Harris Beach Attorneys Abbie Eliasberg Fuchs, Daniel R. Strecker and Alessandra G. Ash review and analyze key judicial holdings and legal developments in federal court and tort hot-spots across the country that have affected the industry in 2023 and may shape the years ahead. To assist clients and lawyers to prepare the best defense strategies in these suits, they share potential implications for future cases as they pertain to these topics:
- Sixth Circuit rejects overly ambitious PFAS class action
- Hair relaxer MDL proceeds
- Illinois law permits punitive damages in wrongful death cases, and increases availability of expedited trials
- California rejects COVID-19 “take-home” liability
- New York ends COVID-19 nursing home litigation coordination, rejects expansion of wrongful death damages
- Preliminary approval of $13.68 billion settlement in AFFF MDL
- United States Supreme Court decision on general personal jurisdiction (Mallory)
- Amendments to Federal Rule 702 governing expert witness testimony
Sixth Circuit Rejects Overly Ambitious PFAS Class Action
Hardwick v. 3M Co. (In re E.I. du Pont de Nemours), No. 22-3765, 87 F.4th 315 (6th Cir. Nov. 27, 2023)
The United States Court of Appeals for the Sixth Circuit vacated a district court’s order certifying a class of 11.8 million people whose blood is allegedly contaminated with polyfluoroalkyl substances (“PFAS”), including perfluorooctanoic acid (“PFOA”), and directed the lower court to dismiss the suit for lack of standing. The court also denied plaintiff’s petition for rehearing en banc. The putative class would have encompassed all persons residing in Ohio, and Plaintiff originally sought to certify a class representing all persons living in the United States.
In 2018, the plaintiff sued ten defendants alleging he was exposed to PFAS/PFOA while using firefighting foam as a firefighter. PFAS, which encompass thousands of different compounds, are stable and can allegedly remain in the environment for long periods, leading them to be pejoratively labeled “forever chemicals.” Plaintiff had not been diagnosed with any illness he attributed to PFAS/PFOA, but claimed he was at increased risk as a result of this exposure. A test allegedly determined five specific PFAS were present in his bloodstream. Plaintiff moved to certify a class containing every person “residing within the United States at the time of class certification for one year or more since 1988 with 0.05 parts per trillion (ppt) or more of PFOA and at least 0.05 ppt or more of any other PFAS in their blood serum.” It was not disputed that essentially all persons residing in the United States have this trace amount of PFAS in their blood and therefore qualified.
While the district court refused to go as far as plaintiff asked, it granted the motion in part and certified pursuant to Rule 23(b)(2) a class containing every person “subject to the laws of Ohio” who has “0.05 parts per trillion (ppt) of PFOA (C-8) and at least 0.05 ppt of any other PFAS in their blood serum.” Essentially every person residing in Ohio qualified.
While the breadth of the certified class is particularly notable, the Sixth Circuit focused on the threshold though related question of standing, in particular, the requirement that plaintiff have suffered an injury “traceable” to the defendants before the court. Plaintiff was required to plead this element to the degree required by Rule 8(a)(2), “enough to raise a right to relief above the speculative level.” Here, plaintiff therefore had to allege facts plausibly supporting an inference that each of the 10 defendants likely caused at least one of the specific PFAS compounds to be in his blood.
The court held plaintiff failed to do so. Plaintiff repeatedly referred to defendants collectively, instead of pleading specific defendants’ alleged conduct. In other words, plaintiff failed to trace his injury to each defendant. Furthermore, plaintiff’s allegations were too conclusory to satisfy traceability. While plaintiff concededly had five specific compounds in his blood, he alleged only that these defendants manufactured and distributed “PFAS,” a term encompassing thousands of compounds. Therefore, plaintiff failed to allege facts supporting a plausible inference that the 10 defendants before the court caused these PFAS compounds to be in his blood. The court described this as a textbook example of the “the-defendant-unlawfully-harmed-me” approach that the United States Supreme Court has rejected.
