Miller, Federal Practice and Procedure §§ 1765-
1769 at 615-57. See In re Agent Orange, supra, 506 F. Supp.
at 788; Payton v. Abbott Labs, supra, 83 F.R.D. at 388.
The trial court found that “whichever firm is chosen to
represent named plaintiffs will vigorously and competently
litigate the action.” We assume that the plaintiffs’ California
counsel named in the briefs were known to the district
court to be competent attorneys. And the court correctly
found “no reason to suspect any antagonism between any
of the absentees and the named plaintiffs.”
App. 18
Appellants argue, however, that adequacy is not satisfied
because representative plaintiffs who do not have a cause
of action against a particular defendant (such as individual
doctors) cannot fairly and adequately protect the interests
of those who do have such causes of action.
The counsel originally designated by the court to be lead
counsel for the nationwide class and statewide class at-
tempted to resign from both positions, The judge did not
accept his resignation from the statewide class. Attorneys
for the California plaintiffs who appealed assert that they
will suggest that their clients opt out of the California lia-
bility class, leaving only the nationwide punitive damage
class. If they do so, the issue of a California liability class
may become moot.
C. RULE 23(b)(3) REQUIREMENTS
Under Rule 23 (b) (3) questions of law and fact common
to members of the class must predominate over questions
affecting individual members, and the class action must be
superior in terms of fairness and efficiency to other means
of litigation. Fed. R. Civ. P. 23(b)(3); LaMar v. H & B
Novelty and Loan Co., supra, 489 F.2d at 467.
1. Predominance.
The trial judge found that a “common nucleus of opera-
tive facts” exists in this case that can be resolved in one
adjudication. This common factual nucleus is “whether and
when defendants knew or should have known of the dangers
of the Dalkon Shield to its users... [and] the facts sur-
rounding defendants’ design, production, etc. of the Dalkon
Shield. . . .”
Although those are common factual questions, the court
should have balanced these concerns with the greater num-
App. 19
ber of questions affecting individual class members. The
23(b)(3) class is limited to the issue of liability, but
Robins’ overall liability, under some of the theories, cannot
be proved unless each plaintiff also proves that Robins’
breach of its duty proximately caused her particular injury.
For those plaintiffs who assert a breach of warranty
claim, additional individual factual issues will have to be
argued and determined. Robins’ warranties consisted mainly
of various medical journal and medical trade-show adver-
tisements over a four-year period. Different types of ad-
vertisements were printed on different dates in different
journals. Different doctors read various periodicals. The
advertisements were made to and read not by plaintiffs but
by their doctors.
While facts about what warranties or representations
Robins made and whether Robins breached them could be
determined on a class basis, these facts can also be reached
in consolidated discovery proceedings, and can be expected
to become standardized after a few trials.
2. Superiority.
Efficiency is a factor supporting class action treatment
for some of the issues raised by California plaintiffs. The
strongest supporting factor, however, is that by litigating
portions of liability (defective or negligent design, exist-
ence of warranties) on a class basis, litigation costs of
presenting evidence and expert witnesses will be greatly
reduced.
A trial court can sever and try only certain issues on a
class basis under Rule 23(c)(4)(A). The few issues that
might be tried on a class basis in this case, balanced against
issues that must be tried individually, indicate that the time
saved by a class action may be relatively insignificant. A
App. 20
few verdicts followed by settlements might be equally
efficacious.
3. Considerations of Rule 23(b)(3)(A-D).
In determining if common issues predominate and a class
action is superior, the court should consider the factors
provided in 23(b)(3)(A-D).
A. The California liability class members have a strong
interest in controlling the prosecution of separate actions.
Counsel for plaintiffs who have appealed have stated they
will recommend that their clients opt out of the class. If a
large number do so, the class will be unable to proceed.
B. Several Dalkon Shield cases already have been com-
pleted in California, and over 300 are pending.
C. The majority of California Dalkon Shield cases were
not filed in the Northern District of California, although
most plaintiffs’ counsel are from the Northern or Central
Districts.
D. Management is made difficult by the complexity and
multiplicity of issues and by plaintiffs’ hostility to the class
action.
In addition, in this case, many plaintiffs have sued other
defendants, such as their individual doctors, and the pres-
ence of these separate defendants creates additional prob-
lems of management.
CONCLUSION
The California liability class does not satisfy the typi-
cality requirement of Rule 23 (a) (3) or the Rule 23 (b) (3)
requirement that the class action be superior to other avail-
able means of adjudication. We do not preclude further
consideration by the district court of motions to certify a
more limited class or subclasses under Rule 23 (b) (3).
App. 21
The court erred in certifying the Rule 23(b)(1)(B)
nationwide punitive damage class on its own motion with-
out giving out-of-state plaintiffs an opportunity to partici-
pate in prior briefings or hearings, and without estab-
lishing as a fact that Robins’ assets were too limited to
permit conventional litigation. Even if further proceedings
were had on those issues, however, the case would still fail
to meet Rule 23(a)’s preliminary requirements of com-
monality, typicality and adequacy of representation.
Moreover, separate early punitive damages awards need
not inescapably affect later awards. Therefore a Rule
23(b)(1)(B) class action is inconsistent with this court’s
decisions in LaMar and McDonnell Douglas. We conclude
that both classes must be decertified.
The orders challenged in this appeal are vacated and the
cause is remanded for further proceedings.
Vacated and remanded.
App. 22
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
Nos. 81-4648, 81-4649, 81-4650, 81-4651, 81-4652,
81-4653, 81-4654, 81-4655, 81-4656
In re: Northern District of California,
DALKON SHIELD IUD PRODUCTS LIABILITY
LITIGATION
JANICE ABED, et al.,
Appellants,
v.
A. H. ROBINS COMPANY, et al.,
a Virginia corporation, HUGH J. DAVIS, M. D.,
and IRWIN S. LERNER,
Appellees.
ORDER
Before: GOODWIN, ANDERSON and SCHROEDER,
Circuit Judges
The panel has voted to deny the petitions for rehearing
and reject the suggestions for rehearing en banc filed herein
on July 2 and July 23, 1982.
The full court was advised of the suggestions for en banc
rehearing and no active judge called for a vote on whether
to rehear the case en banc. (Fed. R. App. P. 35.)
The petitions for rehearing and suggestions for rehearing
en banc are denied.
August 26, 1982
App. 23
In re: NORTHERN DISTRICT OF CALIFORNIA
“DALKON SHIELD” IUD PRODUCTS
LIABILITY LITIGATION
No. C-80-2213 SW
United States District Court,
N. D. California
Nov. 5, 1981
MEMORANDUM OF OPINION AND ORDER
CONDITIONALLY CERTIFYING CLASS ACTIONS
SPENCER WILLIAMS, District Judge
INTRODUCTION
The latter half of the twentieth century has witnessed a
virtual explosion in the frequency and number of lawsuits
filed to redress injuries caused by a single product manu-
factured for use on a national level. Indeed, certain products
have achieved such national notoriety due to their tremen-
dous impact on the consuming public, that the mere men-
tion of their names—Agent Orange, Asbestos, DES, MER/
29, Dalkon Shield—conjure images of massive litigation,
corporate stonewalling, and infrequent yet prevalent, “big
money” punitive damage awards.
In a complex society such as ours, the phenomenon of
numerous persons suffering the same or similar injuries as
a result of a single pattern of misconduct on the part of a
defendant is becoming increasingly frequent.
The judicial system’s response to such repetitive litigation
has often been blind adherence to the common law’s tradi-
tional notion of civil litigation as necessarily private dispute
resolution.’ In situations where this traditional mode of
Miller, Of Frankenstein Monsters and Shining Knights: Myth,
, and the “Class Action Problem,” 92 Harv.L.Rev. 664, 667-
70 (1979).
App. 24
litigation threatens to leave large numbers of people with-
out a speedy and practical means of redress and simul-
taneously threatens to expose defendants to continuing pun-
ishment for the same wrongful acts, the class action device
is a powerful tool to accomplish its proclaimed goals of
judicial economy and fairness."
Factual Background
This action involves the claims of thousands of women
across the United States that they have been injured by an
allegedly defective intrauterine device called the Dalkon
Shield.
The Dalkon Shield was invented in 1968. It was clinically
tested from September 1968 to November 1969, at which
time it was commercially introduced to the medical pro-
fession by the Dalkon Corporation. On June 12, 1970, the
A. H. Robins Co., Inc. (Robins), a manufacturer and dis-
tributor of pharmaceuticals and other products, acquired
all rights to the Dalkon Shield. Robins then initiated its
own program to test the product and simultaneously began
to market it. Between June 12, 1970, and June 28, 1974,
approximately 2.2 million Dalkon Shields were inserted in
women in the United States. On the latter date, Robins
suspended distribution of the Dalkon Shield.
A Dalkon Shield could be inserted only by a physician,
who normally obtained the device from a surgical supply
house. Each Dalkon Shield package contained labeling in-
structions and materials that described its advantages and
disadvantages. It was the physician’s responsibility to ex-
plain to the prospective wearer these advantages and dis-
* See Advisory Committee Note to the 1966 Amendments to Rule
23, 39 F.R.D. 98 (1966); 7 Wright, Miller & Kane, Federal Practice
and § 1751 (1980 ed.); Grad v. Memorex Corp., 61
F.R.D. 88 (N.D. Cal. 1973).
App. 25
advantages and, if the decision was made to have the
Dalkon Shield inserted, to perform certain preliminary fitting
procedures outlined in the labeling .nstructions.
During the years in which the Dalkon Shield has been
utilized, a large number of women have had adverse reac-
tions to the device. The plaintiffs in these actions allege
that they have sustained various injuries from their use of
the Dalkon Shield including uterine perforations, infec-
tions, pregnancy, spontaneous abortion, fetal injuries and
hysterectomies. The plaintiffs predicate their right to re-
cover against various defendants on theories of negligence,
strict products liability, breach of warranty, conspiracy
and fraud. In the vast majority of these actions, the plain-
tiffs seek substantial sums in punitive damages.
At the present time, some 1,573 suits involving claims
for compensatory damages well over $500 million and
claimed punitive damages in excess of $2.3 billion, are
pending against A. H. Robins.* The potential for the con-
structive bankruptcy of A. H. Robins, a company whose
net worth is $280,394,000.00, raises the unconscionable
possibility that large numbers of plaintiffs who are not first
in line at the courthouse door will be deprived of a practical
means of redress.
The problem raised by this litigation is that the cases filed
against the defendant, including the 165 pending in this
district, involve nearly identical complaints, nearly identical
legal claims, and a nearly identical factual background as
to all issues of liability. As this court knows from its own
experience in trying one nine-week case in 1980, any at-
For a further, although adversarial, presentation of facts see, Van
Dyke, The Dalkon Shield: A “Primer” in IUD Liability, 6 Western
State Univ.L.Rev. 1. (1978).
*See Affidavit of R. P. Wolf, and Assistant General
Counsel of A. H. Robins Company. (June 19, 1981).
App. 26
tempts to try all these cases would bankrupt the district
court’s calendar and result in a tedium of repetition lasting
well into the next century.
Due to the national importance of the issues involved in
respect to class certification, opting instead for a more de-
liberate approach. The court conducted a series of status
conferences to discuss various methods for achieving econo-
mies of time and expense in the trial of these actions.
On February 9, 1981, the court ordered briefing from all
parties on the class certification issue. After careful con-
sideration of these briefs and the arguments of all counsel
at several subsequent hearings, the court issued its order
conditionally certifying this class action.
CERTIFICATION OF A CLASS ACTION
The power of a trial court to limit re-examination of legal
disputes by the use of representative suits has its genesis
in the cid court of equity’s recognition of the “bill of
peace.” Developed as a procedural device to prevent a mul-
tiplicity of actions at common law, the bill of peace per-
mitted consolidation of numerous actions involving com-
mon issues in a single suit in equity.“ The device was often
utilized when many parties were making claims as to the
same property or fund.’
The class action was a logical extension of the court's
equitable jurisdiction over bills of peace and was accepted
in re: Northern District of California “Dalkon Shield” TUD
Products Liability Litigation, 521 F. . 1188 (N.D. Cal. 1981).
See generally 1 Pomeroy urisprudence, §§ 252, 253
(1918); . Chafee, Bille of Peace Multiple Parties, 45 Harv.L.
Rev. 1297 (1932); 1 H. Newberg, Clas Actions, 1004 eet 2
See, e. g., Hom v. Tenants of Bromsgrove 2 K 166
1681); Brown v. Vermuden, 2 Eng. Rep. 802 ( 676).
App. 27
early on by American courts.’ Trial courts retained their
broad equitable powers to prevent a multiplicity of actions
when a large number of persons with a single legal griev-
ance sued or threatened to sue a defendant for alleged mis-
conduct arising out of identical treatment of class members.
In recognition of the large measure of discretion vest-
ed in the trial court to balance conflicting interests,”
enable a trial court to issue orders regarding coordination
of lawsuits even though no party to the action requests such
order. The court has a duty, for example, to determine on
its own motion whether or not a class action may be main-
ta ned. Moreover, the court may sua sponte certify sub-
classes during the pendency of an action without being
bound by the plaintiff's complaint.”
The fact that no plaintiff in this district sought class
relief is not dispositive of the power of this court to certify
a class action for two reasons.”
* See J. Story, Equity Pleadings, § 97 (3d ed. 1944); Note, Action
Under the Codes Against Representative Defendants, 36 Harv.L.
Rev. 89 (1922); Smith v. Swormstedt, 57 U.S. [16 How] 288, 14
L.Ed. 942 (1854); Supreme Tribe of Ben-Hur v. Cauble, 255 U.S.
356, 41 S.Ct. 338, 65 L.Ed. 673 (1921).
* See Cohn, The New Federal Rules of Civil Procedure, 54 Geo.
LI. 1204, 1214 (1966).
10 Senter v. General Motors Corp., 532 F.2d 511, 520-21 (6th
Cir.), cert. denied, 429 U.S. 870, 97 S.Ct. 182, 50 L.Ed.2d 150
(1976); Castro v. Beecher, 459 F.2d 725, 731 (ist Cir. 1975);
Stevenson v. Smith, 73 F.R.D. 79 (D. Del. 1976); Frankel, Some
— Observations Concerning Civil Rule 23, 43 F. RD. 39
(1
mn Fed. R. Civ. P. 230 c) (I); Carr v. Conoco Plastics, Inc., 423
F. 2d 57, 58 (Sth Cir.) cert. denied, 400 U.S. 951, 91 S.Ct. 241, 27
L.Ed.2d 257 (1970); Philadelphia Elec. Co. v. Anaconda American
Brass Co., 43 F.R.D. 452, 462-63 (E.D. Pa. 1968).
TI
fashioned their lawsuits as actions. See, e. g., National Women's
Health Network v. A. H. Robins Company, No. C-81-0004-N (D.
