97-121 La.App. 5 Cir. 6/30/97, Gas Water Heater Products Liability Litigation, In re

• Decision Date: 30 June 1997
• Citation: 697 So.2d 341
• Parties: 97-121 La.App. 5 Cir
• Court: Court of Appeal of Louisiana — District of US

Page 341

697 So.2d 341

97-121 La.App. 5 Cir. 6/30/97

In re GAS WATER HEATER PRODUCTS LIABILITY LITIGATION. (Three Cases)

Nos. 97-C-121, 97-C-142 and 97-C-299.

Court of Appeal of Louisiana Fifth Circuit.

June 30, 1997.

Stephen P. Murphy, Washington, DC, and Frederick W. Bradley, New Orleans, and Edward T. Hackney, Southcorp USA, Inc., Atlanta, GA, Steven W. Usdin, John P. Cerise, Suzanne M. Ciaccio, James F. Shuey, Scott S. Partridge, New Orleans, for Defendant/Relator.

Wendell H. Gauthier, Bruce C. Dean, Metairie, Robert M. Johnston, New Orleans, for Plaintiff/Respondent.

Before WICKER, CANNELLA and DALEY, JJ.

[97-121 La.App. 5 Cir. 3] DALEY, Judge.

These consolidated Applications for Supervisory Writs arise out of a class action litigation filed on June 25, 1996, in the First Parish Court for the Parish of Jefferson entitled "In Re: Gas Water Heater Products Liability Litigation" naming as defendants three hot water heater manufacturers (State Industries, Inc., Mor-Flo Industries, Inc., and Rheem Manufacturing Co.) and three Jefferson Parish plumbing distributors of hot water heaters. The plaintiff class is alleged to be all residents of Louisiana who have purchased gas-fired hot water heaters over the past ten years from these three manufacturers. The class has not yet been certified.

Writ No. 97-C-121 was filed by defendant State Industries, Inc. on February 3, 1997, objecting to the failure of the First Parish Court to grant their Motion to Transfer the case to the 24th Judicial District Court, claiming that the jurisdictional amount of the claims in controversy exceeded the First Parish Court's statutory limit of $10,000.00. Writ No. 97-C-142 was filed by defendant Mor-Flo Industries, Inc. [97-121 La.App. 5 Cir. 4] on February 7, 1997, alleging the same grounds as Writ No. 97-C-121 and further arguing that Mor-Flo was entitled to a jury trial.

These two writ applications were consolidated by order of this court. On March 26, 1997, this court denied the writ applications, finding that the litigation was properly in First Parish Court. Judge Cannella dissented with reasons. The parties filed writ applications with the Supreme Court. On May 1, 1997, the Supreme Court granted the writ applications and remanded the matter to this court for briefing, oral argument, and opinion.

Meanwhile, on March 27, 1997, defendant Rheem Manufacturing Company (Rheem) filed Writ No. 97-C-299, seeking this court's review of the trial court's denial of their Exception of Lack of Subject Matter Jurisdiction on the grounds that First Parish Court's statutory limit on the amount in dispute had been exceeded by the plaintiffs' claims, and denial of their Exception of Improper Cumulation. After the Supreme Court's remand of the consolidated writs, this court on its own motion consolidated Writ 97-C-299 with the remanded writs for briefing, oral argument, and opinion.

This suit has been previously removed to and remanded from Federal District Court. The procedural history is evidence of the considerable time and resources spent by the parties battling over what is the proper forum. Lengthy legal battles over forum undermine confidence in the legal system by inferring that a tactical advantage in a particular forum is of overriding importance to the merits of the suit.

Defendant manufacturers all seek transfer of this class action to district court based upon the position that the jurisdictional amount of this suit exceeds First Parish Court's statutory limit of $10,000.00. They also suggest that the First Parish Court is not equipped to handle a complex class action litigation. Plaintiffs' counsel oppose [97-121 La.App. 5 Cir. 5] aggregation of damage claims for jurisdictional purposes, stipulating that no class member's claim exceeds $10,000.00. The primary legal issue presented to the Court is whether the claims of class members are aggregated or stand alone for subject matter jurisdictional purposes. The trial court found the "amount in dispute" was the amount claimed by each individual plaintiff, not the aggregated amount. We affirm the trial court, finding that class members' claims involving separate damages are not aggregated for subject matter jurisdictional purposes.

