Northern Dist. of California, Dalkon Shield IUD Products Liability Litigation, In re, s. 81-4648

CourtUnited States Courts of Appeals. United States Court of Appeals (9th Circuit)
Writing for the CourtBefore GOODWIN, ANDERSON and SCHROEDER; GOODWIN; Williams
Citation693 F.2d 847
PartiesIn re NORTHERN DISTRICT OF CALIFORNIA, DALKON SHIELD IUD PRODUCTS LIABILITY LITIGATION. Janice ABED, et al., Plaintiffs-Appellants, v. A. H. ROBINS COMPANY, et al. a Virginia corporation, Hugh J. Davis, M.D., and Irwin S. Lerner, Defendants-Appellees. to 81-4656.
Docket NumberNos. 81-4648,s. 81-4648
Decision Date26 August 1982

Thomas J. Brandi, Abramson & Bianco, San Francisco, Cal., Cory Streisinger, Arthur C. Johnson, Johnson, Harrang & Swanson, Eugene, Or., Bradley Post, Post, Syrios & Bradshaw, Wichita, Kan., J. Michael Egan, Minneapolis, Minn., Kevin J. Dunne, Sedgwick, Detert, Moran & Arnold, San Francisco, Cal., for Abed, et al. (Dalkon Shield).

Charles Alan Wright, Austin, Tex., argued, for A. H. Robins Co., et al.; Douglas E. Bragg, Bragg & Dubofsky, Denver, Colo., on brief.

Appeal from the United States District Court for the Northern District of California.

Before GOODWIN, ANDERSON and SCHROEDER, Circuit Judges.

GOODWIN, Circuit Judge.

Plaintiffs appeal from a district court order conditionally certifying their claims as: (1) a nationwide class action on the issue of punitive damages pursuant to Federal Rule of Civil Procedure 23(b)(1)(B); and (2) a statewide (California) class action on the issue of liability pursuant to Rule 23(b)(3). In re Northern District of California "Dalkon Shield" IUD Products Liability Litigation, 521 F.Supp. 1188 (N.D.Calif.1981); 526 F.Supp. 887 (N.D.Calif.1981).

All plaintiffs claim to have been injured by the Dalkon Shield intrauterine device. All of those plaintiffs who have joined in this appeal challenge class certification. Defendant A. H. Robins also opposes certification of the California 23(b)(3) class. Defendant Hugh J. Davis opposes certification of both classes.

Between June 1970 and June 1974, approximately 2.2 million Dalkon Shields were inserted in women in the United States. Many users sustained injuries. Complaints include uterine perforations, infections, ectopic and uterine pregnancies, spontaneous

abortions, fetal injuries and birth defects, sterility, and hysterectomies. Several deaths also were reported. On June 28, 1974, Robins withdrew the Dalkon Shield from the market

By May 31, 1981, approximately 3,258 actions relating to the Dalkon Shield had been filed, and 1,573 claims were pending. The claims are based on various theories: negligence and negligent design, strict products liability, breach of express and implied warranty, wanton and reckless conduct, conspiracy, and fraud. Most plaintiffs seek both compensatory and punitive damages.

Some plaintiffs joined Robins, Davis, and Irwin W. Lerner as defendants, as well as their own doctors or medical practitioners who recommended and inserted the Dalkon Shield, and local suppliers. Many plaintiffs sued fewer defendants.

In 1975 all actions then pending in federal district courts alleging damages from the use of the Dalkon Shield were transferred by the Judicial Panel on Multidistrict Litigation to the District of Kansas for consolidated pretrial proceedings. In re A.H. Robins Co. Inc., "Dalkon Shield" Liability Litigation, 406 F.Supp. 540 (Jud.Pan.Mult.Lit.1975), 419 F.Supp. 710 (Jud.Pan.Mult.Lit.1976), 438 F.Supp. 942 (Jud.Pan.Mult.Lit.1977). After four years of consolidated discovery, the Judicial Panel began vacating its conditional transfer orders and remanding the cases to their respective transferor courts. In re A.H. Robins Co. Inc., "Dalkon Shield" IUD Products Liability Litigation, 453 F.Supp. 108 (Jud.Pan.Mult.Lit.1978), 505 F.Supp. 221 (Jud.Pan.Mult.Lit.1981).

State courts have also received a number of Dalkon Shield cases. The results have been mixed. Some plaintiffs have recovered substantial verdicts. Others have recovered nothing. Many cases have been settled.

Approximately 166 Dalkon Shield cases were pending in the Northern District of California. After one jury trial that lasted nine weeks, Judge Williams consolidated all Dalkon Shield cases pending in that district and ordered briefing on the feasibility of a class action. All but one of California plaintiffs' counsel opposed class certification. Out-of-state plaintiffs were not notified of the briefing request and did not participate in the status conferences held to discuss the class action proposal. All defendants at that time opposed class certification.