App. 28
First, it is now recognized that a federal district court
has broad and inherent power to regulate litigation be-
fore it. This inherent power, which is broader and more
flexible than the authority granted in the federal rules, is
derived from the court’s duty to achieve expeditious disposi-
tion of cases.
Exercise of the court’s power to control litigation is
particularly appropriate in cases where a class action could
reduce a multiplicity of identical suits. As this court stated
in its previous order,” the trial judge enjoys a wide range
of discretion in overseeing all aspects of class action litiga-
tion particularly in determining the certification issue. In
fact, the court has more control over the class action than
over ordinary actions, and thus must assume a more active
role in its certification and management.”
Nothing in Rule 23 prohibits a court from certifying
a class action when to do so would result in both a major
savings of judicial time in avoiding repetitive litigation and
Mass. filed Jan. 12, 1981). Additionally, at least one plaintiff filed a
brief in support of this court’s announced decision to certify a class.
Link v. Wabash Railroad Co., 370 U.S. 626, 629-31, 82 S.Ct.
1386, 1388-89, 8 L.Ed.2d 734 (1962) (sua sponte dismissal for lack
of prosecution): Van Bronkhorst v. Safeco Corp., 529 F.2d 943, 951
2 — 1976); Doe v. Rostker, 89 F. R. D. 158, 163 (N. D. Cal.
American Pipe & Constr. Co. v. Utah, 414 U.S. 538, 94 S.Ct.
756, 38 L.Ed.2d 713 (1974) (Rule 23 is desi to avoid the “multi-
icity of activity” on the part of courts litigants. ).
1 In re: Northern District of California “Dalkon Shield” IUD
Products Liability Litigation, 521 F Supp. 1188 (N.D. Cal. 1981).
% Gardner v. Westinghouse Broadcasting Co., 559 F.2d 209, 212
(3d Cir. 1977), aff'd, 437 U.S. 478, 98 S.Ct. 2451, 57 L.Ed.2d 364
Stale Price v. Lucky Stores Inc., 501 F.2d 1177, 1182 (9th Cir.
1 .
Yaffe v. Powers, 454 F.2d 1362, 1367 (Ist Cir. 1972); 3B J.
Moore, Federal Practice, J 23.50 (2d ed. 1980); 7 Wright, Miller &
Kane, Federal Practice and Procedure, § 1785 (1980 ed.)
C. Wright, Class Actions, 47 F.R.D. 169, 185 (1969).
App. 29
the preservation of the collective interests of ail class mem-
bers. Any alleged limitations contained in Rule 23 as to
the exercise of the court’s class action jurisdiction do not
control the result of this case because the federal rules state
that they were not intended to limit the pre-existing juris-
diction of the federal courts.”
It is well-established that courts tried representative
suits, in the interest of judicial efficiency, long before the
adoption of Rule 23.” As noted above, this case was cog-
nizable under the court’s equity jurisdiction.” Therefore,
the trial court in exercising its equity power may certify a
class even when no individual plaintiff fashions his com-
plaint to seek such relief.
The inherent powers of the trial court in conducting
a class action lawsuit clearly vest it with the authority to
certify a class when such a decision is in the collective
best interest of the plaintiffs.“ As this court stated in its
previous order:
** While at least one court appears to have fastened on the refer-
ence in Rule 23(c)(1) to actions “brought” as class suits as preventi
the sua sponte grant of class relief, Wilson v. Zarhadnick, 534 F.2
55, 57 (Sth Cir. 1976), no less an expert on Rule 23 than Professor
Moore concludes that the trial court’s expanded role under the rule
contemplates situations in which a court may transform an action
commenced as a non-class action on its own motion. 3B J. Moore,
Federal Practice, J 23.02 (2d ed. 1980).
Fed. R. Civ. P. 82; accord, Brennan v. Silvergate District Lodge
No. 50, 503 F.2d 800, $04 (9th Cir. 1974).
*° Hom v. Tenants of Bromsgrove, a Se 277 (Ch. 1681);
7 Wright, Miller & Kane, Federal Practice and E I
App. 30
In this action, plaintiffs are represented by many dif-
ferent law firms, each with an individual interest in
securing a punitive damage award for their clients. The
court, on the other hand, is in the best position of being
able to observe the spectrum of cases filed throughout
the country with only the collective interest of the plain
tiffs in mind.”
In light of this factual finding, and the observed need to
prevent an unnecessary race to the courthouse door, the
most equitable solution is certification of a class designed
to insure equal access to a recovery fund.
There is a second reason supporting this court’s decision
to certify this class. On June 26, 1981, the defendant filed
a Motion for Class Certification of a Rule 23(b)(1)(B)
class of all persons who have claims against it for punitive
damages.
It is axiomatic that either a plaintiff or a defendant
may move for class certification.“ That a defendant may
move for class certification is particularly compelling in the
context of 23(b)(1) class suit as that subdivision, like
equity’s “bill of peace,” is designed to protect the plaintiff
and the defendant from the prejudice caused by the filing
of multiple suits. The analogy to the “bill of peace” is per-
represents parties with conflicting interests. The early punitive dam-
age recovery of plaintiff No. 1 necessarily will effect the right of
plaintiff No. 2 to monetary recovery. As such, the plaintiffs’ lawyer
is placed in the unethical position of advising one client to pursue
his right, to the detriment of the other client.
n re Northern District of California Dalton Shield” IUD
Products Liability Litigation, 521 F.Supp. 1188, 1192 (N.D. Cal.
1981).
Fee Stevenson v. Smith, 73 F.R.D. 79 (D. Del. 1976); Kubin,
Class Maintainability in California, 27 Hastings L.J.
293, 297 (1975). See generally Argo v. Hills, 425 F Supp. 151, 159
(E.D.N.Y. 1977).
App. 31
suasive since in that context the defendant could resort to
the equity court for such relief.”
Accordingly, the court hereby grants the defendant's
motion.
The class action certified in this case, however, is limited
to two basic issues. First, this court does not purport to
restrict in any fashion an out-of-state plaintiff's right to sue
A. H. Robins Company, or any other defendant, for com-
pensatory damages arising out of her use of the Dalkon
Shield. On the contrary, this court simply is attempting to
coordinate the plaintiffs’ national claims for punitive dam-
ages. While this coordination will prevent any one plaintiff
from receiving an individual “windfall” punitive damage
award, it will also insure the right of all plaintiffs to some
proportionate share of any punitive damage recovery.
Second, with regard to plaintiffs who have chosen to file
in federal courts located in California, this court is exer-
cising its broad discretion to eliminate repetitious litigation
by certifying an issues-only class action on the question of
the drug company’s liability arising from the manufacture
and sale of the Dalkon Shield. Not only will these plaintiffs
have tie right to opt out of this statewide class action on the
liability issue, but each plaintiff will, if the class is success-
ful, return to her own court for a determination of individual
issues such as damages, causation and other affirmative
defenses.
The following constitutes a discussion of the court’s
reasons for certifying these two class actions.
Fee, Z. Chafee, Bills of Peace With Multiple Parties, 45 Harv.L.
Rev. 1297 (1932).
* Fed. R. Civ. P. 23(c)(4)(A) permits a class to be maintained
with respect to particular issues.
App. 32
CERTIFICATION OF CLASS ON PUNITIVE DAMAGES
Rule 23(b)(1) allows class actions to avoid creating
a risk of incompatible standards of conduct for the party
opposing the class, or of judgments for some class mem-
bers that threaten the interests of others, if separate ac-
tions are prosecuted.*” Termed the “prejudice” class ac-
tion provision,” Rule 23(b)(1) permits class actions as a
method of obviating potential prejudice and inconsisten-
cies which may result to the parties from a series of in-
dividual actions. Structurally, this provision is divided into
two clauses, (A) and (B), which appropriately can be
characterized as two sides of the same coin.”
Rule 23(b)(1)(A) takes as its focal point the possible
adverse effects individual actions may have on the party
opposing the class.“ This subdivision is designed to prevent
* Causey v. Pan American World Airways, Inc., 66 F.R.D. 392
(E.D. Va. 1975).
jn re “Agent Orange Product Liability Litigation, 506 F.Supp.
762, 789 (E.D.N.Y. 1980).
® Fed. R Civ. P. 23(b) (1) (A) and (B) provide:
(b) Class Actions Maintainable.
An action may be maintained as a class action if the prerequi-
sites of subdivision (a) are satisfied, and in addition:
(1) the prosecution of separate actions by or against individual
members of the class would create a risk of
(A) inconsistent or v: adjudications with respect to in-
dividual members of the class which would establish incom-
patible 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
page 17 to the adjudications
or substantially impair or *
See La Mar v. Ww ab Novels A Loon Con 9 Pod 461 1—
interests; .
Cir. 1973).
% A Wright, Miller & Kane, Federal Practice and Procedure,
§ 1773 (1980 ed.); see also Green v. Occidental Petroleum Corp.,
541 F.2d 1335, 1340 n.10 (9th Cir. 1976).
App. 33
the party opposing the class from being forced into incom-
patible standards of conduct.”
Subdivision B, upon which this court relies, permits class
actions in situations where separate suits prejudicially affect
the class members. This subdivision emphasizes the po-
tential undesirable effects on class members, rather than on
the party opposing the class. Subdivision B applies when
individual adjudication would, as a practical matter, dis-
pose of the interests of class members who are not parties
or substantially impair or impede the ability of absent
class members to protect their interests. Fed.R.Civ.P.
23(b)(1)(B). If individual actions inescapably alter the
substance of the rights of others having similar claims, Rule
23(b)(1)(B) becomes operative.”
Class certification under Rule 23(b)(1)(B) generally
is designed to accomplish equitable distribution of a liznited
fund to all members of a proposed class who have a claim
and whose interest may otherwise be impaired by damage
awards in individual actions that deplete or diminish the
fund.”
The Advisory Committee Notes state that (b)(1)(B)
applies to “situations where the judgment in a nonclass
action by or against an individual member of the class, while
not technically concluding the other members, might do so
as a practical matter.“
Although the court is not characterizing this as an interpleader
situation, the amount of punitive damages recoverable againet Robine,
is, at least in theory, a sum certain for interpleader purposes. Con-
ceptually, this sum certain can be viewed as a limited fund.
32 See Green v. Occidental Petroleum Corp., 541 F.2d 1335, 1340
(9th Cir. 1976).
** 3B J. Moore, Federal Practice J 23.35[2] (2d ed. 1980); see
also Dickinson v. Burnham, 197 F.2d 973 (2d Cir.), cert. denied,
344 US. 875, 73 S.Ct. 169, 97 L.Ed. 678 (1952).
(966) of Advisory Committee on Rules, 39 F.R.D. 69, 100-101
App. 34
Neither the Rule nor the Advisory Committee Notes re-
quires proof that claims “will”, as a certainty, exhaust the
fund. Certification is appropriate if individual actions “may”
affect the claims of parties not before the court.
The instant matter is properly maintained as a Rule
23(b)(1)(B) action. At issue here is a limited common
fund potentially exhaustible by some of the prospective
claimants. Claims in excess of $3 billion have been filed
thus far, and A. H. Robins’ assets currently equal $280
million.” There is good reason to believe that the total judg-
ments may exceed, to a substantial degree, the ability of
A. H. Robins to respond. Although the court makes no
determination as to the liability of A. H. Robins, the court
notes that it cannot be said with assurance that A. H. Robins
can satisfy the judgments in toto.
The situation presented here is identical to that in
Coburn v. R Corp., 77 F.R.D. 43 (E.D. Ky. 1977). In
Coburn, claims in excess of $1.5 billion were filed, and
the assets of the defendant were approximately $3
million. The court held the matter maintainable as a Rule
23(b)(1)(B) class action and stated:
In no event, however, should this litigation become an
unseemly race to the courtroom door with monetary
0
rest.
The threat of constructive bankruptcy pervades this mat-
ter, and as in Coburn, this court views Rule 23(b)(1)(B)
as the most practical method of avoiding the “race to the
courthouse” syndrome.
Moreover, it now appears that the claims filed against this de-
fendant are increasing in number. See Affidavit, Robert G. Watts,
filed September 22, 1981.
* 77 F.R.D. 43, 45.
App. 35
This situation is distinguishable from that of In re Agent
Orange Product Liability Litigation, 306 F.Supp. 762
(E.D.N.Y. 1980). In Agent Orange there were five named
defendants who suffered no threat of real or constructive
bankruptcy. The court noted the unlikelihood of insolvency
and rejected the idea of a Rule 23(b)(1)(B) class action
on the ground that it was not a situation of multiple claim-
ants who may deplete the fund and leave nothing for the
late-comers /d.
We have here the situation noted in Green v. Occidental
Petroleum Corp., 541 F.2d 1335 (9th Cir, 1976), an in-
stance where mass tort litigation is appropriately handled
as a class action. In a footnote, the Green court reasoned
that the claims of the named plaintiffs would substantially
impair or impede the interests of other members not parties
to the adjudication where the claims of all plaintiffs ex-
ceeded the assets of the defendant. Id. at 1340 n.9. In such
a situation, a group of individuals would be allowed full
compensation which would impair the rights oi those not in
court.
A limited fund exists in this case for another compelling
reason. It is clear that successive trials of individual claims
may “as a practical matter be dispositive” of the rights of
other members of the class because there certainly is an
implied in law ceiling on the amount of punitive damages
that may be assessed against the defendant company.”
It is almost certain that an award of punitive damages
to a plaintiff in one case will alter the potential recovery
See deHaas v. Empire Petroleum Co., 435 F.2d 1223, 1231
(10th Cir. 1970); Roginsky v. Richardson-Merrell, Inc., 378 F.2d
832 (2d Cir. 1967). Plaintiffs have no right to, or vested interest in,
punitive damages. Plaintiffs do, however, have a right to seek punitive
damages. It is this right to seek that the consequences of individual
actions will impair.
App. 36
of a plaintiff in a later filed suit. In theory, when a plaintiff
recovers punitive damages against a defendant that repre-
sents a finding by the jury that the defendant was sufficiently
punished for the wrongful conduct. If the jury’s verdict
constitutes excessive punishment, the trial judge is em-
powered to use remittitur to reduce the award to the proper
amount.
If plaintiff No. 1 recovers one million dollars in punitive
damages, plaintiff No. 2 runs a serious risk of being told
that the amount awarded in the first suit represented an
implied finding of the maximum amount the defendant
should be punished. Obviously, the greater the number of
plaintiffs, the more serious the risk becomes that the late
plaintiff will find her demand for punitive damages dis-
missed. At the very least, the trial court may admit evi-
dence as to the payment of prior awards working to the
detriment of a party seeking additional punishment for the
ame misconduct.”
Finally, in light of the fact that no plaintiff has a right
to punitive damages, courts are likely to solve the inherent
practical and constitutional problems with multiple punish-
ment for the same conduct by creating doctrines severely
%8 See generally Globus v. Law Research Service, Inc., 418 F.2d
1276 (2d Cir. 1969), cert. denied, 397 U.S. 913, 90 S.Ct. 913, 25
L.Ed.2d 93 (1970); Roginsky v. Richardson-Merrell, Inc. 378 F.2d
832 (2d Cir. 1967); Maxey v. Freightliner Corp., 450 F. . 955
(N.D. Tex. 1978); Putz & Asitz, Punitive Damage Claims of Class
Members Who Opt Out: Should They Survive? ——— U.S.F.L. Rev.
