Amicus Curiae Brief — American Bankers Insurance Co. of Florida v. Alexander

NOTION FILED \o)

JuL 9 2001 No. 00-1826

Jn the Supreme Court of the Anited States

AMERICAN BANKERS INSURANCE COMPANY OF FLORIDA,

Petitioner,

Vv.

BELINDA ALEXANDER, ET AL.,

Respondents.

On Petition for a Writ of Certiorari to the

Supreme Court of Mississippi

MOTION OF THE CHAMBER OF COMMERCE

OF THE UNITED STATES FOR LEAVE TO FILE

BRIEF AS AMICUS CURIAE AND BRIEF

IN SUPPORT OF PETITIONER

STEPHEN A. BOKAT Roy T. ENGLERT, JR.

ROBIN S. CONRAD ALAN E. UNTEREINER*

JOSHUA A. ULMAN Robbins, Russell, Englert,

National Chamber Orseck & Untereiner LLP

Litigation Center, Inc. 1801 K Street, N.W.

1615 H Street Suite 411

Washington, D.C. Washington, D.C. 29006

(202) 463-5337 (202) 775-4500

* Counsel of Record

x WW

MOTION FOR LEAVE TO FILE BRIEF

AS AMICUS CURIAE

Pursuant to Rule 37.2 of the Rules of this Court, the

Chamber of Commerce of the United States (“the Chamber”)

moves for leave to file the accompanying brief as amicus curiae

in support of the petition for a writ of certiorari. Counsel for

petitioner has consented to the filing of this brief, but counsel

for the respondents has withheld consent.

The Chamber, a non-profit corporation organized under the

laws of the District of Columbia, is the largest federation of

business, trade, and professional corporations in the United

States. The Chamber represents an underlying membership of

approximately three million businesses and organizations of

every size, in every business sector, and from every geographic

region of the country. A central function of the Chamber is to

represent the interests of its members in important matters

before the courts, Congress, and the Executive Branch. To that

end, the Chamber regularly files amicus curiae briefs in cases

that raise issues of vital concern to the Nation’s business

community.

The Chamber believes that this case presents the Court with

a valuable opportunity to clarify the limitations placed by the

Due Process Clause of the Fourteenth Amendment on the

authority of state courts to abandon traditional, time-honored

safeguards historically observed in the conduct of civil litiga-

tion. State and federal courts face growing pressure to fashion

novel methods of processing a rising tide of complex litigation,

including mass tort cases involving asbestos, tobacco, drugs,

medical devices, automobiles, and other products; and class

actions against insurance companies, banks, and other business-

es. In the decision below, the Mississippi Supreme Court sub-

stantially relaxed — to the point of abandoning — a vital pre-

requisite to the joinder of parties in a single civil lawsuit. As a

result, business defendants in the Mississippi courts now face

the prospect — without even the minimal protections inherent

in a class action, which Mississippi does not permit — of liti-

gating cases against hundreds if not thousands of individual

plaintiffs joined as parties to a single lawsuit.

This is no idle or parochial concern. Modern mass tort liti-

gation is a ship capable of calling in any friendly port. Even be-

fore the decision below, Mississippi had become a ““Mecca’ for

mass tort suits against national industry.” Pet. 3 (citing Ballard,

Mississippi Becomes A Mecca for Tort Suits, NAT’L L.J., April

30, 2001, at Al). For example, rural Jefferson County, with a

population of 8345 and a potential jury pool of 6571 voters, has

been the situs of a series of tort lawsuits resulting in multi-

million-dollar verdicts or settlements — all presided over by

Judge Lamar Pickard, the county’s only judge who hears major

civil cases. As a consequence of the decision below, Mississip~

pi will become an even more powerful magnet for mass tort

litigation in the United States, with ripple effects felt throughout

the national economy by a wide array of industries.

Finally, the Chamber has a substantial interest in ensuring

that review is not denied, incorrectly, for lack of a “[f]inal

judgment{] or decree[] rendered by the highest court of a State

in which a decision could be had.” 28 U.S.C. § 1257. As we

explain below, the Mississippi Supreme Court’s decision is

reviewable under this Court’s decisions interpreting Section

1257’s “finality” requirement. The Court should apply its prag-

matic approach to finality questions in this case to “avoid the

mischief of economic waste and of delayed justice.” Cox Broad-

casting Corp. v. Cohn, 420 U.S. 469, 478 (1975) (internal

quotations omitted).

Such flexibility is especially important given the growing

number of multistate class actions and other mass tort cases that

are being filed in the state courts. See Deborah Hensler et al.,

Preliminary Results of the RAND Study of Class Action

Litigation, at 15 (1997) (“[the] doubling or tripling over the past

several years of the number of putative class actions” faced by

U.S. companies has been “concentrated in the state courts”).

This trend is a reaction to a series of federal decisions holding

that nationwide class actions could not be certified consistent

2

with the requirements of Fed. R. Civ. P. 23, due process, and

federalism. See, e.g., Broussard v. Meineke Discount Muffler

Shops, Inc., 155 F.3d 331 (4th Cir. 1998); Andrews v. AT&T, 95

F.3d 1014 (11th Cir. 1996); Castano v. American Tobacco Co.,

84 F.3d 734 (Sth Cir. 1996); In re Rhone-Poulenc Rorer, Inc.,

51 F.3d 1293 (7th Cir. 1995). See also Cabraser, Life After

Amchem: The Class Struggle Continues, 31 LOY. L.A. L. REV.

373, 386 (1998) (“It is no secret that class actions — formerly

the province of federal diversity jurisdiction — are being

brought increasingly in the state courts.””). This case is a telling

example: it was only after a federal court refused to certify

federal class actions that the plaintiffs’ counsel filed these cases

in the Mississippi courts. See Pet. 4-5.

In the Chamber’s experience, the latest wave of multistate

class actions and other mass litigation in the state courts —

many of which no federal court would certify — frequently re-

sult in serious threats to the federal constitutional rights of

business defendants. The Chamber has a substantial interest in

ensuring the continued availability of review by this Court of

decisions of the state courts that finally resolve important

federal constitutional questions in such cases.

The Chamber’s motion for leave to filed the accompanying

brief as amicus curiae should be granted.

Respectfully submitted.

STEPHEN A. BOKAT Roy T. ENGLERT, JR.

