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Class Action Defense Cases-Smith v. Illinois Central Railroad: Illinois Supreme Court Agrees With Defense That Class Action Status Should Not Have Granted In Lawsuit Arising From Train Derailment

Factual and Legal Issues Arising from Train Derailment Would Require Individual Minitrials Thereby Rendering Class Action Treatment Inappropriate Illinois Supreme Court Holds

Plaintiffs filed a class action in Illinois state court against Illinois Central Railroad seeking damages allegedly caused by the derailment of a train in Tamaroa, Illinois. Smith v. Illinois Central RR Co., ___ N.E.2d ___, 2006 WL 3491683 (Ill. November 30, 2006) [Slip Opn., at 1.]. The trial court granted plaintiffs’ request to certify the lawsuit as a class action; the appellate court rejected defense arguments and affirmed. Id. The Illinois Supreme Court, however, granted the defense leave to appeal and reversed the lower courts. Id., at 1-2. The High Court agreed with defense attorneys that common issues of law and fact do not predominate, thus rendering the lawsuit unsuitable for class action treatment. “Proof of proximate causation and damages will be highly individualized and will consume the bulk of the time at trial.” Id., at 14.

In February 2003, the derailment in Southern Illinois of a train carrying various chemicals led to the mandatory evacuation of at least 1000 people. Slip Opn., at 2. Shortly thereafter, the railroad instituted a claims process through which it compensated individuals and businesses for alleged losses caused by the derailment and evacuation; in return, the railroad received written releases of liability from all known claims. Id. In June 2003, plaintiffs initiated a class action seeking (as detailed in the Note below) damages for injuries resulting from the derailment and evacuation. Id., at 2-3. The circuit court rejected defense arguments against certification of the lawsuit as a class action, and granted plaintiffs’ motion. Id., at 3. Before the appellate court, defense attorneys advanced several arguments including, (a) mass tort actions are not proper for class action treatment “because such actions would trigger an unworkable array of fact-intensive, claimant-specific questions that would inevitably result in numerous minitrials that defy class treatment”; (b) commonality does not exist as common questions of fact and law do not predominate; (c) the class definition was overly broad and would require individualized analyses to determine membership. Id., at 4-5. The appellate court, over a dissent, rejected each argument and affirmed the judgment authorizing class certification.

The Illinois Supreme Court reversed. Preliminarily, the Court noted that “Decisions regarding class certification are within the discretion of the trial court and will not be disturbed on appeal unless the trial court abused its discretion or applied impermissible legal criteria.” Slip Opn., at 5-6 (citation omitted). It further observed that the state’s class action procedures are “patterned” after Rule 23 of the Federal Rules of Civil Procedure, id., at 6, and focused on the predominance requirements of Rule 23(b)(3), the purpose of which “is to ensure that the proposed class is sufficiently cohesive to warrant adjudication by representation, and it is a far more demanding requirement than the commonality requirement of Rule 23(a)(2).” id., at 6-7 (citations omitted). As the Court explained at page 7,

The test for predominance is not whether the common issues outnumber the individual ones, but whether common or individual issues will be the object of most of the efforts of the litigants and the court. . . . Determining whether issues common to the class predominate over individual issues requires the court to identify the substantive issues that will control the outcome, assess which issues will predominate, and then determine whether these issues are common to the class. . . . Such an inquiry requires the court to look beyond the pleadings to understand the claims, defenses, relevant facts, and applicable substantive law. . . . (Citations omitted.)

As defense attorneys noted, no prior Illinois appellate court had ever approved a mass tort lawsuit as a class action. Slip Opn., at 6. The Supreme Court noted that class treatment of mass tort actions is “disfavored,” id., at 7, and that the Advisory Committee Notes to Rule 23 “clearly indicates that certification in such cases should be the exception rather than the rule,” id., at 8. The Court then relied upon a Texas case and a Fifth Circuit case to underscore its holding that class action treatment in this case would be inappropriate. Id., at 8-11. The Supreme Court held that the lower courts erred in “equat[ing] liability for the derailment with liability for the alleged health consequences arising from exposure to the chemicals.” Id., at 11. The bottom line is that “Proof of proximate causation in this case will involve highly individualized variables, including whether and to what extent, and to which chemicals each member was exposed, location at the time of exposure, age, activity, medical history, and credibility.” Id. Additionally, the putative class action seeks various types of damages and the class members will be required to prove which particular type(s) of damages they incurred, meaning that “individual issues of proximate causation and damages will consume the great bulk of the time at trial.” Id. Accordingly, the Illinois Supreme Court concluded that the predominance requirement was not met and the lower courts erred in authorizing class action treatment against the railroad.

NOTE: The Supreme Court summarized plaintiffs’ class action complaint at pages 2 and 3 as follows:

The complaint alleged that the proposed class plaintiffs “were injured and damaged in one or more of the following ways: a. They breathed the harmful chemicals, causing present and potential future damage to their lungs and other bodily organs and tissues; b. Their skin was exposed to the harmful chemicals, resulting in present and potential future damage to their skin and other bodily organs and tissues; c. The harmful chemicals polluted and contaminated their food and water supplies; d. They have experienced physical and mental pain and suffering, fear, anguish, discomfort, and emotional distress, and they will continue to do so in the future, including the fear of future adverse medical consequences and dread diseases; -3- e. They were required to evacuate their homes and business, resulting in severe inconvenience and, in some cases, expense and/or loss of income; f. They have incurred medical and related expenses, and will incur such expenses in the future; g. They have lost wages, earning capacity, and other income, and will experience such losses in the future; f. [sic] They will be required to expend sums to clean the harmful chemical contamination from their real and personal property; g. [sic] To the extent that they are unable to clean the harmful chemical contamination from their real and personal property, the property will be diminished in value as a result of the contamination; h. [sic] The harmful chemicals have caused damage to the plaintiffs’ real and personal property; i. [sic] The plaintiffs will be required to undergo medical monitoring to detect future physical harm that may result from contact with the harmful chemicals; j. [sic] The plaintiffs will be required to sample their property to determine whether their property has been contaminated and the extent of that contamination.”

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