—— (1981); Note, Mass Liability and Punitive Damages Overkill,
30 Hastings L.J. 1797 (1979); Coccia & Morrissey, Punitive Dam-
ages in Products Liability Cases Should Not Be Allowed, 22 Trial
L. O. 46 (1978).
8° State ex rel. Young v. Crookham, 290 Or. 61, 618 P.2d 1268,
1272-73 (1980); see generally 11 Punitive Damages, § 4.8
(1980); Restatement (Second) of T 11. 909 (1977); Morris,
TY Damages in Tort Cases, 44 . L. Rev. 1173, 1195
(1
App. 37
limiting the right to recover punitive damages in the mass
tort situation. The United States Supreme Court has often
recognized that limitations, up to and including elimination,
may be placed on the power to award punitive damages if
there exists a strong countervailing interest.“ As such, the
interest underlying the due process rights of the defendant
rises to such a level.
THEORY OF PUNITIVE DAMAGES
Punitive damages in product liability litigation have the
potential not only to punish a defendant but to severely
damage its finances. In mass tort iiability situations the
inequity and harmful effect of civil punitive damages are
multiplied many times over.
There is no “right” to punitive damages, and the
awarding of punitive damages lies completely within the
discretion of the trier of fact.“ As a general rule, puni-
tive damages are recoverable in situations in which the
defendant’s misconduct involves intentional or malicious
wrongdoing. The basis for punitive damages is their de-
terrent effect on the future conduct of the tort-feasor, and
not their benefit to the specific victim.
Punitive damages are, to a large degree, a windfall
to a plaintiff. The compensatory damage award serves the
function of fully compensating the plaintiff for the injuries
suffered. Punitive damages are exacted for the benefit of
society with the intended effect of deterring defendant from
0 See, e.g., Newport v. Fact Concerts, Inc., ——- U.S. ——, 101
S.Ct. 2748, 69 L.Ed.2d 616 (1981) (municipalities are immune from
punitive damages); International Brotherhood of Electrical Workers
v. Foust, 442 U.S. 42, 48-50, 99 S.Ct. 2121, 2125-27, 60 L. Ed. 2d
698 (1979) (Labor Policy); Gertz v. Robert Welch, Inc., 418 U.S.
323, 349-50, 94 S.Ct. 2997, 3011-12, 41 L.Ed.2d 789 (1974)
(First Amendment).
Fee, e.g., Stoody Co. v. Royer, 374 F.2d 672 (10th Cir. 1967).
App.38
similar conduct in the future. These awards are measured
with an eye more to the total net worth of the defendant
than to the actual damage suffered by the individual plain-
tiff. Since each jury in a mass tort litigation situation will
award punitive damages for wrongful conduct that affected
an entire class of injured parties, a series of separate actions
may result in windfall awards to individual plaintiffs at the
expense of a disproportionately punished defendant.
Punitive damage awards by juries can reach staggering
amounts.“ Where, as here, one act or omission creates an
injury to more than one victim, the possibility of multiple
actions against the defendant arises. The punitive damage
award in any one of the actions might constitute a reason-
able deterrent. Yet, each plaintiff is permitted to try her
case in a vacuum, oblivious to other pending actions or to
prior punitive damage awards. Each plaintiff may then
receive a punitive damage award with the result that the
cumulative awards financially destroy the defendant.
The purpose of punitive damages is to sting, not kill,
a defendant. Punitive damages should not be permitted
to bankrupt a defendant.”
The potential for abuse implicit in repeated awards of
punitive damages based on the same conduct is presently
In Grimshaw v. Ford Motor Co., 119 Cal. App.3d 757, 174
Cal.Rptr. 348 (1981), the jury awarded the plaintiff $125 million
in punitive damages. The jury based its award on the profit Ford
Motor Company reaped from its omission to act properly. This
award was later reduced by the trial court, and on appeal, the trial
court was affirmed. See also Pease v. Fletcher Jones Beech Aircraft
(Orange County, California, June, 1971 jury award of $17,250,000
as punitive damages, later set aside); Rosendin v. Avco-Lycoming
(Santa Clara County, California, March 1971 jury award of
$10,500,000 as punitive damages).
** See Wynn Oil Co. v. Purolator Chemical Corp., 403 F.Supp.
226 (M.D. Fla. 1974).
App. 39
ameliorated only by the tendency of trial and appellate
judges to reduce the jury awards.
In Roginsky v. Richardson-Merrell, Inc., 378 F.2d 832
(2d Cir. 1967), Judge Friendly discussed the implications
of the potential for punitive damage “overkill.” The court
noted that it knew of no principle “whereby the first
punitive damage award exhausts all claims for punitive
damages and would preclude future judgments. . . .”“* The
court recognized, though, the difficulty in administering
claims for punitive damages in a multiplicity of suits so as
to avoid overkill.
A Rule 23(b)(1)(B) nationwide class action for puni-
tive damages obviates many of the abuses inherent in mul-
tiple punitive damage awards,
A defendant has a due process right to be protected
against unlimited multiple punishment for the same act.
A defendant in a civil action has a right to be protected
against double recoveries not because they violate “double
jeopardy” but simply because overlapping damage awards
violate that sense of “fundamental fairness” which lies at
the heart of constitutional due process. Certainly the prin-
ciple of res judicata, the notion that litigation must come
to an end, that a party cannot sue or be sued repeatedly on
the same cause of action, is a part of the process that is
due under our constitutional system.
Our law on punitive damages was created in an era
of single plaintiff versus single defendant disputes and has
not yet been adapted to the complexity of multiparty litiga-
tion. Common sense dictates that a defendant should not be
subjected to multiple civil punishment for a single act or
378 F.2d 832, 839.
App. 40
unified course of conduct which causes injury to multiple
plaintiffs.“
Without a Rule 23 (b) (1) (B) class action, the individual
and cumulative awards of punitive damages may reach
astounding amounts. How often is the defendant to be pun-
ished? Under the doctrine of punitive damages there is no
limiting rule in such a situation. There is no fair way to
guide the juries. There is no basis for priority to punitive
damages among the claimants, or for awarding such dam-
ages to one or more and not to others. In light of the ob-
vious application of punitive damages in the products lia-
bility context,“ the class action is the best available device
to protect the interests of all parties.
STATEWIDE CLASS ACTION UNDER B(3)
In order to bring and maintain a class action, a po-
tential litigant must satisfy all of the conditions of Rule
23(a) and must also establish that such action is appro-
priate under one of the subdivisions of 23(b).
a. Numerosity. Rule 23(a)(1) states that a prerequisite
to certification is that “the class is so numerous that joinder
of all members is impracticable, ...” In this case, defend-
there are at least several hundred potential class members.
Moreover, this court alone has more than 160 prospective
putz and Astiz, Punitive Damage Claims of Class Members Who
Out: Should They Survive?, ——— U.S.F.L. Rev. —— (1981).
„ 1 ee ee
797 (1979). Cf. Western Union Telegraph Co. v.
App. 41
individual suits pending before it. The court finds that the
numerosity requirement is satisfied.
b. Commonality. A second requirement for class certifi-
cation is that “there are questions of law or fact common
to the class... Fed. R. Civ. P. 23 (a) (2). Each of the cases
filed in California federal courts contain common issues of
fact and law with respect to issues of design, testing, manu-
facturing, labeling and inspection of the Dalkon Shields and
with respect to issues of negligence, strict products liability,
adequacy of warnings at relevant time periods, breach of
warranty, fraud and conspiracy.
c. Typicality. Rule 23(a)(3) further requires that “the
claims or defenses of the representative parties are typical
of the claims or defenses of the class.
If the representatives’ claims or defenses, and the claims
or defenses of the class members “stem from a single
event or are based on the same legal or remedial theory,”
Rule 23(a)(3) is satisfied.“ It is apparent in these Dalkon
Shield cases that class members state claims arising out of
the same factual setting and therefore the representative
parties’ claims are typical.
The more serious difficulty arises from the fact that,
where different plaintiffs sue different defendants, “typicality
is lacking when the representative plaintiffs’ cause of action
is against a defendant unrelated to the defendants against
whom the cause of action of the members of the class
lies.“ However, the La Mar court articulated two excep-
tions to its strict rule. The court stated:
17 Wright, Miller & Kane, Federal Practice and Procedure § 1764
(1980 ed.).
La Mar v. HA Novelty & Loan Co., 489 F.2d 461, 465 (9th
Cir., 1973).
App. 42
Obviously this position does not embrace situations in
which al! injuries are the result of a conspiracy or cun-
certed schemes between the defendants at whose hands
the class suffered injury. Nor is it intended to apply
in instances in which all defendants are juridically re-
lated in a manner that suggests a single resolution of
the dispute would be expeditious.”
This case falls within the exceptions recognized by
La Mar in that piaintiffs have alleged a concerted scheme
or conspiracy between defendants in the marketing, design,
testing, and production of Dalkon Shields.
Moreover, there exists a juridical relationship between
defendants which enables a single resolution of this action
and precludes a multiplicity of similar actions.
The court [La Mar] merely discussed a few prior
cases within which the court considered a juridical re-
lationship sufficient to justify class treatment to exist.
These cases involved class actions brought against
state officials applying a common rule. . . There is no
discussion in La Mar of other possible types of juridical
links that make class treatment of an action proper.”
The court in In re Itel went on to find a juridical link to
permit class action treatment in that case, although the
“specific kind of juridical link discussed in La Mar is not
present in this case.
This court, like the court in In re Itel, gives much con-
sideration to the “great judicial convenience and economy
which class certification would serve” in this case.” Ac-
Id. at 466.
% In re Itel Securities Litigation, 89 F.R.D. 104, 121 (N. D. Cal.
App. 43
cordingly, this court recognizes that an important legal rela-
tionship justifying class treatment in this case is that each
defendant is united in a chain of privity that has allowed
them to introduce the Dalkon Shield into the stream of
commerce, Among the defendants are the inventors of the
Dalkon Shield, the manufacturer and producer of the ma-
terial and/or end product, and the distributor and/or sup-
plier of the devices. All common issues of liability will
necessarily entail careful examination of the role of each
defendant in the alleged torts, the possible theories of lia-
bility as appropriate, and the impact of each defendant's
role on all other defendants. For these reasons, the court
finds the presence of juridical links necessary to allow this
suit to proceed as a class action.”
d. Adequacy of Representation. The last requirement of
Rule 23(a) is that “the representative parties will fairly
and adequately protect the interests of the class.” This rule
has been interpreted to require (1) that the representative
party be a forceful advocate and his chosen attorney must
be an experienced advocate, and (2) the representative
party must have interests which are compatible with the
members of the class.“
The representative parties represent a wide spectrum of
injuries and circumstances. Additionally, the court has no
reason to suspect any antagonism between any of the ab-
sentees and the named plaintiffs. In fact, the interests of
named plaintiffs are indistinguishable from those of the
absentees. The many firms currently involved in this cer-
tification of the class have been involved in approximately
700 other Dalkon Shield cases. From its many interactions
* This court will, if necessary, consider severing the case as to the
individual defendants in order to retain
% Schulman v. Ritzenbreg, 47 F. R. D. 202, 207 (DDC 1979).
App. 44
to date with the firms in this case, this court determines that
whichever firm is chosen to represent named plaintiffs will
vigorously and competently litigate the action.
Rule 23(b)
In addition to the requirements of Rule 23(a), certifica-
tion depends on a demonstration that this action meets one
of the alternative requirements of Rule 23(b) as well.
Rule 23(b)(3) states that if
the court finds that the questions of law or fact com-
mon 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 contro-
versy,“
then the class action may be maintained.
a. Mass Tort vs. Mass Products Liability. Mass mar-
keting of contraceptives such as the intrauterine device was
the beginning of a modern phenomenon, and for several
reasons does not fit in the category of “mass accident” torts.
This situation more closely resembles that of personal
injury suits alleging misfeasance or negligence by defend-
ants over a long period of time.”
The framework originally implemented for the tradi-
tional litigation of tort injuries (one plaintiff versus one
defendant) was not intended to and cannot effectively ac-
commodate numerous individuals with grievances derived,
in part or in whole, from mass marketing of medical de-
vices or drugs. If such traditional structures are mechani-
cally used merely for the convenience and familiarity of
adhering to traditional practices, then a great many per-
sons will be without effective and practical means of re-
Fed. R. Civ. P. 23 (b) (3).
** Mink v. Univ. of Chicago, 460 F.Supp. 713 (N. D. Ill. 1978).
App. 45
dress. This court's certification of a statewide federal district
court litigants’ class is properly within the scope of the
historical function of courts and of Rule 23(b) (3).
b. Predominance. The first of two mandatory charac-
teristics of a 23(b)(3) action is that “the questions of law
or fact common to the members of the class predominate
over any questions affecting only individual members.”
In mass product liability cases such as these cases now
before the court, the foremost difficulty lies in whether or
not innumerable individual issues or complaints will sub-
sume the common issues. There is the possibility that signifi-
cant questions of individual injury, causation, and medical
history would effect individual cases differently and the
action then “would degenerate in practice into multiple law-
suits separately tried.“
This court does not maintain that this one class action
suit disposes of the individual questions that inevitably
would mandate separate trials. In the Order of Class Certi-
fication,” it was specifically mandated that these cases must
return to the districts of original jurisdiction for further
trial of individual application of the outcome of this class
action.
More importantly, this class is brought together “more by
a mutual interest in the settlement of common questions than
it is divided by the individual members’ interest in the
matters peculiar to them.“ Professor Moore would focus
on whether the proposed class was “seeking to remedy a
common legal grievance.” * Professors Wright, Miller and
See Advisory Committee Note to the 1966 Amendments to Rule
23, 39 F.R.D. 69, 103 (1966).
88 In re Northern District of California “Dalkon Shield” IUD Prod-
ucts Liability Litigatiom 521 F.Supp. 1188 (N.D. Cal. 1981).
on J. Moore, Federai Practice J 23.45[2] (2d ed. 1980).
eo
App. 46
Kane, however, would focus on whether there existed a
“common nucleus of operative facts” that could be resolved
in one adjudication.“ Both seem to reject quantitative mea-
sures of time and attention needed to resolve individual
versus Class issues.
In this case, the common nucleus of operative facts that
lends itself to class adjudication is whether and when de-
fendants knew or should have known of the dangers of the
Dalkon Shield to its users. Most evidently, if any one
plaintiff is to recover any measure of damages, she must
establish defendants’ liability on this issue. As previously
stated, the facts surrounding defendants’ design, produc-
tion, etc. of the Dalkon Shield are the primary focus of this
class action and if established, plaintiffs will prevail. Then
and only then may plaintiffs proceed to the other issues in
the suit: causation, damages and affirmative defenses. In
this manner, bifurcation of these important issues ade-
quately satisfies Rule 23(b)’s predominance requirements.
c. Superiority. The other major requirement of Rule
23(b)(3) is that class adjudication must be “superior to
other available methods.”
