Kern v. Siemens Corp.

• Citation: 393 F.3d 120
• Decision Date: 20 December 2004
• Docket Number: No. 04-0957-CV.,04-0957-CV.
• Parties: Rudolph KERN, And on behalf of the Estate of Erich Kern, Angela Kern, And on behalf of the Estate of Erich Kern, John S. Habblett, LTC (Ret.), and on behalf of the Estates of Jennifer Kirkpatrick Habblett Goodridge, Michael Jonclair Goodridge and Kyle William Goodridge, Suzanne K. Habblett, And on behalf of the Estates of Jennifer Kirkpatrick Habblett Goodridge, Michael Jonclair Goodridge and Kyle William Goodridge, Dick Baker, Dr., And on behalf of the Estate of Carrie Lynn Baker, Carol Baker, Dr., and on behalf of the Estate of Carrie Lynn Baker, Claire Goodridge, Individually as surviving father and as personal representative of the estate of Maj. Michael Clair Goodridge, deceased and individually as surviving grandfather and as personal representative of the estates of Michael Jonclair Goodridge, deceased and Kyle William Goodridge, deceased for himself and on behalf of decedents' estates, the distributes thereof and on behalf of decedents' surviving next of kin, including Julianne V. Goodridge, the surviving mother of Maj. Michael Clair Goodridge and surviving grandmother of Michael Jonclair Goodridge and Kyle William Goodridge, Plaintiffs-Appellees, v. SIEMENS CORPORATION, Siemens AG, Waagner-Biro Binder AG in Abwicklung, Waagner-Biro Binder Beteiligungs AG, WB Holding AG, Binder and Co. AG, Bosch Rexroth AG, Bosch Rexroth Corporation, and Omniglow Corporation Defendants-Appellants, Leitner Lifts USA Inc., Leitner S.P.A., Osterreichische Elektrizitatswirtschafts AG, Swoboda Karoserie AG, Bauberdarfszentrum Stadlbauer AG, Gletscherbahnen Kaprun AG, ABC Corporations 1-10, John Does 1-10, Swoboda Karoserie-Und, Stahlbau Gmbh, Tauren Touristik, Gmbh, Thyssen Schachtbau, Gmbh, Thyssenkrupp AG, Intersport Austria Gmbh, Intersport International Corp., Intersport Marketing USA, Heitkamp, Inc., Gletscherbahnen Kaprun Aktiengesellschaft Defendants.
• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)

Page 120

393 F.3d 120

Rudolph KERN, And on behalf of the Estate of Erich Kern, Angela Kern, And on behalf of the Estate of Erich Kern, John S. Habblett, LTC (Ret.), and on behalf of the Estates of Jennifer Kirkpatrick Habblett Goodridge, Michael Jonclair Goodridge and Kyle William Goodridge, Suzanne K. Habblett, And on behalf of the Estates of Jennifer Kirkpatrick Habblett Goodridge, Michael Jonclair Goodridge and Kyle William Goodridge, Dick Baker, Dr., And on behalf of the Estate of Carrie Lynn Baker, Carol Baker, Dr., and on behalf of the Estate of Carrie Lynn Baker, Claire Goodridge, Individually as surviving father and as personal representative of the estate of Maj. Michael Clair Goodridge, deceased and individually as surviving grandfather and as personal representative of the estates of Michael Jonclair Goodridge, deceased and Kyle William Goodridge, deceased for himself and on behalf of decedents' estates, the distributes thereof and on behalf of decedents' surviving next of kin, including Julianne V. Goodridge, the surviving mother of Maj. Michael Clair Goodridge and surviving grandmother of Michael Jonclair Goodridge and Kyle William Goodridge, Plaintiffs-Appellees, v. SIEMENS CORPORATION, Siemens AG, Waagner-Biro Binder AG in Abwicklung, Waagner-Biro Binder Beteiligungs AG, WB Holding AG, Binder and Co. AG, Bosch Rexroth AG, Bosch Rexroth Corporation, and Omniglow Corporation Defendants-Appellants Leitner Lifts USA Inc., Leitner S.P.A., Osterreichische Elektrizitatswirtschafts AG, Swoboda Karoserie AG, Bauberdarfszentrum Stadlbauer AG, Gletscherbahnen Kaprun AG, ABC Corporations 1-10, John Does 1-10, Swoboda Karoserie-Und, Stahlbau Gmbh, Tauren Touristik, Gmbh, Thyssen Schachtbau, Gmbh, Thyssenkrupp AG, Intersport Austria Gmbh, Intersport International Corp., Intersport Marketing USA, Heitkamp, Inc., Gletscherbahnen Kaprun Aktiengesellschaft Defendants.

