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

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Abstract:

For centuries, our national litigation system has embraced a bedrock principle: that claims should be pursued and resolved individually, plaintiff-by-plaintiff. In recent years, efforts to aggregate claims have become more frequent. One familiar form of aggregation has provoked a storm of controversy: the class action. Criticisms focus on the many ways class actions may compromise defendants - and plaintiffs - due process rights (e.g., by binding a large group of parties to the same result simultaneously, a risky proposition if the facts surrounding each claim are not highly similar). But class actions are not the only aggregation vehicle through which harms may occur. "Mass actions" are proliferating in some states. In that form of litigation, the claims of large numbers of plaintiffs are joined indiscriminately for simultaneous trial under unusually lenient aggregation standards, depriving the defendants (and sometimes the claimants, as well) of basic due process and trial fairness rights.

Mass actions most frequently involve fraud or personal injury claims involving tobacco, asbestos, pharmaceutical products, or insurance company practices. They join hundreds (or even thousands) of plaintiffs (and often multiple defendants) into a single massive proceeding, even though the individual plaintiffs have no obvious connection to each other. In essence, mass actions are clearly an end-run - an effort by the plaintiffs' lawyers to litigate highly individualized claims in an aggregated, class action style, even though they would not satisfy the prerequisites for class treatment if they were asserted as a class action.

In mass actions, plaintiffs' counsel often find a local plaintiff, well known to the jury pool, who has suffered a serious injury, and then tack on tens or even hundreds of less compelling cases by plaintiffs who live outside the county or outside the state, who essentially free-ride on the main claim. For example, one plaintiff who suffered cancer might be combined with many others who merely fear they may get cancer. In this way plaintiffs' counsel can sway a jury to award huge damages to numerous plaintiffs whose claims would seem far less compelling if they were tried individually.

Mass actions also enable plaintiffs' counsel to overwhelm a jury with evidence in a manner that makes it impossible to reach a fair verdict. For example, when a mass action involves hundreds (or even thousands) of plaintiffs, their counsel are unfairly permitted to piece together evidence from among the various claimants to construct a "perfect plaintiff" one who, of course, does not exist in the real world, for presentation to the jury. Counsel may pick and choose among the facts presented by the many plaintiffs in attempting to establish all the various elements of the claim and the jury is often left with the indelible impression that the collective evidence counsel offers satisfies each individual plaintiff's particular burden of proof. For example, if one plaintiff had an allegedly misleading conversation with a defendant's representative about the potential side-effects of a drug, that conversation will be repeatedly referenced to the jury, even though none of the other 1,000 plaintiffs in the action had such a conversation. As a result, the jury may come away with the patently false impression that all plaintiffs had such conversations and relied on them in electing to use the drug at issue.

These harms are magnified exponentially when a mass action includes claims against several or many defendants. In such cases, it is difficult for any particular defendant to have a fair opportunity to put on its unique defenses at trial: evidence admitted as to one defendant's knowledge of a defect many years ago will inevitably tar other defendants as well. The jury will also be hopelessly lost in attempting to determine the precise lawfulness of any one particular defendant's conduct. Mass actions thus often become a thumbs-up, thumbs-down vote on corporate America, with the lowest common denominator of conduct often being extrapolated to plaintiffs' verdicts against all defendants. And, to make matters worse, the host of state laws that need to be applied in the typical consolidated proceeding, should the state court engage in a proper choice-of-law analysis, inevitably confuse and prejudice the jury.

Unlike class actions, mass actions often seek, and sometimes obtain at trial, millions of dollars for each plaintiff. Since these cases are typically brought in counties where seven-figure jury awards are routine, the risk of going to trial can be even greater than in a class action, and the settlement pressure even stronger.

To examine some mass action activity in detail, this study reports on mass action activity in Jefferson County, Mississippi from 1999 through 2001 as compiled by Stateside Associates, a Virginia-based research organization, under the direction of the Center for Legal Policy of the Manhattan Institute. The data reveal several disturbing patterns:

First, the frequency of filing of mass joinder actions in Jefferson County, Mississippi was vastly disproportionate to the county's population and the overall volume of the court's civil docket. (The total number of plaintiffs outnumbered the total number of residents of Jefferson County.)
Second, the vast majority of these cases had little (if any) relationship to Jefferson County.
Third, plaintiffs' counsel consistently included one local defendant to insulate their cases from federal jurisdiction.
Fourth, the complaints were brought by counsel from all over the country.
Fifth, plaintiffs' counsel made little, if any, effort to explain in their complaints exactly what the plaintiffs were alleging or why their claims should be litigated jointly; to the contrary, many of these complaints simply included long lists of plaintiffs with no facts regarding their allegations (and often, no addresses), and thus were clearly intended to intimidate defendants into settlement negotiations.
Mid-year in 2001, Jefferson County's only civil judge reversed his position of being quite hospitable to nationwide mass actions and announced that he was only going to allow mass actions to proceed in his court with in-county plaintiffs. Since then, the party has reportedly moved elsewhere - to other Mississippi counties such as Holmes, Jones, and Jasper. Other states, particularly West Virginia, are now welcoming mass actions as well.

The Mississippi experience makes clear that if an isolated state court signals a willingness to cut due process and fundamental fairness corners in order to accommodate aggregated claims litigation, enterprising plaintiffs' counsel will promptly herd claims to that court in droves from distant locations. In the end, however, the results are catastrophic. Defendants are victimized. The courts and their constituencies suffer, because the courts are largely diverted from fulfilling their primary responsibility for resolving local disputes. Often, claimants are not treated fairly, with some being undercompensated to benefit others who are overcompensated. Only the plaintiffs' lawyers are assured of a happy result.