Appendix — Grady v. Rhone-Poulenc Rorer Inc.

Suprens Court, GA.

2 a ep

95 147 JUL 251995

No. 95-° a ;

IN THE

Supreme Court of the United States

OCTOBER TERM, 1995

HON. JOHN F. GRADY, ef al.

Petitioners,

Vv.

RHONE-POULENC RORER INC., ef al,

Respondents.

On Petition for a Writ of Certiorari

to the United States Court of Appeals

for the Seventh Circuit

PETITIONERS’ APPENDIX

Of Counsel

Curtis R. Reitz

3400 Chestnut Street

Philadelphia, PA 19104

David L. Shapiro

1575 Massachusetts Ave.

Cambndge, MA 02138

David S. Shrager

Counsel of Record

Shrager, McDaid, Loftus,

Flum & Spivey

2001 Market Street

Philadelphia, PA 19103

Phone: (215) 568-7771

Dianne M. Nast

Robert J. LaRocca

Roda & Nast, P.C.

Lancaster, PA 17602

Robert Huntley

Givens, Pursley & Huntley

Boise, ID 83701

Jan Adams

The Holloran Law Firm

St. Louis, MO 63101

Timothy Eble

Ness, Motley, Loadholt,

Richardson & Poole

Charleston, SC 29402

Jere M. Fishback

St. Petersburg, FL 33701

Debra A. Thomas

Chicago, IL 60601

Charles Kozak

Kaneohe, HI 96744

Thomas W. Mull

Mull and Mull

Covington, LA 70433

Eric H. Weinberg

New Brunswick, NJ 08901

Judith S. Kavanaugh

Earl, Blank, Kavanaugh

& Stotts, P.A.

Sarasota, FL 34236

Roy G. Spece

Tucson, AZ 85718

Timothy C. Davis

Heninger, Burge & Vargo

Birmingham, AL 35203

James A. Green

Levin, Middlebrooks,

Mabie, Thomas, Mayes

& Mitchell

Pensacola, FL 32501

Ronald B. Grayzel

Levinson, Axelrod,

Wheaton & Grayzel

Edison, NJ 08818

Robert E. Turffs

Kanetsky, Moore

& DeBoer

Venice, Florida 34285

Alan K. Laufman

Dallas, TX 75219

Robert L. Parks

Anderson, Moss,

Sherouse & Petros

Miami, FL 33132

TABLE OF CONTENTS

PAGE

Opinion of the Court of Appeals for the

seventn Circuit, haere 16. 1995 occ ccc ccc ccecce la

Class Certification Order, Pretrial Order No. 5,

PE RE reed aren ihcbedahide bosses ckeses 3la

Memorandum Opinion of the United States

ae ee a re 34a

Order Denying Motion for Certification of

§ 1292(b) Appeal, September 22, 1994 ................ 63a

Order of Court of Appeals Denying Rehearing,

PTE, Aas es wa waN eae ekit Sic eek enc oe cease 65a

Petition for a Writ of Mandamus, December 19, 1994 .... 67a

Response to the Petition for a Writ of Mandamus,

Mn I ka oe as a oa he Oe ec eee 11l6a

Reply in Support of Petition for a Writ of Mandamus,

NI nk Wa Gh eae ie) wale ick boas «oxo 154a

Letter from Hon. John F. Grady to Counsel,

i kia ake oes 165a

Order Copley Pharmaceutical, Inc. v. Brimmer,

No. 95-8032 (CA 10, May 31, 1995)

(denying Petition for Writ of Mandamus )............. 169a

Order Jn re Copley Pharmaceutical, Inc.,

MDL Docket No. 1013 (D. Wyoming,

April 25, 1995)(denying defendant’s motion

to decertify the class and the court’s trial plan) ......... 17la

TABLE OF CONTENTS—continued

PAGE

Order Jn Re Bausch & Lomb, Inc.,

No. 94-7118 (CA 11, December 1, 1994)

(denying Petition for Writ of Mandamus) ............. 197a

Order In Re Breast Implant Litigation,

No. 92-3420 (CA 6, May 22, 1992)

(denying Petition for Writ of Mandamus) ............. 198a

2B GSK. FS F281, Tees MO. 0s caw hnen Gods nndseees 200a

Rule 23, Federal Rules of Civil Procedure ............. 204a

eo a al

paeen Ah NS A ND el rg nibaeiee (dh

ee es wee ee meee tr ea

A lea) i ET ASB a tS SRG TBE be ity enc oetitees

atid

a as cnr nna

la

IN THE

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

No. 94-3912

IN THE MATTER OF:

RHONE-POULENC RORER INCORPORATED, et al.,

Petitioners.

Petition for a Writ of Mandamus to Hon.

John G. Grady, United States District Judge,

Northern District of Illinois, Eastern Division, in

Wadleigh et al. v. Rhone-Poulenc Rorer Inc., et al.

No. 93 C 5969

Argued January 30, 1995-—Decided March 16, 1995

Before POSNER, Chief Judge, and BAUER and ROVNER,

Circuit Judges.

POSNER, Chief Judge. Drug companies that manufacture

blood solids are the defendants in a nationwide class action

brought on behalf of hemophiliacs infected by the AIDS virus as

a consequence of using the defendants’ products. The defendants

have filed with us a petition for mandamus, asking us to direct

the district judge to rescind his order certifying the case as a

class action. We have no appellate jurisdiction over that order.

An order certifying a class is not a final decision within the

meaning of 28 U.S.C. § 1291; it does not wind up the litigation

in the district court. And, in part because it is reviewable (at

least in principle—the importance of this qualification will appear

2a

shortly) on appeal from the final decision in the case, it has been

held not to fit any of the exceptions to the rule that confines

federal appellate jurisdiction to final decisions. In short, as the

Supreme Court made clear in Coopers & Lybrand v. Livesay,

437 U.S. 463, 98 S.Ct. 2454, 57 L.Ed.2d 351 (1978), and

Gardner v. Westinghouse Broadcasting Co., 437 U.S. 478,

480-82, 98 S.Ct. 2451, 2453-54, 57 L.Ed.2d 364 (1978), it is not

an appealable order. Those decisions involved the denial rather

than the grant of motions for class certification, but the grant is

no more final than the denial and no more within any of the

exceptions to the final-decision rule. Hoxworth v. Blinder,

Robinson & Co., 903 F.2d 186, 208 (3d Cir.1990); 7B Charles

Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal

Practice and Procedure § 1802, pp. 484-86 (2d ed. 1986). Still,

even nonappealable orders can be challenged by asking the court

of appeals to mandamus the district court. Indeed, as a practical

matter only such orders can be challenged by filing a petition for

mandamus; an appealable order can be challenged only by

appealing from it; the possibility of appealing would be a

compelling reason for denying mandamus. For obvious reasons,

however, mandamus is issued only in extraordinary cases.

Otherwise, interlocutory orders would be appealable routinely,

but with "appeal" renamed "mandamus." Kerr v. United States

District Court, 426 U.S. 394, 403, 96 S.Ct. 2119, 2124, 48

L.Ed.2d 725 (1976); Eisenberg v. United States District Court,

910 F.2d 374, 375 (7th Cir.1990).

How to cabin this too-powerful writ which if uncabined

threatens to unravel the final-decision rule? By taking seriously

the two conditions for the grant of a writ of mandamus. The first

is that the challenged order not be effectively reviewable at the

end of the case--in other words, that it inflict irreparable harm.

Kerr v. United States, supra, 426 U.S. at 403, 96 S.Ct. at 2124;

In re Sandahl, 980 F.2d 1118, 1119 (7th Cir.1992); Eisenberg

v. United States District Court, supra, 910 F.2d at 375. The

petitioner "must ordinarily demonstrate that something about the

order, or its circumstances, would make an end-of-case appeal

3a

ineffectual or leave legitimate interests unduly at risk." In re

Recticel Foam Corp., 859 F.2d 1000, 1005-06 (Ist Cir.1988).

Second, the order must so far exceed the proper bounds of

judicial discretion as to be legitimately considered usurpative in

character, or in violation of a clear and indisputable legal right,

or, at the very least, patently erroneous. Gulfstream Aerospace

Corp. v. Mayacamas Corp., 485 U.S. 271, 289, 108 S.Ct. 1 133,

1143-44, 99 L.Ed.2d 296 (1988); Allied Chemical Corp. v.

Daiflon, Inc., 449 U.S. 33, 35, 101 S.Ct. 188, 190, 66 L.Ed.2d

193 (1980) (per curiam); United States v. Spilotro, 884 F.2d

1003, 1006-07 (7th Cir.1989); In re Sandahl, supra, 980 F.2d at

1121; Maloney v. Plunkett, 854 F.2d 152 (7th Cir.1988). We

shall not have to explore these gradations; it will be enough to

consider whether the district judge's order can fairly be

characterized as usurpative.

The set of orders in which both conditions are satisfied is

small. It certainly is not coterminous with the set of orders

certifying suits as class actions. For even though such orders

often, perhaps typically, inflict irreparable injury on the

defendants (just as orders denying class certification often,

perhaps typically, inflict irreparable injury on the members of

the class), irreparable injury is not sufficient for mandamus;

there must also be an abuse of discretion that can fairly be

characterized as gross, very clear, or unusually serious. But it is

not an empty set. The point of cases like Coopers & Lybrand is

that irreparable harm is not enough to make class certification

orders automatically appealable under 28 U.S.C. § 1291, not that

mandamus is never appropriate in a class certification Setting.

There is a big difference between saying that all class

certification rulings are appealable as of right because they are

final within the meaning of section 1291 (the position rejected in

Coopers & Lybrand ) and saying that a handful are-the handful

in which the district judge committed a clear abuse of discretion.

Mandamus has occasionally been granted to undo class

certifications, see, e.g., In re Fibreboard Corp., 893 F.2d 706

(5th Cir.1990), and we are not aware that any case has held that

4a

mandamus will mever be granted in such cases. See In re

Catawba Indian Tribe, 973 F.2d 1133, 1137 (4th Cir.1992);

DeMasi v. Weiss, 669 F.2d 114, 117-19 and n. 6 (3d Cir.1982).

The present case, as we shall see, is quite extraordinary when all

its dimensions are apprehended. We shall also see that when

mandamus is sought to protect the Seventh Amendment's right

to a jury trial in federal civil cases, as in this case, the

requirement of proving irreparable harm is relaxed.

The suit to which the petition for mandamus relates,

Wadleigh v. Rhone-Poulenc Rorer Inc., 157 F.R.D. 410 arises

out of the infection of a substantial fraction of the hemophiliac

population of this country by the AIDS virus because the blood

supply was contaminated by the virus before the nature of the

disease was well understood or adequate methods of screening

the blood supply existed. The AIDS virus (HIV~-human

immunodeficiency virus) is transmitted by the exchange of

bodily fluids, primarily semen and blood. Hemophiliacs depend

on blood solids that contain the clotting factors whose absence

defines their disease. These blood solids are concentrated from

blood obtained from many donors. If just one of the donors is

infected with the AIDS virus the probability that the blood solids

manufactured in part from his blood will be infected is very high

unless the blood is treated with heat to kill the virus. For general

background, see Margaret W. Hilgartmer, “AIDS and

Hemophilia," 317 New England Journal of Medicine 1153

(1987); Leon W. Hoyer, "Hemophilia A," 330 New England

Journal of Medicine 38 (1994); "U.S. CDC: HIV Cutting Lives

Short in Hemophilia, Study Says," AIDS Weekly, Feb. 14, 1994.

First identified in 1981, AIDS was diagnosed in

hemophiliacs beginning in 1982, and by 1984 the medical

community agreed that the virus was transmitted by blood as

well as by semen. That year it was demonstrated that treatment

with heat could kill the virus in the blood supply and in the

following year a reliable test for the presence of the virus in

blood was developed. By this time, however, a large number of

hemophiliacs had become infected. Since 1984 physicians have

a

Sa

been advised to place hemophiliacs on heat-treated blood solids,

and since 1985 all blood donated for the manufacture of blood

solids has been screened and supplies discovered to be

HIV-positive have been discarded. Supplies that test negative

still are heat-treated, because the test is not infallible and in

particular may fail to detect the virus in persons who became

infected within six months before taking the test.

The plaintiffs have presented evidence that 2,000

hemophiliacs have died of AIDS and that half or more of the

remaining U.S. hemophiliac population of 20,000 may be

HIV-positive. Unless there are dramatic breakthroughs in the

treatment of HIV or AIDS, all infected persons will die from the

disease. The reason so many are infected even though the

supply of blood for the manufacture of blood solids (as for

transfusions) has been safe since the mid-80s is that the disease

has a very long incubation period; the median period for

hemophiliacs may be as long as 11 years. Probably most of the

hemophiliacs who are now HIV-positive, or have AIDS, or have

died of AIDS were infected in the early 1980s, when the blood

supply was contaminated.

Some 300 lawsuits, involving some 400 plaintiffs, have

been filed, 60 percent of them in state courts, 40 percent in

federal district courts under the diversity jurisdiction, seeking to

impose tort liability on the defendants for the transmission of

HIV to hemophiliacs in blood solids manufactured by the

defendants. Obviously these 400 plaintiffs represent only a

small fraction of the hemophiliacs (or their next of kin, in cases

in which the hemophiliac has died) who are infected by HIV or

have died of AIDS. One of the 300 cases is Wadleigh, filed in

September 1993, the case that the district judge certified as a

class action. Thirteen other cases have been tried already in

various courts around the country, and the defendants have won

twelve of them. All the cases brought in federal court (like

Wadleigh)—cases brought under the diversity jurisdiction—have

been consolidated for pretrial discovery in the Northern District

of Illinois by the panel on multidistrict litigation.

6a

The plaintiffs advance two principal theories of liability.

The first is that before anyone had heard of AIDS or HIV, it was

known that Hepatitis B, a lethal disease though less so than

HIV-AIDS, could be transmitted either through blood

transfusions or through injection of blood solids. The plaintiffs

argue that due care with respect to the risk of infection with

Hepatitis B required the defendants to take measures to purge

that virus from their blood solids, whether by treating the blood

they bought or by screening the donors--perhaps by refusing to

deal with paid donors, known to be a class at high risk of being

infected with Hepatitis B. The defendants’ failure to take

effective measures was, the plaintiffs claim, negligent. Had the

defendants not been negligent, the plaintiffs further argue,

hemophiliacs would have been protected not only against

Hepatitis B but also, albeit fortuitously or as the plaintiffs put it

"serendipitously,” against HIV.

The plaintiffs’ second theory of liability is more

conventional. It is that the defendants, again negligently,

dragged their heels in screening donors and taking other

measures to prevent contamination of blood solids by HIV when

they learned about the disease in the early 1980s. The plaintiffs

have other theories of liability as well, including strict products

liability, but it is not necessary for us to get into them.

The district judge did not think it feasible to certify

Wadleigh as a class action for the adjudication of the entire

controversy between the plaintiffs and the defendants.

Fed.R.Civ.P. 23(b)(3). The differences in the date of infection

alone of the thousands of potential class members would make

such a procedure infeasible. Hemophiliacs infected before

anyone knew about the contamination of blood solids by HIV

could not rely on the second theory of liability, while

hemophiliacs infected after the blood supply became safe (not

perfectly safe, but nearly so) probably were not infected by any

of the defendants’ products. Instead the judge certified the suit

"as a class action with respect to particular issues" only.

Fed.R.Civ.P. 23(ch4)(A). He explained this decision in an

Rett haces des ithe MU ei Hit9 Ot Oe WL ad PPO Lita BA Protiivhaet y tin

7a

opinion which implied that he did not envisage the entry of a

final judgment but rather the rendition by a jury of a special

verdict that would answer a number of questions bearing,

perhaps decisively, on whether the defendants are negligent

under either of the theories sketched above. If the special verdict

found no negligence under either theory, that presumably would

be the end of all the cases unless other theories of liability

proved viable. If the special verdict found negligence, individual

members of the class would then file individual tort suits in state

and federal district courts around the nation and would use the

special verdict, in conjunction with the doctrine of collateral

estoppel, to block relitigation of the issue of negligence.

With all due respect for the district judge's commendable

desire to experiment with an innovative procedure for

streamlining the adjudication of this "mass tort," we believe that

his plan so far exceeds the permissible bounds of discretion in

the management of federal litigation as to compel us to intervene

and order decertification. The plaintiffs’ able counsel argues that

we need not intervene now, that it will be time enough to

intervene if and when a special verdict adverse to the defendants

is entered and an appeal taken to us. But of course a verdict as

such is not an appealable order. Only when a final judgment is

entered, determining liability and assessing damages, will the

case, including interim rulings such as the certification of certain

issues in the case for determination in a class action, be

appealable to us. Since without a final judgment the special

verdict would not (with an exception noted later in this opinion)

even have collateral estoppel effect, Amcast Industrial Corp. v.

Detrex Corp., 45 F.3d 155, 158 (7th Cir.1995), the district judge

may have intended that the special verdict would be followed by

a trial on any remaining liability issues, and on damages, limited

to Wadleigh and the other named plaintiffs in the Wadleigh case.

That trial would culminate in a final judgment, which would

both be appealable to us and impart collateral estoppel effect to

the special verdict. The members of the class, other than the

named plaintiffs, would take the special verdict back to their

8a

home districts and use it to limit the scope of the individual trials

that would be necessary—for remember that the district judge has

refused to certify the case as a class action for a final

adjudication of the controversy between the class and the

defendants—-to determine each class member's actual entitlement

to damages and in what amount.