On June 25, 1981, Judge Williams entered an order conditionally certifying a nationwide class, under Fed.R.Civ.P. 23(b)(1)(B), 1 consisting of all persons who filed actions for punitive damages against Robins. 2 The court asserted jurisdiction on the basis of diversity of citizenship, 28 U.S.C. Sec. 1332. One stated purpose of certification was to insure the rights of all plaintiffs to a proportionate share of any punitive damages recovery from the "limited fund" of Robins' assets. Judge Williams stated:

"At the present time, some 1,573 suits involving claims for compensatory damages well over $500 million and claimed punitive damages in excess of $2.3 billion, are pending against A. H. Robins. The

potential for the constructive bankruptcy of A. H. Robins, a company whose net worth is $280,394,000.00, raises the unconscionable possibility that large numbers of plaintiffs who are not first in line at the courthouse door will be deprived of a practical means of redress."

No testimony was taken and the way in which the "fund" was limited was not specified.

Judge Williams also conditionally certified a California statewide subclass under Rule 23(b)(3) consisting of plaintiffs who have filed actions against Robins in California. 3 This California class is limited to the question of Robins' liability arising from the manufacture and sale of the Dalkon Shield. Any plaintiff may opt out of this class, whereas all plaintiffs in the nation would be bound by the determination on punitive damages.

Plaintiffs from California, Oregon, Ohio, Florida, and Kansas moved to decertify the punitive damages class. The district court denied the motion and certified the issues for an interlocutory appeal, pursuant to 28 U.S.C. Sec. 1292(b). This court granted the interlocutory appeals and ordered them expedited.

I The Rule 23(b)(1)(B) Nationwide Punitive Damages Class
A. Rule 23(a) Prerequisites
1. Commonality.

The district court held that the punitive damages class presented common questions about Robins' knowledge of the safety of its product at material times while the Shield was on the market. What Davis, Lerner and Robins knew about the Dalkon Shield, when they knew it, what information they withheld from the public, and what they stated in their advertising to doctors and in their product instructions during various time periods may all be common questions. These questions are not entirely common, however, to all plaintiffs.

Moreover, as the plaintiffs correctly argue, the 50 jurisdictions in which these cases arise do not apply the same punitive damages standards. Punitive damages standards can range from gross negligence to reckless disregard to various levels of wilfullness and wantonness. If commonality were the only problem in this case, it might be possible to sustain some kind of a punitive damage class. But difficulties remain with other certification requirements.

2. Typicality.

Typicality, while it may not be insurmountable, remains a significant problem. The district court order recites that representative parties have been selected. In Re Northern District of California "Dalkon Shield" IUD Products Liability Litigation, 526 F.Supp. at 919. However, all of the appealing plaintiffs assert that no plaintiff has accepted the role, and that no single plaintiff or group of plaintiffs could be typical of the numerous persons who might have claims. No plaintiff has appeared in this appeal in support of class certification. Again, while typicality alone might not be an insurmountable problem, it helps make the overall situation difficult to rationalize as proper for class treatment.

3. Adequacy of representation.

The court designated lead counsel for the nationwide class, but he has resigned. New counsel has been designated but has not yet started to represent the class. Apparently none of the attorneys already involved in the case is willing to serve as class counsel. The district judge may well be better able to choose a good lawyer than some of the plaintiffs may be, but the right of litigants to choose their own counsel is a right not lightly to be brushed aside.

The plaintiffs argue that newly appointed, even if expert counsel, may not litigate the action as vigorously as counsel selected by plaintiffs. This court is hesitant to force unwanted counsel upon plaintiffs on the assumption that appointed counsel will be adequate. Even if the class were otherwise acceptable, it would have to be decertified if adequate lead counsel turned out to be unavailable.

We are not necessarily ruling out the class action tool as a means for expediting multi-party product liability actions in appropriate cases, but the combined difficulties overlapping from each of the elements of Rule 23(a) preclude certification in this case.

B. The Rule 23(b)(1)(B) Requirements
1. Applicability of McDonnell Douglas.

The Ninth Circuit has expressly barred class certification under 23(b)(1)(B) for independent tort claims seeking compensatory damages, unless separate actions "inescapably will alter the substance of the rights of others having similar claims." McDonnell Douglas Corp. v. U. S. Dist. Ct., C.D. of Cal., 523 F.2d 1083, 1086 (9th Cir. 1975), cert. denied, 425 U.S. 911, 96 S.Ct. 1506, 47 L.Ed.2d 761 (1976), quoting LaMar v. H & B Novelty & Loan Company, 489 F.2d 461, 467 (9th Cir. 1973). In McDonnell Douglas, this court found that "[a]t worst, individual actions (for air crash damages) would leave unnamed members of...

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