In examining the interests of the class members, the
importance of each member having her own day in court
should be balanced against the great cost and technical
difficulties of discovery and independent litigation in general.
There currently are more than 160 individual cases in-
volving Dalkon Shields pending before this court. Pretrial
proceedings have been delayed so that the class action could
be pursued. If these individual cases are forced to be liti-
gated one by one, the congestion ensuing for this court
and the other district courts would produce an unnecessary
0 7A Wright, Miller & Kane, Federal Practice and Procedure
§ 1778 (1980 ed.).
App. 47
and unprecedented burden on California’s federal judicial
system. The class action is the method of handling these
cases so that disruption to the court system will be mini-
mized.
The Northern District is the appropriate forum in which
to concentrate the class action due to the number of cases
filed in this district and based on this court’s familiarity
with the issues and procedures peculiar to this type of case.
This court recently has concluded a trial involving a Dalkon
Shield injury. The law firms of counsel involved in the
many cases to be certified as a class are already in the
vicinity of the Bay Area, or are in close contact with law
firms in this area.
Although the class is so large that joinder is impracti-
cable, it is not so great that management is impracticable.
Bifurcation of the limited common issues, carefully designed
procedures for discovery, deposition and introduction of
evidence, and other additional court orders tailored to fit
this action insure that manageability problems will be
minimal.
In summary, the certification of all plaintiffs who file
Dalkon Shield cases in the federal courts of California up
to and including the commencement of the trial in this ac-
tion meets the prerequisites of Rule 23(a) and addition-
ally satisfies the balancing factors of Rule 23(b)(3).
MOTION TO VACATE CERTIFICATION ORDER
On August 31, 1981, the court heard lengthy argument
on a motion brought by one plaintiff's counsel” to vacate
The plaintiff's counsel (referred hereinafter as “plaintiff's coun-
sel”), Bradley Post, is the lead liaison plaintiff's coursel at the
Multi-District Litigation in Wichita, Kansas. Although Mr. Post's
motion was joined in by several plaintiffs, this court does not wish to
intimate that all plaintiffs nationwide joined or agreed with the ob-
App. 48
the June 25, 1981 conditional certification order. After
careful consideration of the excellent arguments and briefs
of all counsel, the evidence in the record with regard to the
incidence and potential for punitive damage awards, and all
other matters in the record, this court orally denied the
motion to vacate. The following constitutes the court’s
written opinion denying the motion.
Personal Jurisdiction
The plaintiff's counsel begins by raising an important and
fundamental question which strikes at the very heart of our
jurisprudential system. The issue presented is whether a
court may exercise in personam jurisdiction over a plain-
tiff’s class action suit where some of the unnamed class
members neither reside in nor have contacts with the forum
state. Resolution of this question requires accommodation
of the conflicting principles underlying representative ad-
judication and those supporting traditional restrictions on
the exercise of personal jurisdiction.
As in almost all cases in which the issue of in personam
jurisdiction arises,” there is no clean slate for the court’s
use, but only a cluttered board etched with over one hun-
dred years of United States Supreme Court precedent.
In Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565 (1877),
the United States Supreme Court held that a state’s sover-
jections raised at the hearing on this motion. However, Mr. Post
„ eee ape
Al Eee
full extent permitted by the Constitution. See Cal. Civ. Proc. § 410.10.
Therefore the jurisdictional analysis becomes a search for the outer
limits of what due process permits. Forsythe v. Overmyer, 576 F.2d
779, 782, cert. denied, 439 U.S. 864, 99 S.Ct. 188, 58 L.Ed.2d 174
App. 49
eign power, and hence the jurisdiction of its courts, was con-
fined by the territorial boundaries of the state.”
In an opinion by Mr. Justice Field, the Court declared as
a “principal of general, if not universal, law” that “in an
action for money or damages where a defendant does not
appear in the court, and is not found within the State, and
is not a resident thereof but has property therein, the juris-
diction of the court extends only over such property. . . .”™
After Pennoyer, the expansion of multistate enterprise
and the development of the automobile posed problems for
strict application of a territorial power theory.“ Courts,
therefore, developed fictional jurisdictional theories in an
attempt to reconcile the territorial power theory with modern
realities. Courts “inferred” physical power by asserting ju-
risdiction based on theories of implied consent, domicile and
constructive presence.”
The wooden rule of Pennoyer was made more flexible in
International Shoe Co. v. Washington, 326 U.S. 310, 66
S.Ct. 154, 90 L.Ed. 95 (1945). The Supreme Court estab-
lished a jurisdictional theory based on due process and fun-
damental fairness when it declared:
[D]ue process requires only that in order to subject
a defendant to a judgment in personam if he be not
present within the territory of the forum, he have
certain minimum contacts with it such that the main-
on US. 714, 720, 24 L.Ed. 565.
*
* See generally Casad, Shaffer v. Heitner: An End to Ambivalence
in Jurisdiction Theory? 26 Kan.L.Rev. 61, 63 (1977).
For a further discussion of the development of the post-Pennoyer
j adaptation see Kurland, The Supreme Court, the Due
Process Clause and the In Personam Jurisdiction of State Courts
From Pennoyer to Denckla: A Review, 25 U.Chi.L.Rev. 569 (1958).
App. 50
tenance of the suit does not offend “traditional notions
of fair play and substantial justice.“
While there are no precise yardsticks by which to mea-
sure the necessary minimum contacts under the /nterna-
tional Shoe standard, courts have stressed certain factors in
reaching jurisdiction decisions.”
In World-Wide Volkswagen v. Woodson, 444 U.S. 286,
100 S.Ct. 559, 62 L.Ed.2d 490 (1980), the high court’s
most recent pronouncement on jurisdictional standards, the
Supreme Court affirmed the “minimum contacts” formula
and stressed its dual functions—to protect a defendant from
the burdens of “litigating in a distant or inconvenient forum”
and to prevent states “through their courts [from reaching]
out beyond the limits imposed by them as co-equal sover-
eigns in a federal system.“ The court ruled that the Okla-
homa court’s exercise of jurisdiction over out-of-state car
dealers was improper.
The “minimum contacts” test outlined above is a stan-
dard that has been applied exclusively to cases in which
a forum sought to exercise jurisdiction over non-resident
International Shoe Co. v. Washington, 326 U.S. 310, 316, 66
S. Ct. 154, 158, 90 L.Ed., 95 (1945) quoting Milliken v. Meyer, 311
U.S. 457, 463, 61 S.Ct. 339, 342, 85 L.Ed. 278 (1940).
® The Ninth Circuit has developed a three-part test in all cases
where general jurisdiction is not conceded:
(1) ——— é> cutee ost —
mate some transaction with the forum or some act
by which he purposefully avails himself the privilege of
activities in the forum, thereby invoking ‘he bene-
fits and protections of its laws. (2) The claim must be one
which arises out of or results from the defendant’s forum-
related activities. (3) Exercise of jurisdiction must be reason-
able. Data Disc, Inc. v. Systems Technology Assoc., Inc., 557
F.2d 1280, 1287 (9th Cir. 1977) (citations omitted). Accord,
Taubler v. Giraud, 655 F.2d. 991, 993 (9th Cir. 1981).
*® World-Wide Volkswagen v. Woodson, 444 U.S. 286, 100 S.Ct.
559, 62 L.Ed.2d 490 (1980).
App. 51
defendants. The notions of residence and territoriality,
which gave rise to the minimum contacts test to protect
absent defendants, have no application to absent plaintiffs
who already are protected by notice of a right to be heard
and adequate representation.”
The strict rules of personal jurisdiction governing most
civil actions necessarily must yield when a lawsuit is
brought that is representative in nature, particularly when
such an action involves alleged misconduct that takes place
in more than one state.”
It has long been recognized that class actions may
proceed, in fact often must proceed, in the absence of per-
sonal jurisdiction over all class members. In Supreme Tribe
of Ben-Hur v. Cauble, 255 U.S. 356, 41 S.Ct. 338, 65 L.Ed.
673 (1921), the United States Supreme Court allowed a
class action brought in federal court on behalf of persons
who “resided in many different states of the Union,” and
held that the judgment rendered therein was binding on all
7 Ross, Multistate Consumer Class Actions in Illinois, 57 Chi-Kent
L.Rev. 397, 414 (1981).
Federal courts have long assumed jurisdiction over nationwide
classes notwithstanding that a majority of plaintiffs were not within
the jurisdiction of the district court. See, e.g., United States v. Will,
449 U.S. 200, 101 S.Ct. 471, 66 L.E.2d 392 (1980); Califano v.
Yamasaki, 442 U.S. 682, 701-03, 99 S.Ct. 2545, 2558-59, 61
L.Ed.2d 176 (1979); McClure v. Harris, 503 F.Supp. 409, 415
(N.D. Cal. 1980); Philadelphia Elec. Co. v. Anaco American
Brass Co., 43 F.R.D. 452 (E.D. Pa. 1968).
This court recognizes that these cases involved representative plain-
tiffs who were seeking certification rather than resisting it, such
that the issues were never raised. However, these nationwide class
actions have been certified most often in "23(b) (1) and (b)(2)
class suits where the unnamed class members would not have been
entitled to opt-out or receive notice. As such, the mere ition
of the viability of class suits in these contexts seems to imp y that
— 1 end net gonsense, fo tho foundation af dao
process in the class suit.
App. 52
members.” The court noted that the class action judgment
was valid and binding despite the fact that the federal court
did not have jurisdiction over all members of the class.
In Hansberry v. Lee, 311 U.S. 32, 61 S.Ct. 115, 85
L.Ed. 22 (1940) the court was even more explicit in its
recognition of the special jurisdictional nature of the class
suit:
It is a principle of general application in Anglo-
American jurisprudence that one is not bound by a
judgment in personam in a litigation in which he is not
designated as a party or to which he has not been made
a party by service of process.... To these general
rules there is a recognized exception that to an extent
not precisely defined by judicial opinion, the judgment
on a ‘class’ or ‘representative’ suit, to which some mem-
bers of the class are parties, nay bind members of the
class or those represented who were not made parties
to it. (citations omitted.)
The deviation from the jurisprudential maxim that “every-
one is entitled to his day in court” has been recognized in
the language and case law interpretation of Federal Rule
23. Rule 23(a)(1) requires that the class be “so numerous
that joinder of all members is impracticable.” The imprac-
ticability standard encompasses not only cases with an
unmanageably large number of plaintiffs but also preserves
the old equity notion that joinder is impracticable or im-
7 255 U.S. 356, 364, 41 S.Ct. 338, 341, 65 L.Ed. 673. See also
Hartford Life Insurance Co. v. Ibs, 237 U.S. 662, 671-74, 35 S.Ct.
692, 695-96, 50 L.Ed. 1165 (1915).
311 US. 32, yd a 115, Mien’ Veliay’ Bee 22 (em-
i pplied). Accord, sier v. Mi roadcasting
= 656 20 1295, 1299 (9th Cir. 1981); Calagaz v. Calhoon,
309 F.2d 248, 254 (Sth Cir. 1962); Maraist and Sharp, Federal
Procedure’s Troubled Marriage: Due Process and The Class Action,
49 Tex.L.Rev. 1 (1970).
App. 53
possible when the court is unable to acquire jurisdiction
over all class members."
Similarly, the jus tertii nature of a class suit is ex-
emplified in a 23(b)(1) or 23(b)(2) class action. In light
of the fact that the (b)(1) or (b) (2) class is most cohesive
in interest and that the issues determined in the class suit
essentially are the same as to all class members, courts
have held that due process does not require that unnamed
plaintiffs be given a chance to opt out or receive notice of
the action.” Rather due process requires only that class
members in such courts be adequately represented. It is
axiomatic, of course, that these rules are constitutionally
permissible only because the remedies afforded by a class
action are a sufficient alternative for the protection of the
unnamed plaintiffs.”
Finally, in the analogous area of subject matter ju-
risdiction, it is well-recognized that a class suit brought in
federal court upon diversity of citizenship, only requires Mat
the citizenship of the named parties be considered. Courts
have reconciled due process requirements with the relaxa-
tion of rules governing subject matter jurisdiction by stress-
™ See 7 Wright, Miller & Kane § 1762 (1980 ed.); Donelan,
Prerequisites to a Class Action Under New Rule 23, in The Class
wa — Symposium, 10 B.C. Ind. & Comp. L. Rev. 527, 531
1969).
% Dosier v. Miami Valley Broadcasting Corp., 656 F.2d 1295,
1299 (9th Cir. 1981); Robertson v. National Basketball Associa-
tion, 556 F.2d 682, 686 (2nd Cir. 1977); Larionoff v. United States,
533 F.2d 1167 (D.C. Cir. 1976), d., 431 U.S. 864, 97 S. Ct. 2150,
53 L.Ed.2d 48 (1977); A. Miller, Problem of Giving Notice in
cality. 7 Wright, Miller & Kane § 1789 (1980 ed.).
* Snyder v. Harris, 394 U.S. 332, 340, 89 S.Ct. 1053, 1058, 22
L.Ed.2d 319 (1969); see also cases cited in note 105 infra.
App. 54
ing the sheer necessity of such rules in order to retain the
viability of the class action device.“
Many courts” and a host of commentators” have ex-
pressed doubts that the minimum contacts test should be
extended to unnamed members of a plaintiff's class. Im-
posing a requirement that all class members be within the
court’s jurisdiction would substantially negate the prac-
tical effects of the class action device. “[R]equiring personal
jurisdiction over all of the class members would in effect
destroy the class action concept since by definition there
could be no ‘absent’ members.
If in every case unnamed class members were lurking in
the background waiting to challenge the action due to lack
C. — ae eee (3d ed. 1976) and cases
cited therein. Similarly, for only the residence of
one named party need be — mf Co. v. Advance-
United Expressways, 494 F.2d 126 ce | Cir. 1974); Research Corp
2 Associated Growers, Inc., 301 F.Supp. 497 (N. D. Al.
% Schlosser v. Allis- Chalmers Corp., 86 Wis. 2d 226, 271 N. W. ad
879 (1978); Shutts v. Phillips Petroleum Co., 222 Kan. 527, 567
P.2d 1292 (1977), cert. denied, 434 U.S. 1068, 98 S.Ct. 2 55
L.Ed.2d 769 (1978). Contra, Feldman, v. Bates Mfg. Co., 143
N.J.Super. 84, 89-94, 362 A.2d 1177, 1179-82 (1976).