We asked at argument whether the district judge indeed

planned to enter a final judgment at least with respect to the

named plaintiffs, so that the ruling on class certification could

eventually be appealed. The plaintiffs’ counsel relayed the

question to the judge, who wrote them that he does envisage the

eventual entry of a final judgment with regard to the named

plaintiffs. This procedure for eliciting the judge's views was

irregular. A judge against whom mandamus is sought is

authorized to file a brief, Fed.R.App.P. 21(b), and Judge Grady

had not done so. In effect the letter was his brief, but because it

was filed out of time the petitioners had no chance to respond to

it.

Nevertheless we shall assume in accordance with the judge's

letter that eventually there will be a final judgment to review.

Only it will comie too late to provide effective relief to the

defendants; and this is an important consideration in relation to

the first condition for mandamus, that the challenged ruling of

the district court have inflicted irreparable harm, which is to say

harm that cannot be rectified by an appeal from the final

judgment in the lawsuit. The reason that an appeal will come too

late to provide effective relief for these defendants is the sheer

magnitude of the risk to which the class action, in contrast to the

individual actions pending or likely, exposes them. Consider the

situation that would obtain if the class had not been certified.

The defendants would be facing 300 suits. More might be filed,

but probably only a few more, because the statutes of limitations

in the various states are rapidly expiring for potential plaintiffs.

The blood supply has been safe since 1985. That is ten years

ago. The risk to hemophiliacs of having become infected with

HIV has been widely publicized; it is unlikely that many

“ diy Ne ict ike

9a

hemophiliacs are unaware of it. Under the usual discovery

statute of limitations, they would have to have taken steps years

ago to determine their infection Status, and having found out file

Three hundred is not a trivial number of lawsuits. The

potential damages in each one are great. But the defendants

have won twelve of the first thirteen, and, if this is a

representative sample, they are likely to win most of the

remaining ones as well. Perhaps in the end, if class-action

treatment is denied (it has been denied in all the other

hemophiliac HIV suits in which class certification has been

sought), they will be compelled to pay damages in only 25 cases,

involving a potential liability of perhaps no more than $125

million altogether. These are guesses, of course, but they are at

once conservative and usable for the limited Purpose of

comparing the situation that will face the defendants if the class

certification stands. All of a sudden they will face thousands of

plaintiffs. Many may already be barred by the statute of

limitations, as we have suggested, though its further running was

tolled by the filing of Wadleigh as a class action. American Pipe

& Construction Co. v. Utah, 414 U.S. 538, 554, 94 S.Ct. 756,

766, 38 L.Ed.2d 713 (1974). (If the class is decertified, the

Statute of limitations will start running again. Glidden y.

Chromalloy American Corp., 808 F.2d 621, 627 (7th Cir.1986);

Barrett v. U.S. Civil Service Comm'n, 439 F.Supp. 216, 218-19

(D.D.C.1977); cf. American Pipe & Construction Co. y. Utah,

supra, 414 U.S. at 552, 561, 94 S.Ct. at 765, 770; Crown, Cork

& Seal Co. v. Parker, 462 US. 345, 354, 103 S.Ct. 2392, 2398,

76 L.Ed.2d 628 (1983)).

Suppose that 5,000 of the potential class members are not

yet barred by the statute of limitations. And suppose the named

plaintiffs in Wadleigh win the class portion of this case to the

extent of establishing the defendants’ liability under either of the

two negligence theories. It is true that this would only be prima

facie liability, that the defendants would have various defenses.

10a

But they could not be confident that the defenses would prevail.

They might, therefore, easily be facing $25 billion in potential

liability (conceivably more), and with it bankruptcy. They may

not wish to roll these dice. That is putting it mildly. They will

be under intense pressure to settle. Milton Handler, "The Shift

from Substantive to Procedural Innovations in Antitrust Suits,”

71 Column.L.Rev. 1, 8-9 (1971); William Simon, "Class

Actions—Useful Tool or Engine of Destruction," 55 F.R.D. 375

(1972); Marc Galanter, "Why the ‘Haves’ Come Out Ahead:

Speculations on the Limits of Legal Change," 9 Law & Soc'y

Rev. 95, 143 and n. 121 (1974); Charles D. Schoor, "Class

Actions: The Right to Solicit," 16 Santa Clara L.Rev. 215,

239-40 and n. 82 (1976); Joseph Grundfest, "Disimplying

Private Rights of Action under the Federal Securities Laws: The

Commission's Authority," 107 Harv.L.Rev. 963, 973 n. 38

(1994); Lester Brickman, "On the Relevance of the

Admissibility of Scientific Evidence: Tort System Outcomes

Are Principally Determined by Lawyer's Rates of Return,” 15

Cardozo L.Rev. 1755, 1780-82 (1994); Note, "Conflicts in Class

Actions and Protection of Absent Class Members,” 9/ Yale L.QJ.

590, 605 n. 67 (1982). If they settle, the class certification--the

ruling that will have forced them to settle--will never be

reviewed. General Motors Corp. v. City of New York, 501 F.2d

639, 657-58 (2d Cir.1974) (concurring opinion); cf. Mars Steel

Corp. v. Continental Illinois National Bank & Trust Co., 834

F.2d 677, 682-83 (7th Cir.1987). Judge Friendly, who was not

given to hyperbole, called settlements induced by a small

probability of an immense judgment in a class action "blackmail

settlements." Henry J. Friendly, Federal Jurisdiction: A

General View 120 (1973). Judicial concern about them is

legitimate, not "sociological," as it was derisively termed in Jn

re Sugar Antitrust Litigation, 559 F.2d 481, 483 n. 1 (9th

Cir.1977).

The defendants did not mention their concern about

settlement pressures until the oral argument of this appeal, so we

should consider whether the argument is waived and we

;

;

lla

therefore cannot consider it. If a party fails to present a ground

for reversal, the appeals court will not supply it; this is the

doctrine of waiver. Hartmann v. Prudential Ins. Co., 9 F.3d

1207, 1214 (7th Cir.1993); United States v. Rodriguez, 888 F.2d

519, 524 (7th Cir.1989); Bonds v. Coca-Cola Co., 806 F.2d

1324, 1328 (7th Cir.1986). The doctrine is not that if the party

fails to offer a particular reason for its position, the court cannot

consider that reason. Transcraft, Inc. v. Galvin, Stalmack,

Kirschner & Clark, 39 F.3d 812, 820 (7th Cir.1994). Were that

the rule, the role of an appellate court would be confined to

weighing the reasons, pro and con a particular ground, that the

parties happened to proffer. Appellate consideration so

truncated could not produce durable rules to guide decision in

future cases; judicial opinions would be impoverished if all they

did were call balls and strikes. The defendants here properly

asserted as the basis for mandamus the two necessary conditions:

irreparable harm and clear violation of right. For obvious

reasons they did not point out in support of the first condition

that if mandamus is denied they will be forced to settle-for such

an acknowledgment would greatly weaken them in any

settlement negotiations. We should be realistic about what is

feasible to put in a public brief.

We do not want to be misunderstood as saying that class

actions are bad because they place pressure on defendants to

settle. That pressure is a reality, but it must be balanced against

the undoubted benefits of the class action that have made it an

authorized procedure for employment by federal courts. We

have yet to consider the balance. All that our discussion to this

point has shown is that the first condition for the grant of

mandamus--that the challenged ruling not be effectively

reviewable at the end of the case—is fulfilled. The ruling will

inflict irreparable harm; the next question is whether the ruling

can fairly be described as usurpative. We have formulated this

second condition as narrowly, as stringently, as can be, but even

so formulated we think it is fulfilled. We do not mean to suggest

that the district judge is engaged in a deliberate power-grab. We

12a

have no reason to suppose that he wants to preside over an

unwieldy class action. We believe that he was responding

imaginatively and in the best of faith to the challenge that mass

torts, graphically illustrated by the avalanche of asbestos

litigation, pose for the federal courts. But the plan that he has

devised for the HIV-hemophilia litigation exceeds the bounds of

allowable judicial discretion. Three concerns, none of them

necessarily sufficient in itself but cumulatively compelling,

persuade us to this conclusion.

The first is a concern with forcing these defendants to stake

their companies on the outcome of a single jury trial, or be

forced by fear of the risk of bankruptcy to settle even if they

have no legal liability, when it is entirely feasible to allow a

final, authoritative determination of their liability for the colossal

misfortune that has befallen the hemophiliac population to

emerge from a decentralized process of multiple trials, involving

different juries, and different standards of liability, in different

jurisdictions; and when, in addition, the preliminary indications

are that the defendants are not liable for the grievous harm that

has befallen the members of the class. These qualifications are

important. In most class actions~and those the ones in which

the rationale for the procedure is most compelling--individual

suits are infeasible because the claim of each class member is

tiny relative to the expense of litigation. That plainly is not the

situation here. A notable feature of this case, and one that has

not been remarked upon or encountered, so far as we are aware,

in previous cases, is the demonstrated great likelihood that the

plaintiffs’ claims, despite their human appeal, lack legal merit.

This is the inference from the defendants’ having won 92.3

percent (12/13) of the cases to have gone to judgment. Granted,

thirteen is a small sample and further trials, if they are held, may

alter the pattern that the sample reveals. But whether they do or

not, the result will be robust if these further trials are permitted

to go forward, because the pattern that results will reflect a

consensus, or at least a pooling of judgment, of many different

tribunals.

13a

For this consensus or maturing of judgment the district

judge proposes to substitute a single trial before a single jury

instructed in accordance with no actual law of any jurisdiction--a

jury that will receive a kind of Esperanto instruction, merging

the negligence standards of the 50 states and the District of

Columbia. One jury, consisting of six persons (the standard

federal civil jury nowadays consists of six regular jurors and two

alternates), will hold the fate of an industry in the palm of its

hand. This jury, jury number fourteen, may disagree with twelve

of the previous thirteen juries-and hurl the industry into

bankruptcy. That kind of thing can happen in our system of civil

justice (it is not likely to happen, because the industry is likely

to settle-whether or not it really is liable) without violating

anyone's legal rights. But it need not be tolerated when the

alternative exists of submitting an issue to multiple juries

constituting in the aggregate a much larger and more diverse

sample of decision-makers. That would not be a feasible option

if the stakes to each class member were too slight to repay the

cost of suit, even though the aggregate stakes were very large

and would repay the costs of a consolidated proceeding. But this

is not the case with regard to the HIV-hemophilia litigation.

Each plaintiff if successful is apt to receive a judgment in the

millions. With the aggregate stakes in the tens or hundreds of

millions of dollars, or even in the billions, it is not a waste of

judicial resources to conduct more than one trial, before more

than six jurors, to determine whether a major segment of the

international pharmaceutical industry is to follow the asbestos

manufacturers into Chapter 11.

We have hinted at the second reason for concern that the

district judge exceeded the bounds of permissible judicial

discretion. He proposes to have a jury determine the negligence

of the defendants under a legal standard that does not actually

exist anywhere in the world. One is put in mind of the concept

of "general" common law that prevailed in the era of Swift v.

Tyson. The assumption is that the common law of the 50 states

and the District of Columbia, at least so far as bears on a claim

14a

of negligence against drug companies, is basically uniform and

can be abstracted in a single instruction. It is no doubt true that

at some level of generality the law of negligence is one, not only

nationwide but worldwide. Negligence is a failure to take due

care, and due care a function of the probability and magnitude of

an accident and the costs of avoiding it. A jury can be asked

whether the defendants took due care. And in many cases such

differences as there are among the tort rules of the different

states would not affect the outcome. The Second Circuit was

willing to assume dubitante that this was true of the issues

certified for class determination in the Agent Orange litigation.

In re Diamond Shamrock Chemicals Co., 725 F.2d 858, 861 (2d

Cir.1984).

We doubt that it is true in general, and we greatly doubt that

it is true in a case such as this in which one of the theories

pressed by the plaintiffs, the "serendipity" theory, is novel. If

one instruction on negligence will serve to instruct the jury on

the legal standard of every state of the United States applicable

to a novel claim, implying that the claim despite its

controversiality would be decided identically in all 50 states and

the District of Columbia, one wonders what the Supreme Court

thought it was doing in the Erie case when it held that it was

unconstitutional for federal courts in diversity cases to apply

general common law rather than the common law of the state

whose law would apply if the case were being tried in state

rather than federal court. Erie R.R. v. Tompkins, 304 U.S. 64,

78-80, 58 S.Ct. 817, 822, 82 L.Ed. 1188 (1938). The law of

negligence, including subsidiary concepts such as duty of care,

foreseeability, and proximate cause, may as the plaintiffs have

argued forcefully to us differ among the states only in nuance,

though we think not, for a reason discussed later. But nuance

can be important, and its significance is suggested by a

comparison of differing state pattern instructions on negligence

and differing judicial formulations of the meaning of negligence

and the subordinate concepts. See, e.g., McCarty v. Pheasant

Run, Inc., 826 F.2d 1554, 1556-57 (7th Cir.1987); Olson v.

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Prosoco, Inc., 522 N.W.2d 284, 286-90 (1a.1994); Arkansas

Kraft v. Cottrell, 313 Ark. 465, 855 S.W.2d 333, 337 (1993);

Flight Line, Inc. v. Tanksley, 608 So.2d 1149, 1158-59

(Miss.1992); Knight v. Jewett, 3 Cal. 4th 296, 11 Cal.Rptr.2d 2,

834 P.2d 696 (1992); Doe v. Grosvenor Properties (Hawaii)

Ltd., 73 Haw. 158, 829 P.2d 512 (1992); Riddle v. McLouth

Steel Products Corp., 440 Mich. 85, 485 N.W.2d 676 (1992);

Kinsey v. Bray, 596 N.E.2d 938, 940 (Ind.App.1992); Preston

v. Keith, 217 Conn. 12, 584 A.2d 439 (1991); Kalata v.

Anheuser-Busch Cos., 144 Il.2d 425, 163 Ill.Dec. 502, 581

N.E.2d 656 (1991); Tappe v. lowa Methodist Medical Center,

477 N.W.2d 396 (1a.1991); Rollins v. Peterson, 813 P.2d 1156

(Utah 1991); Walton v. Potlatch Corp., 116 Idaho 892, 781 P.2d

229 (1989); Toy v. District of Columbia, 549 A.2d 1

(D.C.App.1988); Wickwire v. Arctic Circle Air Services, 722

P.2d 930 (Alaska 1986); Streich v. Hilton-Davis, 214 Mont. 44,

692 P.2d 440, 449 (1984); Freund v. Cellofilm Properties, Inc.,

87 N.J. 229, 432 A.2d 925 (1981); Marlow v. City of Columbia

Heights, 284 N.W.2d 389 (Minn.1979); Petition of Kinsman

Transit Co., 338 F.2d 708, 721- 26 (2d Cir.1964). "The common

law is not a brooding omnipresence in the sky, but the articulate

voice of some sovereign or quasi sovereign that can be

identified." Southern Pacific Co. v. Jensen, 244 U.S. 205, 222,

37 S.Ct. 524, 531, 61 L.Ed. 1086 (1917) (Holmes, J., dissenting).

The voices of the quasi-sovereigns that are the states of the

United States sing negligence with a different Pitch. ©

The "serendipity" theory advanced by the plaintiffs in

Wadleigh is that if the defendants did not do enough to protect

hemophiliacs from the risk of Hepatitis B, they are liable to

hemophiliacs for any consequences-including infection by the

more dangerous and at the time completely unknown AIDS

virus— that proper measures against Hepatitis B would, all

unexpectedly, have averted. This theory of liability, which

draws support from Judge Friendly's opinion in Petition of

Kinsman Transit Co., supra, 338 F.2d at 725, dispenses, rightly

or wrongly from the standpoint of the Platonic Form of

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negligence, with proof of foreseeability, even though a number

of states, in formulating their tests for negligence, incorporate

the foreseeability of the risk into the test. See, e.g., Fawley v.

Martin's Supermarkets, Inc., 618 N.E.2d 10, 13 (ind.App.1993);

Comment Note, "Foreseeability as an Element of Negligence and

Proximate Cause," 100 A.L.R.2d 942 (1994). These states

follow Judge Cardozo's famous opinion in Palsgraf v. Long

Island R.R., 248 N.Y. 339, 162 N.E. 99 (1928), under which the

HIV plaintiffs might (we do not say would—we express no view

on the substantive issues in this litigation) be barred from

recovery on the ground that they were unforeseeable victims of

the alleged failure of the defendants to take adequate precautions

against infecting hemophiliacs with Hepatitis B and that

therefore the drug companies had not violated any duty of care

to them.

The plaintiffs’ second theory focuses on the questions when

the defendants should have learned about the danger of HIV in

the blood supply and when, having learned about it, they should

have taken steps to eliminate the danger or at least warn

hemophiliacs or their physicians of it. These questions also may

be sensitive to the precise way in which a state formulates its

standard of negligence. If not, one begins to wonder why this

country bothers with different state legal systems.

Both theories, incidentally, may be affected by differing

state views on the role of industry practice or custom in

determining the existence of negligence. In some states, the

standard of care for a physician, hospital, or other provider of

medical services, including blood banks, is a professional

standard, that is, the standard fixed by the relevant profession.

In others, it is the standard of ordinary care, which may,

depending on judge or jury, exceed the professional standard.

Joseph Kelly, "The Liability of Blood Banks and Manufacturers

of Clotting Products to Recipients of HIV-Infected Blood: A

Comparison of the Law and Reaction in the United States,

Canada, Great Britain, Ireland, and Australia," 27 John Marshall

Law Review 465, 472-74 (1994); United Blood Services v.