ROBIN S. CONRAD ALAN E. UNTEREINER*

JOSHUA A. ULMAN Robbins, Russell, Englert,

National Chamber Orseck & Untereiner LLP

Litigation Center, Inc. 1801 K Street, N.W.

1615 H Street Suite 411

Washington, D.C. Washington, D.C. 20006

(202) 463-5337 (202) 775-4500

JULY 2001 * Counsel of Record

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES .........---- eee eeeeeee il

INTEREST OF THE AMICUS CURIAE ........-++++>: 1

V7.0) Ls ere Oe a eee eee rer Teese ee. 1

REASONS FOR GRANTING THE PETITION ......... 4

I. THE DUE PROCESS ISSUE PRESENTED IN THIS

CASE WARRANTS THE COURT’S ATTENTION .. 6

I. THE DECISION BELOW IS A “FINAL JUDGMENT”

THAT THIS COURT HAS JURISDICTION TO

I ci Ven cs is bee awee Renee Fes 13

A. This Court Has Jurisdiction Under Established

ie eee na as 14

B. Practical Considerations Strongly Favor Review

De ee ine Cae Wee ak ae we Ors 17

"o( os | Rae eernn ey Osta wna Ere re 20

(i)

ii

TABLE OF AUTHORITIES

Page(s)

Cases:

ACand5S, Inc. v. Abate, 710 A.2d 944 (Md. Ct. Spec.

App.), cert. denied, 713 A.2d 979 (Md. 1998),

oust. Goniell, SES UF. GFE CHG. cteiccivecvsede 12

American Export Lines, Inc. v. Alvarez, 446 U.S. 274

CIDE oics bec css b6C ses Bor ee eae aw eteaeee ue 5

Calder v. Jones, 465 U.S. 783 (1984) .............05. 15

California v. Rooney, 483 U.S. 307 (1987) ............ 17

Castano v. American Tobacco Co., 84 F.3d 734

CS Ca. TEED iia io GEOR SEA hice 18

Cox Broadcasting Corp. v. Cohn, 420 U.S. 469

CISTS) oo Seeks AN Oa 5, 13, 17

Crane v. Kentucky, 476 U.S. 683 (1986) ............... 8

Daubert v. Merrell Dow Pharmaceuticals, Inc.,

SOUR: Fre Cees bk sha cadaaiicdassiekceweks ll

Bote v. Tenmmn, SE8 UE. Tae CRI hove ee vtccinctndkere 8

Hathorn v. Lovorn, 457 U.S. 255 (1982) .............. 18

Honda Motor Co. v. Oberg, 512 U.S. 415 (1994) ...... 5,8

In re Chevron U.S.A., Inc., 109 F.3d 1016

TABLE OF AUTHORITIES — Continued

Page(s)

In re Chevron U.S.A., Inc., 109 F.3d 1016

NN Mian is Nas ON 6 eK dso 0 6a sds vaeas 10, 12

In re Repetitive Stress Injury Litig., 11 F.3d 368

ache Mie Rie ta dei eweh Ken weaes 06s 8

In re Rhone-Poulenc Rorer, Inc., 51 F.3d 1293

I ok Sa Beas eS Sn ee we at 18

In re Winship, 397 U.S. 358 (1970) .............20055- 8

Kansas City-Southern Railway Co. v. Johnson, 2001

WL 107864 (Miss. Feb. 8, 2001) ................. 10

Kurcnz v. Honda North America, Inc.,

oP A Bee Fe | re 11

Local 438, Construction & General Laborers’

Union v. Curry, 371 U.S. 542 (1963) ............. 19

Mathews v. Eldridge, 424 U.S. 319 (1976) ......... passim

Mercantile National Bank v. Langdeau,

Pe is sao oh ant nedon <tdne 15, 16, 17

Murray's Lessee v. Hoboken Land & Improvement Co.,

Oe Sis SR PACED no ab notin wengnvecese 8

Philips Petroleum Co. v. Shutts, 472 U.S. 797 (1985) .... 8

Richards v. Jefferson County, 517 U.S. 793 (1996) ...... 5

Rosenblatt v. American Cyanamid Co.,

SEE I hk Skee Dhakc ao 05 64 wig sho vo na 15

Shaffer v. Heitner, 433 U.S. 186 (1977) .............. 15

Tumey v. Ohio, 273 U.S. 510 (1927) ............22.05- 8

iv

TABLE OF AUTHORITIES — Continued

Page(s)

United States v. Armour & Co., 402 U.S. 673 (1971) ..... 8

Statutes and Rules:

a I tho oak 06 6c ckS bok soe ee passim

A Ee ee oe re ee 2

ee ag a ha dw decd cd bole SOE 7,15

se Oe en rare 11

Re we TED a5 hd Cevineast ddkoneew wen eaenue 2

Miscellaneous:

Ballard, Mississippi Becomes A Mecca for Tort Suits,

NAT'L L.J., Apeil 30, 2001, @ Al ................ ll

Barton, Utilizing Statistics and Bellwether Trials in

Mass Torts: What Do the Constitution and Federal

Rules of Civil Procedure Require?, 8 WM. & MARY

Rk eR ann ery ree 12

Big Jury Awards Have Insurers on Run from State,

COMMERCIAL APPEAL, June 20, 2001 ............. 12

Borden & Horowitz, The Limits of Sampling and

Consolidation in Mass Tort Trials: Justice

Improved or Justice Altered?, 22 LAW &

PSYCHOL. REV. 435 CISPS) oo. ccc cccccwcsecccnce 10

Critics Link Lawyer Ads, Big Awards, CLARION-LEDGER,

BU EE obs Svc choo acs hac daeee ieee 11

Vv

TABLE OF AUTHORITIES — Continued

Page(s)

Fox News: Special Report with Brit Hume, 2001

WL 5000700 (June 4,2001) ............... 00 eee 11

Kraft, Hitting the Jackpot in Mississippi Courtrooms:

Pharmacies Often in the Middle, CLARION-LEDGER,

PE a re ae hee EN i's 11

Mitchell, Jefferson County Ground Zero for Cases,

CLARION-LEDGER, June 18,2001 ................ 12

Mitchell, Out-of-State Cases, In-State Headaches,

CLARION-LEDGER, June 18,2001 ................ 11

Mulderig, Wharton & Cecil, Tobacco Cases May Be

Only the Tip of the Iceberg for Assaults on

Privilege, 67 DEF. COUNSEL J. 16 (2000) .......... 13

Note, The Finality Rule for Supreme Court Review of State

Court Orders, 91 HARV. L. REV. 1004 (1978) ....... 18

Report of the Advisory Committee on Civil Rules

and the Working Group on Mass Torts,

SEF WM I SoU cece cachucsncss 9, 10

BRIEF FOR THE CHAMBER OF COMMERCE

OF THE UNITED STATES AS AMICUS CURIAE

IN SUPPORT OF PETITIONER

INTEREST OF THE AMICUS CURIAE'

The interest of the amicus curiae is described in the

accompanying motion for leave to file this brief.