No. 04-0957-CV.

United States Court of Appeals, Second Circuit.

Argued: November 2, 2004.

Decided: December 20, 2004.

Robert A. Swift, Kohn, Swift & Graf, Philadelphia, PA (Jay J. Rice, Diane E. Sammons, Randee M. Matloff, Nagel, Rice & Mazie, LLP, Livingston, NJ; Martin J. D'Urso, Hilary E. Cohen, Kohn, Swift & Graf, Philadelphia, PA; Kenneth P. Nolan, Christina M. Fry, Speiser, Krause, Nolan & Granito, New York, NY, of counsel), for Plaintiffs-Appellees.

Christopher Landau (Thomas D. Yannucci, P.C., Brant W. Bishop, Susan Engel, of counsel), Kirkland & Ellis LLP, Washington, DC, for Defendants-Appellants Siemens Corporation and Siemens AG.

Frederick W. Reif, Debra Tama, Riker Danzig Scherer Hyland & Perretti LLP, New York, NY, for Defendants-Appellants Waagner-Biro Binder AG in Abwicklung, Waagner-Biro Binder Beteiligungs AG, WB Holding AG, Binder and Co AG.

Arthur J. Liederman, Dylan C. Braverman, Morrison, Mahoney & Miller, LLP, New York, NY, for Defendant-Appellant Bosch Rexroth AG.

Arnd N. von Waldow, Reed Smith, LLP, Pittsburgh, PA; Paul P. Rooney, Reed Smith, LLP, New York, NY, for Defendant-Appellant Bosch Rexroth Corporation.

E. Gordon Haesloop, Bartlett, McDonough, Bastone & Monaghan, LLP, Mineola, NY, for Defendant-Appellant Omniglow Corporation.

Before: CARDAMONE, CABRANES, and SOTOMAYOR, Circuit Judges.

JOSÉ A. CABRANES, Circuit Judge.

Defendants Siemens Corporation, Siemens AG, Waagner-Biro Binder AG in Abwicklung, Waagner-Biro Binder Beteiligungs AG, WB Holding AG, Binder and Co AG, Bosch Rexroth AG, Bosch Rexroth Corporation, and Omniglow Corporation (collectively, "defendants") appeal from the order of the United States District Court for the Southern District of New York (Shira A. Scheindlin, Judge), dated November 12, 2003, granting plaintiffs' motion for class certification. See In re Ski Train Fire in Kaprun, Austria on November 11, 2000, No. MDL 1428 (S.D.N.Y. Nov. 12, 2003). The District Court certified the class, pursuant to Fed.R.Civ.P. 23(b)(3) "for liability purposes only," as "limited to the claims of heirs, beneficiaries and personal representatives of individuals who died in the Ski Train Fire at Kaprun [,] Austria on November 11, 2003." Id. To join this class, the District Court's order further required that prospective members "opt in" by affirmatively consenting to inclusion. See In re Ski Train Fire in Kaprun, Austria on November 11, 2000, 220 F.R.D. 195, 199, 209-11 (S.D.N.Y.2003). Defendants argue, inter alia, that the District Court overstepped the bounds of Rule 23 by certifying an "opt in" class. We agree and therefore reverse the order of the District Court.

BACKGROUND

The history of this case is reported in the opinion and order of the District Court, and we recount below only those facts relevant to the disposition of this appeal. See In re Ski Train Fire, 220 F.R.D. 195. On November 11, 2000, a funicular¹ train caught fire inside a tunnel near Kaprun, Austria; 155 passengers and crew members died in the inferno. Among the victims were ninety-two Austrians, thirty-seven Germans, ten Japanese, eight Americans, four Slovenians, two Dutchmen, a Briton, and a Czech. Plaintiffs, family members of the American victims, filed various lawsuits related to the Kaprun tragedy in several American courts. The Judicial Panel on Multidistrict Litigation transferred these cases to the United States District Court for the Southern District of New York "for coordinated or consolidated pretrial proceedings." See In re Ski Train Fire in Kaprun, Austria on November 11, 2000, 175 F.Supp.2d 1379, 1380 (J.P.M.L.2001).