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Quintana, 827 P.2d 509, 525-26 (Colo.1992). Which approach

a state follows, and whether in those states that follow the

professional-standard approach manufacturers of blood solids

would be assimilated to blood banks as providers of medical

Services entitled to shelter under the professional standard, could

make a big difference in the liability of these manufacturers. We

note that persons infected by HIV through blood transfusions

appear to have had little better luck suing blood banks than

HIV-positive hemophiliacs have had suing the manufacturers of

blood solids. Kelly, supra, at 465-77.

The diversity jurisdiction of the federal courts is, after Erie,

designed merely to provide an alternative forum for the litigation

of state-law claims, not an alternative system of substantive law

for diversity cases. But under the district judge's plan the

thousands of members of the plaintiff class will have their rights

determined, and the four defendant manufacturers will have their

duties determined, under a law that is merely an amalgam, an

averaging, of the nonidentical negligence laws of 5]

jurisdictions. No one doubts that Congress could

constitutionally prescribe a uniform standard of liability for

manufacturers of blood solids. It might we suppose promulgate

pertinent provisions of the Restatement (Second) of Torts. The

point of Erie is that Article III of the Constitution does not

empower the federal courts to create such a regime for diversity

cases.

If in the course of individual litigations by HIV-positive

hemophiliacs juries render special verdicts that contain findings

which do not depend on the differing state standards of

negligence—-for example a finding concerning the date at which

one or more of the defendants learned of the danger of HIV

contamination of the blood supply--these findings may be given

collateral estoppel effect in other lawsuits, at least in states that

allow "offensive" use of collateral estoppel. In that way the

essential purpose of the class action crafted by Judge Grady will

be accomplished. If there are relevant differences in state law,

findings in one suit will not be given collateral estoppel effect in

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others, Commissioner v. Sunnen, 333 U.S. 591, 599-600, 68

S.Ct. 715, 720-21, 92 L.Ed. 898 (1948); Goodson v.

McDonough Power Equipment, Inc., 2 Ohio St.3d 193, 2 OBR

732, 443 N.E.2d 978, 987-88 (1983)-- and that is as it should be.

The plaintiffs argue that an equally important purpose of the

class certification is to overcome the shyness or shame that many

people feel at acknowledging that they have AIDS or are

HIV-positive even when the source of infection is not a

stigmatized act. That, the plaintiffs tell us, is why so few

HIV-positive hemophiliacs have sued. We do not see how a

class action limited to a handful of supposedly common issues

can alleviate that problem. Any class member who wants a share

in any judgment for damages or in any settlement will have to

step forward at some point and identify himself as having AIDS

or being HIV-positive. He will have to offer jury findings as

collateral estoppel, overcome the defendants’ defenses to liability

(including possible efforts to show that the class member became

infected with HIV through a source other than the defendants’

product), and establish his damages. If the privacy of these class

members in these follow-on proceedings to the class action is

sought to be protected by denominating them "John Does," that

is something that can equally well be done in individual lawsuits.

The "John Doe" device-and with it the issue of privacy—is

independent of class certification.

The third respect in which we believe that the district judge

has exceeded his authority concerns the point at which his plan

of action proposes to divide the trial of the issues that he has

certified for class-action treatment from the other issues involved

in the thousands of actual and potential claims of the

representatives and members of the class. Bifurcation and even

finer divisions of lawsuits into separate trials are authorized in

federal district courts. Fed.R.Civ.P. 42(b); Sellers v. Baisier,

792 F.2d 690, 694 (7th Cir.1986). And a decision to employ the

procedure is reviewed deferentially. Berry v. Deloney, 28 F.3d

604, 610 (7th Cir.1994); De Witt, Porter, Huggett, Schumacher

& Morgan, S.C. v. Kovalic, 991 F.2d 1243, 1245 (7th Cir.1993);

19a

Barr Laboratories, Inc. v. Abbott Laboratories, 978 F 2d 98, 105

(3d Cir.1992). However, as we have been at pains to stress

recently, the district judge must carve at the joint. Hydrite

Chemicals Co. v. Calumet Lubricants Co., 47 F.3d 887, 890-91

(7th Cir.1995); cf. McLaughlin v. State Farm Mutual

Automobile Ins. Co., 30 F.3d 861, 870-71 (7th Cir.1994). Of

particular relevance here, the judge must not divide issues

between separate trials in such a way that the same issue is

reexamined by different juries. The problem is not inherent in

bifurcation. It does not arise when the same jury is to try the

successive phases of the litigation. But most of the separate

"cases" that compose this class action will be tried, after the

initial trial in the Northern District of Illinois, in different courts,

scattered throughout the country. The right to a jury trial in

federal civil cases, conferred by the Seventh Amendment, is a

right to have juriable issues determined by the first jury

impaneled to hear them (provided there are no errors warranting

a new trial), and not reexamined by another finder of fact. This

would be obvious if the second finder of fact were a judge. Byrd

v. Blue Ridge Rural Electric Cooperative, Inc., 356 U.S. 525,

537-38, 78 S.Ct. 893, 900-01, 2 L.Ed.2d 953 (1958); Davenport

v. DeRobertis, 844 F.2d 1310, 1313-14 (7th Cir.1988); Hunter

v. Allis-Chalmers Corp., 797 F.2d 1417, 1421 (7th Cir.1986).

But it is equally true if it is another jury. Gasoline Products Co.

v. Champlin Refining Co., 283 U.S. 494, 500, 51 S.Ct. 513, 515,

75 L.Ed. 1188 (1931); McDaniel y. Anheuser-Busch, Inc., 987

F.2d 298, 305 (Sth Cir.1993); Alabama v. Blue Bird Body Co.,

573 F.2d 309, 318 (Sth Cir.1978). In this limited sense, a jury

verdict can have collateral estoppel effect. Davenport v.

DeRobertis, supra, 844 F.2d at 1313-14; Hudson Ins. Co. v. City

of Chicago Heights, 48 F.3d 234, 237-38 (7th Cir. 1995).

The plan of the district judge in this case is inconsistent with

the principle that the findings of one jury are not to be

reexamined by a second, or third, or nth jury. The first jury will

not determine liability. It will determine merely whether one or

more of the defendants was negligent under one of the two

20a

theories. The first jury may go on to decide the additional issues

with regard to the named plaintiffs. But it will not decide them

with regard to the other class members. Unless the defendants

settle, a second (and third, and fourth, and hundredth, and

conceivably thousandth) jury will have to decide, in individual

follow-on litigation by class members not named as plaintiffs in

the Wadleigh case, such issues as comparative negligence--did

any class members knowingly continue to use unsafe blood

solids after they learned or should have learned of the risk of

contamination with HIV?--and proximate causation. Both issues

overlap the issue of the defendants’ negligence. Comparative

negligence entails, as the name implies, a comparison of the

degree of negligence of plaintiff and defendant. See, e.g.,

Alaska Stat. § 09.17.080; ILCS 735 5/2-1116; N.J.Stat. §

2A:15-5.1; Ohio Rev.Code § 2315.19; Utah Code § 78-27-38.

Proximate causation is found by determining whether the harm

to the plaintiff followed in some sense naturally, uninterruptedly,

and with reasonable probability from the negligent act of the

defendant. It overlaps the issue of the defendants’ negligence

even when the state's law does not (as many states do) make the

foreseeability of the risk to which the defendant subjected the

plaintiff an explicit ingredient of negligence. See, e.g., Powell

v. Drumheller, --- Pa. ----, 653 A.2d 619 (1995); Whittaker v.

Saraceno, 418 Mass. 196, 635 N.E.2d 1185 (1994); Vincent v.

Fairbanks Memorial Hospital, 862 P.2d 847, 851-52 (Alaska

1993); Flight Line, Inc. v. Tanksley, supra, 608 So.2d at

1158-59; Wasfi v. Chaddha, 218 Conn. 200, 588 A.2d 204

(1991). A second or subsequent jury. might find that the

defendants’ failure to take precautions against infection with

Hepatitis B could not be thought the proximate cause of the

plaintiffs’ infection with HIV, a different and unknown

blood-borne virus. How the resulting inconsistency between

juries could be prevented escapes us.

The protection of the right conferred by the Seventh

Amendment to trial by jury in federal civil cases is a traditional

office of the writ of mandamus. Beacon Theatres v. Wesiover,

2la

359 U.S. 500, 510-11, 79 S.Ct. 948, 956-57, 3 L.Ed.2d 988

(1959); Dairy Queen, Inc. v. Wood, 369 U.S. 469, 472, 82 S.Ct.

894, 897, 8 L.Ed.2d 44 (1962); Maloney v. Plunkett, supra;

First National Bank v. Warren, 796 F.2d 999 (7th Cir. 1986).

When the writ is used for that purpose, strict compliance with

the stringent conditions on the availability of the writ (including

the requirement of proving irreparable harm) is excused. In

Beacon, for example, if the judge had gone ahead and tried the

equitable claims first and made his decision collateral estoppel

in the subsequent jury trial, the losing party would have been

entitled to a new trial, wiping out the judge's decision. There

was no irreparable harm, yet mandamus was granted--which is

one reason why in cases like Maloney and Sandahl we have said

that the use of the writ cannot be reduced to formula. But the

looming infringement of Seventh Amendment rights is only one

of our grounds for believing this to be a case in which the

issuance of a writ of mandamus is warranted. The others as we

have said are the undue and unnecessary risk of a monumental

industry-busting error in entrusting the determination of potential

multi-billion dollar liabilities to a single jury when the results of

the previous cases indicate that the defendants’ liability is

doubtful at best and the questionable constitutionality of trying

a diversity case under a legal standard in force in no state. We

need not consider whether any of these grounds standing by

itself would warrant mandamus in this case. Together they make

a compelling case.

We know that an approach similar to that proposed by Judge

Grady has been approved for asbestos litigation. See in

particular Jenkins v. Raymark Industries, Inc., 782 F.2d 468 (Sth

Cir.1986); In re School Asbestos Litigation, 789 F.2d 996 (3d

Cir.1986). Most federal courts, however, refuse to permit the

use of the class-action device in mass-tort cases, even asbestos

cases. Thomas E. Willging, Trends in Asbestos Litigation 93-98

(Federal Judicial Center 1987); cf. In re Fibreboard Corp.,

supra, In re Joint Eastern & Southern District Asbestos

Litigation, 982 F.2d 721 (2d Cir.1992). Those courts that have

22a

permitted it have been criticized, and alternatives have been

suggested which recognize that a sample of trials makes more

serise than entrusting the fate of an industry to a single jury. See,

e.g., Michael J. Saks & Peter David Blanck, "Justice Improved:

The Unrecognized Benefits of Aggregation and Sampling in the

Trial of Mass Torts," 44 Stan.L.Rev. 815 (1992). The number of

asbestos cases was so great as to exert a well-nigh irresistible

pressure to bend the normal rules. No comparable pressure is

exerted by the HIV-hemophilia litigation. That litigation can be

handled in the normal way without undue inconvenience to the

parties or to the state or federal courts.

The defendants have pointed out other serious problems

with the district judge's plan, but it is unnecessary to discuss

them. The petition for a writ of mandamus is granted, and the

district judge is directed to decertify the plaintiff class.

ILANA DIAMOND ROVNER, Circuit Judge, dissenting.

The majority today takes the extraordinary step of granting

defendants’ petition for a writ of mandamus and directing the

district court to rescind its order certifying the plaintiff class.

Although certification orders like this one are not immediately

appealable (see Coopers & Lybrand v. Livesay, 437 U.S. 463, 98

S.Ct. 2454, 57 L.Ed.2d 351 (1978)), the majority seizes upon our

mandamus powers to effectively circumvent that rule. Because,

in my view, our consideration of Judge Grady's decision to

certify an issue class under Fed.R.Civ.P. 23(c)(4) should await

an appeal from the final judgment in Wadleigh, I would deny the

writ.

The Supreme Court has consistently cautioned that

mandamus is a drastic remedy‘to be employed only in the most

extraordinary of cases. See, e.g., Gulfstream Aerospace Corp.

v. Mayacamas Corp., 485 U.S. 271, 289, 108 S.Ct. 1133,

1143-44, 99 L.Ed.2d 296 (1988); Allied Chem. Corp. v. Daiflon,

Inc., 449 U.S. 33, 34, 101 S.Ct. 188, 189-90, 66 L.Ed.2d 193

(1980) (per curiam); Kerr v. United States District Court for the

Northern District of California, 426 U.S. 394, 402, 96 S.Ct.

23a

2119, 2123-24, 48 L.Ed.2d 725 (1976). The writ traditionally has

been used only "to confine an inferior court to a lawful exercise

of its prescribed jurisdiction" ! is justified only by

"exceptional circumstances amounting to a judicial ‘usurpation

of power.' "Will v. United States, 389 U.S. 90, 95, 88 S.Ct. 269,

273, 19 L.Ed.2d 305 (1967); see also Gulfstream Aerospace

Corp., 485 U.S. at 289, 108 S.Ct. at 1143-44; Allied Chemical,

449 USS. at 35, 101 S.Ct. at 190; Kerr, 426 U.S. at 402, 96 S.Ct.

at 2123-24. "To ensure that mandamus remains an extraordinary

remedy," the Supreme Court requires the proponents of a writ to

"show that they lack adequate alternative means to obtain the

relief they seek," and that their right to relief is "clear and

indisputable." Mallard v. United States District Court for the

Southern District of Iowa, 490 U.S. 296, 309, 109 S.Ct. 1814,

1822, 104 L.Ed.2d 318 (1989); see also Allied Chemical, 449

U.S. at 35, 101 S.Ct. at 190 (party seeking issuance of writ must

"have no other adequate means to attain the relief he desires");

Kerr, 426 U.S. at 403, 96 S.Ct. at 2123-24; Eisenberg v. United

States District Court for the Southern District of Illinois, 910

F.2d 374, 375 (7th Cir.1990) (petitioner must show "that

immediate correction is necessary-- without it the petitioner will

suffer serious and irreparable injury.").

Even when a petitioner's right to relief is sufficiently clear,

a writ should not issue if an adequate alternative is available.

See Maloney v. Plunkett, 854 F.2d 152, 154 (7th Cir.1988); Jn

re American Airlines, Inc., 972 F.2d 605, 608 (Sth Cir.1992)

("unless [petitioner] demonstrates that it lacks an adequate

alternative means to obtain relief, we need not consider whether

its right to a writ of mandamus is ‘clear and indisputable.’ "), cert.

denied, — U.S. —, 113 S.Ct. 1262, 122 L.Ed.2d 659 (1993).

We observed in Maloney, for example, that clear error is a

necessary but not sufficient condition for the issuance of the

writ: "Not only must the error be clear; it must be irremediable

by the regular appellate remedies." 854 F.2d at 154; cf. Will,

389 U.S. at 104, 88 S.Ct. at 278 ("Mandamus, it must be

remembered, does not run the gauntlet of reversible errors."

24a

(internal quotation omitted)). And when review of the

challenged order is available by direct appeal after entry of a

final judgment, "it cannot be said that the litigant ‘has no other

adequate means to seek the relief he desires."" Allied Chemical

Corp., 449 U.S. at 36, 101 S.Ct. at 191; see also In re City of

Springfield, Illinois, 818 F.2d 565, 568 (7th Cir.1987); J.H.

Cohn & Co. v. American Appraisal Assoc., Inc., 628 F.2d 994,

999 (7th Cir.1980); Campanioni v. Barr, 962 F.2d 461, 464 (Sth

Cir.1992).

The majority concedes that this court would have an

opportunity to review the certification order on appeal from a

final judgment addressed to the named plaintiffs in Wadleigh.

(Ante at 1297.) Yet the majority finds this avenue inadequate

because "it will come too late to provide effective relief to the

defendants." (Jd.) This is so because class treatment of

plaintiffs’ claims will pose a liability risk of such magnitude that

defendants "will be under intense pressure to settle." (Jd. at

1298.) And if that risk produces the predicted settlement, the

district court's certification order would evade this court's

review. (Jd.) Because of the likelihood of a settlement, then, the

majority believes that the first condition for issuance of a writ of

mandamus has been satisfied, and it proceeds to consider

whether the district court's discretionary decision to certify a

class amounts to a "judicial usurpation of power." (/d. at 1304.)

I find the majority's reasoning troubling in several respects.

First, it means that the preliminary requirement for

mandamus--the lack of an alternative means of obtaining

relief--will be satisfied by virtually every class certification

order, which then authorizes the court to assess the relative

merits of the order to determine whether it is "usurpative." The

majority's complaint about Judge Grady's order—that it will make

a settlement more likely than if defendants’ negligence were to

be determined by separate juries in individual trials--is true of

most every order certifying a large plaintiff class. Certification

orders almost always increase the likelihood of settlement by

expanding the scope of defendants’ exposure. Yet that does not

25a

make the order any less reviewable if defendants resist the

temptation to settle and litigate to final judgment. See In re

Sugar Antitrust Litigation, 559 F.2d 481, 483 n. 1 (9th Cir.1977).

Indeed, in concluding that certification orders are not

immediately appealable under 28 U.S.C. § 1291, the Supreme

Court observed that any order certifying a large plaintiff class

“may so increase the defendant's potential damages liability and

litigation costs that he may find it economically prudent to settle

and to abandon a meritorious defense." Coopers & Lybrand,

437 US. at 476, 98 S.Ct. at 2462. Yet that did not stop the

Court from finding that "orders granting class certification are

interlocutory" and thus not immediately appealable as of right.