STATEMENT

The respondents (plaintiffs below) are 659 individuals who

borrowed money from Fidelity Financial Services of Mississippi

(“Fidelity”) to purchase automobiles. At the time of those indi-

vidual loan-transactions, each respondent “lived in a different

locale (51 different Mississippi counties and 11 states); each

purchased a different vehicle, at a different time, from a differ-

ent automobile dealer; and each had different discussions with

different salespersons and loan officers at different Fidelity

offices who made separate representations to each individual

plaintiff.” Pet. 6-7. In signing their individual loan contracts,

respondents each agreed to keep the collateral (i.e., the vehicle)

protected by insurance during the term of the loans. If any of

the individual respondents failed to discharge this contractual

obligation, however, Fidelity was expressly authorized under

the individual loan contracts to purchase “single interest” collat-

eral protection insurance (“CPI”), and to pass the cost of the CPI

along to the individual borrowers. Petitioner, the American

Bankers Insurance Company of Florida (“American Bankers”),

was one of two companies that sold CPI coverage to Fidelity.

At different times and for different reasons, each of the 659

respondents eventually defaulted. Some defaulted on their

monthly payments, and their vehicles were repossessed; others

merely defaulted on their contractual obligation to maintain

insurance. Each respondent “has a different story for defaulting

! Pursuant to Rule 37.6 of the Rules of this Court, the Chamber states that no

counsel for a party has authored this brief in whole or in part and that no

Cn et te ee

on the insurance obligation: some * * * were involved in auto-

mobile accidents, some simply refused to pay, some could not

obtain insurance, and some were happy to allow Fidelity to pur-

chase CPI because it was less expensive than their previous in-

surance.” Pet. 7. Each respondent claims to have been wrong-

fully charged a different amount for CPI purchased by Fidelity,

since the cost of coverage depended upon its duration as well as

on the value of the collateral, which was of course different in

each case.

On the basis of those individual loan transactions, and the

Case-speciiic decisions by Fidelity to purchase CPI for each re-

spondent, respondents alleged that Fidelity and American

Bankers had engaged in fraud, breached their fiduciary duties,

and engaged in a “nefarious scheme” involving CPI. Pet. 7.

After a federal court refused to certify class actions based on

those individualized claims, respondents filed complaints in

state court in selected Mississippi counties. Because

Mississippi does not allow class actions, respondents asked the

trial courts to order a mass joinder of parties under Rule 20 of

the Mississippi Rules of Civil Procedure. Like Fed. R. Civ. P.

20 and the joinder rules of virtually every other State,

Mississippi’s rule permits the joinder of multiple plaintiffs as

parties only if the plaintiffs assert a “right to relief jointly,

severally, or in the alternative in respect of or arising out of the

same transaction, occurrence, or series of transactions or

occurrences,” and if a “question of law or fact common to all

these persons will arise in the action.” Miss. R. Civ. P. 20

(emphasis added).

The Mississippi trial courts ordered mass joinder of respon-

dents’ claims, and those rulings were affirmed by a sharply

divided Mississippi Supreme Court. Pet. App. la-28a. In the

majority’s view, the “same transaction” requirement was satis-

fied because the varying CPI costs charged to individual respon-

dents were all governed by a single “master policy” issued by

American Bankers to Fidelity, because the “insurance certificate

issued to each [respondent] was identical,”and because respon-

dents vaguely alleged that American Bankers and Fidelity had

3

conspired to defraud them by charging excessive rates in an

inequitable manner. Pet. App. 6a-7a & n.4, 1la. The majority

summarily rejected American Bankers’ argument that the

joinder in a single lawsuit of hundreds of individual plaintiffs

— each advancing multiple claims based on different, highly

fact-specific assertions — would “violate [the company’s] fun-

damental right to a fair and impartial trial.” Pet. App. 13a; see

also ibid. (rejecting objection that mass joinder would result in

“cumulative and otherwise inadmissible evidence being admit-

ted from multiple, separate, and unrelated transactions’’).

In dissent, four justices condemned as unprecedented the

majority’s broad interpretation of the “same transaction or

occurrence” requirement. Pet. App. 25a-28a. In the dissenters’

view, that fundamental requirement is satisfied — and joinder

of parties is proper — only if “the cases have a common nucleus

of facts,” which “necessarily implies that the plaintiffs’ claims

will be more similar than dissimilar.” Jd. at 27a. Moreover, the

record in these cases (including respondents’ vague allegations)

was simply insufficient, in the dissenters’ judgment, to deter-

mine whether the “same transaction” requirement, properly

understood, was satisfied here. The dissenters elaborated:

There is no indication of the date or time that the plaintiffs

formed a relationship with Fidelity * * *, the office or

location [in which] * * * the fiduciary relationships

developed, the Fidelity employees who may be potential

witnesses, the various reasons that the plaintiffs defaulted

on their obligations with Fidelity causing insurance

coverage by American Bankers * * * to become an issue,

or the amount of actual damages of each plaintiff. These

facts are essential to a determination whether the plaintiffs

in this case have shown a common transaction or

occurrence, as these cases all potentially involve vastly

different evidence.

Pet. App. 25a. “If the plaintiffs’ cases arose at different Fidelity

offices employing different personnel and different agreements,

then the proof of each case is likely to involve different

——

4

witnesses and evidence.” Jd. at 26a-27a. “Judicial economy is

not served,” the dissenters explained, “if we overburden our trial

courts through joinder with cases that involve potentially

different evidentiary proofs.” Jd. at 26a.