In their amended complaint before the District Court, plaintiffs sought damages, as well as declaratory and injunctive relief, from various entities, alleging that the train and tunnel were improperly designed, constructed, and maintained, as well as negligently operated and promoted. Plaintiffs also alleged, inter alia, that certain defendants fraudulently misrepresented the safety of the train and the tunnel and intentionally inflicted emotional distress. Most significantly for the purposes of this appeal, plaintiffs brought their claims "on their own behalf, and on behalf of a class of heirs and representatives of victims" of the Kaprun tragedy "who consent in being included as members of the class." If certified, the plaintiffs' class would consequently include the heirs and beneficiaries of foreign victims. Plaintiffs asked the District Court to certify this class pursuant to Rule 23(b)(2) and 23(b)(3).²

In an amended order dated October 14, 2003, the District Court certified plaintiffs' class pursuant to Fed.R.Civ.P. 23(b)(3),³ to resolve "liability issues only," rather than damages. In re Ski Train Fire, 220 F.R.D. at 199. The class would consist of "all heirs, beneficiaries and personal representatives of all individuals who died in the fire who consent to inclusion." Id. (internal quotation marks and emphasis omitted). "Because participation in the class requires prospective members to take affirmative action" by first consenting "to be bound by the judgment," the District Court certified "an `opt-in' class, as opposed to the traditional Rule 23(b)(3) `opt-out' class." Id. at 209, 211. Defendants⁴ now appeal the District Court's certification decision.

Defendants challenge the District Court's decision on four grounds. First, they argue that Rule 23 does not permit certification of a class with an "opt in" provision. Second, they argue that a class of "all heirs, beneficiaries and personal representatives" is unmanageable because identifying class members would require an individualized inquiry into each decedent's estate. Third, defendants challenge the suitability of the class action mechanism for resolving issues of legal liability in an accident with mass fatalities. Finally, defendants argue that the District Court erred by certifying a class to pursue claims of fraud and intentional infliction of emotional distress, since such claims may require individual determinations.

DISCUSSION

I. Standard of Review

We review a district court's decision to certify a class for abuse of discretion. See, e.g., Parker v. Time Warner Entm't Co., 331 F.3d 13, 18 (2d Cir.2003). "A district court `abuses' or `exceeds' the discretion accorded to it when (1) its decision rests on an error of law (such as application of the wrong legal principle) or a clearly erroneous factual finding, or (2) its decision — though not necessarily the product of a legal error or a clearly erroneous factual finding — cannot be located within the range of permissible decisions." Zervos v. Verizon N.Y., Inc., 252 F.3d 163, 169 (2d Cir.2001) (internal citations omitted).

II. An "Opt in" Class

We first consider whether the District Court erred by certifying what it described as an "opt in" class. Rule 23(c) contains a so-called "opt out" requirement, mandating that members of a class certified under Rule 23(b)(3) be afforded an opportunity to "request exclusion" from that class.⁵ The language of Rule 23 does not, however, require members of any class affirmatively to opt into membership. Nor is such an "opt in" provision required by due process considerations. See Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 812, 105 S.Ct. 2965, 86 L.Ed.2d 628 (1985) ("We reject [the] contention that the Due Process Clause of the Fourteenth Amendment requires that absent plaintiffs affirmatively `opt in' to the class, rather than be deemed members of the class if they do not `opt out.'").

Not only is an "opt in" provision not required, but substantial legal authority supports the view that by adding the "opt out" requirement to Rule 23 in the 1966 amendments, Congress prohibited"opt in" provisions by implication. Professor Benjamin Kaplan of Harvard Law School, who served as Reporter of the Advisory Committee on Civil Rules from 1960 to 1966, and later as a Justice of the Supreme Judicial Court of Massachusetts, explained that the Committee rejected the suggestion "that the judgment in a (b)(3) class action, instead of covering by...