Sixth Circuit rejects overly ambitious PFAS class action – implications for future cases:
The ubiquity of PFAS has resulted in widespread litigation, some overly ambitious in scope and lacking firm grounding. For example, in Hardwick, it was not disputed that every American had detectable part-per-trillion levels of PFAS in their blood. However, federal courts may require, as a matter of standing and satisfaction of Rule 8, specific and non-speculative pleading, even in the class context. The Sixth Circuit’s decision is ammunition for companies defending these lawsuits, and other lawsuits founded on overly broad, vague and speculative allegations of product identification and causation. Defendants seeking to prevent meritless lawsuits from escalating into discovery fishing expeditions should use the Sixth Circuit’s decision as leverage.
Hair Relaxer MDL Proceeds
In re Hair Relaxer Mktg. Sales Pracs. & Prods. Liab. Litig., No. 23-cv-00818 (N.D. Ill. Nov. 13, 2023)
In February 2023, the United States Judicial Panel consolidated individual and putative class action lawsuits pending in 19 districts that allege hair relaxer products cause cancer, endometriosis and other injuries to the reproductive system. Over 8,200 cases were consolidated for pre-trial proceedings into the MDL in the United States District Court for the Northern District of Illinois.
In their master long-form complaint (“MLC”), plaintiffs allege defendants’ various hair relaxer products contain alleged endocrine-disrupting chemicals (“EDCs”), including phthalates and formaldehyde. These EDCs allegedly cause injuries to the reproductive system, including cancer. In the MLC, plaintiffs cite an October 2022 study by the National Institutes of Health (“NIH”) that found a statistically significant increase in uterine cancer in women who reported use of “straightening products,” with some evidence of a dose-dependent relationship. Plaintiffs also cite a 2021 study funded by the NIH and the National Institute on Minority Health Sciences, which found a statistically significant increase in ovarian cancer in women who reported “frequent” use of “straighteners/relaxers or pressing products.”
The MLC asserts 15 counts, including negligence/gross negligence, strict liability (design defect/failure to warn), breach of warranty, fraudulent misrepresentation/concealment, statutory consumer protection and unfair or deceptive trade practices, and derivative claims.
Defendants filed a joint pre-answer motion to dismiss pursuant to Rule 12(b)(2) (personal jurisdiction) and Rule 12(b)(6) (failure to state a claim). The court granted in part and denied in part defendants’ joint motion. As to the branch of defendants’ motion seeking dismissal of plaintiffs’ negligence, design defect and failure to warn claims pursuant to Rule 12(b)(6), the court held the MLC contains sufficient factual information. The court found unavailing defendants’ argument that plaintiffs failed to identify specific products, defects and timeframes. The court indicated that such issues may be more appropriately litigated in response to the contemplated short-form complaints. The court disregarded defendants’ critiques of the 2021 and 2022 NIH studies as premature. The court similarly upheld the warranty claim pleading.
On the other hand, the court applied a stricter standard and dismissed the majority of plaintiffs’ fraud claims on the grounds that the allegations in the MLC failed to show that the concealment was more than “mere passive omission of facts” as opposed to an intentional omission.
The court also granted 12(b)(2) personal jurisdiction dismissal to an internationally incorporated company with only one United States office in New Jersey, where it conducts limited business unrelated to hair relaxers. The court dismissed plaintiffs’ assertion that personal jurisdiction issues cannot be decided on an MDL-wide basis as unsupported by authority. While plaintiffs appealed to the United States Supreme Court’s recent decision in Mallory v. Norfolk S. Ry. Co., upholding Pennsylvania’s requirement that out-of-state corporations consent to general personal jurisdiction (see discussion below), they could point to no similar consent-to-jurisdiction in Illinois. Therefore, the court granted the motion to dismiss.
Hair relaxer MDL proceeds – implications for future cases:
The Northern District of Illinois’ decision permitting the hair relaxer MDL to proceed demonstrates how federal notice pleading may allow largely boilerplate allegations to survive, especially in the MDL setting where subsequent short-form complaints, “fact sheets” or similar methods for narrowing allegations are anticipated. Courts are also unlikely to consider challenges to the sufficiency of plaintiffs’ scientific support at the pleading stage. On the other hand, federal MDL courts may still enforce stricter fraud-pleading requirements and consider dismissal on personal jurisdiction grounds. Therefore, MDL defendants may still leverage Rule 12 motions to limit their exposure or even dispose of cases at this early stage.
