School District of Lancaster v. Lake Asbestos of Quebec, Ltd.

789 F.2d 996, 4 Fed. R. Serv. 3d 750, 1986 U.S. App. LEXIS 24808
CourtCourt of Appeals for the Third Circuit
DecidedMay 1, 1986
DocketNos. 84-1642, 84-1643, 84-1649, 84-1651, 84-1652, 84-1670 to 84-1672, 84-1692 to 84-1696, 85-1243, 85-1272, 85-1287 and 85-1288
StatusPublished
Cited by291 cases

This text of 789 F.2d 996 (School District of Lancaster v. Lake Asbestos of Quebec, Ltd.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
School District of Lancaster v. Lake Asbestos of Quebec, Ltd., 789 F.2d 996, 4 Fed. R. Serv. 3d 750, 1986 U.S. App. LEXIS 24808 (3d Cir. 1986).

Opinion

OPINION OF THE COURT

WEIS, Circuit Judge.

In an effort to reach an equitable result in these asbestos property damage cases brought by school authorities, the district court certified a nationwide mandatory class for punitive damages and an opt-out class for compensatory damages. We conclude that the mandatory class cannot be approved because of a lack of necessary findings and for the additional reason that the class, being under-inclusive, cannot in the circumstances here accomplish the objectives for which it was created. We will, however, affirm the denial of a (b)(2) class and despite misgivings on manageability, will affirm the district court’s conditional [999]*999certification of a Rule 23(b)(3) opt-out class on compensatory damages.

The district court invoked Fed.R.Civ.P. 23(b)(1)(B) in entering the certification order designating a mandatory class for school districts seeking punitive damages and followed Rule 23(b)(3) in forming a class for those seeking compensatory damages. A request for class certification under Rule 23(b)(2) was denied.

Pursuant to 28 U.S.C. § 1292(b), the court certified that the order constituting the 23(b)(1)(B) class raised a controlling question of law respecting possible violation of the Anti-Injunction Act, 28 U.S.C. § 2283. Various parties have appealed, challenging not only that phase of the case but also the propriety of the (b)(3) certification as well as the denial of the (b)(2) request.1

This litigation began with the filing of class action complaints in the Eastern District of Pennsylvania by several Pennsylvania school districts and the Barnwell, South Carolina School District. The cases were consolidated soon after filing. Defendants, numbering approximately fifty, are associated with the asbestos industry as miners, bulk suppliers, brokers, assemblers, manufacturers, distributors, and at least one contractor.

As a result of federal legislation and regulation, plaintiffs are required to test for the presence of asbestos in schools.2 The complaints seek compensatory and punitive damages as well as injunctive relief stemming from compliance with the federal legislation and the alleged need to remove or treat materials containing asbestos. The claims are based on theories of negligence, strict liability, intentional tort, breach of warranty, concert of action, and civil conspiracy.

After a group of plaintiffs presented a motion for the formation of classes under section (b)(1) and (b)(2) of Rule 23, the court issued an order certifying such classes but limited them to claims against three defendants which had agreed not to oppose that action. This ruling led to objections by various other plaintiffs and defendants, and the court later vacated the order in part. Arguments were then heard from all parties who split, not along the usual plaintiff-defendant lines, but into a number of unusual alignments as dictated by their perceived interests. The eventual certification order included the claims against all defendants.

In conditionally creating a mandatory class under (b)(1)(B) on the punitive damage claims, the court found “a substantial possibility that early awards of punitive damages in individual cases [would] impair or impede the ability of future claimants to obtain punitive damages.” In re Asbestos School Litigation, 104 F.R.D. 422, 437 (E.D.Pa.1984). Although plaintiffs had advanced the argument that the defendants’ funds would be exhausted before all claimants were paid, no substantive evidence was presented demonstrating that those assets would be insufficient, and accordingly the district judge declined to address that issue. Id. at 434 n. 15.

The court believed that a mandatory class would create an opportunity for parity of treatment by bringing all injured parties into the same forum. Nevertheless, any plaintiff who opted out of the (b)(3) class would be permitted to settle a punitive damage claim with defendants. Additional support for certification was found in the strong “federal interest inherent in asbestos abatement” and the minimal intrusion on the interests of the school districts.

Class certification under 23(b)(2), however, was denied. The court commented that “despite the ingenuity of plaintiffs’ claims for limited equitable remedies, this case remains at bottom, one for legal damages.” 104 F.R.D. at 438. Although [1000]*1000recognizing the possibility that at some point there might be “an incidental need for equitable relief,” the court concluded that such a potential could not sustain certification under 23(b)(2).

The court directed the certification of a 23(b)(3) class, finding the numerosity requirement satisfied by estimates that friable asbestos is present in approximately 14,000 of the nation’s schools, about 8,500 of which have an abatement problem. Commonality existed in an underlying core of issues identified as:

“(a) The general health hazards of asbestos;
(b) defendants’ knowledge or reason to know of the health hazards of asbestos;
(c) defendants’ failure to warn/test; and
(d) defendant’s concert of action and/or conspiracy involving formation of and adherence to industry practices.”

104 F.R.D. at 429. Those elements could “be established by common proof, which, although it may be complex, does not vary from class-member school to class-member school.”

The typicality requirement was satisfied because the plaintiffs’ theories of liability were harmonious, and the named plaintiffs stood in a position similar to other members of the class. Some of the parties had obliquely questioned the adequacy of representation, but the court concluded that the class was represented by counsel “very experienced with class action litigation and thoroughly familiar with property damage and mass disaster litigation.”

In considering the specific requirements for a (b)(3) certification, the court noted that the presence of asbestos in school buildings had a similar impact on each member of the class. Additionally, the question of proximate cause was a legal one which could be resolved on a class-wide basis without involving individualized member-by-member proof.

Addressing the requirement of superiority, the court emphasized that in resolving “at least some of the issues” on a class basis potential savings in expense would result, a consideration particularly important in asbestos litigation with its staggering costs. Moreover, because all claims were for property damage, the level of concern for the plaintiffs’ right to choose individual forums and counsel was reduced.

The district judge conceded that the manageability aspect was not “wholly without difficulty,” but stated “at this point I believe the management problems can be overcome.” The court was convinced that although the substantive tort law of many jurisdictions might be applicable, the basic variations could be reduced to a reasonable number and subclasses could be created to accommodate those differences.

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Bluebook (online)
789 F.2d 996, 4 Fed. R. Serv. 3d 750, 1986 U.S. App. LEXIS 24808, Counsel Stack Legal Research, https://law.counselstack.com/opinion/school-district-of-lancaster-v-lake-asbestos-of-quebec-ltd-ca3-1986.