Troy Watson v. Shell Oil Company and Brown & Root, U.S.A., Inc., Robert Adams, Sr. v. Shell Oil Company and Brown & Root, U.S.A., Inc.

979 F.2d 1014
CourtCourt of Appeals for the Fifth Circuit
DecidedDecember 7, 1992
Docket91-3449
StatusPublished
Cited by94 cases

This text of 979 F.2d 1014 (Troy Watson v. Shell Oil Company and Brown & Root, U.S.A., Inc., Robert Adams, Sr. v. Shell Oil Company and Brown & Root, U.S.A., Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Troy Watson v. Shell Oil Company and Brown & Root, U.S.A., Inc., Robert Adams, Sr. v. Shell Oil Company and Brown & Root, U.S.A., Inc., 979 F.2d 1014 (5th Cir. 1992).

Opinion

POLITZ, Chief Judge:

Shell Oil Company arid Brown and Root, U.S.A., ■ Inc., defendants in this mass-tort class action, have permissibly appealed interlocutory orders in this diversity suit. The orders at issue define the class and class issues, designate class representatives, and set a trial plan. Finding neither error nor abuse of discretion, for the reasons assigned we affirm the proposed trial plan.

I.Background

This litigation arises out of an explosion at Shell’s manufacturing facility in Norco, Louisiana. At approximately 3:30 a.m. on May 5, 1988, failure of a pipe elbow, allegedly fabricated and installed by Brown & Root, permitted the escape of a vapor cloud *1017 of combustible gases. The vapor ignited and a massive explosion ripped through the plant, causing extensive damage both on the plant site and in the surrounding communities. That same morning the instant federal class action suit was filed. During the next week class action suits were filed in Louisiana state courts and were removed to federal court. The claims against Shell are founded on Louisiana law theories of negligence, strict liability and intentional tort. Plaintiffs assert claims in negligence and strict liability against Brown & Root. 1 Plaintiffs also seek punitive damages against both defendants. 2

The actions were consolidated and referred to a magistrate judge with instructions to conduct an evidentiary hearing and to submit a report and recommendation regarding designation of class representatives and subclass definitions. The district court substantially adopted the magistrate judge’s recommendations, certified the litigation as a class action under Fed.R.Civ.P. 28(b)(3),. defined the plaintiff class, 3 and, pursuant to Fed.R.Civ.P. 28(c)(4), defined the “outside the gate” and “inside the gate” subclasses (“Subclass A” and “Subclass B”, respectively). 4 Subclass A includes in excess of 18,000 claimants. 5 Subclass B has sixteen Shell employee claimants. 6 The district court established notification and opt-out procedures and approved a Plaintiffs’ Legal Committee to represent the class.

The district court identified as liability issues common to both subclasses the determination of fault: (1) as it relates to compensatory damage claims, and (2) whether it is sufficient to warrant imposition of punitive damages. As' to Subclass B only, the court identified as additional issues: (1) whether the fault of Shell Oil or any other person claiming benefit of workers compensation immunity was intentional thus obviating the immunity, and (2) whether punitive damages are available if workers compensation is the exclusive remedy. 7 The district court thereafter established a procedure for identifying absent class members and obtaining information relating to their claims.

After extensive briefing by the parties, the district court issued orders detailing a *1018 four-phase plan for trial. 8 In Phase 1 a jury would determine common issues of liability. 9 If the jury found punitive damage liability it would then perform the Phase 2 function and determine compensatory damages in 20 fully-tried sample plaintiff cases. 10 Based on the findings in these cases, the jury would then establish the ratio of punitive damages to compensatory damages for each class member. If the jury finds no punitive damage liability in Phase 1, Phase 2 is to be omitted.

In Phase 3, a different jury is to resolve issues unique to each plaintiffs compensatory damage claims, e.g. injury, causation, and quantum. Phase 3 calls for trials in waves of five, scheduled according to a format based upon factors, 11 including location of the injured person or property at the time of the explosion and extent and nature of the damages. The district court anticipates that “after several waves are tried, a reasonable judgment value for each category of claims would emerge so as to facilitate settlements.” 12 In Phase 4 the district court is to compute, review, and award punitive damages, if any are established in Phase 1, for the plaintiffs awarded compensatory damages.

Based on the district court’s certification under 28 U.S.C. § 1292(b), Shell and Brown & Root timely sought leave for an interlocutory appeal which we granted.

II. Analysis

We revisit the problem of mass tort litigation recently addressed. 13 The instant litigation, involving claims by more than 18,000 plaintiffs, starkly presents the nearly insurmountable problems of balancing procedural fairness with judicial efficiency in the management of mass tort litigation. At the threshold we must note that in many respects this appeal presents only the broad outlines of the district court’s trial plan and, to a large extent, appellate review must await its implementation. Keenly mindful of the magnitude of the mass litigation problem, its increasing frequency, and the need for innovative solutions, we review the present challenges to the district court’s orders.

A. The Trial Plan: Punitive Damage Concerns

1. Applicability of Fibreboard

Shell and Brown & Root first argue that Phase 2 violates principles enunciated in In re Fibreboard Corp. In that case the panel reluctantly vacated a trial plan in mass tort litigation involving the claims of 3,031 plaintiffs asserting asbestos-related injuries. The dispute in Fibreboard centered on the aspect of the plan that called for a jury to ascertain damages for the entire class on the basis of a trial of the specific claims of eleven class representatives, together with such evidence as the parties presented about the claims of thirty illustrative plaintiffs, and the testimony of experts about damages to the entire class. We found the Fibreboard scheme infirm for two reasons. First, the proposed plan failed to require each claimant to prove both causation and damages, as required by Texas law. Second, because the proceeding was to ascertain damages for a group of claimants who suffered widely divergent injuries essentially on the basis of a statistical profile, the plan failed to qualify as a “trial” in the sense contemplated by Article III of the Constitution, and

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Bluebook (online)
979 F.2d 1014, Counsel Stack Legal Research, https://law.counselstack.com/opinion/troy-watson-v-shell-oil-company-and-brown-root-usa-inc-robert-ca5-1992.