Id. But the majority here would override Coopers’ edict, making

certification orders reviewable on mandamus simply because the

likelihood of a settlement makes the order unreviewable at the

end of the case. I cannot reconcile this conclusion with Coopers

& Lybrand or with the Supreme Court's mandamus cases. See

In re Catawba Indian Tribe of South Carolina, 973 F.2d 1133,

1137 (4th Cir.1992) (court reluctant to permit mandamus to

accomplish "what Coopers & Lybrand so clearly prohibits by

way of interlocutory appeal not certified under 28 U.S.C. §

1292(b)."); DeMasi v. Weiss, 669 F.2d 114, 118-19 (3d

Cir.1982) (refusing to employ mandamus to circumvent Coopers

& Lybrand); see also In re School Asbestos Litigation, 921 F.2d

1338, 1342 (3d Cir.1990) ("[T]his court adheres to its decision

in DeMasi and does not intend to dilute our clear holding that

precludes the use of mandamus to reverse the grant or denial of

a Class certification.").' I thus cannot agree that the possibility

' The majority relies on In re Fibreboard Corp., 893 F.2d 706 (Sth

Cir.1990), to support its writ here, contending that the Fifth Circuit, like

"[m)ost federal courts, ... refuse[s] to permit the use of the class- action device

in mass-tort cases.” (Ante at 1304; see also at 1295.) In Fibreboard, however,

the court objected to a procedure whereby the claims of nearly 3,000 plaintiffs

would be resolved in a “sample” trial of only forty-one representative class

members. 893 F.2d at 711. On the basis of the evidence addressed to the

sample, the jury would determine actual damages dve the entire class, rather

than the amount due each plaintiff. /d st 709. The court issued a writ of

26a

of a settlement satisfies defendants’ burden under the first of the

two requirements for mandamus.

I also am wary of the majority's application of a "settlement

theory” in this case, as defendants did not offer that rationale in

support of their petition. Their failure to do so is important

because the Supreme Court has required the party seeking

mandamus to bear the burden of establishing that it lacks an

alternative means of obtaining relief. See, e.g., Mallard, 490

US. at 309, 109 S.Ct. at 1822; In re Catawba Indian Tribe, 973

F.2d at 1136; In re Recticel Foam Corp., 859 F.2d 1000, 1006

(1st Cir.1988). Nowhere in their petition or in their briefs to this

court did defendants suggest that Judge Grady’s order would

prompt them to settle. Instead, defendants argued that

irreparable harm would result from the class trial itself, as well

as from the satellite litigation it would spawn.? The possibility

mandamus because this procedure would violate Texas law. Id. at 711-12.

But contrary to the majority's assertions here, the Fifth Circuit did not refuse

to permit any class treatment of the plaintiffs’ claims, nor did it discourage use

of the class action device in mass torts. Instead, the court expressly authorized

a class trial addressed, inter alia, to whether the defendants had acted

negligently. Jd. at 708 (describing Phase I trial) at 712 (authorizing Phase I

trial); see also Jenkins v. Raymark Indus., Inc., 782 F.2d 468 (Sth Cir.1986)

(affirming class certification ruling in earlier phase of same litigation). The

Phase I trial authorized in Fibreboard is similar to that envisioned by Judge

Grady here, and the Phase II trial to which the Fibreboard court objected bears

no resemblance to the individual Phase I trials that would follow the class

negligence trial under Judge Grady's plan. Moreover, to the extent that

Fibreboard may support the issuance of a writ even where a direct appeal is

later available, that decision fails to explain why the opportunity for a later

appeal would not provide an adequate alternative means of obtaining relief.

Perhaps the court was concerned, however, that a direct appeal could only

follow a class-wide judgment, whereas here, the class issues would be

reviewable on direct appeal from a judgment addressed only to the named

plaintiffs.

2 Specifically, defendants argued that Judge Grady’s certification order did

not envision entry of a final judgment (a position the majority has

appropriately rejected), that a class trial would spawn additional litigation in

jurisdictions throughout the country over the effect of the class verdict, and

that the class trial would delay discovery in other cases, perhaps preventing

defendants from deposing plaintiffs whose health continues to deteriorate.

27a

of a settlement was raised for the first time by the court itself at

oral argument. Generally, arguments not raised in a party's brief,

but only at oral argument, are waived. See, e.g., United States

v. Rodriguez, 888 F.2d 519, 524 (7th Cir.1989). But even

assuming that we may consider the argument (see ante at

1298-99), I fail to see how counsel's vague statements at oral

argument about the possibility of a settlement can be said to

satisfy defendants’ substantial burden of establishing that they

will suffer irreparable harm. The only "evidence" supporting

counsel's assertion has been supplied by the majority's own

Statistical conjecturing, to which plaintiffs have had no

opportunity to respond. Cf. LB Credit Corp. v. Resolution Trust

Corp., 49 F.3d 1263, 1268 (7th Cir.1995) (refusing to consider

argument raised for the first time in a post-judgment motion

because the opposing party had no Opportunity to test the

assumptions underlying the argument). The burden of proving

irreparable harm lies with the party seeking mandamus relief, not

with the court, and defendants wholly failed to meet that burden

here.

Furthermore, even if the possibility of a settlement were

relevant to the first mandamus requirement, and even if it had

been asserted by defendants in support of their petition, I still

cannot agree with the majority's premise that Judge Grady's

order in fact will prompt a settlement. Contrary to the clear

implication of the majority's opinion (ante at 1298), the class

portion of the anticipated trial in this case would not go so far as

to establish defendants’ liability to a class of plaintiffs; it would

instead resolve only the question of whether defendants were _

negligent in distributing tainted clotting factor at any particular

point in time. Even if defendants were faced with an adverse

class verdict, then, a plaintiff still would be required to clear a

number of hurdles before he would be entitled to a judgment.

For example, defendants no doubt would contest at that stage

whether a particular plaintiff could establish proximate causation

(Pet. for a Writ of Mandamus at 45-48.)

28a

or whether his or her claim is in any event barred by the statute

of limitations. Thus, contrary to the majority's implication, a

class verdict in favor of plaintiffs would not automatically entitle

each member of the class to a seven-figure judgment. (See ante

at 1300.) The defendants will thus have ample opportunity to

settle should they lose the class trial. And that would seem to

me an advisable strategy in light of the success they have had in

earlier cases. That factor distinguishes this case from a more

standard class action, where a non-bifurcated trial would resolve

all relevant issues and conclusively establish liability to the

class. Perhaps that explains why defendants’ own arguments in

support of their petition are based on the assumption that a class

trial would ensue, rather than on the proposition that a settlement

would follow inevitably from Judge Grady’s order.’

> As an alternative to its settlement theory, the majority suggests that the

irreparable harm requirement is relaxed in this case because the certification

order infringes defendants’ Seventh Amendment right to a jury trial. (Ante at

1295, 1303-04.) But the circumstances here are unlike those in Beacon

Theatres, Inc. v. Westover, 359 U.S. 500, 79 S.Ct. 948, 3 L.Ed.2d 988 (1959),

and Dairy Queen, Inc. v. Wood, 369 U.S. 469, 82 S.Ct. 894, 8 L.Ed.2d 44

(1962), which the majority cites to support its position. In those cases,

mandamus issued after the district court had decided to try equitable claims to

the court before trying related legal claims to a jury. Because the court's

findings on the equitable claims would have effectively denied defendants

their right to jury resolution of issues common to their legal claims, the

Supreme Court granted mandamus to protect defendants’ right to a jury trial.

Beacon Theatres, 359 U.S. at 510-11, 79 S.Ct. at 956-57; Dairy Queen, 369

U.S. at 472-73, 82 S.Ct. at 897; see also Will v. Calvert Fire Ins. Co., 437

U.S. 655, 665 n. 7, 98 S.Ct. 2552, 2559 n. 7, 57 L.Ed.2d 504 (1978). The

Court believed that there was no need to await an appeal from a final judgment

in that circumstance to remedy an obvious violation of the Seventh

Amendment. See First Nat'l Bank of Waukesha v. Warren, 796 F.2d 999, 1004

(7th Cir.1986). Here, by contrast, the district court's certification order does

not present such an obvious Seventh Amendment problem, as it will not

deprive defendants of their right to have a jury resolve any issue. Instead, the

Seventh Amendment violation the majority envisions might appear, if at all,

only in a phase Il trial. It is thus a possible but by no means imminent

consequence of the certification order. And if any constitutional problem were

to materialize, it would be reviewable either by this court after the class trial

or by other courts reviewing phase I] trials. In either event, the reviewing

court would then have a record to examine, rather than speculating about a

29a

Finally, although the availability of review on direct appeal

after final judgment makes it unnecessary for me to discuss the

merits of the certification order, the majority's arguments

addressed to the propriety of forcing "defendants to stake their

companies on the outcome of a single jury trial" or of allowing

a single jury to “hold the fate of an industry in the palm of its

hand" seem to me at odds with Fed.R.Civ.P. 23 itself. (See ante

at 1299, 1300, 1304.) That rule expressly permits class

treatment of such claims when its requirements are met,

regardless of the magnitude of potential liability. And I see

nothing in Rule 23, or in any of the relevant cases, that would

make likelihood of success on the merits a prerequisite for class

certification. (Cf. ante at 1299, 1304.) The majority's preference

for avoiding a class trial and for submitting the negligence issue

"to multiple juries constituting in the aggregate a much larger

and more diverse sample of decision-makers" (ante at 1300) is

a rationale for amending the rule, not for avoiding its application

in a specific case. Cf. Coopers & Lybrand, 437 U.S. at 470, 98

S.Ct. at 2458-59 (policy arguments addressed to the benefits and

burdens of class litigation are matters only for legislative

consideration).

I must concede that I too have doubts about whether the

class trial proposed by Judge Grady will succeed, and |

sympathize with many of the apprehensions of my brothers. But

in my view, the law requires that Judge Grady's plan be given

the opportunity to succeed. Class certification orders are, after

all, conditional orders subject to modification or revocation as

the circumstances warrant. Fed.R.Civ.P. 23(c)(1); Coopers &

Lybrand, 437 U.S. at 469, 98 S.Ct. at 2458; DeMasi, 669 F.2d

at 118; General Motors Corp. v. City of New York, 5C1 F.2d

potential constitutional violation, as the majority does here. See In re

Diamond Shamrock Chem. Co., 725 F.2d 858, 862 (2d Cir.) (denying

mandamus because “[rjeview of the many issues raised by the class

certification will be available [on direct appeal] when the ramifications of each

aspect of the ruling will be evident."), cert. denied, 465 U.S. 1067, 104 S.Ct.

1417, 79 L.Ed.2d 743 (1984). I thus cannot agree that the mere possibility of

& constitutional violation somehow eliminates the first mandamus requirement.

30a

639, 647 (2d Cir.1974). If the problems envisioned by the

majority were to materialize at a class trial, Judge Grady could

always ‘modify his earlier ruling or even abandon it altogether,

and his response in that regard would be reviewable by this court

on direct appeal, once the actual ramifications of the certification

order were evident. See In re Diamond Shamrock Chem. Co.,

725 F.2d 858, 862 (2d Cir.), cert. denied, 465 U.S. 1067, 104

S.Ct. 1417, 79 L.Ed.2d 743 (1984).

In the final analysis, I think it significant that the majority

recognizes the need for limits on the mandamus power--"if

uncabined," that power has the potential "to unravel the

final-decision rule" of 28 U.S.C. § 1291. (Ante at 1294.) The

way to cabin that power, the majority explains, is "[b]y taking

seriously the two conditions for the grant of a writ of

mandamus." (/d.) Yet in holding that the possibility of a

settlement satisfies the first condition, the majority, regrettably,

has failed to heed its own counsel. I respectfully dissent.

3la

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

IN RE: ) MDL-986

)

FACTOR VIHIORIX i+) No. 93 C 7452

CONCENTRATE )

BLOOD PRODUCTS __) THIS DOCUMENT

LITIGATION ) RELATES TO:

)

) JONATHAN WADLEIGH,

) et al. v. RHONE-

) POULENC RORER, INC.,

)

et al., No. 93 C 5969

PRETRIAL ORDER NO. 5

CLASS CERTIFICATION ORDER

For the reasons set forth in the Memorandum Opinion entered

by this court on August 17, 1994, and after consideration of

plaintiffs’ motion for class certification and the memoranda in

Support and in opposition, the court finds:

1. Pursuant to Rule 23(a) of the Federal Rules of Civil

Procedure:

(a) The class is so numerous that joinder of all members

is impracticable;

() There are questions of law and fact common to the

class;

(c) The claims of the representative plaintiffs are typical

of the claims of the class; and

32a

(d) The representative plaintiffs will fairly and

adequately protect the interests of the class.

2. Pursuant to Rule 23(c)(4)(A) of the Federal Rules of Civil

Procedure, the court finds that the negligence issues against all

defendants and the breach of fiduciary duty issues against

defendant National Hemophilia Foundation (“NHF”) are

appropriate for classwide determination.

3. Pursuant to Rule 23(b)(3), with respect to such claims the

court finds:

(a) Questions of law and fact common to the members

of the class predominate over any questions which

may affect only individual members; and

(b) A class action is superior to any other available

methods for the fair and efficient adjudication of

this controversy.

4. The court finds that there may be valid reasons why

certain class members would elect not to assert claims against the

NHF while still desiring to assert claims against the fractionator

defendants. This raises the possibility of class members opting out

solely to avoid asserting claims against the NHF. This

consideration is sufficient to justify the creation of an opt-out

procedure for class members as to the NHF only, while allowing

for their continued class membership in the litigation against the

fractionator defendants.

Accordingly, it is hereby ORDERED THAT:

1. Class certification is granted under Federal Rule of Civil

Procedure 23(c)(4)(A) as to the negligence issues against all

defendants and the breach of fiduciary duty issues against

defendznt National Hemophilia Foundation.

2. The following class is hereby certified:

(a) Except as stated in (c), below, all persons who are,

or deceased persons who were, (1) citizens or

permanent residents of the United States, and are (2)

persons with hemophilia, and were (3) users of

33a

Factor VIII or Factor IX manufactured by Alpha,

Armour, Baxter or Miles and supplied by them in

the United States, and are (or deceased persons who

were) (4) infected with HIV allegedly as a result of

use of such Factor VIII or Factor [X; and

(b) Except as stated in (c), below, parents, spouses,

children, guardians, and legal representatives of

such persons, with direct or derivative claims.

(c) A person who has previously made a claim against

one or more defendants where that claim has

resulted in a final judgment or settlement shall not

be a member of the class as to such defendant(s).

3. Plaintiffs in the amended complaint, Civil Action No. 93

C 5969, are hereby designated to serve as class representatives.

4. The members of plaintiffs’ Steering Committee in Jn Re

Factor VIII or IX Concentrate Blood Products Litigation, MDL-

986, are appointed to serve as class counsel.

5. Plaintiffs’ motion for class certification is denied in all

other respects.~_

DATED: November 3, 1994

ENTER:

John F. Grady, United States District Judge

34a

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

JONATHAN

WADLEIGH, et al.,

Plaintiffs,

V. No. 93 C 5969

RHONE-POULENC RORER, INC.,

INC., ARMOUR PHARMA-

CEUTICAL COMPANY, INC.,

MILES, INC., BAXTER

HEALTHCARE CORPORATION,

ALPHA THERAPEUTIC

CORPORATION, and NATIONAL

HEMOPHILIA FOUNDATION,

Defendants.

MEMORANDUM OPINION

GRADY, District Judge.

This opinion addresses plaintiffs’ motion for class

certification. The named plaintiffs in this diversity case are

persons suffering from hemophilia and the spouses, guardians and

personal representatives of persons who suffer or have suffered

from the disease. Hemophilia is a hereditary bleeding disorder in

males caused by an insufficiency of certain proteins in the blood

which are necessary for coagulation to occur. These proteins are

referred to as "Factor VIII" and "Factor [X." According to the

complaint, some 20,000 persons in the United States have

hemophilia. The primary risk of the disease is bleeding,

35a

spontaneously or as a result of trauma, into joints, muscles, or body

cavities.

At one time, hemophiliacs were treated by transfusions of

plasma or whole blood. This required hospitalization and was

largely ineffective because plasma and whole blood contain low

levels of Factor VIII and IX. More effective methods were sought,

and, by the late 1960s, it had become possible to extract Factor

VIII and Factor IX from the blood of donors, concentrate it, and

infuse the hemophiliac with the concentrate, known as

antihemophilic factor concentrate ("AHF").'! The concentrate was

far more effective in bringing about clotting and it was more

convenient as well, inasmuch as no hospitalization was required

and the patient could self-inject.

Four of the defendants in this case are manufacturers who

extract Factors VIII and [IX from donated blood, process it into

AHF and distribute the AHF for use by persons with hemophilia.

The manufacturing process is known as "fractionating,” and these

defendants are referred to as "fractionators." The remaining

defendant in the case is the National Hemophilia Foundation

("Foundation"), a not-for-profit association organized to advance

the interests of the hemophilia community. .

The basis of the suit is plaintiffs' claim that as a result of using

the defendant fractionators' concentrates they (or their spouses,

wards, or decedents) became infected with the Human

Immunodeficiency Virus ("HIV") virus. This is the virus that

causes Acquired Immune Deficiency Syndrome ("AIDS"), a

disease that, over time, destroys the body's immune system and

ultimately results in death. Some of the plaintiffs allege that they

have contracted the virus, some allege that they have developed

AIDS, and others allege that their decedents have died from

AIDS-related complications.