REASONS FOR GRANTING THE PETITION

With barely a nod to the U.S. Constitution, the Mississippi

Supreme Court has substantially relaxed — to the point of aban-

doning — a vitally important prerequisite to the joinder of mul-

tiple parties in a single civil lawsuit: the requirement that the

claims of the joined parties arise from “the same transaction or

occurrence.” Without that essential common ground, a trial fea-

turing multiple, misjoined parties will necessarily result in ex-

treme unfairness to the litigant who is situated on the opposite

side of the “v.” A defendant facing numerous misjoined plain-

tiffs, for example, will be forced to respond to a welter of

multifarious factual allegations and claims. Because of this po-

tential for unfairness, the joinder rules long applied in virtually

every State — and in the federal courts — have given real teeth

to the “same transaction or occurrence” requirement. By

effectively abandoning this traditional safeguard, and upholding

the mass joinder of hundreds of individual plaintiffs in these

cases, the Mississippi Supreme Court has infringed the due

process rights of petitioner and threatened the due process rights

of scores of other national businesses that are (or will become)

the targets of mass joinder cases in the Mississippi courts.

Further review is warranted because this case presents the

Court with a valuable opportunity to clarify the limitations

placed by the Due Process Clause of the Fourteenth Amendment

on the authority of state courts — in the name of judicial effi-

ciency — to abandon traditional, time-honored safeguards his-

tori:ally observed in the conduct of civil litigation. In recent

years, that issue has arisen with increasing frequency as the state

courts have struggled to manage the growing number of mass

tort actions involving asbestos, tobacco, prescription drugs,

medical devices, paint, handguns, automobiles, and other

products as well as a variety of other class actions. Although

5

decisions such as Honda Motor Co. v. Oberg, 512 U.S. 415

(1994) (invalidating Oregon’s refusal to apply traditional review

of excessiveness of damages), and Richards v. Jefferson Coun-

ty, 517 U.S. 793 (1996) (invalidating Alabama’s refusal to apply

traditional res judicata requirement of representation in a prior

lawsuit), provide valuable reaffirmation that the Constitution

limits extreme departure from traditional procedural safeguards,

those cases did not involve common-law or traditional

restrictions on the basic architecture of a civil lawsuit. Indeed,

as the Court noted in Oberg, “[b]ecause the basic procedural

protections of the common law have been regarded as so

fundamental, very few cases have arisen in which a party has

complained of their denial”; “most” of this Court’s “due process

decisions involve arguments that traditional procedures provide

too little protection.” 512 U.S. at 430. This case accordingly

provides an excellent opportunity to clarify the limits imposed

by due process on state authority to disregard procedural

protections long afforded to litigants.

Review should be granted now even though the Mississippi

Supreme Court’s decision did not bring the litigation below to

an end. As we explain below, the 5-4 decision of the

Mississippi Supreme Court qualifies under this Court’s

decisions as a “final judgment” that is reviewable under 28

U.S.C. § 1257 as construed in Cox Broadcasting Corp. v. Cohn,

420 U.S. 469 (1975). Even if the Court does not see this case as

fitting within one of the four categories identified in Cox

Broadcasting — in which the Court said there were “at least”

four categories of cases qualifying for an exception to strict

finality — it should apply its “intensely practical approach” to

determining “finality” in this case.”

? See, e.g., American Export Lines, Inc. v. Alvarez, 446 U.S. 274,277 (1980)

(exercising jurisdiction under 28 U.S.C. § 1257 even though state court

decision did not “readily fit into any of the categorical exceptions to strict

finality” recognized in Cox Broadcasting).

6

I. THE DUE PROCESS ISSUE PRESENTED IN THIS

CASE WARRANTS THE COURT’S ATTENTION

In the decision below, the Mississippi Supreme Court has

eliminated a fundamental precondition to permissive joinder of

parties in a single civil lawsuit: the requirement that the claims

of the joined parties all arise from “the same transaction or

occurrence.” Virtually every State of the Union, and the federal

courts, authorize the use of permissive joinder only when this

essential precondition is satisfied. See Pet. 15. The three States

that do not impose this requirement set even stricter limitations

on joinder. See id. at 15 & n.19.

Respondents’ claims do not come close to satisfying the

“same transaction” test. Each claim arises out of a manifestly

distinct transaction: the purchase of a particular automobile at

a particular price by an individual respondent; the purchaser’s

execution, in connection with that purchase, of a loan agreement

with Fidelity; and the subsequent imposition of a CPI charge

when the purchaser, for reasons largely if not entirely unique to

him or her, failed to discharge the contractual obligation to

maintain insurance on the vehicle (and, in some cases, ceased to

make payments altogether on the loan). Each respondent lives

in a different place; each dealt with different salespersons and

loan officers at different Fidelity offices who made separate rep-

resentations at different times; each accordingly will call differ-

ent witnesses; and each claims a different amount of damages.

Not only are these transactions not “the same”; they have almost

nothing in common. .

Respondents, however, argued successfully below that all

of the myriad and multifarious transactions and occurrences

underlying respondents’ claims in fact arose out of a single

“transaction or occurrence” and thus could be joined in a single,

sprawling lawsuit. Respondents and the court below attempted

to justify that Alice-in- Wonderland interpretation of “transac-

tion or occurrence” merely by observing that the CPI charged in

each of their cases was pursuant to a master policy issued to

Fidelity by petitioner American Bankers, the insurance certifi-

7

cate issued to each respondent was identical, and (respondents

vaguely alleged) American Bankers and Fidelity had entered

into a “nefarious scheme” to defraud them by charging exces-

sive rates in an inequitable manner. Under the majority’s logic,

Mississippi plaintiffs henceforth will be able to join together in

one gigantic lawsuit any number of individualized tort or other

claims against a single defendant, so long as the plaintiffs can

identify some common supplier or business partner of the pri-

mary defendant whose dealings with the primary defendant can

be characterized as a “nefarious scheme.” Since large business-

es often consolidate their business with one or two suppliers, the

only by the reach of a fertile legal imagination. Under the lower

court’s rationale, for example, every person in the United States

who is injured by a defendant’s product — no matter how the

accident occurred or what aspect of the product’s design

allegedly was responsible for the particular plaintiff's injury —

presumably could join in a single lawsuit in Jefferson County,

Mississippi.

