Class Action Defense Cases–Gintis v. Bouchard Transportation: First Circuit Reverses Denial Of Class Action Treatment Holding Defense Arguments Suggest Common Issues May Predominate

Mar 17, 2010 | By: Michael J. Hassen

District Court Denial of Class Action Certification on Grounds that Individuals Issues will Predominate over Common Issues Contradicted by Defense Arguments on Appeal that it will Raise Common Challenges in Individual Lawsuits First Circuit Holds

Plaintiffs filed a class action against Bouchard Transportation arising out of an oil spill in Buzzards Bay in southeastern Massachusetts; the class action complaint alleged Massachusetts state law claims for “strict liability for damage to real property on the owner of a vessel from which oil has spilled” and for “negligent discharge of petroleum,” and a common law claim for nuisance. Gintis v. Bouchard Transp. Co., ___ F.3d ___ (1st Cir. February 23, 2010) [Slip Opn., at 2, 3]. According to the allegations underlying the class action complaint, in 2003 a fuel barge owned and operated by defendant strayed off course in Buzzards Bay and struck a reef, spilling 98,000 barrels of oil and contaminating 90 miles of the shore. Id., at 2. Defendants engaged in government-supervised cleanup operations that were completed in October 2006, id., at 2-3, Plaintiffs owned “residential waterfront property on the bay,” id., at 2. Plaintiffs moved the district court to certify the litigation as a class action; the district court denied class action treatment concluding that individual issues would predominate. Id., at 3-4. Specifically, the district court observed that defendant “has not conceded liability to any individual plaintiffs, that on the public nuisance claim plaintiffs must show both unreasonable interference and special injury to each claimant, and that plaintiffs must establish compensatory damages specific to each piece of property.” Id., at 4. The First Circuit reversed.

The Circuit Court noted that the district court’s class action certification determination had “relied heavily on the denial of class certification in Church v. General Electric Co., 138 F. Supp. 2d 169 (D. Mass. 2001), which had stressed that recovery for contamination of land downstream from a point of toxic discharge into a river would require parcel-by-parcel determinations as to injury and damages.” Gintis, at 4. The First Circuit concluded, however, that Church “does not support a general rule that pollution torts charged against a single defendant escape class treatment on the ground that the requirements to show injury, cause and compensatory amount must be sustainable as to specific plaintiffs.” Id., at 5. On the contrary, “If that were the law, the point of the Rule 23(b)(3) provision for class treatment would be blunted beyond utility, as every plaintiff must show specific entitlement to recovery, and still Rule 23 has to be read to authorize class actions in some set of cases where seriatim litigation would promise such modest recoveries as to be economically impracticable.” Id. (citation omitted). The Circuit Court also observed that several cases “in the same genre go the other way.” Id., at 5-6 (citations omitted).

Moreover, the Circuit Court held that reversal was required because class action certification decisions “must rest on rigorous analysis” and the district court’s analysis failed to meet that standard. Gintis, at 4-5 (citation omitted). In particular, defendant’s argument that it would vigorously dispute each individual claim by attacking the records relied upon by plaintiffs “seems to promise that most or all cases, if individually litigated, would require repetitious resolution of an objection by [defendant] that is common to each one of them.” Id., at 6-7. In the Circuit Court’s words, “[Defendant’s] position, in other words, apparently guarantees a crucial common issue of great importance in the event of individual litigation.” Id., at 7. The same held true for defendant’s attack on “appraisal methodology,” which “will be another highly significant common issue.” Id. In short, the defendant’s arguments on appeal “appear to show that substantial and serious common issues would arise over and over in potential individual cases.” Id. The First Circuit did not order the district court to certify the litigation as a class action, but remanded the matter with instructions that the district court analyze the motion in greater detail. Id., at 8-9.

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