' Plaintiffs and the defendants disagree as to whether it is accurate to refer

to Factor IX concentrate as AHF, but that question is not material to the class

tification i , 5 fas thie dnttien

a ee ee

36a

The core of plaintiffs’ negligence claim is that the fractionators

knew in the 1970s that viruses which cause various diseases, such

as hepatitis, were blood-borne, and therefore the fractionators

should have taken precautions to prevent or at least reduce viral

contamination of their products. Instead, plaintiffs allege, the

fractionators used plasma collected from paid donors, a group they

should have known included many persons at high risk for viral

infection, such as intravenous drug users. A major allegation of

negligence is that the defendants failed to use available technology

to sterilize their AHF products despite their knowledge that a large

percentage of patients who use the products were being infected

with hepatitis and other serious viral diseases.

The complaint goes on to allege that when the condition now

known as AIDS was first reported in 1980, the manufacturers

should soon thereafter have known that the disease was

blood-borne and could be transmitted by their AHF products.

Despite this known risk, the defendants continued to use pooled

plasma from paid donors, failed to screen the donors to identify

and exclude persons likely to be HIV-positive, failed to take steps

to sterilize their products, and failed to warn the hemophilia

community of the danger of contracting AIDS from the use of their

products. Instead, plaintiffs allege, the fractionators gave false

assurances of the safety of their products which they knew would

be relied upon by hemophilia patients and their treating physicians.

Plaintiffs allege that the defendant Foundation, influenced by the

financial contributions it received from the fractionators, gave

similar unfounded assurances of the safety of the fractionators'

products, knowing that the hemophilia patients and their treating

physicians would rely on those assurances.

Plaintiffs allege that more than half of the 20,000 persons with

hemophilia in the United States have become infected with the

HIV virus and that about 2,000 persons with hemophilia had died

from AIDS by the time the complaint in this case was filed in

September of 1993.

The complaint contains counts charging the fractionators with

negligence, strict products liability, breach of implied warranty and

37a

conspiracy and a count charging the defendant Foundation with

negligence and breach of fiduciary duty. Compensatory and

punitive damages are sought against all defendants.

DISCUSSION

In seeking class certification, plaintiffs assert they have met all

requirements of Rule 23(a) and (b)(3) of the Federal Rules of Civil

Procedure. In the alternative, plaintiffs argue that particular issues

should be certified for class treatment pursuant to Rule 23(c)(4).

Defendants contend that none of the Rule 23 requirements are met

and oppose any form of certification. What follows is a discussion

of the opposing arguments concerning compliance with the various

requirements of the rule.

Numerosity

Rule 23(a)(1) provides that a class action can be maintained

only if "the class is so numerous that joinder of all members is

impracticable..." As noted above, plaintiffs estimate that there are

some 20,000 persons in the United States who have hemophilia

and that as many as half of them may be infected with the HIV

virus, usually as a result of using one or more of the defendants’

concentrates. Plaintiffs argue that it would not be feasible for each

of the affected persons to file a separate suit, owing in part to the

substantial litigation costs required to prosecute a claim involving

complex scientific issues. It is this financial consideration, along

with the reluctance of many HIV-infected hemophiliacs to make a

public disclosure of their condition, that, according to plaintiffs,

accounts for the fact that no more than about 300 cases have been

filed nationwide. Defendants respond that there is no financial

impediment to filing suit, since cases of this kind are typically

handled by lawyers on a contingent fee basis. Moreover,

defendants challenge the suggestion that embarrassment is a

deterrent to filing suit; the more likely explanation for the

relatively low number of filings, according to defendants, is the

realization among the hemophiliac community that there is no

basis for any claim against the defendants.

38a

On the numerosity question, as well as other issues discussed

in this opinion, this court has an advantage that a trial judge ruling

on a class certification motion usually does not have. It has the

advantage of having presided over a trial involving the same

subject matter. The case of Poole v. Alpha, No. 86 C 7623

(N.D.II1.), was tried to a jury in this court in 1993. Stephen Poole

was a hemophiliac who became infected with the HIV virus as a

result of using Factor VIII concentrate and eventually died of

AIDS, leaving a widow and children surviving. Poole's estate sued

the same four fractionators named as defendants in this case,

alleging that Poole had used each of their concentrates. The claims

and defenses were substantially identical to those that appear to be

presented in this case. Expert witnesses testified on both sides

concerning the questions of negligence and proximate cause. After

5 1/2 weeks of trial, the jury returned a special verdict finding that

"none of the defendants was negligent in any of the ways charged

by the plaintiff." Judgment was entered for the defendants, and the

case is now on appeal to the Seventh Circuit.

The trial of the Poole case was enormously expensive for both

sides, and it is unlikely in the extreme that every member of the

proposed class in this case would be able to fund a separate action

of that kind, even with attorneys working on a contingent fee basis.

Expert witness fees alone would run into the tens of thousands of

dollars. But aside from the matter of expense, the more specific

question under Rule 23(a)(1) is whether the class is so numerous

that joinder of all members is impracticable. And whether the

class consists of hundreds of persons, as defendants argue, or

thousands, as plaintiffs say, the number is obviously too large to

join as plaintiffs in this one action. Although the rule mentions

only the number of class members--thus the shorthand

"numerosity" for the rule 23(a)(1) requirement--it is clear that the

number is to be considered in connection with all of the relevant

circumstances bearing upon the practicability of joinder. See, e.g.,

Garcia v. Gloor, 618 F.2d 264, 267 (Sth Cir.1980), cert. denied,

449 U.S. 1113, 101 S.Ct. 923, 66 L.Ed.2d 842 (1981):

39a

The basic question is practicability of joinder, not

number of interested persons per se.

Practicability of joinder depends on size of class,

ease of identifying its members and determining

their addresses, facility of making service on

them if joined and their geographic dispersion.

(citation omitted)

In this case, the members of the putative class are alleged to

be dispersed throughout the fifty states and the District of

Columbia. Their identities are for the most part unknown to the

named plaintiffs. Some of the class members may be unaware of

their HIV infection. To the extent there is merit to plaintiffs’

allegations that the defendants have misled the hemophilia

community concerning the safety of factor concentrates, class

members may be unaware of the alleged connection between

concentrates and transmission of HIV. "For purposes of

determining class certification, the allegations are taken as true and

the merits of the complaint are not examined." Allen v. Isaac, 99

F.R.D. 45, 49 (N.D.III.1983) (citing Eisen v. Carlisle & Jacquelin,

417 U.S. 156, 177-78, 94 S.Ct. 2140, 2152-53, 40 L.Ed.2d 732

(1974)). It is not, of course, necessary that joinder of all class

members be impossible. As the Seventh Circuit has stated, Rule

23 should be construed to permit a class action where the class is

" ‘so numerous that their voluntarily, unanimously joining in a suit

is concededly improbable and impracticable.’ " Hohmann v.

Packard Instrument Co., 399 F.2d 711, 715 (7th Cir.1968)

(quoting Weeks v. Bareco Oil Co., 125 F.2d 84, 88 (7th Cir.1941)).

Moreover, the numerosity requirement is met unless it is

practicable to join all members of the class. Here, with many

members of the class not even identified, there is no plausible

argument that it is practicable to join all of them at this time. See

Jack v. American Linen Supply Co., 498 F.2d 122, 124 (Sth

Cir.1974) ("“{JJoinder of unknown individuals is certainly

impracticable. Thus the requirements of Rule 23(a)(1) would

appear to be met here."). And nothing in the rule suggests that

class certification should await exhaustion of all efforts to identify

40a

every class member; on the contrary, Rule 23(c)(1) requires that

the court rule on class certification "[a]s soon as practicable after

the commencement of an action brought as a class action...."

Plaintiffs have satisfied the numerosity requirement.

Common Questions of Law or Fact.

The next prerequisite for a class action is the requirement of

Rule 23(aX2) that there be "questions of law or fact common to the

class....". The fractionator defendants do not argue that there are no

common questions of law or fact but make a variety of arguments

as to why common questions do not "predominate over any

questions affecting only individual members,” a requirement of

Rule 23(b)(3). The defendant Foundation, however, argues that

there are no questions of law or fact that are common both to it and

the fractionator defendants. The Foundation contends that the

determination of whether it was negligent will be based on facts it

knew or reasonably should have known, whereas the facts known

to the fractionators may have been different. While this may be

true to an extent, it is also true that one of the principal factual

questions in the case will be the state of scientific knowledge at

various relevant times concerning the likelihood of transmission of

virus by the factor concentrates and what could be done to prevent

it. Much of that knowledge was disseminated through scientific

journals available to all of the defendants. What the defendant

Foundation should have known, and when it should have known

it, will be determined by what was reasonably inferable from the

available data at various points in time. That inquiry will be the

same whether the defendant under consideration be a fractionator

or the Foundation. According to the complaint, the Foundation

was privy to much of the same information available to the

fractionators. The jury might reach different conclusions as among

the various defendants, but this does not indicate the absence of a

common question.

The fiduciary questions pertain only to the Foundation, but

proof of a breach of any fiduciary obligation will depend largely

on the common question of what was known in the scientific

4la

community at the relevant times. Plaintiffs' argument will be that

if the Foundation ignored or misrepresented the danger of infection

associated with the concentrates, it violated its obligations to the

members of the hemophilia community who relied upon its advice

or its failure to warn.

The common question requirement of Rule 23(a)(2) is

satisfied.’

Typicality

The third prerequisite is that "the claims or defenses of the

representative parties are typical of the class or defenses of the

class....". Rule 23(a)(3). Defendants argue that the claim of each

class member is unique in the severity of his hemophilia, the nature

of the medical treatment received, the identity and quantity of

factor concentrate used, the manner and date of HIV infection, and

various other circumstances affecting both liability and damage

issues. Therefore, argue the defendants, no class member's claim

is "typical" and no class action can be maintained.

The typicality requirement of the rule overlaps other

requirements designed to ensure that the class representative will

fairly and adequately prosecute the claims of the absent class

members. It is thus related to the common question requirement

just discussed as well as to the fair representation requirement of

Rule 23(a)(4), discussed below. 7 A. Wright, Miller & Kane,

Federal Practice and Procedure: Civil 2d § 1764. Fair and

adequate representation does not require that the claims of the

representative and the absent members be factually identical. That

would usually be impossible. The typicality requirement is

satisfied if the claims and legal theories of the class representative

? If it were true that the common questions between plaintiffs and the

fractionator defendants were different from the common questions between

plaintiffs and the Foundation, this would not mean that there should be no

class certification. It would simply mean that there are two class actions rather

than one, or that there should be a severance for trial purposes. See Rule 42(b),

Fed.R.Civ.P.

42a

are the same as those of the absent class members, even though

factual distinctions may exist:

A plaintiffs claim is typical if it arises from the

same event or practice or course of conduct that

gives rise to the claims of other class members

and his or her claims are based on the same legal

theory.... The typicality requirement may be

satisfied even if there are factual distinctions

between the claims of the named plaintiffs and

those of other class members. Thus, similarity of

legal theory may control in the face of differences

of fact.

De La Fuente v. Stokely-Van Camp, Inc., 713 F.2d 225, 232

(7th Cir.1983) (citations omitted). See also Forbush v. J.C.

Penney Co., Inc., 994 F.2d 1101, 1106 (Sth Cir.1993).

The complaint in this case alleges that all members of the class

were injured as a result of the defendant fractionators’ negligence

in the collection of blood plasma from high-risk donors, their

failure to use available methods to deactivate virus in their

concentrates, and their sale of contaminated product, without

warning of the danger, for use by the class members. The

defendant Foundation is charged along with the fractionators with

negligent failure to warn class members of the danger involved in

the use of the fractionators' products. The claims of all class

members are the same, and their legal theories are the same.

The typicality requirement of Rule 23(a)(3) is satisfied.

Adequacy of Representation

The final prerequisite is the requirement of Rule 23(a)(4) that

"the representative parties will fairly and adequately protect the

interests of the class." Defendants again point to the factual

differences noted in the foregoing discussion of the typicality

requirement. Their argument that these differences impair the

ability of the named plaintiffs to represent the class is no more

persuasive here. Defendants suggest that class representatives who

use only Factor VIII would have no interest in making a case in

43a

regard to Factor [X and that plaintiffs who used the concentrate of

one fractionator would have no interest in making a case against

any other fractionator. The short answer to this, however, is that

according to the complaint, there is at least one class representative

for each base that needs to be covered.

Finally, defendants suggest that plaintiffs’ failure to join

additional defendants, such as health-care providers, indicates a

lack of zeal to protect the interests of the class. The court is not in

a position to second-guess the strategy of plaintiffs in their

selection of defendants. Certainly nothing on the face of the

complaint indicates an obvious error in that strategy. The court

does note that plaintiffs’ counsel in this case are experienced in

Factor VIII and Factor [X concentrate litigation and in fact have

been appointed by this court to the Plaintiffs’ Steering Committee

in the Muilti-District Litigation which has been centralized in this

court for consolidated pretrial proceedings. Jn Re Factor VIII and

Factor IX Concentrate Litigation, MDL-986.

The court concludes that the named plaintiffs will adequately

represent the class.

Rule 23(b)(3) Considerations

In addition to fulfilling the prerequisites of Rule 23(a),

plaintiffs must satisfy the requirements of Rule 23(b)(3)

that the questions of law or fact common to

members of the class predominate over any

questions affecting only individual members, and

that a class action is superior to other available

methods for the fair and efficient adjudication of

the controversy.

The court's finding that there are common questions of law

and fact sufficient to meet the requirement of Rule 23(a)(2) is not

the same thing as a finding that those questions predominate over

those that affect only individual members of the class.

Plaintiffs emphasize that the defendant fractionators have

engaged in essentially similar conduct in regard to their collection

of plasma and the manufacture and sale of their concentrates. A

44a

major common issue is whether that conduct was negligent in the

various respects alleged by plaintiffs. Plaintiffs point out that they

have all been injured in essentially the same way, by contracting

HIV from the concentrates, and they minimize any problem

associated with the proof of proximate cause in the individual case.

Defendants, on the other hand, emphasize that there were

differences in their collection and manufacturing procedures, so

that a common determination of negligence would be impossible.

The court is not persuaded by this argument, because the point, at

least as far as ordinary negligence is concerned, is not what

particular procedures the defendants used but whether they failed

to take precautions that plaintiffs allege would have been taken by

reasonably careful fractionators, specifically, the screening of

donors and the sterilization of the concentrates. Should a jury

determine that the failure to take these measures was negligence,

then, regardless of what procedures a particular fractionator did

use, it could be found negligent on the same basis as any other

fractionator found guilty of the same omissions. |

Defendants argue that there can be no common question of

negligence because the rights of the individual class members

would be determined according to the law of their state of

residence (presumably the place where the injury occurred); the

negligence law of each of fifty-one jurisdictions would have to be

applied by the jury, making a joint trial impossible.

Defendants are accurate in pointing out that the negligence

law of the various states is not uniform in regard to the duty it

imposes upon a defendant in cases of this kind. According to one

writer, most jurisdictions would hold a fractionator only to a

"professional standard of care," which means that the plaintiff

would have to prove that the conduct of the fractionator departed

from what other fractionators were doing at the time. Joseph

Kelly, The Liability of Blood Banks and Manufacturers of Clotting

Products to Recipients of HIV-Infected Blood: A Comparison of

the Law and Reaction in the United States, Canada, Great Britain,

Ireland, and Australia. 27 J. Marshall L.Rev. 465, 472-73 (1994).

The “professional standard of care" rule has a curious history,

45a

described in an interesting article by Professor Theodore Silver,

One Hundred Years of Harmful Error: The Historical

Jurisprudence of Medical Malpractice, 1992 Wis.L.Rev. 1193.

The author explains how physicians were originally held to a

standard of ordinary care, just like everyone else. They were

required to possess the degree of skill that was ordinarily possessed

by other physicians and to exercise reasonable care in treating

patients. Confusion began with the Illinois case of Ritchey v. West,

23 Ill. 329 (1860), where the court, giving no indication that it

intended to announce a new rule, stated that a physician was

required to "possess and exercise that degree of skill which is

ordinarily possessed by members of the profession," id. at 330

(emphasis added), thus conflating the required skill and the

required degree of care. Silver, supra, at 1222-25. Eventually,

most courts, without seeming to realize they were changing the

law, began to express the duty in terms of "professional custom"

(more often now referred to as "professional standard of care"),

which Silver criticizes as senselessly indulgent:

With professional custom as the standard, the

nation's physicians may lawfully adopt and

follow practices that are patently negligent and

unreasonable under the standard of ordinary care

to which all others are held. The medical

community is answerable not for want of care but

for want of conformity. It is thus recognized that

the medical profession has the curious advantage

of establishing, on its own, the standard of care to

which it is legally obliged.

Id. at 1213. Various justifications have been offered for the

rule, but they seem unpersuasive. Jd. at 1214-19. It is not easy to

understand what basis there is for extending the benefit of the rule

to commercial suppliers of blood products, such as the defendants

in this case. A few courts have held fractionators to a duty of

ordinary care. Kelly, supra, at 474-76. This court, applying what

it believed to be Illinois law, instructed the jury in Poole v. Alpha

that defendants were required to use reasonable care, and that

46a

{w]hen I use the words "reasonable care,” I mean

the care that would be used by reasonably careful

collectors of blood or plasma and processors of

Factor VIII concentrate under circumstances

similar to those shown by the evidence at and

prior to the time Stephen Poole contracted the

HIV virus. The law does not say how reasonably

careful collectors of blood or plasma and

processors of Fector VIII concentrate would act

under those circumstances. That is for you to

decide. In determining whether any defendant

exercised reasonable care under _ the

circumstances you may consider:

a. the state of medical and scientific

knowledge available at and prior to the

time Stephen Poole became infected with

HIV;

b. the Food and Drug Administration's

regulations governing licensing,

manufacturing methods, and labeling; and

c. the practices and procedures of collectors

of blood or plasma and processors of

Factor VIII concentrate at and prior to the

time Stephen Poole became infected with

HIV.