Jurisdiction and Powers of First Parish Court of Jefferson

The First Parish Court of the Parish of Jefferson has civil jurisdiction concurrent with that of the state 24th Judicial District Court, within its territorial boundaries, when the amount in dispute does not exceed ten thousand dollars, exclusive of interest, costs, and attorneys fees. LSA-R.S. 13:2561.2. First Parish Court has general jurisdiction except for certain limitations enumerated in LSA-R.S. 13:2561.4. The First Parish Court is not prohibited by law from hearing a class action lawsuit, provided that its other jurisdictional requirements are met. First Parish Court judges are elected, possess the same qualifications that are required of district judges, and have all the powers of a district court judge within the limits of the jurisdiction of the court. LSA-R.S. 13:2561.5 and 2561.7. The provisions of the Louisiana Code of Civil Procedure are applicable to the First Parish Court in all civil cases. LSA-R.S. 13:2561.10.

Defendants argue that this class action suit falls outside the jurisdictional limits of First Parish Court and seek transfer or dismissal of the case. In reviewing defendants' position, the court must be mindful that a basic and fundamental principle of civil procedure is that the plaintiff chooses the forum for a lawsuit, and [97-121 La.App. 5 Cir. 6] when there is a choice between two courts with concurrent jurisdiction, the plaintiff's choice controls absent some overriding issue of forum non conveniens.

Jurisdiction--"amount in dispute"

LSA-R.S. 13:2561.2 provides that the First Parish Court has civil jurisdiction concurrent with that of the district court when the amount in dispute does not exceed $10,000.00 exclusive of interest, costs and attorneys' fees.

At issue is the definition of "amount in dispute" in the context of a class action. The Louisiana Code of Civil Procedure defines the "amount in dispute" as the amount demanded, including punitive damages, or the value asserted in good faith by the plaintiff. This does not include interest, court costs, attorney fees, or penalties, even when provided by agreement or law. LSA-C.C.P. art. 4841(B).

The plaintiffs' petition asserts that each individual plaintiff's claim does not exceed $10,000.00 in value. Therefore, the plaintiffs argue that the case falls under the jurisdiction of First Parish Court. The defendants argue that the amount in dispute should be calculated by aggregating all of the claims of each class member. Defendants argue in brief that, "The amount at risk in this multi-million dollar class action involving close to a million potential class members clearly exceeds $10,000.00."

Class action is a procedural mechanism designed to efficiently and economically manage large numbers of claims in which common issues predominate over individual issues. Stevens v. Board of Trustees of Police Pension Fund, 309 So.2d 144, 151 (La.1975). As such, the claims of individual plaintiffs are not aggregated. A proper analogy is to cumulated plaintiffs with similar causes of action against defendants, authorized by LSA-C.C.P. art. 461 and 463. In Knox v. Palermo, [97-121 La.App. 5 Cir. 7] 180 So.2d 750 (La.App. 4 Cir.1965), three lessees filed suit against their landlord in First City Court for the City of New Orleans. The plaintiffs were joined because the cause of action and facts were the same. Although the First City Court's maximum jurisdictional amount in dispute was $1,000.00, the total aggregate claim of all three plaintiffs was $1,500.00. The Fourth Circuit held that each tenant's claim was within the jurisdiction of the City Court. For jurisdictional amount purposes, the claims were not aggregated because the claims were not dependent upon the other and each involved separate damages. The court relied on LSA-C.C.P. art 463(2), which states: "Two or more parties may be joined in the same suit as either plaintiffs or defendants if: ... (2) Each of the actions cumulated is within the jurisdiction of the court." In this matter both plaintiffs' counsel and defense counsel advised this court during oral argument that the class members' damages are not identical and will vary in amounts.

Federal courts have interpreted "the amount in controversy" language for jurisdictional purposes. While Federal court rulings are not binding on us, we find that their rulings on this issue are instructive. In Zahn v. International Paper, 414 U.S. 291, 94 S.Ct. 505, 38 L.Ed.2d 511 (1973), ¹ the United States Supreme Court held that each plaintiff in a class action must satisfy the jurisdictional amount and claims cannot be aggregated for jurisdiction determinations. Federal courts have rejected defendants' argument, finding repeatedly that claims are not aggregated for subject matter jurisdictional purposes. ² There are exceptions, however, to the nonaggregation [97-121 La.App. 5 Cir. 8] rule. Zahn held that "when several plaintiffs unite to enforce a single title or right, in which they have a common and undivided interest, it is enough that their interest collectively equal jurisdictional amounts." Single title or right was defined in Troy Bank v. G.A. Whitehead and Company, 222 U.S. 39, 32 S.Ct. 9, 56 L.Ed. 81 (1911) as "a single thing or identity in which the plaintiffs have a common and undivided interest, and which neither can enforce in the absence of the other." In other words, the presence of each plaintiff in the suit is necessary and indispensable for the recovery of their common right. Holt v. Lockheed Support Systems, Inc., 835 F.Supp. 325 (W.D.La.1993). This is the same factor Louisiana courts require before they would aggregate claims in joinder cases. See Knox v. Palermo, supra. In this case the...