The majority’s “standard” is no standard at all. It essential-

ly reads the “same transaction or occurrence” requirement out

of the joinder rule. By doing that, it threatens to subject

business defendants in the Mississippi courts to mass

proceedings that are extremely difficult, if not impossible, to

transaction or occurrence” requirement is drained of all meaning

unless “the cases have a common nucicus of facts,” which in

turn “necessarily implies that the plaintiffs’ claims will be more

similar than dissimilar.” Pet. App. 27a. See also Fed. R. Civ.

P. 23(a) (authorizing class actions only where there are

“questions of law or fact common to the class” and the claims

or defenses of the representative parties are “typical of the

claims or defenses of the class”).

The Due Process Clause of the Fourteenth Amendment

requires state courts to ensure that a party is accorded adequate

procedural safeguards before being deprived of a property or

liberty interest (see, e.g., Mathews v. Eldridge, 424 U.S. 319,

335 (1976)), and it also protects against “arbitrary and

inaccurate adjudication” (Honda Motor Co. v. Oberg, 512 US.

415, 430 (1994)). At a minimum, due process guarantees “a

meaningful opportunity to present a complete defense” (Crane

v. Kentucky, 476 U.S. 683, 690 (1986)) and safeguards the

“right to litigate the issues raised” (United States v. Armour &

Co., 402 U.S. 673, 682 (1971)). For that reason, it is plain that

due process is denied when a jury becomes so overwhelmed by

the parties’ presentations or so distracted by extraneous material

that it cannot return a fair verdict; “[{a] fair trial in a fair tribunal

is a basic requirement of due process.” Estes v. Texas, 381 U.S.

532, 543 (1965). And this Court has made clear that due

process requirements are “not altered by the fact that it may be

more difficult or more burdensome to comply with the

constitutional limitations because of the large number of”

claims to be adjudicated. Philips Petroleum Co. v. Shutts, 472

U.S. 797, 821 (1985). “[C]ousiderations of convenience and

economy must yield to a paramount concern for a fair and

impartial trial.” Jn re Repetitive Stress Injury Litig., 11 F.3d 368,

373 (2d Cir. 1993) (internal quotations omitted; emphasis

added).

Mississippi’s mass joinder procedure violates due process.

As explained above, it represents a rejection of the uniformly

established procedural safeguard — long embodied in the

joinder rules of virtually every American jurisdiction — under

which parties joined in a single lawsuit must have claims that

arise out of the “same transaction or occurrence.” This Court

has emphasized that “traditional practice provides a touchstone

for constitutional analysis.” Oberg, 512 U.S. at 430 (citing

cases). See also Murray’s Lessee v. Hoboken Land & improve-

ment Co., 59 U.S. (18 How.) 272, 277 (1856); Tumey v. Ohio,

273 U.S. 510, 523 (1927); In re Winship, 397 U.S. 358, 361-362

(1970). The Mississippi Supreme Court’s “abrogation ofa well-

established common-law protection against arbitrary depriva-

tions of property raises a presumption that its procedures violate

the Due Process Clause.” Oberg, 512 U.S. at 430.

Even putting the presumption of unconstitutionality to one

. side, mass joinder of parties who lack claims that arise from the

same transaction or occurrence is manifestly unfair. To see why

this is so, one need only imagine what is would be like for a

single defendant to be forced, at trial, to defend against a hand-

ful of entirely unrelated plaintiffs, each advancing a variety of

claims. Suppose that a manufacturer were sued by a former em-

ployee for race discrimination; by a disgruntled customer for

fraud associated with the sale of a product; by another dis-

gruntled customer who purchased a different product for negli-

gent product design and breach of warranty of fitness; by acom-

petitor for violations of RICO and the antitrust laws; by a land-

lord for breach of a commercial lease; and by shareholders for

securities fraud. A trial that featured such a welter of allega-

tions by divergent plaintiffs could not possibly be fair. The

mere fact that these wildly divergent claims were combined in

a single proceeding would make it impossible for a defendant to

receive a fair hearing.

Respondents’ claims, even if not quite as divergent as those

in this example, arise out of such divergent circumstances as to

raise an equally serious risk of jury confusion. In addition, as

petitioner notes, the complaints involved in this case “allege 13

distinct fact-specific claims against three remaining defendants,

including * * * fraud, breach of fiduciary duty and conspiracy.”

Pet. 20-21. Even in a six-plaintiff trial, then, the jury would be

required to decide the facts regarding six separate lending trans-

actions as well as to resolve a total of 234 individual claims

arising from these unconnected transactions. That is a recipe for

jury confusion.

What is more, the greater surface similarity in respondents’

claims gives rise to risks of its own: faced with similar claims

by multiple plaintiffs (but ones arising out of wholly different

transactions or occurrences), jurors would be strongly inclined

to believe that the defendant is culpable. See Report of the Ad-

visory Committee on Civil Rules and the Working Group on

Mass Torts, 187 F.R.D. 293, 305 (1999) (“[A]ggregated plain-

tiffs may acquire power that dispersed individual plaintiffs

10

would lack, enhancing — and perhaps exaggerating — their

underlying substantive rights”); Borden & Horowitz, The Limits

of Sampling and Consolidation in Mass Tort Trials: Justice

Improved or Justice Altered?, 22 LAW & PSYCHOL. REV. 43, 59

(1998) (reporting finding that “the amount of responsibility

assigned to the defendant” by juries increased “as the size of the

nontrial plaintiff population increased” i. mass litigation). This

risk is compounded in these cases because respondents’ lawyers

were perfectly free to select which of the many hundreds of

clients they represented to present first in the sequential trials

ordered below. See Jn re Chevron U.S.A., Inc., 109 F.3d 1016,

1020 (5th Cir. 1997) (Due Process Clause prohibits the use of

statistical sampling techniques unless the sample cases “are

representative of the larger group of cases or claims from which

they are selected”).

The severe prejudice caused by the Mississippi Supreme

Court’s mass joinder procedure is aggravated, moreover, by

other features of Mississippi law. As petitioner points out (Pet.