In this view, the conduct of other fractionators is relevant but

not conclusive on the question of negligence. See Silver, supra, at

1241; Darling v. Charleston Community Memorial Hosp., 33 Ull.2d

326, 211 N.E.2d 253, 257, 261 (1965).

Defendants assert repeatedly in their briefs that negligence law

differs from state to state, but the only difference they specifically

identify is the distinction between ordinary negligence and

professional standard of care. They give no examples of differing

definitions of ordinary negligence. It is this court's impression that

the definition of ordinary negligence is substantially identical in all

47a

jurisdictions. In Illinois, for instance, it is defined as “the failure

to do something which a reasonably careful person would do, or

the doing of something which a reasonably careful person would

not do, under circumstances similar to those shown by the

evidence.” IPI, Civil, 10.01. This is not materially different from

the definition in the Restatement:

Unless the actor is a child, the standard of

conduct to which he must conform to avoid being

negligent is that of a reasonable man under like

circumstances.

Restatement (Second) of Torts, § 283 (1977). Counsel for the

fractionator defendants in this case were trial counsel in Poole, and

they have not made any attempt to show that the Illinois definition

is materially different from that of any other state. The court

presumes their research has been exhaustive and is content for

present purposes with the assumption that, as far as ordinary

negligence is concerned, no individualized issues are created by

the fact that the claims of the various class members arose in a

multiplicity of jurisdictions.

Defendants argue with particular vigor that the law concerning

foreseeability of injury will differ among the various jurisdictions.

Plaintiffs’ complaint emphasizes the fractionators' knowledge as

early as the 1970s that blood carries virus and that the Hepatitis B

virus was in fact transmitted by blood and blood products. It is

further alleged that defendants knew that new viruses could appear

at any time. Finally, it is alleged that defendants knew that heat

? In the trial of Poole v. Alpha, the jury was given the following

instruction:

When I use the word “negligence” in these instructions, I mean the

failure to do something which a reasonably careful fractionator

would do, or the doing of something which a reasonably careful

fractionator would not do, under circumstances similar to those

shown by the evidence. The law does not say how a reasonably

careful fractionator would act under the circumstances. That is for

you to decide.

48a

kills viruses. It is plaintiffs’ theory that this knowledge imposed

upon the fractionators a duty to sterilize their products to protect

against transmission of any harmful virus, known or unknown.

This allegation is designed to get around the fact that the AIDS

virus was not discovered until the early 1980s, by which time a

substantial portion of the hemophilia population had already

become infected with it. Defendants argue that this effort by

plaintiffs to impose a duty on them to protect against unknown

hazards would require application of the law of each state. This is

simply a variant of defendants’ argument that there are differences

in the negligence law of the various states. But the defendants

have cited no case law from any state pertinent to the question of

whether a defendant has a duty to guard against unknown but

allegedly foreseeable risks. This court believes the general rule

would be that there is such a duty. The question is not whether the

particular risk is known, but whether it is of a kind that was

foreseeable to the defendant. In the Poole trial, the jury was given

the following instruction:

The defendants had no duty to protect against

injuries that were not reasonably foreseeable. On

the other hand, it is not necessary for plaintiff to

prove that the defendants could have foreseen the

HIV virus itself. In determining whether any of

the defendants were negligent, you should

evaluate that defendant's conduct in light of what

was reasonably foreseeable at the time of the

defendant's claimed acts or omissions.

If, in the time that has elapsed since the Poole trial, counsel

for the fractionators had found case law from any jurisdiction

which conflicts with the sense of that instruction, they would have

cited it. In the absence of such case authority, the court is satisfied

that every jurisdiction would follow the rule suggested in § 435 of

Restatement (Second) of Torts:

Foreseeability of Harm or Manner of Its Occurrence (1) If the

actor's conduct is a substantial factor in bringing about harm to

another, the fact that the actor neither foresaw nor should have

49a

foreseen the extent of the harm or the manner in which it occurred

does not prevent him from being liable.

(2) The actor’s conduct may be held not to be a

legal cause of harm to another where after the

event and looking back from the harm to the

actor's negligent conduct, it appears to the court

highly extraordinary that it should have brought

about the harm.‘

As far as plaintiffs’ negligence claims are concerned, then,

there do not appear to be any individual issues, arising out of either

the peculiar circumstances of an individual plaintiff or differences

in state law, that would predominate over the common issues. The

fact that the defendants might be subject to different duties in

different jurisdictions --customary or professional standard in some

and ordinary care in others --does not create a multiplicity of

individual issues. The fact questions as to what was known in the

relevant scientific community at various times, and the efficacy of

what the fractionators were doing at various times, are common.

Separate problems are presented by the claims based on strict

products liability and breach of implied warranty. The defendants

have filed motions to dismiss these counts of the complaint on the

ground that the "blood shield" statutes and case law of all states

protect the manufacturers or distributors of blood products from

strict products liability or liability based on breach of implied

* Comment "a" of § 435 explains:

a. The fact that the actor, at the time of his negligent conduct, neither

realized nor should have realized that it might cause harm to another of the

particular kind or in the particular manner in which the harm has in fact

occurred, is not of itself sufficient to prevent him from being liable for the

other's harm if his conduct was negligent toward the other and was a

substantial factor in bringing about the harm. However, the manner in which

the harm occurs may involve the cooperation of other assisting factors so

numerous and so important that the actor's negligence cannot be regarded as

a substantial factor in bringing about the harm. (See § 433, Clause (a).)

50a

warranty.’ The court has not ruled on these motions, because the

class certification motion should be decided first. Koch v. Stanard,

962 F.2d 605, 607 (7th Cir.1992). If the motions are granted, that

will moot any question as to whether individual issues predominate

in these claims. But even if the motions are denied, the court

believes that individual issues do in fact predominate and that strict

liability and breach of implied warranty are therefore inappropriate

subjects for class treatment. See discussion at pp. 426-27, infra.

All that is likely to remain against the fractionators, then, is a

straight negligence case. And if plaintiffs’ entitlement to relief

depended simply upon proof of negligence, there would be little

impediment to certification of the entire liability case as a class

action. But, of course, more is required. Before any member of the

class would be entitled to damages, there must be proof of a causal

relationship between the member's HIV infection and the

negligence of some defendant. Specifically, each class member

must prove proximate cause. Here, again, this court's experience

in the trial of Poole v. Alpha is invaluable.

There is no reason to think the proximate cause issue was

more complex in the Poole trial than it would be in the cases of

most of the putative class members here. The claim in Poole was

that the decedent had used the concentrates of each of the four

defendant fractionators. Plaintiff sought to hold all of them liable

on the theory that his infection could have resulted from, or have

been exacerbated by, his use of each of the four products. Both

sides offered expert testimony on the question of whether a patient

who is infected with HIV can be further injured by a subsequent

exposure to the virus. At the close of the evidence, the court found

that plaintiff had failed to present evidence sufficient to create a

jury question and instructed the jury that liability could not be

* In Poole v. Alpha the strict liability counts were dismissed because of the

Illinois Blood Liability Act, which bars any action against a blood product

manufacturer or distributor based on strict liability or breach of warranty.

Poole v. Alpha Therapeutic Corp., 698 F.Supp. 1367, 1370-71 (N.D.II1.1988)

(Moran, J.).

Sla

based on a theory of “aggravation, acceleration, or ‘reinfection.’ "

The alleged error in withdrawing that issue from the jury is one of

the points raised in the pending appeal to the Seventh Circuit. The

importance of the issue for present purposes is to illustrate how

complex the matter of proximate cause can be. This court has no

way of knowing whether in future trials plaintiffs may be able to

create a jury issue regarding aggravation from multiple exposures

to contaminated concentrates provided by different manufacturers.

In any event, to recover against any defendant, a plaintiff must

show that he used contaminated concentrate provided by that

defendant. Where a plaintiff is able to show that he used only one

fractionator’s concentrate, the task is reduced to proving

contamination. But in the case of a long-term hemophiliac like

Stephen Poole, the likelihood of exclusive use of one brand of

concentrate is small. The brands seem to be regarded as fungible

by treating physicians, and a patient may receive a brand simply

because it is the one the supplier had in stock at the time. When a

hemophiliac is hospitalized, the hospital provides the brand it has

on hand, which may be different from the brand the patient had

been using at home. It seems likely, therefore, that most class

members are in the position of Stephen Poole-—they used more than

one brand of concentrate during the time they could have been

infected with the HIV virus. It would almost never be possible to

demonstrate by direct evidence that the virus was transmitted by a

particular infusion of concentrate. Nor is circumstantial evidence

likely to supply the causative link. The normal circumstances are

simply the infusion from a particular lot of concentrate and the

subsequent appearance of the virus in the blood of the patient,

perhaps years later, after many additional infusions from other lots

of concentrate.

Various doctrines have evolved to afford a possibility of

recovery to a plaintiff in this predicament. One is the "market

share" doctrine, a burden-shifting device which permits a plaintiff

unable to show which defendant's product caused his injury to

recover against the defendants in proportion to their share in the

market of the offending product. Another doctrine is "alternative

52a

liability," which, under certain circumstances, shifts the burden of

proof on proximate cause to all defendants whose products could

possibly have caused the injury. This is the theory adopted by this

court in the Poole case, in the belief that this is the law of Illinois

(a hotly disputed proposition, now moot because of the verdict in

favor of defendants). See Poole v. Alpha Therapeutic Corp., 696

F.Supp. 351, 354-56 (N.D.I11.1988) (Moran, J.). But enough has

been said to indicate that each of the many class members may be

confronted with formidable problems, both factual and legal, in

establishing whose negligence was a proximate cause of his HIV

infection. The law in regard to proving proximate cause in a case

of this kind is by no means uniform throughout the country. One

jurisdiction might recognize the market share doctrine, another

might recognize alternative liability, and a third might recognize

neither, requiring instead that the plaintiff carry the burden of

proving whose negligence in fact caused his injury. In some

jurisdictions, the law on this subject is not settled.

On the proximate cause issue in the case against the

fractionators, then, individual questions involving the particular

circumstances of each plaintiff, and often the law peculiar to

different jurisdictions, will clearly predominate. The only common

question might be the issue of possible aggravation from multiple

exposures.

In the case against the Foundation, proof of proximate cause

will also involve a predominance of individual questions. Each

class member will have to prove what acts or omissions of the

Foundation he relied upon and how that reliance caused his HIV

infection.

All of this does not mean that the question under Rule

23(b)(3) comes down to whether the common questions on

negligence predominate over the individual questions on proximate

cause, or vice versa. This is obvious from the second requirement

of Rule 23(b)(3), "that a class action is superior to other available

methods for the fair and efficient adjudication of the controversy."

A class action involving both negligence and proximate cause

could not be "superior" to any other method, simply because it is

53a

not feasible. It may be that other methods —individual trials of the

numerous individual claims being the only one that occurs to the

court-are equally impracticable, but that does not help the

plaintiffs. There is no way a single jury in this case could

comprehend and determine the proximate cause questions that

would be presented by the claims of the hundreds (plaintiffs say

thousands) of class members in this case.

The only conclusion the court can draw is that the

requirements of Rule 23(b)(3) are not satisfied by the case as a

whole, because the proximate cause issue is unmanageable on a

class basis.

Certification of Particular Issues

In view of the different conclusions the court has reached as

to the negligence and proximate cause issues, the question

naturally arises whether there is some way of carving out the

common issues and treating them on a class basis. This brings us

to a consideration of Rule 23(c)(4)(A), which provides that

[w]hen appropriate, an action may be brought or

maintained as a class action with respect to

particular issues....

Plaintiffs argue that there are several areas suitable for

certification under Rule 23(c)(4)(A). They see no problem with

certifying the issues of negligence, strict liability, breach of

implied warranty, and punitive damages. Plaintiffs’ only

concession appears to be that proximate cause would be

problematic.

For their part, defendants find insuperable obstacles to

certification of any issue. They again rely most heavily on their

argument that the differing law of fifty-one different jurisdictions

would make a joint trial impossible.

The court's view is that the common negligence and breach of

fiduciary duty issues can appropriately be certified but that the

remaining issues suggested by plaintiffs do not qualify.

54a

Negligence and Breach of Fiduciary Duty

The arguments of the parties here are largely the same as those

advanced in regard to the common issue question under Rule

23(a)(2) and (b)(3), supra, pp. 416-422. The court agrees with

plaintiffs that there are common negligence issues that could

practicably be tried in one action on a class basis. Defendants’

argument that the law of each jurisdiction is different is, as

indicated earlier in this opinion, not persuasive. Defendants’ other

major argument, that the producis and procedures of each

defendant were different, poses no obstacle to a jury determination

of whether each defendant was negligent in any of the ways

claimed by the plaintiffs. One of the verdict forms submitted to the

jury in Poole v. Alpha, for instance, was as follows:

SPECIAL VERDICT FORM A

We, the jury, find that before Stephen Poole was infected with

the HIV virus the following defendant(s) was (were) negligent in

the following ways charged by the plaintiff:

Alpha Cutter Armour Baxter

Use of paid plasma donors --

charge "a"

Failure to use surrogate testing --

charge "b"

Failure to warn --

charge "c"

55a

Failure to adopt methods

to inactivate viruses --

charge "d"

Continued to market

unpasteurized concentrates --

charge "e"

Failure to screen out

previously rejected

donors -- charge "f"

Failure to withdraw

concentrate from the

market -- charge "g"

The court recalls no argument by the defendants in the Poole

trial that this form of verdict was unworkable or that the jury

would not understand it. As it turned out, the jury did not complete

that form but instead signed the alternative form finding that none

of the defendants had been negligent in any of the ways claimed by

plaintiff. Here again, however, the ability of the jury to make that

determination illustrates the feasibility of trying the defendants

jointly on common allegations of negligence. In Poole, it was

done with one plaintiff and multiple defendants. The fact that the

present case involves multiple plaintiffs would add no difficulty,

inasmuch as the issue that would make a joint trial of the claims of

multiple plaintiffs impracticable, proximate cause, would not be

involved.

Defendants argue that because of the different negligence law

in the various jurisdictions there could be no joint trial of the

plaintiffs’ negligence claims consistent with the defendants’ right

56a

to due process. The claims of many of the class members arise

only under the law of a particular jurisdiction, usually the state of

their residence, since this is where they would have used the factor

concentrates of one or more of the defendants. This does not

necessarily mean that the law of that state would govern the action,

because there could be situations where the law of more than one

jurisdiction might apply. Due process requires " ‘that for a State's

substantive law to be selected in a constitutionally permissible

manner, that State must have a significant contact or significant

aggregation of contacts, creating state interests such that choice of

its law is neither arbitrary nor fundamentally unfair.'" Phillips

Petroleum Co. v. Shutts, 472 U.S. 797, 818, 105 S.Ct. 2965, 2978,

86 L.Ed.2d 628 (1984) (quoting Allstate Ins. Co. v. Hague, 449

U.S. 302, 312-13, 101 S.Ct. 633, 639-40, 66 L.Ed.2d 521 (1981)).

In this case, if the substantive negligence law of the various states

really were as diverse as defendants claim, there could be no joint

trial of the negligence issue (just as there obviously could be no

joint trial of the proximate cause issue, given the diversity of

approaches to that question). However, because this court

concludes that the definition of negligence is substantially the same

throughout the country (albeit some jurisdictions would impose a

duty of ordinary care and others a more lenient standard), it sees no

danger of a due process violation.‘

The real question under Rule 23(c)(4)(A) is whether a verdict

finding each of the defendants guilty or not guilty of the various

charges of negligence would be useful in the resolution of any of

the individual damage claims of the class members. (These would

be individual damage claims now pending or later brought in the

appropriate jurisdictions.) That depends upon whether the

negligence issues could be framed in a way that would make the

verdict of the jury a suitable predicate for further proceedings

* "We must first determine whether Kansas law conflicts in any material

way with any other law which could apply. There can be no injury in applying

Kansas law if it is not in conflict with that of any other jurisdiction connected

to this suit.” Shutts, 472 U.S. at 816, 105 S.Ct. at 2976.

57a

under the negligence law of the particular jurisdiction under

principles of collateral estoppel. See generally Gray v. Lacke, 885

F.2d 399, 406 (7th Cir.1989), cert. denied, 494 U.S. 1029, 110

S.Ct. 1476, 108 L.Ed.2d 615 1990); Cohen v. Bucci, 905 F.2d

1111, 1112-13 (7th Cir.1990); Falconer v. Meehan, 804 F.2d 72,

75- 76 (7th Cir.1986); Count; of Cook v. Midcon Corp., 773 F.2d

892, 898-904 (7th Cir.1985). There seems to be no reason the

parties could not offer evidence relevant both to the questions of

ordinary care and professional standard of care. The court has

already indicated that it believes the ordinary negligence

instructions given in Poole v. Alpha would be suitable for use in

any other jurisdiction where ordinary negligence is the standard.

It should be possible to draft instructions pertaining to the

customary or professional standard of care in equally general

terms, applicable to all jurisdictions where the defendants’ duties

would be measured by such a standard.

As far as the defendant Foundation is concerned, a verdict on

the negligence and fiduciary duty allegations should be useable by

or against the Foundation in any other jurisdiction where it might

be made a defendant. It appears that the applicable negligence

standard would be ordinary negligence, rather than a professional

standard of care, but if that is not correct as to all jurisdictions, the

jury could be instructed on both standards, just as in the case of the

fractionator defendants.