Ross, Multistate Consumer Class Actions in Illinois, 57 Chi-Kent
L 3 397 (1981); Comment, Multistate Plaintiff Class 1
Jurisdiction and Certification, 92 Harv.L. Rev. 718 (1979); Com-
ment, Toward a Policy-Based Theory of State Court Jurisdiction
Over Class Actions, 56 Tex.L.Rev. 1033 (1978); Comment, In
Personam Jurisdiction Over Nonresident Plaintiffs in Multistate Class
Actions, 17 Washburn L.J. 382 ag yb Comment, Consumer Class
Actions with a Multistate Class: Problem of Jurisdiction, 25
L.J. 1411 (1974); K. Funds, Class Actions, 8-27 (III. Inst.
for 1979); 3B J. Moore, Federal Practice, J 23.1115] (2d ed.
1980); Restatement (Second) of Judgments § 26 (Tent. Draft No.
5, March 10, 1978).
Parsons and Starr, Environmental ion and Defendant
Class Actions: The Unrealized Viability of Rule 23, 4 Envir. L. O.
881, 888-89 (1975). See also In re Securities Litigation, 79
F.R.D. 283, 291 (N.D. Cal. 1978).
App. 55
of jurisdiction, courts would rarely, if ever, certify classes
involving large numbers of plaintiffs. Such a result was
never intended by either the early courts of equity or the
drafters of modern Rule 23.
above and rules governing class actions is resolved, at
least with respect to plaintiffs’ classes,” by requiring that
designated representatives adequately represent the interest
of the class.“ The rule is plain, therefore, that if members
ment entered a plaintiff class is, at worst, res judicata and
denies an i See T
an issue previously tried in a class in he was
represented. See 28 in the Law—Class Actions,
Harv.L.Rev. 1318, 1404 (1976).
s Parsons and Starr, Environmental Litigation and Defendant Class
oe a ee oe 23, 4 Envir. L.Q. 881,
888-89 (1975); 1 Defendant Class Actions, 91 Harv L. Rev.
630, 638 (1978); Note, Class Actions —Adequacy of Representa-
App. 56
axis upon which all questions of due process and jurisdic-
tional power turn.”
In evaluating the assertion of jurisdiction in a case in-
volving multiple plaintiffs injured by the identical conduct
of defendants, the primary concern is whether the exercise
of such power is fair and reasonable to the parties before
the court. Courts have identified several factors that should
be considered in assessing the reasonableness of subjecting
an unwilling defendant to jurisdiction.“ This court will con-
sider these factors in turn.
1. The Extent of the Partys Purposeful Integration
Into the Forum State.“
In Hanson v. Denckla, 357 U.S. 235, 78 S.Ct. 1228, 2
L.Ed.2d 1283 (1958) the Supreme Court, speaking in the
context of an unwilling defendant, stated that the exercise
of jurisdiction requires “that there be some act by which
the defendant purposefully avails itself to the privilege of
conducting activities within the forum State, thus invoking
the benefits and protections of its laws.“
Some Problems in Class Actions, 9 Buff. L. Rev. 433, 434 (1960).
Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct.
lenging the court’s jurisdiction.
See World-Wide V v. Woodson, 444 U.S. 286, 297,
100 S.Ct. 559, 567, 62 L.Ed.2d 490 (1980); Insurance Co. of North
America v. Marina Salina Cruz, 649 F.2d 1266, 1270 (9th Cir.
1981); Rocke v. Canadian Automobile Sport Club, 660 F.2d 395
(9th Cir. 1981).
* 375 U.S. 235, 253, 78 S.Ct. 1228, 1239, 2 L.Ed. 2d 1283.
App. 57
As previously discussed, this factor, which is only one of
many for the court to consider, does not apply to exercise
of jurisdiction over unnamed plaintiff parties in the class
action context.” Rather, the “purposeful availment” of ade-
quate representatives is sufficient.
2. The Burden of Defending in the Forum State.
In the present class action suit, there is virtually no bur-
den placed on out-of-state class members in the prosecution
of this suit. Local class representatives will appear as wit-
nesses and local class counsel will bear the initial expense of
litigation. Any requirement that non-resident class members
file affidavits in their home-state for use in the class suit in
California presents a minimal burden in light of the sub-
stantial savings of time and expense afforded all parties.
3. Conflicts with Sovereignty of Other States.
It is now well-recognized that “the Due Process Clause,
acting as an instrument of interstate federalism, may some-
times act to divest the State of its power to render a valid
judgment.“ The reasonableness of jurisdiction under this
standard depends upon the seriousness of the potential
affront to the sovereignty of a foreign state.”
In the present case, there is a limited incursion into the
sovereignty of other states with respect to the determina-
tion of the amount in which the corporate defendant should
be punished, The court does not purport to deprive other
states of the power to try causes in their own courts. In
fact, the single determination of the punitive damages
* See notes 79-84 supra.
" World-Wide Volkswagen v. Woodson, 444 U.S. 286, 294, 100
S.Ct. 559, 565, 62 L.Ed.2d 490 (1980).
* Insurance Co. of North America v. Marina Salina Cruz, 649
F.2d 1266, 1272 (9th Cir. 1981).
App. 58
issues may well protect the interests of non-resident class
members who might otherwise be deprived of the oppor-
tunity to collect additional sums as part of an award of
exemplary damages.”
In acknowledging the viability of multistate class actions
and the special due process rules applicable thereto, the
United States Supreme Court has recognized that the sover-
eignty aspect of our federal system yields, to some extent,
to the practical necessities of the representative suit. There-
fore, the interests underlying our constitutional federalism
do not apply with equal force to a federal class action.
4. The Forum States Interest in Adjudicating the Dispute.“
The interest of the forum state in this case is significant.
A significant percentage of the parties allegedly injured by
the defendant’s product are California residents.” This state
has a significant interest in promoting safe products and in
protecting its own citizens.“ Finally, this state has an in-
terest in seeing that its residents not be deprived of a po-
tential punitive damage recovery due to earlier awards made
in other forums.
5. The Parties’ Interest in Convenient and Effective Relief.
In analyzing the power of a court to assert jurisdiction, an
important, though by no means determinative, factor to
consider is the parties’ interest in obtaining convenient and
effective relief, particularly when these interests are not
Fee notes 37-39 supra.
% World-Wide Volkswagen v. Woodson, 444 U.S. 286, 292, 100
S.Ct. 556, 564, 62 L.Ed.2d 490 (1980).
From cases filed to date, it appears that 15-20% of all potential
plaintiffs reside in the state.
* See discussion infra regardin es Se Came Se See
sented in this lawsuit. Notes 162-63 infra. See also Taubler v. Giraud,
655 F.2d 991 (9th Cir. 1981).
App. 59
adequately preserved by the plaintiff's personal choice of
forum.”
In the present case, both plaintiffs and the defendant stand
to gain by having one binding determination of the punitive
damage question. Certainly later plaintiffs are able to
avoid the inevitable dismissal of their punitive damage
claims. Similarly, the defendant is able to put a stop to
repetitive litigation that runs the risk of punishing it over
and over again for the same conduct.
6. The Interstate Judicial System’s Interest in Obtaining the
Most Efficient Resolution of Controversies.
In World-Wide Volkswagen v. Woodson, 444 U.S. 286,
292, 100 S.Ct. 556, 564, 62 L.Ed.2d 490 (1980), the
Supreme Court recognized that the exercise of jurisdiction
may turn in some cases on the need for interstate coopera-
tion in resolving controversies and the “shared interests of
the several States in furthering fundamental substantive so-
cial policies.“ The Court expressly recognized, therefore,
that in some situations fairness to parties opposing juris-
diction must be evaluated in light of factors such as judicial
efficiency and interstate cooperation.
In the present case, there is certainly a need for rational
coordination of an otherwise unmanageable group of cases
involving an identical issue, i. e., the amount of punitive
damages the defendant should be required to pay for its
alleged misconduct. All states in which punitive damages
are allowed have a shared interest in seeing that the alleged
misconduct is punished.
% World-Wide Volkswagen v. Woodson, 441 U.S. 286, 292, 100
S.Ct. 556, 564, 62 L.Ed.2d 490 (1980); Kulko v. Superior Court,
436 U.S. 84, 92, 98 S.Ct. 1690, 1696, 56 L.Ed.2d 132 (1978).
% 444 U.S. 286, 292, 100 S.Ct. 556, 564, 62 L.Ed.2d 490, ci
Kulko v. Superior Court, 436 U.S. 84, 98 S.Ct. 1690, 56 L. Ed.
132 (1978).
App. 60
The “minimum contacts” test was never intended to
be a rigid formulation demanding blind conformity. Rather,
it varies with the measure of values affected, the
costs inflicted by failure to exercise jurisdiction and the
facts of each case before the court.” The present case in-
volves both the class action exceptions to normal jurisdic-
tional requirements and a situation where the ultimate fair-
ness to all parties concerned is a single determination of
an issue with national implication. As such, the court has
properly exercised jurisdiction over the members of this
class within the parameters of due process and fundamental
fairness.
Subject Matter Jurisdiction
Jurisdiction over the subject matter is critical in the
federal court system because all federal courts are courts of
limited jurisdiction.“ As such, this court is under an inde-
pendent obligation to examine the basis of its jurisdiction
over the subject matter in order to avoid an unconstitu-
tional invasion of the powers reserved to the states.
A class action must have an independent basis of
jurisdiction as Rule 23 cannot be interpreted to extend in
any way the subject matter jurisdiction of the federal
courts.*” The present case satisfies this requirement because
o See generally Carrington and Rash, Substantive Interests and
the Jurisdiction of the State Courts, 66 Mich.L.Rev. 227 (1967).
1° See C. Wright, Law of Federal Courts 17-18 (3d ed. 1976);
Green, Basic Civil Procedure 13 (2d ed. 1978).
0 13 Wright, Miller & Cooper, Federal Practice & Procedure,
8 3522 (1980 ed.); C. Wright, Law of Federal Courts 17 (3d ed.
le Fed. R.CivP. 82. While no parties to this litigation have chal-
lenged the court’s 21 parties within
this class, this court is obliged to notice want of jurisdiction on its
own motion. Kenosha v. Bruno, 412 U.S. 507, 511, 93 S.Ct. 2222,
2225, 37 L.Ed.2d 109 (1973).
App. 61
it comes within this court’s diversity jurisdiction.”
This court has examined two possible objections to
the exercise of subject matter jurisdiction in this action.
First, it might be argued that this case does not satisfy the
so-called “complete diversity” requirement™ because certain
unnamed class members reside in the same state as the
defendant. This argument, however, ignores the rule that
in a class suit, diversity is determined only by the citizen-
ship of the named representatives.“ If a contrary rule
applied, class actions would be unworkable due to the
inability of the court to identify the citizenship of all un-
named class members.
In the present case all named plaintiffs, while repre-
senting the gamut of injuries and claims, are residents of
states diverse from that of the defendant. Accordingly, this
court has jurisdiction on the basis of diversity.
Second, the jurisdiction of this court might be attacked
on the argument that each plaintiff in the class does
not state a claim in excess of the $10,000 jurisdictional
amount. This argument is premised on the United States
Supreme Court’s decision requiring that each class member,
named or unnamed, must meet the amount in controversy
requirement.“
108 See 28 U.S.C. § 1332.
10 In Strawbridge v. Curtis, 7 U.S. (3 Branch) 267, 2 L.Ed. 435
(1806) the rule was established that where there are multiple plain-
tiffs or defendants, if any plaintiff is a citizen of the same state as
any defendant, the diversity is not complete and no jurisdiction
attaches.
10 Snyder v. Harris, 394 U.S. 332, 340, 89 S.Ct. 1053, 1058, 22
L.Ed.2d 319 (1969); Supreme Tribe of Ben-Hur v. Cauble, 255
US. 356, 363, 41 S.Ct. 338, 341, 65 L.Ed. 673 (1921); Friedman v.
eyers, 482 F.2d 435 (2d Cir. 1973); C. Wright, Law of Federal
Courts 355 (3d ed. 1976).
10 See 28 U.S.C. § 1332.
0 Snyder v. Harris, 394 U.S. 332, 89 S.Ct. 1053, 22 L.Ed.2d 319
App. 62
In determining whether or not all the plaintiffs satisfy
the jurisdictional amount requirement, this court is guided
by the rule that the “sum claimed by the plaintiff controls
if the claim is apparently made in good faith.“ Further-
more, “it must appear to a legal certainty that the claim
is really for less than the jurisdictional amount to justify
dismissal. This rule applies to a plaintiff's claim for
punitive damages.
the face of plaintiff's allegations concerning punitive
damages, this court cannot say to a legal certainty that
the total award will not yield more than $10,000 to each
successful claimant. If a contrary result appears, the court
(1969) (aggregation of separate claims will not satisfy jurisdictional
amount); Zahn v. International Paper Co., 414 U.S. 291, 301, 94
S.Ct. 505, 511, 38 L.Ed.2d 511 (1973) (“[e]ach plaintiff in Rule
23(b) (3) class action must satisfy the jurisdictional amount. ).
After Zahn, it is uncertain whether the rules stated above apply
with equal force to Rule 23(b)(1) and 23 (b) (2) class actions. Prior
to the 1966 Amendment to Rule 23, the aggregation of claims
always was permitted in the “true” class suit because like a
23(b)(1)(B) class, the plaintiffs’ rights were joint. common and
derivative. See, e.g., Gibbs v. Buck, 307 U.S. 66, 59 S.Ct. 725, 83
L.Ed. 1111 (1939); Brotherhood of R.R. Trainmen v. Templeton,
181 F.2d 527 (8th Cir.), cert. denied, 340 U.S. 823, 71 S.Ct. 57, 95
L.Ed. 605 (1950). However, in light of the jurisdictional amount in
this case, this court need not address that issue at this time.
8 Ft. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283,
288, 58 S.Ct. 586, 590, 82 L.Ed. 845 (1938). Accord, City of
— v. City of Los Angeles, 451 F.2d 948, 952-53 (9th Cir.
10° Td. at 952.
n gell v. Preferred Life Assurance Society, 320 U.S. 238, 64 S.Ct.
5, 88 L.Ed. 15 (1943).
un See note 4 supra.
“2 Even assuming the success of all 1800 claimants at their indi-
vidual trials, a $10,000 punitive damage award to each only would
require a total fund of $18,000,000. Without passing on the merits
< be beyond the reals of reasonable posubilty. Ragardlows, it does
r
12
1
4
f
i
App. 63
can dismiss the punitive damage claims as to those parties
who are shown to be unable to meet the jurisdictional
requirement.
The claims before this court for an award of punitive
damages also satisfy the jurisdictional amount require-
ment under an exception to the rule against aggregation of
claims by multiple parties. The settled rule is that “when
several plaintiffs unite to enforce a single title or right in
which they have a common and undivided interest, it is
enough if their interests collectively equal the jurisdictional
amount.” 1m
The present plaintiffs arc seeking to vindicate a common
integrated interest in a punitive damage award against the
A. H. Robins Company. In Berman v. Narragansett Racing
Association, 414 F.2d 311 (Ist Cir. 1969), cert. denied,
396 U.S. 1037, 90 S.Ct. 682, 24 L.Ed.2d 681, the court
confronted a virtually identical set of facts. In Berman, the
plaintiffs, as representatives of fellow race horse owners,
brought a class action against the owners of a racetrack for
their alleged failure to pay money alleged to be due plain-
tiffs under annual purse agreements. The object c the
class action was to determine the validity of a fund for later
distribution to individual horse owners based on an as yet
undetermined recovery formula.