5 & n.4), venue in the Mississippi courts is proper in any forum

where one joined plaintiff resides. This allows forum-shopping

of the most egregious sort. The availability of standardless

mass joinder in Mississippi thus gives plaintiffs’ lawyers carte

blanche to concentrate vast numbers of claims and plaintiffs in

hand-picked rural counties famous for producing astronomical

verdicts.’ Unless this Court intervenes to correct this situation,

> Mississippi’s substantive law also makes the state an attractive forum for

tort plaintiffs from around the country. For example, the Mississippi

Supreme Court recently held that “hedonic damages” (i.e., damages for the

ll

litigants will face years of injustice in mass joinder cases in

Mississipoi |

become a ““Mecca’ for mass tort suits against national indus-

try.” Pet. 3 (citing Ballard, Mississippi Becomes A Mecca for

Tort Suits, NAT’L L.J., April 30, 2001, at Al). Since 1995, at

least nineteen Jefferson County damage awards have exceeded

$9 million, and six have exceeded $100 million each. Jerry

Mitchell, Out-of-State Cases, In-State Headaches, CLARION-

LEDGER, June 18, 2001. Jefferson County’s reputation for

massive verdicts has spurred lawyers to troll for potential

plaintiffs by inundating county residents with advertisements in

the local paper and on local television. See Critics Link Lawyer

Ads, Big Awards, CLARION-LEDGER, June 18, 2001; Fox News:

Special Report with Brit Hume, 2001 WL 5000700 (June 4,

2001) (“The local papers are filled with attorney advertisements,

been caused by any product.”).‘ Lawyers in out-of-state

plaintiffs’ firms reportedly are scurrying to take the Mississippi

bar so that they will be eligible to purchase a ticket in this

lottery. See Ballard, supra, NAT’L L.J., April 30, 2001, at Al

(reporting that “many of the 41 lawyers” in an Alabama

plaintiffs’ firm “have recently taken the Mississippi bar exam”).

Faced with the prospect of defending a lawsuit in Jefferson

County, many companies have felt compelled to offer

been excluded under Fed. R. Evid. 702 and Daubert v. Merrell Dow

Pharmaceuticals, Inc., 509 U.S. 579 (1993) — by “the vast majority” of

federal courts to have considered the issue. Kurcnz v. Honda North America,

Inc., 166 F.R_D. 386, 388-389 (N_D. IIL 1996) (collecting cases).

* The Bankston Drug Store, Jefferson County’s only pharmacy, has been

named so often as defendant in mass tort cases against nationwide

mom-and-pop

count.” Kraft, the in Courtrooms: Pharmacies

Often in Po a gp pm og oye 2001, at 16A; Ballard,

supra, NAT’L L_J., April 30, 2001, at Al.

12

settlements that do not reflect the merits of the case. See

Mitchell, Jefferson County Ground Zero for Cases, CLARION-

LEDGER, June 18, 2001. The threat of large jury verdicts

persuaded forty-four companies to stop selling certain types of

insurance in Mississippi or to pull out of the state altogether.

Big Jury Awards Have Insurers on Run from State, COM-

MERCIAL APPEAL, June 20, 2001. As a consequence of the deci-

sion below, Mississippi will become an even more powerful

magnet for mass tort litigation in the United States, with ripple

effects felt throughout the national economy by a wide array of

industries.

This is not a purely local phenomenon, nor is it one that this

Court should ignore. The prospect of years of coercive and

egregiously unfair proceeding in the Mississippi courts, with the

resultant negative consequences on the national economy, is one

that should give this Court pause. Moreover, this Court has a

responsibility to ensure that state courts adhere to minimum

due process requirements imposed by the federal Constitution,

at least where, as here, the state courts have refused to discharge

Finally, review should be granted because this case presents

the Court with a valuable opportunity to clarify the limitations

placed by the Due Process Clause of the Fourteenth Amendment

on the authority of state courts to abandon traditional, time-

honored safeguards historically observed in the conduct of civil

litigation. In recent years, state and federal courts have faced

growing pressure to fashion novel methods of processing a

rising tide of complex litigation, including mass tort cases and

a variety of class actions.’ In response to the pressures of man-

aging mass tort litigation of unprecedented scope, state judges

* See, e.g., In re Chevron U.S.A., Inc., 109 F.3d 1016 (Sth Cir. 1997) (selec-

tion of “bellwether” plaintiffs); ACandS, Inc. v. Abate, 710 A.2d 944 (Md.

Ct. Spec. App.) (mass consolidation), cert. denied, 713 A.2d 979 (Md. 1998),

cert. denied, 525 U.S. 1171 (1999); see generally Barton, Utilizing Statistics

and Bellwether Trials in Mass Torts: What Do the Constitution and Federal

Rules of Civil Procedure Require?, 8 WM. & MARY BILL RTs. J. 199 (1999).

13

have felt obliged, in a variety of contexts, to abandon the tradi-

tional protections of the common law for reasons of efficiency.

See, e.g., Mulderig, Wharton & Cecil, Tobacco Cases May Be

Only the Tip of the Iceberg for Assaults on Privilege, 67 DEF.

COUNSEL J. 16, 19-23 (2000) (explaining that Minnesota trial

court, in response to sheer number of documents whose privi-

lege status was disputed by plaintiffs, abandoned the traditional

safeguard of document-by-document review in examining privi-

lege claims and instead used an unprecedented categorization

procedure that yielded demonstrably inconsistent results).

Greater guidance from this Court would substantially assist the

lower courts in evaluating when departures from traditional

safeguards in mass tort and other complex litigation are

constitutionally permissible.

Il. THE DECISION BELOW IS A“FINAL JUDGMENT”

THAT THIS COURT HAS JURISDICTION TO

REVIEW

This Court’s certiorari jurisdiction over decisions of the

state courts is conferred by 28 U.S.C. § 1257, which authorizes

review of any “[fjinal judgment{] or decree[{] rendered by the

highest court of a State in which a decision could be had.”

Although in theory this “finality” requirement might be under-

stood as precluding review “where anything further remains to

be determined by a State court,” this Court has long eschewed

“such a mechanical” interpretation. Cox Broadcasting Corp. v.

Cohn, 420 U.S. 469, 477 (1975). Instead, it has consistently

applied an “intensely practical approach” to determining “finali-

ty.” Mathews v. Eldridge, 424 U.S. 319, 331 n.11 (1976); see

also Cox, 420 U.S. at 478 & n.7 (“[T]he requirement of finality

is to be given a practical rather than a technical construction.”)