Illinois Permits Punitive Damages in Wrongful Death Cases, and Increases Availability of Expedited Trials
Illinois Public Act, 103-0514 and 103-0388
Illinois House Bill 219, signed into law as Public Act 103-0514 on August 11, 2023, allows for the recovery of punitive damages in wrongful death and survival actions filed on or after the date of its passing. The law puts no limit on the amount of punitive damages. Previously, Illinois was one of 16 states that did not allow for the recovery of punitive damages in such cases.
The law clarifies that punitive damages are not available in an action for medical or legal malpractice, or in an action against the state or an employee of the state in their official capacity.
Illinois Senate Bill 1748, signed into law as Public Act 103-0388 on July 28, 2023, and effective immediately, mandates preferential trial setting in pending and future actions where the plaintiff, or, in the case of a wrongful death action, a surviving spouse or next of kin, has reached age 67 and moves for such setting. The trial shall commence within one year of the hearing on the motion. The law formerly permitted a party to move for a preferential trial setting at age 70. The former law did not specify that trial be set within one year.
The new rule also allows plaintiffs of any age to obtain preferential trial setting within one year of the hearing on a motion for such setting if the plaintiff, surviving spouse or next of kin show “substantial physical or financial hardship” or “good cause that the interests of justice will be served.” Whereas, under the former rule for younger plaintiffs, the court had discretion to grant a preference (“the court may”), the new rule mandates it (“the court shall”). The new law does not clarify what constitutes physical or financial hardship sufficient to warrant granting preference.
Punitive damages and expedited trials in Illinois – implications for future cases:
Recently passed Illinois House Bill 219 allows for the recovery of punitive damages in new wrongful death and survival cases. Illinois Senate Bill 1748 mandates preferential trial setting in pending and future actions where the plaintiff, surviving spouse or next of kin has reached age 67. This new legislation impacts entities defending new and pending mass-tort litigation in Illinois. The plaintiff bar is more incentivized to pursue wrongful death cases and can leverage more aggressive trial setting than they could formerly. Defendants should therefore be aware of the new rules and account for them when setting strategy and evaluating cases.
California Rejects COVID-19 “Take Home”
Kuciemba v. Victory Woodworks, Inc., 14 Cal. 5th 993 (2023)
The California Supreme Court answered in the negative the Ninth Circuit Court of Appeals’ certified question regarding “take-home” COVID-19 exposure: Under California law, does an employer owe a duty to the households of its employees to exercise ordinary care to prevent the spread of COVID-19?
The question arose in Kuciemba v. Victory Woodworks, Inc., pending in the United States District Court for the Northern District of California. The plaintiffs, an employee and his spouse, claimed the non-employee plaintiff contracted COVID-19 from the employee plaintiff, who allegedly contracted the virus at work and brought it home. Plaintiffs alleged it was foreseeable that an infected employee would bring the virus home, endangering members of the employee’s household.
The District Court granted the defendant employer’s motion to dismiss, and plaintiffs appealed to the Ninth Circuit. Evaluating the facts and District Court decision, the Ninth Circuit recognized a possible analogy to the duty to protect employees’ families from asbestos fibers brought home on clothing. To address what was an open issue of California law, whether such “take-home” liability could exist in the COVID-19 context, the Ninth Circuit certified this question to the California Supreme Court: Under California law, does an employer owe a duty to the households of its employees to exercise ordinary care to prevent the spread of COVID-19?
Before the Ninth Circuit certified this question, in Ek v. See’s Candies, Inc., a California state appellate court determined household/spouse’s claims like those in Kuciemba are not barred by the workers’ compensation law since they are distinguishable from classic derivative causes of action like loss of consortium. However, the Ek court emphasized it expressed no opinion if an employer has a broader duty of care to prevent the spread of COVID-19 to members of its employees’ households. It observed that the duty “would appear worthy of exploration.”