The Foundation has not pointed out any likely differences in

the law of the various jurisdictions as far as fiduciary obligations

are concerned, and it appears that any jury verdict on those issues

could also be given collateral effect.

In order for a verdict in this case to be of maximum use to the

parties in collateral proceedings, the findings of the jury will have

to take account of changes in scientific knowledge over the

relevant period of time. Because there is no dispute that the

fractionator defendants knew in the 1970s that their products could

be contaminated with viruses and that heat kills viruses, plaintiffs’

theory of negligence based on defendants’ failure to heat treat their

products even before the emergence of HIV is not especially

58a

time-dependent. But regarding plaintiffs’ allegations that

defendants negligently failed to recognize soon enough that the

new virus was blood-borne and to take adequate precautions to

prevent its transmission by their products, time is critical. To

recover on a theory of negligence occurring after the virus had

been identified, a plaintiff would obviously have to show he had

used a concentrate distributed by the particular fractionator after

that time. He would also have to show that the particular

defendant had been guilty of some negligent act or omission in

regard to the particular lot of concentrate which caused his

infection. The later the date of infection, the more information the

defendants had and the better chance the plaintiff would have to

persuade the jury that by that time the defendant knew or should

have known that its blood donors should have been screened, its

product heat treated, and the public warned of the danger of HIV

infection. As plaintiffs suggest, jury verdict forms could be drafted

in a way that would permit the jury to find the earliest date by

which each defendant knew or in the exercise of ordinary care

should have known of the danger that its concentrates would

transmit HIV. The verdict form could also call for a finding as to

the earliest date by which each defendant knew or should have

known that a particular precaution --e.g., donor screening, heat

treatment, warnings--was necessary to protect the users of its

product, a finding as to whether the defendant failed to take that

precaution, and a finding as to the date after which the defendant

was negligent in failing to take the particular precaution. And, of

course, the form would permit the jury to make a finding as to each

defendant that it was not negligent at all or that it was not negligent

in particular respects alleged + y plaintiffs.

A separate set of forms would be drafted for the "standard of

professional care" inquiry. The jury would find, as to each

allegation of negligence, whether the particular defendant had

violated the standard of care and, if so, the date the violation

began.

Verdict forms of this kind are not found in form books, and

they will have to be prepared with great care if the verdict of the

t

ie

4,

=

59a

jury is to have the collateral utility contemplated in this opinion.

The court is convinced that it can be done. The result would be the

return of a verdict that would be useable for or against the

defendants in jurisdictions throughout the country. If, for instance,

a particular defendant were found not guilty of ordinary negligence

and not to have violated any professional standard of care, that

defendant would be absolved of any liability to any of the class

members on a negligence theory. On the other hand, if a defendant

is found to have been negligent in a particular respect after a

particular date, that defendant would be subject to further

prosecution by any class member who might attempt to prove that

his HIV infection occurred as a result of using contaminated

concentrate distributed by the defendant after that date. A class

member who could not show he used the fractionator's concentrate

after the "negligence date" would have no negligence claim against

that fractionator based on acts or omissions occurring after that

date. The various possibilities are obviously numerous, but

enough has been said to demonstrate that certification of the

negligence issues would be in the interest of judicial economy even

though it is not feasible to certify the entire case as a class action.

The final question is whether certification of the negligence

issue would, in the language of Rule 23(b)(3), be "superior to other

available methods for the fair and efficient adjudication of the

controversy." Defendants argue that the centralized discovery

being conducted in the multidistrict litigation, followed by

individual trials in the different jurisdictions when the cases are

remanded at the completion of discovery, is a method of

adjudication superior to Rule 23(c)(4)(A) certification of any

particular issues. The court disagrees. It is true that, given the

MD. proceeding, centralized discovery is going to occur whether

or not there is any form of class certification. The relevant

comparison is not between centralized discovery in the MDL and

discovery in a class action, because there is no difference; this

case is part of the MDL. The relevant comparison has to do with

what happens after discovery. All defendants have to offer is a

succession of separate trials in the various jurisdictions, litigating

60a

over and over again the same questions of what was known, when

it was known, what should have been done, when it should have

been done, and whether it would have worked in any event. These

are the same issues that occupied 5 1/2 weeks of a jury's time in

Poole v. Alpha. Defendants want to do it repeatedly, before jury

after jury, with the same witnesses monotonously repeating the

testimony they have given many times before. (Defendants

suggest that they would be willing to read the depositions of expert

witnesses rather than having them testify live, but this takes almost

as much time as having the witness appear live, and, in any event,

the court is doubtful the parties would forego the presentation of

live witnesses. In the Poole trial, most of the expert witnesses

appeared live although their depositions had been taken and they

had testified at previous trials.)

The court concludes that Rule 23(b)(4)(A) certification of the

negligence and breach of fiduciary duty issues—specifically,

whether the fractionator defendants were guilty of ordinary

negligence or whether they violated any professional standard of

care by doing or failing to do any of the things alleged by

plaintiffs, and whether the defendant Foundation was guilty of

negligence or breach of fiduciary duty--is appropriate and clearly

superior to any other available method for the fair and efficient

adjudication of those issues.

It is, of course, possible that for reasons the court does not

presently foresee, the verdict of the jury would not be useable for

collateral purposes in a particular case or perhaps even in a

particular jurisdiction. But that would not detract from the

efficiency of using the verdict in those cases and jurisdictions

where it would be entitled to collateral effect.

Strict Liability and Breach of Implied Warranty

If defendants are correct in their contention that strict liability

and breach of warranty are precluded by the "blood shield” laws of

all jurisdictions, they will be entitled to prevail on their motions to

dismiss these claims. In fact, the court does not understand

defendants’ resistance to certification of these issues if they really

6la

believe they are entitled to dismissal. This is their chance to obtain

a favorable judgment on these issues once and for all, precluding

any individual claims by class members who do not opt out. The

alternative is for the defendants to make these motions, probably

filing identical briefs, in case after case throughout the country.

If, on the other hand, there are jurisdictions in which claims

for strict liability and breach of warranty would lie, the court is not

persuaded by plaintiffs’ argument that these issues are closely

enough related to the negligence question that they can efficiently

be tried together. The problem lies in an area which neither side

has addressed. Products can be negligently manufactured and yet

be «<i, merchantable and fit for the purpose intended. In this case,

a px *ular vial of concentrate might escape HIV contamination

for any number of reasons, regardless of whether it had been

negligently manufactured. For example, the fractionator may have

- been negligent in failing to screen the blood donors for high-risk

individuals, and yet the particular plasma pool may have had no

infected donors. A vial of concentrate prepared from that plasma

pool would not be contaminated and would therefore not breach

any warranty of merchantability or fitness for a particular purpose

and would not be unreasonably dangerous.

In short, the determination as to whether any of the

defendants’ products were unreasonably dangerous, or whether

they breached any implied warranties, must be made on the basis

of evidence relating specifically to the products which were used

by each particular plaintiff and allegedly resulted in that plaintiff's

infection. The determination is inseparable from the proximate

cause issue: Unless a plaintiff can show (by whatever means is

permitted by the law of the particular jurisdiction) that his infection

was proximately caused by a particular defendant's product, he has

not shown that product to be unfit, unmerchantable or

unreasonably dangerous.

The court concludes, therefore, that individual issues

predominate in the product liability and breach of warranty claims

and that Rule 23(c)(4)(A) certification is inappropriate.

62a

Punitive Damages

It appears to the court that unless a jury were to reach a

decision as to whether a defendant's conduct caused actual

damages, and, if so, the nature and extent of those damages, it is

not in a position to make an informed decision as to the

appropriateness of punitive damages. Because the issues the court

will certify do not include proximate cause, the jury will make no

determination of a causal connection between any conduct of a

defendant and any injury to a plaintiff. While this court is of the

view that repetitive assessments of punitive damages for the same

course of conduct are undesirable, and that one assessment in a

class action could be a superior method, this does not appear to be

an appropriate case for that approach.

CONCLUSION

Plaintiffs may prepare a proposed certification order and class

notice in conformity with this opinion and serve copies on the

defendants by August 29, 1994. The parties should attempt to

resolve any disputes as to language, and a hearing will be held on

September 13, 1994, at 2:00 p.m. for the purpose of finalizing the

certification order and class notice.

DATED: August 17, 1994

ENTER:

John F. Grady, United Stated District Judge

63a

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

JONATHAN WADLEIGH,

et al.,

Plaintiffs,

No. 93 C 5969

v.

RHONE-POULENC RORER,

INC., ARMOUR

PHARMACEUTICAL

COMPANY, INC., MILES,

INC., BAXTER

HEALTHCARE

CORPORATION, ALPHA

THERAPEUTIC

CORPORATION, and

NATIONAL HEMOPHILIA

FOUNDATION

Ne Ne Nl ff ef fe ee a ae es

Defendants.

ORDER

The fractionator-defendants’ motion for reconsideration of

this court’s order and memorandum opinion of August 17, 1994,

is denied.

The defendants’ alternative motion for certification pursuant

to 28 U.S.C. §1292(b) is also denied. An appeal at this time would

not materially advance the ultimate termination of the litigation.

64a

The defendants’ opposition to class certification is based in part

upon their contention that a class trial would not be manageable.

The court believes otherwise, but clearly a reviewing court would

be in a better position to assess the efficiency and fairness of a trial

after it has taken place rather than before. Defendants argue that

should the class certification order be reversed after the class trial

is held, the result would be waste and inefficiency. However, the

class trial, offering a possible alternative to the hundreds, if not

thousands of individual trials proposed by the defendants (see

Memorandum Opinion of August 17, 1994, at 34-36), will require

a minute expenditure of time in comparison to what must occur if

there is no class certification. Rather than asking a reviewing court

to determine in advance that it will or will not work, the trial

should be held and the result evaluated in light of the actual

experience.

DATED: September 22, 1994

ENTER:

John F. Grady, United States District Judge

65a

UNITED STATES COURT OF APPEALS

For the Seventh Circuit

Chicago, Illinois 60604

April 27, 1995

Before

Hon. Richard A. Posner, Chief Judge

Hon. John L. Coffey, Circuit Judge

Hon. Joel M. Flaum, Circuit Judge

Hon. Frank H. Easterbrook Circuit Judge

Hon. Kenneth F. Ripple, Circuit Judge

Hon. Daniel A. Manion, Circuit Judge

Hon. Michael S. Kanne, Circuit Judge

Hon. Ilana Diamond Rovner, Circuit Judge

IN THE MATTER OF: )

RHONE-POULENC RORER _) Petition for Writ of

INCORPORATED, et ai., ) Mandamus to Hon.

Petitioners. ) John F. Grady,

) United States District

) Judge, Northern

No. 94-3912 ) District of Illinois,

) Eastern Division, in

) Wadleigh et al. v.

) Rhone-Poulenc Inc.,

) et al., No. 93 C 5969

ORDER

On March 30, 1995, respondents filed a petition for rehearing

with a suggestion of rehearing en banc. A vote of the active

members of the Court was requested, and a majority has voted to

deny a rehearing en banc.*

66a

The petition is therefore DENIED.**

* Judges Flaum, Ripple, and Rovner voted to grant the

petition for rehearing en banc.

** Judge Walter J. Cummings did not participate in the vote

for rehearing en banc.

67a

IN THEUNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

No. 94-3912

RHONE-POULENC RORER INC.,

ARMOUR PHARMACEUTICAL COMPANY,

MILES INC., BAXTER HEALTHCARE CORPORATION, and

ALPHA THERAPEUTIC CORPORATION, Petitioners,

v.

HONORABLE JOHN F. GRADY, Judge,

United States District Court

for the Northern District of Illinois, Respondent.

PETITION FOR A WRIT OF MANDAMUS

This petition arises from Wadleigh et al. v.

Rhone-Poulenc Rorer Inc. et al., No. 93 C 5669 (N.D. III.)

Richard L. Berkman Douglas F. Fuson

Fred T. Magaziner Sara J. Gourley

Susan A. Weber

DECHERT, PRICE & RHOADS SIDLEY & AUSTIN

4000 Bell Atlantic Tower One First Natl. Plaza

Philadelphia, PA 19103 Chicago, IL 60603

(215) 994-4000 (312) 853-7000

ATTORNEYS FOR BAXTER ATTORNEYS FOR

HEALTHCARE CORP. ARMOUR PHARMA-

CEUTICAL CO. &

RHONE-POULENC

RORER INC.

David I. Bell

Daphne B. Subar

KNAPP, PETERSON

& CLARKE

500 N. Brand Boulevard

Glendale, CA 91203

ATTORNEYS FOR

ALPHA THERA-

PEUTIC CORP.

68a

Duncan Barr

Marirose Piciucco

O’CONNOR, COHN,

DILLON & BARR

101 Howard Street

Fifth Floor

San Francisco, CA 94105

ATTORNEYS FOR

MILES INC.

OF COUNSEL FOR

MILES INC.:

Geoffrey R.W. Smith

PIPER & MARBURY

1200 19th Street, N.W.

Washington, D.C. 20036

(202) 861-3900

i:

e

4

¥

>

ee Lee ep re 4 es

69a

IN THE UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

No. 94-3912

RHONE-POULENC RORER INC.,

ARMOUR PHARMACEUTICAL COMPANY,

MILES INC., BAXTER HEALTHCARE CORPORATION,

and ALPHA THERAPEUTIC CORPORATION, Petitioners,

v.

HONORABLE JOHN F. GRADY, Judge,

United States District Court

for the Northern District of Illinois, Respondent.

PETITION FOR A WRIT OF MANDAMUS

CERTIFICATE OF INTEREST

The undersigned, one of the counsel of record for the Petitioners,

furnishes the following list in compliance with Circuit Rule 26.1:

(1) ‘Parties

(A) RHONE-POULENC RORER INC.

(B) ARMOUR PHARMACEUTICAL COMPANY

(C) MILES LABORATORIES, INC., d//a/

CUTTER LABORATORIES, INC.

(D) BAXTER HEALTHCARE CORPORATION

(E) ALPHA THERAPEUTIC CORPORATION

(2) Corporate Information

(A) | RHONE-POULENC RORER INC.

(B)

(C)

(D)

70a

(i) _RHONE-POULENC RORER INC'S

parent is RHONE-POULENC S.A.

(ii) | No publicly held companies own 10% or

more of the stock of RHONE-POULENC

RORER INC. except its parent RHONE-

POULENC S.A.

ARMOUR PHARMACFUTICAL COMPANY

(i) ARMOUR PHARMACEUTICAL

COMPANY'S parent is RHONE-

POULENC RORER INTERNATIONAL

(HOLDINGS) INC.

(ii) | No publicly held companies own 10% or

more of the stock of ARMOUR

PHARMACEUTICAL COMPANY.

RHONE-POULENC RORER _INC.,

which owns 100% of the stock in

ARMOUR PHARMACEUTICAL

COMPANY'S parent RHONE-

POULENC RORER INTERNATIONAL

(HOLDINGS) INC., has issued shares of

stock to the public.

MILES LABORATORIES, INC., d//a/

CUTTER LABORATORIES, INC.

(i) | MILES LABORATORIES, INC.'S parent

is BAYER, A.G.

(ii) | Not applicable.

BAXTER HEALTHCARE CORPORATION

(ij) BAXTER HEALTHCARE

‘CORPORATION'S parent is BAXTER

INTERNATIONAL, INC.

a

(3)

(E)

Tila

(ii) _BAXTER INTERNATIONAL INC. owns

100% of the stock of BAXTER

HEALTHCARE CORPORATION.

ALPHA THERAPEUTIC CORPORATION

(i) ALPHA THERAPEUTIC

CORPORATION'S parent is GREEN

CROSS CORPORATION.

(ii) | Not applicable.

Law Firms

(A)

(B)

(C)

(D)

RHONE-POULENC RORER INC.

(i) Sidley & Austin

ARMOUR PHARMACEUTICAL COMPANY

(i) Sidley & Austin

MILES LABORATORIES, INC., d//a/

CUTTER LABORATORIES, INC.

(i) | O'Connor, Cohn, Dillon & Barr

(ii) Piper & Marbury

BAXTER HEALTHCARE CORPORATION

(i) Dechert, Price & Rhoads

72a

(E) ALPHA THERAPEUTIC CORPORATION

(i) Knapp, Petersen & Clarke

(ii) | Wildman, Harrold, Allen & Dixon

By:

One of the Attorneys for

Petitioners

December 19, 1994

73a

TABLE OF CONTENTS

Page

py ee er eee rere rT ere i

pp Seer rer rrr rere iii

I 6 cca hist ncvaweeeguscceveesacnee’ |

EER a ay FR ae prey 6

EP GUITEE GO SETI cv coven ven catevese¥ercce 6

IE os a Cit satu cehae hae ecue dees nes 13

Cy Er nee are 13

I. Treatment of Hemophilia ..........ccccccece 13

II. AIDS and Hemophilia:

A Miodaees Cipomology «0... cccccccccscces 14

STANDARD FOR ISSUANCE OF THE WRIT ......... 17

WAPIRIG EGO PAPAIN © bs cbs cccncicescccvecs 18

CIEE ES EL ee ee ee nee 20

I. MANDAMUS SHOULD ISSUE BECAUSE

THE FRACTIONATOREFENDANTS ARE

CLEARLY ENTITLED TO RELIEF

FROM THE DISTRICT COURT'S

ERRONEOUS CLASS CERTIFICATION

GE. Sod neva cb edesnsis bunk tadancoenvas 20

74a

Table of Contents (cont'd) Page

A. The Class Should Not Have Been Certified

Because Common Issues of Law Do Not

POE 05 604s 02 da n0ees be ceccvess 20

i Different States Employ

Different Standards of

Foreseeability To Define

the Scope of a Defendant's >

ee Seer 21 :

F Different States Employ Different

Standards of Care to Define

a Defendant's Duty .........000. 28

gE States Where Claims Arise Have

a Strong Interest in Applying

their Own Law to Resolve

(Se 31

B. The Class Should Not Have Been

Certified Because a Class Action

Is Not Superior to Other Methods

For the Fair and Efficient Adjudication

OF I oc 6 Ss wivcccccvccess 34

l. The Class Trial Will Be

Unmanageable ............ xevte am

2. The Class Trial Will Not

Materially Advance the

itt ten ebaadecseees 36

75a

Table of Contents (cont'd) Page

3. The Class Trial Will Give Rise

to Additional Litigation

Regarding the Class Trial's

Preclusive Effect-If Any ........