(internal quotations omitted). “[A]s the cases have unfolded,

the Court has recurringly encountered situations” in which it

elected to treat decisions of the state courts as “final” even

though “there [we]re further proceedings in the lower courts to

come.” Jd. at 477. In Cox, the Court specifically took note of

“at least four categories of such cases” that had been recognized

to date. Ibid.

14

A. This Court Has Jurisdiction Under Established

Case Law

The Mississippi Supreme Court’s decision is reviewable

under several lines of this Court’s decisions. To begin with, it

falls within the fourth category recognized in Cox. That cate-

gory encompasses cases in which (1) “the federal issue has been

finally decided in the state courts with further proceedings

pending in which the party seeking review here might prevail on

the merits on nonfederal grounds, thus rendering unnecessary

review of the federal issue by this Court”; (2) “reversal of the

state court on the federal issue would be preclusive of any fur-

ther litigation on the relevant cause of action rather than merely

controlling the nature and character of, or determining the ad-

missibility of evidence in, the state proceedings still to come”;

and (3) “a refusal immediately to review the state court decision

might seriously erode federal policy.” 420 U.S. at 482-483.

Each of those conditions is satisfied here. First, petitioner’s

federal due process objection to mass joinder was fully consid-

ered — and squarely reyected — by the Mississippi Supreme

Court. See Pet. App. 12a-14a. In addition, it is possible for the

petitioner, if review is denied, to prevail on the merits on non-

federal grounds, thus rendering unnecessary review of the fed-

eral due process issue by this Court. Second, if this Court were

to grant review and reverse on the ground that the mass joinder

endorsed by the lower court violates due process, that would

necessarily terminate respondents’ current lawsuits, which

involve hundreds of improperly joined parties. Nor is this all.

Because only a tiny fraction (2%) of the individual respondents

would have proper venue if they refiled their lawsuits indi-

vidually in the courts in which these mass lawsuits are pending

(see Pet. 4-5, 14, 17 & n.20, 18), reversal would have the further

effect of eliminating at least 98% of respondents’ claims from

the dockets of the pertinent counties. Thus, reversal would do

more than merely affect “the nature and character” of respon-

dents’ legal claims; it would terminate the existing lawsuit and

bar the vast majority of the individual claims in the current fora.

15

Third, federal policy would be seriously undermined if this

Court declines to exercise immediate review. The right to due

process of law is a fundamental protection in our constitutional

scheme. As explained above, numerous federal courts have

concluded that mass tort claims of the kind involved here cannot

be certified consistent with the requirements of due process and

of Fed. R. Civ. P. 23. In fact, that very conclusion was reached

in these cases by federal courts before the present lawsuits were

filed. A clearer example of subverting federal policy is thus

difficult to imagine.®

The decision below is also reviewable under Mercantile

National Bank v. Langdeau, 371 U.S. 555 (1963). That case

involved an action brought in the Texas courts by a receiver for

an insurer in liquidation against two national banks and numer-

ous other defendants. The national bank defendants claimed

that, under a federal statute, they could not be sued in Travis

County, Texas, and that venue was proper only in Dallas

County. The trial judge overruled that objection, and the Texas

Supreme Court upheld that ruling. Notwithstanding the obvi-

ously interlocutory nature of the Texas Supreme Court’s deci-

sion, this Court exercised jurisdiction under Section 1257.

In reaching that result, the Court explained that the banks

had raised a “a substantial claim * * * that a federal statute,

rather than a state statute, determines [venue].” 371 U.S. at

558. Ifthe banks were correct on the merits, moreover, the law

would “prohibit[] further proceedings against the defendants in

the state court in which the suit is now pending.” Jbid. The

issue of whether venue was proper, this Court added, “is a sep-

* See also Calder v. Jones, 465 U.S. 783, 788 n.8 (1984) (exercising

jurisdiction over interlocutory decision of state court that rejected due process

challenge to exercise of personal jurisdiction); Shaffer v. Heitner, 433 U.S.

186, 195 n.12 (1977) (same); Rosenblatt v. American Cyanamid Co., 86 S.

Ct. 1, 2-3 (1965) (Goldberg, J., in chambers) (on petition for a stay, stating

that state decision rejecting due process challenge was final under

Section 1257 because, among other things, it threatened a serious erosion of

national policy).

16

arate and independent matter, anterior to the merits and not en-

meshed in the factual and legal issues comprising the plaintiffs’

cause of action.” Jbid. Finally, the Court explained, it would

“serve[] the policy underlying the requirement of finality in 28

U.S.C. § 1257 to determine now in which state court [the banks]

may be tried rather than to subject them, and [the receiver], to

long and complex litigation which may all be for naught if

consideration of the preliminary question of venue is postponed

until the conclusion of the proceedings.” Jbid.

This case is quite similar. Here too, petitioner has raised a

substantial question of federal constitutional law concerning the

legality of Mississippi’s mass joinder procedure. The Missis-

sippi Supreme Court has considered and emphatically rejected

petitioner’s due process arguments. If petitioner is correct that

the extraordinary proceedings below violate due process, proper

application of the Constitution would terminate the pending

lawsuits in their current form and, because of Mississippi’s

venue rules, “prohibit[] further proceedings” by the vast

majority of the individual respondents “in the state court in

which the suit[s are] now pending.” Moreover, the joinder

issue, like venue, is an important threshold matter that is

anterior to the merits. Although a determination of the question

presented here obviously would require a basic understanding

of the respondent’s allegations and why they cannot be said to

arise out of the “same transaction or occurrence,” the principal

focus of the legal analysis would be on whether Mississippi’s

mass joinder procedure abandons safeguards historically ob-

served in this country, deprives litigants such as petitioner of a

fair trial, and flunks the test set forth in Mathews v. Eldridge,

424 U.S. 319 (1976).

Here, even more than in Langdeau, it would “serve{] the

policy underlying the requirement of finality in 28 U.S.C.

§ 1257 to determine” the joinder question “now * * * rather

than to subject [petitioner] * * * to long and complex litigation

which may all be for naught if consideration of the preliminary

question * * * is postponed until the conclusion of the proceed-

ings.” 371 U.S. at 558. If anything, the burdens on petitioner

17

here will be far greater than the burdens on the two national

bank defendants in Langdeau. Indeed, without this Court’s

intervention, petitioner will face the prospect of more than a

hundred sequential trials by groups of misjoined respondents.

