Oil Spill Class Action Certification Decision Remanded for Future Factual Determination of Predominance and Superiority

In a recent decision, retired Associate Justice Souter of the United States Supreme Court, sitting on the First Circuit bench by designation, vacated the judgment of a lower court and remanded the case for a plenary analysis of whether the plaintiffs had established the necessary criteria for class certification. The decision, Gintis v. Bouchard Transp. Co., 596 F.3d 64, 2010 U.S. App. LEXIS 3644 (1st Cir. Mass. February 23, 2010), rejected the lower court's denial of class action certification based on its reliance on an earlier decision holding that recovery for contamination of land downstream from a point of toxic discharge into a river required parcel-by-parcel determinations as to injury and damages, finding that the lower court ruling failed to grapple with the parties' contending proffers and arguments and accordingly stopped short of exercising informed discretion.

The facts involved the grounding of a tugboat and fuel barge owned by the defendants, causing an oil spill of more than 98,000 barrels of fuel oil, and the contamination of about 90 miles of shoreline. Plaintiffs, consisting of a proposed class of all persons having an interest in property damaged by the spill, excluding shorefront residents of the town of Mattapoisett who had been certified as their own class in a state court action against the defendants, raised three claims, one under Massachusetts General Law ch. 21E, section 5 (imposing strict liability for damage to real property on the owner of a vessel from which oil spilled), a second for violation of Massachusetts General Law ch. 91, section 59A (providing double damages for the negligent discharge of petroleum), and a third for common law nuisance.

In denying the motion for class certification, the trial court found that the plaintiffs had failed to establish, as required under Federal Rule of Civil Procedure 23(b)(3), that common issues of law and fact predominated throughout the potential claims of those who owned the bay shoreline. In ruling in favor of the defendants, the trial court noted that the defendants had not conceded liability to any individual plaintiffs, that plaintiffs were required to show both unreasonable interference and special injury to each plaintiff to establish claims for nuisance, and that plaintiffs were required to establish compensatory damages specific to each parcel. Citing Church v. GE, 138 F. Supp. 2d 169, 2001 U.S. Dist. LEXIS 4676 (D. Mass. 2001), the court noted that its reading of that decision required a parcel-by-parcel determination of injury and damages for contamination of land downstream from a point of toxic discharge.

Justice Souter's decision rejects that analysis, holding that to require a showing of injury, cause and compensatory damages on a plaintiff-by-plaintiff basis would effectively cause the point of Rule 23(b)(3) to be "blunted beyond utility" (Gintis, 596 F.3d 64, 2010 U.S. App. LEXIS 3644 [*5]), noting that 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." (Gintis, 596 F.3d 64, 2010 U.S. App. LEXIS 3644 [*5]), citing Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 617 (1997); Smilow v. Sw. Bell Mobile Sys., 323 F.3d 32, 38 (1st Cir. 2003).

Criticizing the district court's findings as "too sparse to provide a prudent basis for us to say that a class should have been certified", the court concluded that "plaintiffs presented substantial evidence of predominating common issues that called for a searching evaluation." (Gintis, 596 F.3d 64, 2010 U.S. App. LEXIS 3644 [*5]) The predominating issues identified by Souter included defendants' admission of negligence in causing the spill, and contamination and clean up records offered to show harm to individual parcels. Defendants argued that that the records in question would not be exact enough to provide proof specific to separate parcels, an argument rejected by Souter who concluded that "[defendants'] very opposition to the use of the arguably helpful records seems to promise that most or all cases, if individually litigated, would require repetitious resolution of an objection by [defendants] that is common to each of them. [Defendants'] position, in other words, apparently guarantees a crucial common issue of great importance in the event of individual litigation." (Gintis, 596 F.3d 64, 2010 U.S. App. LEXIS 3644 [*7])

The other issue identified as supporting a finding of predominance was the appraisal methodology selected by the plaintiffs, based on severity and duration of contamination. Rejecting defendants' efforts to discredit this approach, the court concluded that defendants' effort "portends a fight over admissibility and weight that would be identical in at least a high proportion of cases if tried individually." (Gintis, 596 F.3d 64, 2010 U.S. App. LEXIS 3644 [*8]) Concluding, Souter notes that defendants' arguments effectively demonstrated that "substantial and serious common issues would arise over and over in potential individual cases." (Gintis, 596 F.3d 64, 2010 U.S. App. LEXIS 3644 [*8])

Additionally, the court suggested that the only apparent mitigation of the prospect of duplicative litigation lay in the possibility that not many individual actions would be brought if separate actions were to be required, which implicated the second condition for certification, that is, superiority of a single class action over a string of individual plaintiffs being required to go it alone. According to Souter, the evidence suggested that the case presented an opportunity to make room for claims that plaintiffs could never afford to press one-by-one, since the record contained an estimate that potential individual claims were in the $12,000 to $39,000 range. Souter opined that "[g]iven the elements of injury, causation and compensation on which [defendants] intends to join issue, there is a real question whether the putative class members could sensibly litigate on their own for these amounts of damages, especially with the prospect of expert testimony required. Like predominance, the issue of superiority is thus a serious one in these circumstances and should be addressed thoroughly." (Gintis, 596 F.3d 64, 2010 U.S. App. LEXIS 3644 [*8])