Chemical Release at Chalmette Refinery Results in Battle Over Class Action Certification (Part 2)

In our last post, we explored the basic elements of class action certification, including the rules that guide a trial court’s decision on whether to grant the certification. Although the trial court is granted wide discretion on this question, it must reach its decision through serious analysis; the failure to substantiate its analysis can result in reversal by the appellate court as illustrated in the recent case, Madison v. Chalmette Refining LLC. On January 12, 2007, a group of students, teachers, and parent chaperones visited the Chalmette National Battlefield. During a historical reenactment, the nearby Chalmette Refinery released a significant amount of petroleum coke dust that was carried to the battlefield area. Five individuals (the “Plaintiffs”) filed suit in federal court against Chalmette Refining, demanding compensation for a variety of damages including “including personal injury, fear, anguish, discomfort, inconvenience, pain and suffering, emotional distress, psychiatric and psychological damages, evacuation, economic damages, and property damages.” The suit sought to represent all individuals who were exposed to the coke dust, specifically:

“all persons entities [sic] located at the Chalmette National Battlefield in St. Bernard Parish, Louisiana, in the early afternoon of Friday, January 12, 2007 and who sustained property damage, personal injuries, emotional, mental, or economic damages and/or inconvenience or evacuation as a result of the incident.”

The district court allowed the parties to conduct discovery on the issue of class certification. Chalmette Refining took the deposition of each of the five named class representatives, yet the Plaintiffs conducted no discovery at all. At the hearing on the motion to certify the class, no evidence was introduced; at the conclusion, the district court orally granted the Plaintiffs’ motion for class certification.

Even before the district court issued its written order, Chalmette Refining petitioned the Fifth Circuit Court of Appeals for an interlocutory appeal over the decision to certify the class. The thrust of Chalmette Refining’s appeal focused on the district court’s findings of “superiority” and “predominance” as required under Federal Rule 23(b)(3). “Determining whether the plaintiffs can clear the predominance hurdle set by Rule 23(b)(3) requires district courts to consider how a trial on the merits would be conducted if a class were certified.” This, naturally, demands a fact-intensive analysis that “will vary depending on the circumstances of any case.” The district court’s order, in the Fifth Circuit’s opinion, revealed that it failed to meet this requirement. Instead, it “adopted a figure-it-out-as-we-go-along approach that … Fifth Circuit cases have not endorsed.” For example, the district court’s order provided no evidence that it meaningfully considered how the Plaintiffs’ claims would be tried, or that it weighed whether the case could be “streamlined using other case management tools, including narrowing the claims and potential plaintiffs through summary judgment.” The district court also apparently failed to acknowledge or resolve the “significant disparities” among even the named class representatives concerning exposure, location, and mitigation. Thus, the Fifth Circuit concluded that by failing to adequately balance the common issues against the individual issues, the district court abused its discretion in determining that common issues predominated and in certifying the class. The court was careful, however, not suggest that class treatment is necessarily inappropriate for the case; instead, Fifth Circuit precedent simply required a “more rigorous analysis” than the district court conducted. Accordingly, the court reversed the district court’s class certification order and remanded the case to the district court for further proceedings.

The Fifth Circuit leaves open the possibility that class certification may still happen in this case if, on remand, the district court properly engages in the analysis required by the Circuit’s jurisprudence and Rule 23. It is interesting to note that no evidence was presented by the Plaintiffs in the district court’s original hearing on certification. Perhaps had more evidence been in play at that stage, the court would have had more information at its disposal on which to base its analysis and could have avoided the reversal on appeal. Ultimately, this case demonstrates the complexities of class action litigation and reminds plaintiffs that an experienced attorney is essential.