Product Liability 2009 - Arnold & Porter LLP

Update on U.S. Product Liability Law Sidley Austin LLP
concluded that the amounts in controversy must be aggregated.
[See Endnote 35.] Thus, when a defendant is faced with multiple
identical or substantially identical claims in which the CAFA
jurisdictional minimum is not met, the defendant may decide to
seek a consolidation of those claims and, if successful, remove the
consolidated action.
Another strategy defendants may employ where a complaint
disavows recovery for amounts at or above $5 million, or is silent
as to the amount in controversy, is to contend that the allegations
contained in the complaint place the jurisdictional minimum at
issue. Defendants should beware, however, that a federal court’s
willingness to consider extrinsic evidence that the minimum
amount in controversy is met depends on the jurisdiction. [See
Endnote 36.]
Removal under CAFA is not a guarantee that the case will remain
in federal court throughout the proceedings. Some courts have
concluded that an action properly removed under CAFA may cease
to be properly in federal court at some point during the proceedings.
In Muehlbauer v. General Motors Corp., No. 05 C 2676, 2009 WL
874511 (N.D. Ill. Mar. 31, 2009), for example, the defendant
properly removed a class action alleging a class in excess of 100
members and an aggregate amount in controversy of over $5
million. For each individual class member, however, the amount in
controversy was “far below” $75,000. When certification of the
class action was denied, the court concluded that subject matter
jurisdiction based on CAFA was no longer proper, and held that it
did not have diversity jurisdiction because the aggregate amount in
controversy of the plaintiffs’ individual claims did not exceed the
jurisdictional minimum of $75,000. In contrast, other courts have
found that where a federal court has subject matter jurisdiction over
a class action under CAFA at the outset of the case, such jurisdiction
does not abate simply because the federal court denies certification
of the class. See, e.g., Garcia v. Boyar & Miller, P.C., 2007 WL
1556961 (N.D. Tex. May 30, 2007).
As consensus has not yet developed on these and other issues,
defendants must ensure that they have a clear understanding of the
current state of the law regarding CAFA in the jurisdictions in
which they are defending against class action or mass action claims.
Forum Non Conveniens
Non-U.S. plaintiffs often file product liability claims in U.S. courts,
seeking to benefit from certain procedural mechanisms and
substantive law that are unavailable in their home countries. The
advantages that encourage non-U.S. plaintiffs to seek redress in
U.S. courts include substantial pretrial discovery, perceived
generous damages awards (including punitive damages), and jury
trials. With the high stakes and expenses associated with mass tort
litigation, the U.S. system may also be appealing because of the
availability of contingency fee arrangements and the absence of
awarding attorneys’ fees to the prevailing party automatically.
Defendants may move to dismiss non-U.S. plaintiffs’ claims on
grounds of forum non conveniens. A court may dismiss a case
based on forum non conveniens where the defendant successfully
establishes that: (1) an alternative forum is available and adequate;
and (2) the balance of factors related to the parties’ private interests
and the public interest weighs in favour of adjudication elsewhere.
Among the private and public interests a court will often consider
are access to witnesses and documents, the ability of the defendant
to implead necessary third parties, the interest of a plaintiff’s home
country in resolving the dispute, and the burden placed on the U.S.
court system if the case is not dismissed. [See Endnote 37.]
In the past year, U.S. courts have issued decisions that highlight
ICLG TO: PRODUCT LIABILITY 2009
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challenges non-U.S. plaintiffs may encounter when facing motions
to dismiss on forum non conveniens grounds. One Florida appellate
court dismissed a case on forum non conveniens grounds where the
purportedly available and adequate forum had declined to exercise
jurisdiction over the case. See Scotts Co. v. Hacienda Loma Linda,
2 So. 3d 1013 (Fla. Dist. Ct. App. 2008). In that case, the defendant
moved to dismiss a Panamanian corporation’s claims based on
forum non conveniens. The lower court denied the motion, but the
appellate court reversed and required the parties to stipulate that the
court would retain jurisdiction if the Panamanian court would not
entertain the case based on preemption (or preventive jurisdiction).
[See Endnote 38.] Id. at 1014-15. After the reversal, and while the
Panamanian corporation sought rehearing and discretionary review
in the Florida Supreme Court, Panama enacted a law that would
block transfers based on forum non conveniens. [See Endnote 39.]
Id. at 1015. The Panamanian corporation filed its complaint in the
Panamanian trial court, including with it “allegations and exhibits
sufficient to invite dismissal based on preemption and the blocking
statute . . . .” Id. at 1016. The Panamanian court did precisely that.
Id. at 1015-16. The case was subsequently reinstated in the Florida
state court, and the defendant appealed such reinstatement. The
Florida appellate court reversed the order of reinstatement. Id. at
1017-18. Central to its decision was the recognition that a non-U.S.
plaintiff whose claims have been dismissed by a U.S. court cannot
take steps to render the alternative forum unavailable either by
“itself inducing the foreign court to dismiss the foreign action or . .
. relying on foreign laws or decisions plainly calculated to preclude
dismissal . . . .” Id. at 1017-18. Thus, the Florida appellate court
concluded that where a court finds an alternative forum available
and adequate, the plaintiff must submit to that forum and support
that court’s exercise of jurisdiction.
Practical considerations may carry significant weight in a court’s
ultimate forum non conveniens analysis. For example, in the Factor
VIII or IX Concentrate Blood Products MDL, defendants moved to
dismiss the claims of Taiwanese citizens based on forum non
conveniens. See In re Factor VIII or IX Concentrate Blood Prods.
Liab. Litig., 595 F. Supp. 2d 855 (N.D. Ill. 2009). After considering
expert testimony from both sides, and determining that Taiwan was
an available forum, that Taiwan and California (where the
complaints were filed) were on par as to adequacy (or inadequacy),
and that on balance, factors favoured dismissal, it ultimately was a
practical consideration on which the court’s decision hinged. See
id. at 860, 866, 874. Anticipating that defendants would move to
dismiss the case in Taiwan on the basis that the statute of limitations
barred the plaintiffs’ claims if the district court granted the motion
to dismiss, the district court concluded that dismissal would impose
unnecessary expense on the plaintiffs where California courts
would apply the same limitations law as would the Taiwanese court.
Id. at 874. Thus, the district court denied defendants’ motion to
dismiss on forum non conveniens grounds.
Timeliness of a defendant’s motion to dismiss based on forum non
conveniens may be another factor that the court considers. In the
Vioxx MDL, the court granted a motion to dismiss claims of various
non-U.S. plaintiffs based on forum non conveniens. In re Vioxx
Prods. Liab. Litig., No. 2:05-MD-01657-EEF-DEK (E.D. La. Feb.
10, 2009). [See Endnote 40.] In so doing, the court rejected the
plaintiffs’ argument that Merck’s motion should be dismissed as
untimely. [See Endnote 41.] Id. at 22. The court noted that there
is no precise time period within which a defendant must file a
motion for dismissal under the doctrine of forum non conveniens.
Id. at 20. Given the complexity of the Vioxx MDL, the court
determined that Merck had filed its motion within a reasonable
time. Id. at 20-22. The court also rejected a request by U.K.
plaintiffs that Merck be required to agree that: (1) the parties would
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