See Pet. 8-9, 17,21. Nor is that all. The effect of the Missis-

sippi Supreme Court’s decision will predictably be felt well

beyond the cases involved here. Not just petitioner, but scores

of other business defendants, will be forced in countless other

lawsuits filed in rural Mississippi courts to undergo proceedings

that violate fundamental norms of due process. For that reason

as well, this Court should treat the decision below as final

within the meaning of Section 1257.

B. Practical Considerations Strongly Favor Review In

This Case

Even if the Court concludes that this case does not fit per-

fectly within one of the established categories of “final deci-

sions” described in Cox Broadcasting, it still can — and should

— exercise jurisdiction under 28 U.S.C. § 1257. This Court has

long applied a “practical rather than a technical construction” to

determining finality. Cox, 420 U.S. at 478 & n.7. Under the

Court’s “intensely practical approach” to finality issues

(Mathews, 424 U.S. at 331 n.11), the decision below is in every

practical sense the final word of Mississippi’s highest court.

This is not a case where the highest court of a State has de-

clined to entertain a discretionary interlocutory appeal, leaving

in place the decision of an intermediate state appellate court that

might be subject to review, and correction, by the state supreme

court in some future appeal. Compare California v. Rooney,

483 U.S. 307, 314 (1987) (per curiam) (“Giving the California

Supreme Court an opportunity to consider the issue in a case

that properly raises it is a compelling reason for us to dismiss

the petition.”). In the decision below, the Mississippi Supreme

Court considered, and squarely rejected on the merits, the due

process objections to mass joinder. Any revisitation of that

issue in some distant return trip of this case to the Mississippi

18

Supreme Court would have to overcome the force of the law-of-

the-case doctrine.’

Second and more important, there is a substantial likelihood

that, if the Mississippi Supreme Court’s decision is allowed to

stand, the denial of certiorari will spell the effective end to this

litigation. As the Seventh Circuit has explained in a closely

related context, companies that face a large certified class and

the possibility of enormous damages are “under intense pressure

to settle.” Jn re Rhone-Poulenc Rorer, Inc., 51 F.3d 1293, 1298

(7th Cir. 1995) (Posner, C.J.); see also Report of the Advisory

Committee on Civil Rules and the Working Group on Mass

Torts, 187 F.R.D. 293, 305 (1999) (“[ A] ggregation often creates

an ‘all or nothing’ risk that defendants find unbearable,” even

where “the class claim is weak or the settlement terms are

otherwise unjustifiable.”); Castano v. American Tobacco Co.,

84 F.3d 734, 746 (Sth Cir. 1996) (class certification “dramati-

cally affects the stakes for defendants,” “makes it more likely

that a defendant will be found liable,” and “creates insur-

mountable pressures on defendants to settle”); Pet. 26. Ifa

company determines (as many do) that it simply cannot afford

to “roll the[] dice” with a jury, and settles the lawsuit, “the class

certification — the ruling that will have forced them to settle —

will never be reviewed.” Rhone-Poulenc, 51 F.3d at 1298. The

same is true of the Mississippi Supreme Court’s joinder deci-

sion in this case. It may well escape review — not only here

but in scores of other lawsuits filed in Mississippi — for the

simple reason that companies are unwilling to proceed to trial

’ Of course, application of Mississippi’s law-of-the-case doctrine by the

Mississippi Supreme Court in a later appeal in this case would not preclude

this Court’s review of the due process issue at that time. See Hathorn v.

Lovorn, 457 U.S. 255, 261 (1982). But cf. Note, The Finality Rule for

Supreme Court Review of State Court Orders, 91 HARV. L. REV. 1004, 1014

(1978) (arguing that “the independent and adequate state grounds doctrine

and the rule of finality are of equal authority as limitations on the jursidiction

of the Supreme Court” and that “there is no principled reason for

compromising one out of a desire to avoid giving effect to the other”).

19

under the egregiously unfair ground rules endorsed by the

Mississippi Supreme Court in this case.

This Court has not hesitated to take account of such prac-

tical realities. For example, in Local 438, Construction & Gen-

eral Laborers’ Union v. Curry, 371 U.S. 542 (1963), this Court

exercised jurisdiction over a decision of the Georgia Supreme

Court reversing the denial of a temporary injunction. Applying

a “practical rather than a technical construction” to 28 U.S.C.

§ 1257, the Court rejected the argument that it should await a

request to review a ruling by the state courts on a permanent in-

junction, explaining: “The truth is that authorizing the issuance

of a temporary injunction, as is frequently true of temporary in-

junctions in labor disputes, may effectively dispose of petition-

er’s rights and render illusory his right to review here * * *.”

371 U.S. at 550. The same can be said here. See also Mathews

v. Eldridge, 424 U.S. 319, 332 (1976) (“statutorily created

finality requirements should, if possible, be construed so as not

to cause crucial collateral claims to be lost and potentially

irreparable injuries to be suffered”).

In the Chamber’s experience, this case is illustrative of the

recent wave of multistate class actions and other mass litigation

filed in the state courts — many of which no federal court

would allow. These cases often present serious threats to the

federal constitutional rights of business litigants. Given the

practical realities of such litigation, the Chamber is concerned

to preserve some meaningful ability of business litigants em-

broiled in such litigation to seek review in this Court.

Although, as explained above, there are several special features

of the decision below that render it “final” as a practical matter

under 28 U.S.C. § 1257, the broader category of class

certification decisions and other threshold aggregation decisions

by the state courts should not be regarded as falling auto-

matically outside this Court’s jurisdiction.

20

CONCLUSION

For the foregoing reasons and those stated in the petition

for a writ of certiorari, review should be granted in this case.

Respectfully submitted.

STEPHEN A. BOKAT Roy T. ENGLERT, JR.

ROBIN S. CONRAD ALAN E. UNTEREINER*

JOSHUA A. ULMAN Robbins, Russell, Englert,

National Chamber Orseck & Untereiner LLP

Litigation Center, Inc. 1801 K Street, N.W.

1615 H Street Suite 41] |

Washington, D.C. Washington, D.C. 20006

(202) 463-5337 (202) 775-4500

JULY 2001 * Counsel of Record