In Kuciemba, the California Supreme Court determined no such duty exists because compelling policy considerations weigh against it. Businesses, courts and the community would face a “significant and unpredictable burden” if employers had a duty to protect non-employees from COVID-19. Establishing this duty would constitute a “dramatic expansion of liability” and thereby “throw open the courthouse doors to a deluge of lawsuits which would be both hard to prove and difficult to cull early in the proceedings.” “Take-home” COVID-19 litigation would burden the courts with complex and time-consuming litigation, likely requiring extensive discovery, witness testimony and expert opinion. The potential damages and defense costs would impose “unprecedented” financial burden on employers.
In the court’s view, these risks could encourage employers to adopt COVID-19 precautions that slow or stop essential services. Ultimately, the court reasoned that recognizing a legally enforceable duty in this context had the “potential to destroy businesses and curtail, if not outright end, the provision of essential public services.” Therefore, it declined to do so.
The court implied, however, that but for these overriding policy considerations, imposing the duty might be appropriate. For example, the court said that spread of COVID-19 from employees to their households is reasonably foreseeable, and resulting injury reasonably certain. The court said employers could have moral blame for failing to adhere to safety protocols, since they have the ability to control the workplace and knowledge of outbreaks, and may save costs by not following safety protocols. The court indicated that future developments may change the calculus and lead to a different outcome. The court also ruled, consistently with the decision reached by the lower court in Ek, that the workers’ compensation bar does not prohibit such claims since the spouse/household member’s injury is legally independent of the employee’s, rather than derivative like loss of consortium.
California rejects COVID-19 “take-home” liability – implications for future cases:
The California Supreme Court’s decision is a strong ruling for employers in California. Though the decision limited employers’ use of workers’ compensation as a defense to “take-home” COVID-19 claims, employers can defend such claims on lack of duty. That the high court of California paid such careful attention to practical considerations will likely influence courts in other states to do the same if faced with similar lawsuits. Where courts do not find the same compelling policy considerations, employers may face “take-home” COVID-19 claims and the burdens the Kuciemba court recognized. However, employers facing such claims may deploy defenses other than a lack of duty, such as speculative causation, lack of notice and adherence to safety protocols.
New York: COVID-19 in Nursing Homes, Rejecting Expansion of Wrongful Death
COVID-19 Nursing Home Litigation
In October 2022, by request of firms representing plaintiffs suing New York nursing homes for their or their family’s alleged injuries and/or death after contracting COVID-19 while residents, the New York Litigation Coordinating Panel (the “Panel”) ruled that such cases will be coordinated in a proceeding akin to an MDL. The Panel’s decision was far-reaching, and coordination arguably applied not just to claims overtly alleging injury/death from COVID-19, but also to non-COVID-19 claims arising in nursing homes contemporaneously with the pandemic. The decision was fiercely opposed by many nursing home defendants, and followed interim preliminary findings and lengthy briefing, including a motion to reargue. Nursing home defendants asserted that differences in the cases rather than commonalities predominated.
The court reached a compromise decision regarding venue. One plaintiff firm sought coordination in Kings County, likely for its plaintiff-friendly reputation. The defense sought coordination in a single centrally located county. The Panel declined to adopt any of the proposed solutions, instead holding that cases will be coordinated in a location central to the appellate department in which they were filed: (1) cases filed in Fourth Department in Erie County, (2) cases filed in First Department in New York County, (3) cases filed in Second Department in Nassau County, and (4) cases filed in Third Department in Albany County.
After the decision, courts began to transfer cases to the respective local coordination parts. In the interim, two nursing home Defendants brought Article 78 petitions in the counties Bronx (impacting First Department coordination) and Suffolk (impacting Second Department coordination) seeking to overturn the Panel’s decision. In New York, Article 78 is a mechanism to challenge decisions by administrative agencies.
Before the Article 78 proceedings could play out, in October 2023, the Panel reversed itself. The Panel ended coordination in the First and Second Departments. Additionally, the Panel ended transfer of cases to coordination parts in the Third and Fourth Departments. Parties whose cases had already been transferred to the Third and Fourth Department coordination parts could stipulate to remain there (whereas in the First and Second Departments coordination ended completely). The Panel did not provide background or meaningfully explain itself. The rules allow the Panel to sua sponte end coordination, and language in the order alluded to this power. It is possible the Panel’s decision was in response, and effectively a capitulation, to the Article 78 proceedings.