The district court in Berman dismissed the action for lack
of subject matter jurisdiction and the First Circuit reversed.
The court stated that the interest of the group of purse-
winners in the asserted right was common and undivided,
"8 For a similar treatment of the jurisdictional amount require-
ment in a class action, see Payton v. Abbott Labs, 83 F.R.D. 382,
395 (D. Mass. 1979).
n Pinel v. Pinel, 240 U.S. 594, 596, 36 S.Ct. 416, 417, 60 L.Ed.
817 (1916); see also C. Wright, Law of Federal Courts 139 n.8 and
cited therein (3d ed. 1976).
"8 414 F.2d 311, 314-15.
App. 64
and as such, the amount of the fund, and not each plaintiff's
individual interest therein, would constitute the “amount
in controversy.” ** The court held that the plaintiffs’ claims
constituted, in their totality, an integrated right against the
defendant, notwithstanding the fact that each class member
had an undivided interest in the distribution of the fund.
Similarly, the plaintiffs in the present case have a com-
mon and undivided interest in the recovery of punitive
damages against the corporate defendant. While no in-
dividual plaintiff has a “right to an award of exemplary
damages, all plaintiffs have a collective interest in the
creation of a fund sufficient to punish and deter any alleged
misconduct on the part of the defendant. Accordingly, the
court must look to the amount of the potential fund, and
not the individual awards, for the determination of the
amount in controversy. Accordingly, the court has subject
matter jurisdiction.
M.. L.—Jurisdiction Issue
The plaintiff's counsel argues that this court is with-
out jurisdiction to certify a class in these actions because
a small number of cases still are pending in the District of
Kansas, where they had been transferred by the Judicial
Panel on Multidistrict Litigation (M. D. L.“).““ This
116 Jd. at 315.
* The Berman court also noted that one factor of considerable
importance in determining if the plaintiffs’ interests are aggregable
is whether the defendant has an interest in how the funds will be
In
D Id. at 316. I Er.
erman, the distribution formula that is adopted will not the
defendant’s overall liability. on of this factor
points to the finding that the interests of the, plaints are common
plier ene Me — t their interest are separable
Id., at
318 note 41 supra and note 156 infra.
119 See In re A. H. Robins Co., Inc., “Dalkon Shield” IUD Prod-
ucts Liability Litigation, 406 F Supp. 540 (Jud.Pan.Mult.Lit. 1975).
App. 65
court disagrees and holds that prohibitions on the exercise
of jurisdiction over cases at multidistrict litigation do not
apply to actions already remanded from such proceedings.
The resolution of the jurisdictional question raised by the
plaintiff's liaison counsel at M.D.L. requires a brief review
of the relevant proceedings before the Judicial Panel on
Multidistrict Litigation (“Panel”). In 1975, the Panel,
acting pursuant to 28 U.S.C. § 1407,“ transferred all ac-
tions involving claims for damages arising out of the use
of the Dalkon Shield intrauterine device to the District of
Kansas with the Honorable Frank G. Theis presiding.”
The parties to the consolidated litigation conducted ex-
tensive pretrial discovery which was made available na-
tionally to all counsel. During the time pretrial discovery
was conducted, the litigation before Judge Theis involved
approximately one thousand actions.
After almost four years of consolidated discovery, Judge
Theis reported to the Panel that all pretrial proceedings
2 28 U.S.C. § 1407 (a) provides: (a) When civil actions involv-
ing one or more common questions of fact are pending in different
districts, such actions may be transferred to any district for co-
ordinated or consolidated pretrial proceedings. Such transfers shall be
this
| snap ype 7 dre, - pre Spneneneg ow oped nen promote
the just and efficient conduct of such actions. Each action so trans-
1. 1 HA ee ee
pretrial proceedings to which it was trans-
ferred unless it shall have been previously terminated: Provided,
however, That the panel may separate any claim, cross-claim, counter-
claim, o third-party claim and remand any of such claims before
ion is rem F (Emphasis in original).
421 See In re A. H. Robins Co., Inc., Dalton Shield” IUD Products
Liability Litigation, ‘Supp. "540, (Jud.Pan.Mult.Lit. 1975); In
re A. H. Robins Co., Inc., “Dalkon Shield” IUD Products Liability
Litigation, 419 F 710 Jud. Pan. Mult. Lit. 1976); In re A. H.
Robins Co., Inc., Shield” IUD Products Liability Litiga-
tion, 438 F.Supp. 942 (Jud.Pan.Mult.Lit. 1977).
7
App. 66
of a general nature had been concluded and that the ob-
jectives of centralized pretrial proceedings under Section
1407 had been accomplished.” Accordingly, Judge Theis
entered his pretrial order on November 28, 1977 and rec-
ommended that the Panel begin remanding actions to their
respective transferor courts.”
Despite the fact that all common discovery was com-
pleted in the transferee district,“ the transfer of the tag-
along actions continued for the sole purpose of obtaining
the benefits and restrictions deriving from the pretrial orders
entered by the transferee judge. Recognizing the obvious
procedural complications caused by this practice, the Panel
began vacating its conditional transfer orders. In so doing,
the Panel expressly noted that transfer of actions from the
Northern District of California particularly was inappro-
122 See In re A. H. Robins Co., Inc., “Dalkon Shield” IUD Prod-
ucts Liability Litigation, Docket No. 211 (D.Kan. 1977) (unpub-
lished order); In re A. H. Robins Co., Inc., “Dalkon Shield” IUD
py Liability Litigation, 453 F Supp. 108, 110 (Jud.Pan.Mult.
Lit. ).
128 In re A. H. Robins Co., Inc., “Dalkon Shield” IUD Products
Liability Litigation, Docket No. 211 (D.Kan. 1977) (unpublished
order).
1 In re A. H. Robins Co., Inc. “Dalkon Shield” IUD Products
Liability Litigation, 453 F. . 108, 110 (Jud.Pan.Mult.Lit. 1978).
125 A “tag-along” action refers to those cases transferred by the
Panel to be joined with cases previously ordered to be trav.sferred.
Rule 1 R.P.J.P.M.L., 78 F.R.D. 562 (1978); See also Weigel, The
Judicial Panel on Multidistrict Litigation, Transferor Courts and
Transferee Courts, 78 F.R.D. 575, 579 (1978).
128 In re A. H. Robins Co., Inc. “Dalkon Shield” IUD Products
Liability Litigation, Docket No. 211 (Jud.Pan.Mult.Lit. October 7,
1980) (unpublished order).
12 See, e.g., In re A. H. Robins Co., Inc., “Dalkon Shield” IUD
Products Liability Litigation, 505 F.Supp. 221 (Jud.Pan.Mult.Lit.
1981); In re A. H. Robins Co., Inc., “Dalkon Shield” IUD Products
Liability Litigation, Docket No. 211 (Jud.Pan.Mult.Lit. October 7,
1980) (unpublished order); In re A. H. Robins Co., Inc., “Dalkon
Shield” IUD Products Liability Litigation, 453 F.Supp. 108 (Jud.
Pan.Mult.Lit. 1978).
App. 67
priate because continuing transfer for multidistrict litigation
would frustrate the local consolidation of cases for all pre-
trial proceedings.
Finally, in January of this year, the Panel vacated several
more orders transferring actions for multidistrict treatment
and stated that transfer “would not serve the conveniences
of the parties and witnesses or promote the just and effi-
cient conduct of the Dalkon Shield litigation.“ The Panel
ruled that as of the date of its opinion, it would no longer
issue conditional transfer orders.
At the time of this court’s order conditionally certifying
a class action, all discovery and motion procedures in
the multidistrict litigation had been concluded and only
fifty-four cases remained at the District of Kansas awaiting
remand. At that time, however, Judge Theis, who retained
jurisdiction over the fifty-four cases, had under submission
a motion to reopen discovery for limited additional fact-
finding pending a decision by the Panel on the defendant's
motion to remand all cases. On October 9, 1981, nearly
four months after this court certified a class action, the
Panel deferred to Judge Theis’s intention to reopen dis-
covery in the cases remaining before him and denied the
request to remand.”
8 In re A. H. Robins Co., Inc., Dalkon Shield” IUD Products
1900) % Docket No. 211, (Jud.Pan.Mult.Lit. October 7,
unpublished order).
19 In re A. H. Robins Co., Inc., “Dalkon Shield” IUD Products
505 F Supp. 221, 223 (Jud.Pan.Mult.Lit. 1981).
% In re A. H. Robins Co., Inc., "“Dalkon Shield” IUD Products
— Litigation, 505 F.Supp. 221, 223, n. 5 (Jud. Pan. Mult. Lit.
1981).
nn re A. H. Robins Co., Inc., Dalton Shield” IUD Products
Liability 521 F.Supp. 1188 (N.D.Cal. 1981).
2 In re A. H. Robins Co., Inc., Dalton Shield” IUD Products
Liability Litigation, (Jud. Pan. Nuit. Lit. October 9, 1981) (un-
— ceder).
App. 68
Plaintiff's counsel argues that this court has no jurisdic-
tion to certify a nationwide class action in cases previously
transferred for multidistrict litigation. The plaintiff relies
exclusively on In re Plumbing Fixture Cases, 298 F.Supp.
484 (Jud.Pan.Mult.Lit. 1968).
In the Plumbing Fixture case, the Panel transferred nine
antitrust actic as involving plumbing fixtures to the Eastern
District of Pennsylvania. In answer to a request by the
parties to one of the actions filed as a class suit, the Panel
rejected the argument that it could transfer the cases before
it but reserve the class action issues for determination by
the transferor court. The Panel reasoned that it had neither
the power nor the disposition to limit the transferee judge’s
authority to rule on pretrial motions. The court estab-
lished the unchallenged rule that once an action has been
transferred for multidistrict litigation, the transferor court
in that action is without jurisdiction to issue any orders,
which includes a class certification order, until the case is
remanded."
The court in Plumbing Fixture premised its result on two
legal grounds. First, the Panel noted that the purpose of
Section 1407 was to eliminate the potential for conflicting
pretrial rulings, and therefore its clear intent was to “invest
the transferee court with the exclusive power, after transfer,
to make the pretrial determination of the class questions.”
The court stated that this rule was designed to insure speedy
and economical coordination and would apply to an action
00 In re Plumbing Fixture Cases, 298 F.Supp. 484, 489-94; see
also Wright, Miller & Kane, Federal Practice & Procedure, § 3862,
p. 328 (1980 ed.).
n re Plumbing Fixture Cases, 298 F.Supp. 484, 493 (Jud. Pan.
Mult.Lit. 1968).
185 Id. at 496.
App. 69
from the time it was transferred until the time it was
remanded.”
Second, the Panel in its Plumbing Fixture opinion recog-
nized the jurisprudential maxim that “[t]wo courts of ex-
clusive different jurisdictions, or venues, cannot exercise
control over the same single claim for relief at the same
time.”**’ Accordingly, the Panel concluded that the class
action determination was left to the court with jurisdiction
over the case.
Plainly, the Plumbing Fixture rule does not deprive this
court of jurisdiction to issue a class action ruling. This court
fully was aware of the necessary comity required by Section
1407 and waited until the remand of cases before certifying
a class action. The Plumbing Fixture case itself made it
crystal clear that the transferor court reacquires the power
to make a class action ruling once a case is remanded to it.
This court properly exercised its jurisdiction to certify
a class based on cases pending before it. At the time of
this court's initial certification order, more than 150 cases
were pending in the Northern District of California and
this court had exclusive jurisdiction over these cases. In fact,
when these cases were remanded, the Panel stated that it
was neither empowered nor inclined to direct, or suggest to,
a transferor judge how he or she should conduct further pro-
ceedings. The Panel stated:
198 Id.
Id. at 495
The Panel acknowledged that the process of certifying a
district transferee court are completed. It stated: “This leaves the
—
Id. at 494.
in re A. H. Robins Co., Inc., Dulkon Shield” IUD Products
Liability Litigation, 453 F.Supp. 108, 110 (Jud. Pan. Mult. Lit. 1978).
A
Application of the Plumbing Fixture holding to the facts
of this case would stand the rule on its head. In that case,
the court acknowledged the usefulness of a single multi-
district class action ruling in order to eliminate conflicting
orders and provide for economical coordination of pretrial
proceedings. In this case, a nationwide determination of
the single issue of punitive damages will result in both a
the contrary, it is clear that the Plumbing Fixture rule does
nee gmvern cases which already have been remanded from
muiiti@isuract litigation.”
eo . *
n Pluenbding Fixture Cases, 298 F . 484, 493 (Jud. Pan.
Miwlt.Lit 1968); see also W Miller & Federal Practice
& Prowedure, § 3866, p. 376 (1980 ed.): Cooney, The of
Tvansferee Courts U the Act, 39 U.Chi.
LRev. 588, 603-07 (1972); In re Corrugated Container
— 5 — 875 [1981-82 Trade Cases J 74,175, 74,1
“3 The presiding at the sultidistrict litigation, Judge Theis,
App. 71
The fact that some fifty-four cases remained before Judge
Theis when this court certified a nationwide class action
does not change the result in this case. It is admitted by
all parties that those cases remained in the District of
Kansas only to acquire the benefits of theretofore completed
discovery. The Panel had long since recognized that al-
ternative efforts at consolidation of cases and saving of
within the sound discretion of the district court. Ab-
Choice of Law as to Punitive Damages
Plaintiff's counsel argues that the issue of punitive
damages is not appropriate for nationwide treatment be-
cause the standards governing their award vary from state
% To the extent that this court does not have jurisdiction over
Co., Inc. “Daikon Shield” 1UD Products
It is of course that mere pendency of a motion before
the Panel of a motion to transfer a case does not
ceedings in the transferor court. R.P.J.M.L. Rule 16;
& Federal Practice & Procedure, § 3866 p. 377 (1980 ed.).
2 v. Lucky Stores, Inc., 501 F.2d 11 1170 (9th Cir.
1974).
App. 72
to state This court disagrees and holds that this lawsuit
involves a sufficiently common question of law so as to
render a class action manageable notwithstanding variations
in state punitive damages laws.
Courts have recognized that a choice of law problem may
involve the application of so many states’ laws that a class
action is impossible. In the present case, however, this
court is capable of identifying and accommodating the
interests of other states with a flexible approach to the trial
of this lawsuit.
termine, however, whether this case involves a “real” or
“true” conflict between the laws sought to be applied.