Il. MANDAMUS SHOULD ISSUE BECAUSE

THE FRACTIONATOR DEFENDANTS

WILL BE IRREPARABLY INJURED IF

THEY ARE NOT GRANTED IMMEDIATE

RELIEF FROM THE DISTRICT COURT'S

ERRONEOUS CLASS CERTIFICATION

CEE AFG FeAD Ce CoS Sed eceeeReecedosseccs

SED, Views saa Ge eSiievncccdbscccoedensene

76a

IN THE UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

No. 94-3912

RHONE-POULENC RORER INC.,

ARMOUR PHARMACEUTICAL COMPANY,

MILES INC., BAXTER HEALTHCARE CORPORATION,

and ALPHA THERAPEUTIC CORPORATION, Petitioners,

v.

HONORABLE JOHN F. GRADY, Judge,

United States District Court

for the Northern District of Illinois, Respondent.

PETITION FOR A WRIT OF MANDAMUS

INTRODUCTION

This petition challenges the District Court's ill-conceived

use of Rule 23(c)(4)(A) in its effort to manage AIDS-related

multidistrict and multistate litigation. The District Court has

certified a nationwide "issue" class for the sole purpose of

determining whether defendants--who process blood derivatives

used to treat hemophilia~—are "guilty" of “ordinary negligence"

under a purportedly uniform nationwide standard conceived by

the Court. The proposed class trial will not determine whether

defendants are liable to any plaintiff or absent class member

because the District Court correctly concluded this case is not

appropriate for Rule 23(b)(3) class certification. Rather, the

class trial will produce an extraordinarily long and hopelessly

complex special verdict form by which the jury will attempt to

make findings about each of the various defendants’ “guilt” on

ROME Ss AIC Se Rie BRM Be AS PA PO AN EG IN I UAE A PY SOE IOS MH NRE

§

i

77a

the wide variety of negligence theories proposed by plaintiffs.

The District Court contemplates that such findings will then be

used by the parties in hundreds-perheps thousands—of

individual trials in federal and state courts around the country.

The District Court's plan will turn the federal multidistrict

and similar state court proceedings into a tangle from which the

parties and the courts may never extricate themselves.

Mandamus should issue because these defendants (I) have a

clear right to relief and (II) will be irremediably injured if they

must wait until final judgment to vindicate that right. Maloney

v. Plunkett, 854 F.2d 152, 155 (7th Cir. 1988). Specifically,

mandamus is appropriate for the following reasons:

I(A). The certification of a negligence issue class is

predicated on the assumption that defendants can be tried under

a uniform national standard for "negligence." No such standard

exists. The certification order disregards critical differences in

state law and applies a de facto federal legal standard, in

violation of the predominance requirement of Rule 23(b)(3), the

Erie doctrine, and the parties’ right to due process. See Erie R.R.

v. Tompkins, 304 U.S. 64 (1938); Phillips Petroleum Co. v.

Shutts, 472 U.S. 797 (1985).

I(B). Class certification is not a superior means of

proceeding with this litigation. First, the proposed class trial will

be unmanageable, involving hundreds of distinct issues upon

which a jury will be required to return specific findings. Second,

the product of that class trial may be nothing more than an

advisory verdict, entitled to no preclusive effect whatsoever in

the trials of individual class members. Third, it will be necessary

to re-introduce at the trials of individual class members the

evidence from the class trial to resolve the following issues:

e whether the alleged negligence of one or more of the

fractionator defendants is the cause-in-fact of harm to the

plaintiff;

78a

e whether the alleged negligence of one of more of the

fractionator defendants is the proximate cause of harm to

the particular plaintiff;

e whether any defenses (e.g., learned intermediary, statute

of limitations, comparative negligence) apply;

e whether any other defendants (such as other providers of

blood-based therapies, hemophilia treatment centers,

physicians, hospitals, and patient advocacy

organizations) are liable;

e whether the plaintiff is entitled to damages and, if so, the

amount of damages;

e the proportionate fault of any defendants found liable

(crossclaims are pending in all MDL cases); and

e any other theories of recovery asserted by plaintiffs,

including strict liability, breach of warranty, and concert

of action.

Thus, rather than serve the interests of judicial economy, the

proposed class trial will actually generate additional litigation.

II. The District Court's error cannot be remedied through

normal appellate review. Indeed, the class verdict may not be

appealable following the class trial. See Bieneman v. Chicago,

864 F.2d 463, 465 (7th Cir. 1988), cert. denied, 490 U.S. 1080

(1989). Even if the verdict is immediately appealable, the legal

effect of the class trial will have to be determined in each of the

subsequent individual trials-leading to a proliferation of

litigation. In addition, the piecemeal litigation of plaintiffs’

negligence claims will give rise to Seventh Amendment and Due

Process challenges to any final "verdict" entered as a result of

these proceedings. See Gasoline Products Co. v. Champlin

Refining Co,, 283 U.S. 494, 500 (1931).

** ¢

Four other courts have recognized that the issues presented

in these cases are not proper subjects for class treatment. See

D.K. v. Armour Pharmaceutical Co., No. L-8154-93 (N.J. Super.

79a

June 9, 1994) (App. 109); Gannon v. Cutter Laboratories, No.

C-85-20078 (N.D. Cal. April 11, 1988) (App. 123); Doe v.

Cutter Biological, Inc., No. 87-0232 (D. Hawaii Dec. 8, 1987)

(App. 137); Doe v. Sno-Isle Community Blood Bank, No. 86-2-

16308-5 (Wash. Super. June 29, 1987) (App. 145). The District

Court ignored the legal analysis and common sense in these

opinions. 3

The District Court's attempt to streamline this litigation

would loose Rule 23 from its moorings. Like federal statutes,

the Rules of Civil Procedure derive their force and effect from

Congress. See 28 U.S.C. § 2074 (Rules Enabling Act, as

amended). Federal courts are bound to apply the rules as

written. They may not rewrite the rules in response to specific

cases. As this Court has held, "[t]o craft a judicially-created

special provision [applicable to certain types of lawsuits] . . .

would violate the Rules Enabling Act that vests authority for

such rulemaking in the Supreme Court and Congress." Robinson

v. Turner, 15 F.3d 82, 85 (7th Cir. 1994). The District Court's

interpretation of Rule 23(c)(4) does not comport with this

principle. To the contrary, the litigation plan proposed by the

District Court is so different from anything contemplated by the

Rules Advisory Committee, the Supreme Court or the Congress

that its adoption would usurp the authority of those bodies under

the Rules Enabling Act.' This Court should therefore direct the

District Court to withdraw its class certification order.”

' The Notes of the Advisory Committee give, as an example of an issue

suitable for class treatment pursuant to Rule 23(c)(4)A), the “adjudication of

liability to the class” with subsequent individual proof of “the amount of their

respective claims. Fed. R. Civ. P. 23(b) Advisory Committee's Note, 39

F.R_D. 69, 106. The Committee explicitly disapproved of the use of Rule 23

in situations in which “significant questions . . . of liability . . . affecting the

individuals in different ways" would result in “an action conducted nominally

as a Class action [degenerating] in practice into multiple lawsuits separately

tried.” Jd. at 103.

? Since notice to the class has not yet issued, vacatur of the certification

order will not confuse purported class members or impede the MDL

proceeding.

80a

JURISDICTION

This lawsuit was filed in United States District Court

pursuant to 28 U.S.C. § 1332. The Court of Appeals has

jurisdiction pursuant to the All Writs Act, 28 U.S.C. § 1651.

STATEMENT OF THE CASE

Approximately 300 lawsuits involving some 400 named

plaintiffs have been filed by American hemophiliacs who claim

to have been infected with the human immunodeficiency virus

("HIV") through the plasma-based therapies used to control their

hemophilia.’ Petitioners, the fractionator defendants, are four of

the companies that provide two types of plasma derivatives used

in such therapy--Factor VIII and Factor [X concentrates.‘

Approximately 60 percent of these cases are pending in various

state courts. The federal cases are consolidated for pretrial

purposes in the Northern District of Illinois (Grady, J.). See In

Re: Factor VIII and Factor IX Concentrate Litigation, MDL

No. 986 (Dec. 7, 1993) (App. 1). See generally 28 U.S.C.

§ 1407.

Of the 13 cases tried to verdict to date, all but one have

resulted in final judgment for the defendants; the sole plaintiff's

judgment is on appeal. Although it has been estimated that from

6,000 to 10,000 persons with hemophilia in the United States

have been infected with HIV, in the nine years since the first

case was filed only 3 to 5% of those persons have chosen to

initiate litigation against the processors of the plasma derivatives

used to treat their disease.

This petition arises from Wadleigh v. Rhone-Poulenc Rorer,

No. 93 C 5969--a purported nationwide class action initiated by

a consortium of plaintiffs’ counsel against the fractionator

> Approximately two-thirds of those cases were filed by class counsel after

the filing of this purported class action.

* Those companies are Armour Pharmaceutical Company, Miles Inc.,

Baxter Healthcare Corporation, and Alpha Therapeutic Corporation.

.

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i

SER ARENT IES ENR ETERS

8la

defendants and the National Hemophilia Foundation ("NHF").’

The named plaintiffs seek to represent (a) all hemophilia patients

who allegedly were infected with HIV as a result of using factor

concentrates processed by the fractionators and (b) the relatives

and legal representatives of these hemophilia patients. Plaintiffs

have asserted claims against the fractionator defendants for

negligence, strict product liability, breach of implied warranty,

and concert of action and against the NHF for breach of

fiduciary duty. App. 33.

On August 17, 1994, the District Court entered the first of

several memorandum opinions and orders relating to plaintiffs’

motion for class certification.‘ The Court first held that plaintiffs

had met the Rule 23(a) requirements for class certification. The

Court expressly found, based on what it mistakenly believed to

be the allegations of the complaint, that plaintiffs were adequate

class representatives and that their claims were typical of those

of members of the purported class. Tab A at 13.’

The Court held, however, that plaintiffs’ claims for

negligence, strict product liability, breach of warranty, and

punitive damages could not be maintained as Rule 23(b)(3) class

* Also named as defendant in the class litigation is Rhone-Poulenc Rorer

Inc., the second-tier parent corporation of Armour.

* Plaintiffs’ class certification motion addressed their claims for

negligence, strict product liability, and breach of implied warranty. In May of

1994, plaintiffs amended their complaint to add a claim for concert of action.

App. 60-61. The District Court requested briefing on certification of that

claim in the fall of 1994.

7 The allegations referred to in the memorandum opinion do not appear in

the amended complaint. See App. 33. Nor had any of the named plaintiffs

been deposed at the time the Court made this finding. The order governing

discovery procedures for Wadleigh and all of the MDL cases provides, inter

alia, that witnesses may only be deposed once in conjunction with the MDL

proceedings. App. 22-24. Because the purported class representatives had not

(and in some cases still have not) produced their initial disclosure statements

and medical records pursuant to the terms of the discovery order, plaintiffs’

class certification motion was briefed without the benefit of adequate

discovery regarding the specific claims of the purported class representatives.

$2a

actions because individual issues predominated over common

ones. See Tab A at 21-22, 26, 36-38. In particular, the Court

concluded that plaintiffs’ negligence claims could not be certified

because, "[o]n the proximate cause issue, . . . individual

questions involving the particular circumstances of each

plaintiff, and often the law peculiar to different jurisdictions, will

clearly predominate." Tab A at 25. The Court announced,

however, that it would certify a class pursuant to Rule

23(c)(4)(A) for the limited purpose of determining whether the

fractionator defendants were "guilty of ordinary negligence."

See id. at 35-36.

The District Court arrived at this result by limiting its focus

to just one part of a cause of action for negligence~—what the

Court called "ordinary negligence." See id. at 18. The Court

stated that this issue could be decided on a nationwide basis

because it "believed" that "the definition of ordinary negligence

is substantially identical in all jurisdictions.". Jd. The Court

rejected the fractionators' argument that states apply different

standards in determining how foreseeable a risk must be in order

to give rise to a legal duty. The Court stated that the "general

rule" is that "a defendant has a duty to guard against unknown

but allegedly foreseeable risks." Jd. at 20. The Court also

rejected the argument that certification should be denied because

different states apply different standards of care in cases such as

this. The Court stated: "The fact that the defendants might be

subject to different duties in different jurisdictions-—customary or

professional standard in some and ordinary care in others--does

not create a multiplicity of issues." Jd. at 21.

The District Court then described the extraordinarily

detailed verdict form that it proposes to "try" the fractionator

defendants for “ordinary negligence”:

As plaintiffs suggest, the jury verdict forms

could be drafted in a way that would permit the

jury to find the earliest date by which each

defendant knew or in the exercise of ordinary

care should have known of the danger that its

nes yeas tein’

83a

AGES ENE Sp dee

concentrates would transmit HIV. The verdict

form would also call for a finding as to the

earliest date by which each defendant knew or

should have known that a particular precaution—

t e.g., donor screening, heat treatment, warnings—

‘ was necessary to protect the users of its product,

: a finding as to whether the defendant failed to

i take that precaution, and a finding as to the date

after which the defendant was negligent in

failing to take the particular precaution. And, of

course, the form would permit the jury to make

a finding as to each defendant that it was not

negligent at all or that it was not negligent in

particular respects alleged by plaintiffs.

BEHRENS NIG ERIE IN ES:

A separate set of forms would be drafted for the

"standard of professional care" inquiry. The jury

' would find, as to each allegation of negligence,

: whether the particular defendant had violated the

: standard of care and, if so, the date the violation

i Id. at 33.

2 After the class trial, the District Court plans to return the

: individual MDL cases to courts around the country for trial.’

: Also at that time, the District Court apparently contemplates that

: class members who have not filed individual lawsuits will be

: able to initiate entirely new lawsuits in order to take advantage

é of any trial verdict in favor of the class. The District Court

. believes that this approach will be superior to trying each

plaintiff's claim individually from the outset because the class

* Presumably, any state court actions that have been held in abeyance

pending the outcome of the “issue” class trial will also resume.

84a

verdict may be deemed binding on the parties in some-if not all-

-jurisdictions. Jd. at 35.’

On September 22, 1994, the District Court summarily

denied the fractionator defendants’ motion for reconsideration.

App. 78. The Court also refused to certify its August 17

decision for immediate appeal pursuant to 28 U.S.C. § 1292(b)."°

The Court subsequently denied plaintiffs’ motion to certify a

class on concert of action. App. 80."" On November 3, 1994, the

Court entered its formal class certification order. Tab B.”

On December 6, 1994, the Court denied defendants’ motion

to amend the class certification order to confirm that all

negligence issues would be tried in the class trial or barred.

App. 96-97. The Court stated that consideration of negligence

issues applicable to only a few class members would cause the

trial to "degenerate" into a "multiplicity of individual trials.”

App. 91-92. The Court therefore decided to leave disposition of

such issues to the Phase 2 trial courts. App. 97. The Court

acknowledged that omission of these issues from the class trial

would give rise to questions about the trial's preclusive effect.

App. 91-92, 96-97.

* Applying a similar rationale, the Court certified a 23(c4)A) class to

determine whether the NHF had breached its fiduciary duty to plaintiffs. Tab

A at 35-36.

During argument of defendants’ motion for 1292(b) certification,

plaintiffs’ lead counsel urged that mandamus was the appropriate vehicle for

any challenge to the class certification order. App. 74.

'' On December 13, 1994, the Court denied plaintiffs’ motion to reconsider

its order denying certification of a class on concert of action.

'2 At the same time, the District Court imposed strict limitations on

discovery by the fractionator defendants. In particular, the Court barred

defendants from deposing MDL plaintiffs including the purported class

representatives—prior to the class trial unless their health seriously

deteriorated. See App. 85-86.

85a

In hearings on December 6 and 13, 1994, the Court

approved plaintiffs’ class notification plan.” Defendants

objected to both the form of notice and to plaintiffs’ distribution

method. The form does not tell class members that they must

file separate lawsuits to benefit from any class verdict. Nor does

it state that the preclusive effects of any class verdict are unclear.

See App. 103-08. The plan for distributing notice depends

largely on the cooperation of organizations that are not parties to

this litigation. Specifically, class counsel will ask nonparty

hemophilia treatment centers and the NHF to distribute notice.

These mailings will be supplemented by publication of summary

notice in USA Today and on electronic bulletin boards. App. 98-

102. Neither the Court nor the parties will have a

comprehensive list of class members to whom notice was

mailed."* The process of notifying class members is scheduled

to begin on January 13, 1995.

ISSUE PRESENTED

Should the District Court be directed to withdraw an

order certifying a class for purposes of determining

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