A “true” or “real” conflict, as opposed to an “apparent”
conflict, exists only when more than one state has a legiti-
mate interest in applying its policy, which differs from that
14° See Bradley Post's Letter to the Court, June 17, 1981; Brief
supporting Lead Counsel's Motion to Vacate, filed August 5, 1981
ee So Se eee
© See, eg, Payton v. Abbott Labs, 83 F.R.D. 382, 386 n.1
(D. Mass. 1979) (Court indicated that a multistate class action
would involve uncommon questions and inadequate class
py oe
20
ee oo issue to the state of
™ See, e.g., In re Air Crash Disaster Near Chicago, Illinois on
May 25, 1979, 644 F.2d 594 (7th Cir. 1981).
1 Kiaxon Co. v. Stentor Electric Mfg. Co. 313 U.S. 487, 61 S.Ct.
1020, 85 L.Ed. 1477 (1941); v. New England Mutual
Life Ins. Co., 575 F.2d 1262 (9th Cir. 1978)
ee Currie, The Disinterested Third State, 28 L. &
Probl. 754, 757-58 (1963). While the use of the term “true”
refers to Professor Currie’s interest analysis, the use of
the term hereir is meant to refer to the threshold issue in all
|
|
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2
g
App. 73
of the forum state. At this point, the court is unable to
discern a true conflict between the general policies under-
lying the various state rules regarding the award of punitive
damages.
While many states have adopted varying standards gov-
erning the proper amount of the punitive award and dif-
ferent procedures by which such an amount is determined,
the policies underlying such awards do not vary from state
to state.
Punitive damages, especially as awarded in the class con-
text, are not compensation for injuries. “Instead they are
private fines levied by civil juries to punish reprehensible
conduct and to deter its future occurrence. Furthermore,
these damages are not given as of right in any state, but
instead represent an amount necessary to punish and deter
the detendant
This case does not involve the classic conflicts issue where
" See generally, , The Use of Comparative Impairment to
Resolve Conflicts: An of the California Experience, 68
e Gertz v. Robert Welch, Inc 418 U.S. 323, 380, 94 S.Ct. 2997,
3012, 41 L.Ed.2d 789 (1974); accord, International Brotherhood
of Electrical Workers v. Faust, 442 U.S. 42, 48, 99 S.Ct. 2121,
App. 74
punished for causing injury to a resident plaintiff is shared
by all states permitting an award of punitive damages.
Assuming the briefs filed before the court on the choice
of law issue reflect some conflicting interests in the method
by which punitive damages should be awarded in this litiga-
tion, the application of California’s choice of law rule does
not point to the application of another state’s law.
California no longer applies a mechanical test, but rather
employs the “governmental interest analysis.“ The resolu-
tion of conflicts under this test requires an examination of
the relevant interests of the implicated states. Generally,
California law will be applied unless California and the
foreign state each have compelling interests in having their
law applied.
Assuming, arguendo, a conflict in governmental interests
in assessing punitive damages, a California court would
determine “which state’s interests would be more impaired
if its policy were subordinated to the policy of the other
state.“ This comparative impairment theory requires that
the court determine the relative commitment by each inter-
ested state to the law involved.
California has a strong interest in allowing punitive dam-
ages as evidenced by its “expansive” and liberal rules gov-
488 To the extent that a small number of states do not permit re-
covery of punitive damages, the individuals who bring suit there are
not included as members of this class. The class herein is defined as
ah Goat ohm tase weld dais —— tu suites
18° F. A. Empresa De Viacao Aerea Rio Grandense v. Boeing Co.,
641 F.2d 746, 749 (9th Cir. 1981); Reich v. Purcell, 67 Cal.2d
551, 432 P.2d 727, 63 Cal.Rptr. 31 (1967).
v. New England Mutual Life Insurance Co., 575
724 1262, 1263-64 (9th Cir. 1977).
1 Offshore Rental Co. v. Continental Oil Co., 22 Cal.3d 157,
165-66, 583 P.2d 721, 726, 148 Cal.Rptr. 867, 872 (1978).
App. 75
erning the award of punitive damages. Moreover, the
state’s Supreme Court recently affirmed California’s intense
commitment to protecting consumers from injuries caused
by defective drugs and medical devices. This policy, which
is noticeably progressive in nature, further supports the
notion that California has a very strong interest in seeing
that the manufacturer of a defective product be severely
punished.
To this point, the court has not located any other state
with as strong an interest in awarding punitive damages in
the product liability context. Therefore, at this time, it ap-
pears that California’s liberal punitive damages law would
be the most impaired by application of another state’s law.
If it later appears that there is a conflict between various
states’ interests in applying formulae for calculating the
amount of punitive damages, this court has several op-
tions open to it in order to resolve the conflict. First, the
court could achieve a compromise to accommodate both
policies such as taking the different laws into account when
an individual from the affected state makes her claim on
168 Rosener v. Sears Roebuck & Co., 110 Cal. App.3d 740, 758-62,
168 Cal.Rptr. 237, 248-50 (1980), appeal dismissed, 450 US.
1051, 101 S.Ct. 1772, 68 L.Ed.2d 247 (1981) (Elkington, J., con-
curring). Putz and Astiz, Punitive Damage Claims of Class Members
Who Opt Out: Should Survive? —— U.S. F. L. Rev.
(1981). Califorr ia generally lists the requirement that there be a rea-
sonable relationship between actual damages and the punitive award
as one factor in attempting to control the jury’s discretion. Such a
rule, however, is unnecessary, if not ou „ in the context of the
multiple party suit where other factors tend to protect against ex-
cessive verdicts.
168 Sindell v. Abbott Laboratories, 26 Cal.3d 588, 611, 607 P.2d
924, 163 Cal.Rptr. 132, cert. denied sub nom. E. R. Squibb & Sons,
Inc. v. Sindell, 449 U.S. 912, 101 S.Ct. 285, 66 L.Ed.2d 140 (1980).
1¢ Of course, variations in standards governing the amount, as
e
a “procedural” 311 California 's law
notwithstanding difference.
App. 76
the class fund. Second, the court could determine a con-
sensus of shared values or policies in formulating a “com-
promise” standard. Finally, the defendant has expressed
an interest in stipulating to the most “liberal” standard of
punitive damages, in which case the plaintiffs would benefit
from the application of non-forum law.
Notwithstanding the various theories advanced above,
any manageability problems posed by the existence of vari-
ous states’ laws does not rise to the level of a bona fide rea-
son to deny certification at this time.
Discovery Regarding Basis of Class Action
Plaintiff's counsel disputes the existence of a limited
fund in these actions and argues that extensive discovery
should be conducted as to the existence of a Rule
23(b)(1)(B) class. Counsel contends, therefore, that this
court’s certification opinion is premature.
It is now well-recognized that discovery may be utilized
to ascertain evidence relating to the presence or absence
of the class action requirements.“ However, the decision
whether or not to grant extensive discovery in connec-
tion with class action determinations lies within the sound
188 See Twerski & Mayer, Teward a Pragmatic Solution of Choice
of Law Problems—At Intertace of Substance and Procedure, 74
Nw.L.Rev. 781 (1979).
„See Trautman, A Comment on Twerski and Mayer: A Prag-
— Towards Consensus As a Basis For Choice-of-Law Solu-
tions, ofstra L. Rev. 833 (1979).
1 8 ppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 347 n. 13,
98 S.Ct. 2380, 2387 n.13, 57 L.Ed.2d 253 (1978); Kamm v. Cali-
fornia City Development Company, 509 F.2d 205, 209-10 (9th Cir.
1975); Kronenberg v. Hotel Governor Clinton, Inc., 41 F. R. D. 42,
44-45 G. D. N. V. 1966); Annotation, Discovery for Purposes of
Determining Whether Class Action Requirements Under Rules 23(.)
and (b) the Federal Rules of Civil Procedure Are Satisfied, 24
ALR ted. 827 (1975); Kubin, Determining Class Main
in California, 27 Hastings L.J. 293, 304-05 (1975).
App. 77
discretion of the trial court. This broad discretion should
be exercised only when the record before the court is so
incomplete as to the presence or absence of the requisite
factors that a conditional certification would irreparably
harm the plaintiffs or defendants.”
A prolonged period of discovery regarding class is-
sues is unnecessary in this litigation. In the instant case,
the plaintiffs and defendants have conducted extensive and
wide-ranging discovery over a period of years while these
cases were at multidistrict litigation." Additionally, the
decision to certify a class in this litigation has been made
only after reviewing a series of affidavits and briefs on the
class issues filed over the course of the last year. This court
has reviewed carefully the entire history of this litigation
and the number of conflicting claims for punitive damages
filed nationally.
The argument that the court’s certification is premature
is flawed for two reasons. First, the plaintiff's counsel offers
no suggestion as to what facts justify delaying this court’s
determination. Plaintiff's counsel himself presents an array
of presently known facts regarding the incidence and po-
tential for punitive damage awards.“
Assuming, arguendo, that the record does not fully dem-
onstrate facts pointing to threatened bankruptcy of the
corporate defendants, the existence of conflicting interests
168 Kamm v. California City Development Company, 509 F.2d
205, 209 (9th Cir. 1975); Berland v. Mack, 48 F.R.D. 121, 126
(S.D.N.Y. 1969).
16° See, e. g., Wolfson v. Solomon, 54 F.R.D. 584 (S. D. N. V. 1972).
wy’ H. Robins Co. “Dalkon Shield” IUD Products Liability
Litigation, 406 F.Supp. 540 (Jud.Pan.Mult.Lit. 1975). Moreover,
the limited reopening of discovery before Judge Theis should be
available to this court by goes to trial.
n See Bradley Post’s Letter to the Court, June 17, 1981.
Fe
3
7
ad
175
App. 78
among plaintiffs as to a limited punitive damage “fund” is
a conceptual certainty. With over 1800 claims filed na-
tionally, it requires no clairvoyant power to conclude that
judges in subsequently fiied lawsuits will rule as a matter
of law that the defendants have been punished enough and
dismiss a plaintiff's claim for exemplary damages. The facts
as to this possibility of “legal roulette” on the punitive dam-
ages issue is well-established at this point in the litigation.”
Second, it is well-recognized that early determinations of
class status should govern as a general rule.“
IIlf there is error to be made, let it be in favor and
not against the maintenance of the class action, for it
Tt appears that „ at cross- purposes,
attempting to run with the hares and chase wi the hounds, regarding
1
i
rill
Hh
171
2
LN deprives each
plaintiff of a valuable and guaranteed right.
pure of permiing a publicized class action for the ex-
permitting jury review of all pending cases and
misconduct wouid inure to the benefit of all plamtiffs and
as difficulties in proving punitive damages present in individual
ap het = reduced in the class action.
1 hand, the latter argument is true, individual plain-
——
anf
In
is determination as to clase maintain “as soon as
ng
soned that where a class action will save time and protect
collective interests, early denial without is unwise
See Ramm v. . N City Development Company, 509 F. 2d 205.
209, 210 (Sth Cir. Cir. 1975); affe v. Powers, 454 F.2d 1362, 1367 (Ist
Harv.L.Rev. 1318, 1423 (1976).
App. 79
is always subject to modification should later develop-
ments during the course of trial so require.
Admittedly, early certification decisions pose the danger
that courts will misjudge the viability of the class. How-
ever, in most cases, including the present one, the prejudice
resulting from an early determination is minimal in light
of the court’s ability to revise or reverse its order if post-
certification discovery reveals the impropriety of a class
suit.““ Rule 23(c)(1) provides that an order certifying
class status may be “altered or amended before the decision
on the merits.” Accordingly, the certification has been made
conditionally, subject to revision if facts develop leading
the court to revise its previously announced position.“
The undesirability of a lengthy class action discovery
period is underscored by the posture of this litigation. Thou-
sands of cases remain pending nationally in both state and
federal courts concerning injuries allegedly caused by the
defendants’ product. Further delay in deciding the impor-
tant issues raised herein necessarily impedes the progress
of those lawsuits. The policy behind “early” certification
applies with special force to these cases as further delay
threatens continuing deprivation of the plaintiff's and the
defendant’s constitutional rights. Accordingly, the most
prudent course is to certify this class and consolidate dis-
covery of facts regarding the existence of a “limited fund”
with the trial of this case on the merits."
e Esplin v. Hirschi, 402 F.2d 94, 99 (10th Cir. 1968), cert.
denied, 394 U.S. 928, 89 S.Ct. 1194, 22 L.Ed.2d 459 (1969). Ac-
cord, Grad v. Memorex Corp., 61 F.R.D. 88, 94 (N.D. Cal. 1973).
118 See e. g., Harriss v. Pan American World Airways, Inc., 74
F.R.D. 24, 35-37 (N.D. Cal. 1977).
10 Social Services Union, Local 535 Service Employees Interna-
2 A AFL-CIO v. Santa Clara, 609 F.2d 944, 948-49 (9th
It is, of course, established that preliminary inquiries into the
App. 80
CERTIFICATION FOR INTERLOCUTORY APPEAL
This case presents important issues of national signifi-
cance. As such, this court’s certification order is an ideal
candidate for interlocutory appeal pursuant to 28 U.S.C.
§ 1292(b).’”
The court is of the opinion that its order involves a con-
trolling question of law as to the certification of a national
class action on punitive damages and a statewide class on
all issues of liability. It is plain that there is substantial
ground for difference of opinion as to these questions.
The court is of the further opinion that an immediate
appeal of this order may materially advance the ultimate
termination of this litigation as to all parties, inasmuch as
an immediate resolution of these issues undoubtedly will
lead to increased settlements and save thousands of hours of
court time.
Swift resolution of the questions raised in this court's class
order on an expedited basis is of prime importance. The
trials of hundreds of actions across the country await the
determination of the questions raised herein. Thousands of
individual plaintiffs independently are seeking punitive
damages against the defendant for essentially the same con-
duct. The plaintiffs and the defendants as well as courts
nationwide stand to gain from an immediate decision of
these questions.
merits of a class action suit are unauthorized by Rule 23. Eisen v.
Carlisle & Jacquelin, 417 U.S. 156, 177, 94 S.Ct. 2140, 2152, 40
— 732 (1974). To chat extent, extensive discovery, which
== Class cation contention endess ss peupedty egpesied unite
necessarily will become entangled with the issues on the merits, should
98 S.Ct. 2454, 2461, 57 L.Ed.2d 351 (1978), Schickle and
Interlocutory Appeals Pursuant to 28 U.S.C. § 1292 0b) and
Use in Class Actions: Discretion Displaces the Death Knell, 15
section 1292(b). Coopers & Lybrand v. Livesay, 437 U.S. 463, 475,
U.S.F.L. Rev. 321 (1981).
App. 81
The court will not certify its previously announced de-
cision to consolidate the cases before it. In deciding
whether consolidation under Rule 42(a) would be desirable
federal district courts are vested with a wide range of dis-
cretion.” There is virtually no dispute that a consolidated
trial of these actions would reduce overlapping issues, du-
plication of proof and waste of the court's time. In the
present case, all parties appear to concede this court's au-
thority to consolidate the 165 cases pending before it.
TRIAL OF THE CLASS ACTION
Since this court’s June 25, 1981 order certifying these
cases as a Class action, counsel for both sides commendably
The trial of this action firmly is set to begin on May 10,
1982, and this court will clear its calendar for the requisite
length of trial.
As presently envisioned, the trial of this lawsuit will
proceed as follows:
First, the named representatives will present their case on
% re Northern District of California's Dalton Shield” IUD
Products Liability ee 521 F . 1188 (N. D. Cal. 1981).
1% Moten v. Masons & International Union
of America, 543 F.2d (D.C. Cir. 1976).
App. 82
Second, some, if not all, of the named representatives will
continue on with the individual aspects of their lawsuits
including damages and causation. The jury will be in-
structed that these parties are representatives of individuals
in a larger class who will present their individual cases on
causation and damages to other juries in subsequent actions.
Third, the lawsuit will continue with the punitive dam-
ages phase of the trial. The same named parties, now rep-
resenting a cohesive national class, will be allowed to present
evidence to the jury regarding all issues relevant to a
determination of the punitive damages question, including
but not limited to, evidence of the defendant's wealth, the
nature and number of the injuries allegedly caused by the
defendant's product, and the extent to which the defend-
ant’s conduct was malicious, wilful, and oppressive.”
Fourth, the jury will be given several interrogatories on
the various issues and it also will be asked to award a sum
as punitive damages to punish the defendant once, and for
all potential claimants if liability is found to exist. Fifth,
App. 83
reasonable period of time.
The trial of this class action poses some exciting possi-
gation of identical disputes. This admonition does not con-
travene the historical role of the judiciary since the power
to affect judicial economy over a swelling caseload is of
ancient origin. The exercise of this power is compelling
when the traditional mode of litigating cases on a piecemeal
5
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55
App. 84
basis deprive large numbers of plaintiffs of a practical means
of redress.
This class action is not the proverbial “Fran :enstein
monster posing as a class suit. On the contrary, this
action is a way of subduing the monster-like qualities of
that special type of repetitive litigation so much the result
of our modern technological society.
Imaginative judicial management of massive litigation is
essential in controlling and expediting cases so that indi-
vidual plaintiffs will not be overwhelmed by litigation costs
and litigation-wise corporate defendants. Similarly, judicial
control of these lawsuits permits a defendant to avoid po-
tential “punitive damages overkill” which is in direct con-
travention to the purpose of such awards.
The prophylactic potential of the class action device is
obvious in cases where consolidated treatment of the puni-
tive damages question provides plaintiffs an equal incentive
to punish a defendant for its alleged conduct. By its very
nature, a large class action suit produces incidental benefits
such as added publicity to potentially unknowing class
members, top-flight presentation of evidence and necessary
in these cases serves to achieve the greatest benefit for the
greatest number of parties.
Accordingly, IT IS ORDERED that this action be main-
tained as « class action. The class shall be composed of the
following:
All persons who have asserted claims for punitive dam-
ages against A. H. Robins Company relating to the
% See, eg, San Antonio Tel. Co. v. American Tel. & Tel. Co.,
68 F.RD. 4 3.75 (W. Tex. 1975). 2
Reel andthe “Cas Action Poblem,"92 Har E Rew. 68,667
App. 85
— ESSE? ene ae & See sae
thereto in federal courts in California.
IT IS ORDERED that this order shall be
subject to alteration or amendment before the decision on
the merits as authorized by Rule 23(c)(1) of the Federal
Rules of Civil Procedure. Any proposed alteration or amend-
ment desired by a party shall be brought before the court
as soon as practicable following discovery of the facts
believed to warrant it.
IT IS FURTHER ORDERED that this court’s order cer-
tifying class actions in this lawsuit is certified for interlocu-
tory appeal pursuant to 28 U.S.C. § 1292(b).
IT IS FURTHER ORDERED that by November 25,
1981, counsel for the parties prepare and submit to the
court a proposed form of notice to be sent by the defendant
to members of the class.
IT IS FURTHER ORDERED that all parties prepare
for the trial of this action scheduled to begin on May 10,
1982.
IT IS FURTHER ORDERED that the parties submit
briefs to this court by February 8, 1982, on the choice of
law issues applicable to the punitive damage issue.
IT IS SO ORDERED.
App. 86
In re NORTHERN DISTRICT OF CALIFORNIA
“DALKON SHIELD” IUD PRODUCTS
LIABILITY LITIGATION.
No. C-80-2213 SW
United States District Court
N. D. California.
June 25, 1981
ORDER CONDITIONALLY CERTIFYING
CLASS ACTIONS
SPENCER WILLIAMS, District Judge
This action involves the claims of thousands of women
across the United States that they have been injured by an
allegedly defective intrauterine device called the Dalkon
Shield. The device was manufactured by defendant A. H.
Robins Company and invented by defendants Hugh Davis
and Irwin Lerner.
The plaintiffs in these actions allege they have sustained
various injuries from their use of the Dalkon Shield includ-
ing uterine perforations, infections, pregnancy, spontaneous
abortion, fetal injuries and hysterectomies. The plaintiffs
predicate their right to recover against various defendants
on theories of negligence, strict products liability, breach
of warranty, conspiracy and fraud. In the vast majority of
these actions, the plaintiffs seek substantial sums in punitive
damages.
In 1975, these actions were transferred to a single district
for coordinated pretrial proceedings. In so doing, the Ju-
dicial Panel on Multidistrict Litigation held that the com-
plaints contained a commonality of factual issues concern-
App. 87
ing the design, testing, manufacturing, labeling, and in-
spection of the Dalkon Shield. On June 17, 1980, this
court consolidated all actions before it fo: pretrial proceed-
ings.”
Approximately one year ago, this court presided over a
single jury trial in one of these actions that lasted nine weeks.
Since that time, and in light of its extended experience with
this litigation, the court conducted a series of status con-
ferences to discuss methods for achieving economies of time
and expense in the trial of these actions. After considera-
tion of alternatives such as videotaping witnesses, consoli-
dation and test cases, this court concluded that class action
certification represents the most reasonable solution to the
repetitive nature of this litigation.
On February 9, 1981, the court ordered briefing from all
parties on the class certification issue. At that time, the
court noted that cases such as these present the obvious
inability of our traditional mode of case-by-case litigation
to deal with repetitive litigation of the same underlying
facts. Each of these cases takes several months to try and
involves many of the same witnesses for each trial. At the
present time, some 1,573 suits involving claims for com-
pensatory damages well over $500 million are pending
against defendant A. H. Robins.’ The potential for the con-
structive bankruptcy of A. H. Robins, a company whose
net worth is $280,394,000.00, raises the unconscionable
possibility that large numbers of plaintiffs who are not first
In re A. H. Robins Co. Dalkon Shield” IUD Products
Litigation, 406 F 540, 541 (Jud.Pan.Mult.Lit. 1975).
* As of the time of this order, this court has 153 Dalkon Shield
cases before it.
* See of R. P. Wolf, and Assistant General
Counsel of A. H. Robins Company. (June 19, 1981). .
App. 88
in at the courthouse door will be deprived of a practical
mez of redress.
A tederal class action, to the extent that it is possible un-
der Federal Rule of Civil Procedure 23, appears to be the
most equitable solution to the monumental problems posed
by this litigation.
It is clear from a reading of the history behind Rule 23
that it was intended primarily to foster judicial economy
within a framework that effectively protects the rights of
individual litigants.* Even before the enactment of Rule 23,
equity courts recognized that class treatment was appro-
priate when judicial efficiency demanded the elimination of
multiple suits arising from the same facts and questions of
law.“ Likewise, it can hardly be said that modern Rule 23
necessarily forecloses the application of class action con-
cepts to cases such as this one in which repetitive litigation
based on a single set of facts threatens to cause irreparable
harm both to the defendant and more importantly to
thousands of plaintiffs left with a legal right but potentially
no adequate remedy.
In response to these problems, the court invited briefs
and conducted hearings on May 20, 1981 and June 3, 1981
on the class action issue. After careful consideration of
these briefs and the arguments of all counsel present, the
court hereby finds that all prerequisites for class certifica-
tion under Rule 23(a) and 23(b)(1)(B) have been satis-
fied and conditionally certifies a nationwide class“ con-
* See Advisory Committee Note io the 1966 Amendments to Rule
23, 39 F.R.D. 98 (1966); 7 Wright, Miller & Kane, Federal Practice
and Procedure, § 1751 (1980 ed.).
® See, e.g., Smith v. Swormstedt, 57 U.S. (16 How.) 288, 14 L.Ed.
942 (1853): 7 Wright, Miller & Kane, Federal Practice and Proce-
dure, § 1751 (1980 ed.).
* In Califano v. Yamasaki, 442 U.S. 682, 99 S.Ct. 2545, 61 L.Ed.2d
176 (1979), the United States Supreme Court expressly upheld the
App. 89
sisting of all persons who, prior to an as yet undetermined
date certain, file written claims for punitive damages against
A. H. Robins Company relating to the Dalkon Shield
intrauterine device.
This court further finds that the prerequisites for class
certification under Rule 23(a) and 23(b)(3) are satisfied
and conditionally certifies a class action on all common
issues of liability as to all persons who have filed suit, or
will file suit before the commencement of the trial of this
case, relating to the Dalkon Shield intrauterine device in
the United States District courts located in the state of
California.
This court further orders that all cases involving the
Dalkon Shield intrauterine device which are filed in the
United States District Court for the Northern District of
California be consolidated for trial on the liability issues
pursuant to Federal Rule of Civil Procedure 42(a). As
part of the Final Trial Order filed in a separate action con-
solidated herein, the court shall order the action severed for
trial on the issues of affirmative defenses, if any, causation
and damages.
The following constitutes a brief explanation of the
court’s reasoning on these matters. The court will issue a
full memorandum of opinion on this matter hereafter.
COURT CERTIFICATION OF CLASS ACTION
The case law and commentary on federal class actions
emphasize the wide range of discretion accorded the trial
court in overseeing all aspects of class action litigation
creation of nationwide classes when the trial court, in its discretion,
determined that it was appropriate. Jd. at 702-03, 99 S.Ct. at 2558-
59. This court is sensitive to the ongoing litigation relating to the
Dalkon Shield. However, nationwide relief is appropriate,
if not essential, in a class action maintained under the limited fund
concept embodied in Fed.R.Civ.P. 23(b)(1)(B).
App. 90
and particularly in determining whether to certify a class
in the first instance.
Many of the trial court’s responsibilities in maintaining
a class action may be exercised even though no party
to the lawsuit requests such action. For example, the district
judge has an obligation to sua sponte determine whether
an action shall proceed as a class action notwithstanding a
motion from either party.“ The court can, on its own mo-
tion, limit the size of a class action, deleting members witii
smaller claims.’ The court is also able to sua sponte dismiss
class allegations that were already certified.”
While the language of Rule 23 generally refers to actions
“brought” or “maintained” as class actions, nothing in the
rule prohibits sua sponte class certification. In fact, Pro-
fessor Moore states in his text on federal practice that the
trial court’s role under Rule 23 contemplates situations in
which it may transform an action commenced as a non-
class action into a class action on its own motion.”
Federal Rule 23 is a rule of civil procedure, not a rule
of jurisdiction. The Federal Rules of Civil Procedure, in-
cluding Rule 23, were promulgated by the Supreme Court
and not by Cungress. Plainly, courts tried cases as class
actions in the interest of judicial efficiency and economy
See, e. g., Payton v. Abbott Laboratories: An is of the
Massachusetts DES Class Action Suit, 6 Amer. J. of Law & Medicine
243, 261 (Summer 1980); Gardner v. Westinghouse Broadcasting
Co., 559 F.2d 209, 212 (9th Cir. 1977).
® Senter v. General Motors Corp., 532 F..2d 511 (6th Cir. 1976);
Stevenson v. Smith, 73 F.R.D. 79, 81 (D. Del. 1976).
State of Illinois v. Harper & Row Publishers, Inc., 301 F.Supp.
484, 493 (N. D. Ill. 1969).
10% Roman v. ESB, Inc., 550 F.2d 143 (4th Cir. 1976).
™ 3B Moore’s Federal Practice, J 23.02-2, p. 23-102 (2d ed.
1980). See also Stoddard v. Ling- 7 emco-V ought, No. 72-1294 (C.D.
Cal. Jan. 27, 1981). Cf. Richmond v. Ivans, 121 U.S. 27, 5i (1887).
App. 91
long before the adoption of Rule 23.“ Therefore, the trial
court in exercising its equity power may certify a class
even when no individual plaintiff fashions his complaint
seeking such relief.
This case presents the unusual situation where court
ordered class treatment is appropriate. In this action, plain-
tiffs are represented by many different law firms, each with
an individual interest in securing a punitive damage award
for their clients. The court, on the other hand, is in the po-
sition of being able to observe the spectrum of cases filed
throughout the country with only the collective interest
of the plaintiffs in mind. Clearly with respect to the issue
of punitive damages, the most equitable approach as to all
present and future plaintiffs is to provide equal access to a
recovery fund.
CERTIFICATION OF NATIONWIDE CLASS ON
PUNITIVE DAMAGES
To qualify for class certification, all four prerequisites
of Rule 23(a) must be satisfied and, in addition, the
proposed class must come within one of the three categories
enumerated in Rule 23(b). With respect to the four re-
quirements of 23(a), the court specifically finds as follows:
1. The class is so numerous that joinder of all members
is impracticable in that there are more than 1600 cases
against Robins presently pending in federal and state courts,
most of which purport to assert claims for punitive damages.
2. There are questions of law and fact common to the
class with respect to the liability of Robins for punitive
damages by reason of its conduct in the manufacture and
marketing of the Dalkon Shield.
* Hom. v. Tenants of Bromsgrove, 1 Vern. 22, 23 Eng. Rep. 277
(Ct.Ch. 1681); 7 Wright, Miller & Kane, Federal Practice and Pro-
cedure, § 1751 (1980 ed.).
App. 92
3. With respect to the issue of punitive damages, the
claims of any representative party to be designated by the
court after consultation amongst counsel for plaintiffs will
be typical of the class. In fact, representative parties are to
comprise a gamut of the existing injuries and claims against
the company. As such, the conclusion as to the degree of
punishment to be accorded this defendant is capable of
determination in one trial.
4. Representative parties to be designated by the court,
potentially representing various subclasses that may be
established in this action, can fairly and adequately protect
the interests of the class.
Furthermore, this court finds that this action is appropri-
ately maintained under Rule 23(b)(1)(B) which states
that an action may be maintained as a class action when
the prosecution of separate actions would create a risk of:
“(B) adjudications with respect to individual members
of the class which would as a practical matter be dis-
positive of the interests of the other members not par-
ties to the adjudications or substantially impair or
impede their ability to protect their interests; .. .”
This court specifically finds that separate actions in-
escapably will alter the substance of the rights of others
having similar claims. In the Dalkon Shield actions pres-
ently on file against A. H. Robins, the punitive damages
specifically claimed total some 82,350, 597,000.00.“ More-
over, to date, jury verdicts for punitive damages against
the defendant company have been entered for $75,000.00
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