Grieving Families Act: New York Rejects Expansion of Wrongful Death
In January 2023, New York’s governor vetoed the “Grieving Families Act,” which would have dramatically expanded the scope and recoverable damages in wrongful death cases in the state. In June 2023, the legislature voted to send revised legislation back to the governor. In December 2023, the governor vetoed the revised legislation.
The Grieving Families Act sought to overturn century-old law that bars plaintiffs in wrongful death suits from recovering damages to compensate them for grief, pain and suffering allegedly caused by the death of a loved one. The Act, by vesting un-related persons and/or distant relatives with a potential right of recovery, would also have dramatically inflated the universe of wrongful death claimants, in addition to increasing the limitations period from two to three years.
New York’s Estates, Powers and Trusts Law (“EPTL”), Section 5, Part 4, governs wrongful death lawsuits. Currently, wrongful death damages are limited to an estate distributee’s “pecuniary injuries” resulting from the death, and punitive damages if otherwise available. As stated in the Pattern Jury Instructions (2:320), distributees may recover the value of services (e.g., household chores) and direct financial support decedent would have provided. “Pecuniary injuries” exclude mental anguish and pain from loss of the decedent’s companionship.
As defined in the EPTL, a “distributee” is “a person entitled to take or share in the property of a decedent under the statutes governing descent and distribution”; only a “distributee” may recover wrongful death damages. As a result, the universe of potential wrongful death claimants is relatively limited. For example, in DeLuca v. Gallo, an intestate decedent without spouse or children was survived by a mother and sister. See 287 A.D.2d 222 (2d Dep’t 2001). Only the mother was eligible to recover; the sister was eligible only if the mother predeceased or renounced her share.
The Act would have permitted wrongful death claimants to recover not only pecuniary loss, but also dramatically larger damages for grief or anguish caused by the death, and the loss of decedent’s love, society, companionship and consortium. In effect, each wrongful death claimant’s unique emotional pain from losing someone they loved would be a compensable injury with a value fixed by the jury.
Furthermore, under the proposed legislation, any of the decedent’s “surviving close family members,” a group determined by the factfinder “based upon the specific circumstances relating to the person’s relationship with the decedent,” could have recovered damages. The proposed Act stated “surviving close family members” “shall be limited to decedent’s spouse or domestic partner, issue, foster-children, step-children, and step-grandchildren, parents, grandparents, step-parents, step-grandparents, siblings or any person standing in loco parentis to the decedent.”
After vetoing the prior proposed Act in January 2023, Governor Hochul published an op-ed criticizing its scope and proposing to narrow the definition of “surviving close family members” (the prior Act’s definition was even broader than the revised version’s). The governor’s suggestion gave voice to concerns the Act would lead to crowding of captions (e.g., by unrelated persons claiming decedent was “like” family) and litigation over the definition. The revised Act, which defined the universe of potential claimants more narrowly (though still dramatically wider than current law permits), represented an effort to avoid another veto. In addition, while the revised Act still allowed for recovery for “grief and anguish,” it removed the prior Act’s allowance for recovery of additional damages for “any disorder caused by such grief or anguish.”
COVID-19 nursing home litigation in New York and proposal to expand wrongful death damages – implications for future cases:
Nursing home defendants in New York, after a lengthy battle, appear to have succeeded in defeating plaintiff firms’ efforts to establish proceedings to coordinate pre-trial litigation in cases alleging injury and/or death as a result of COVID-19 or in connection with the pandemic. The decision is a victory, since pre-trial coordination would have stalled the prompt resolution of many of these claims — for example, various immunities and other procedural defects mean that these cases are sometimes ripe for pre-answer dismissal. Likewise, plaintiffs could have leveraged the precedent created by pre-trial coordination and blurring of major distinctions from case to case to argue for consolidation at trial and/or other advantages.
Defendants and insurers in New York have again avoided a vast expansion of the nature of, and damages available in, wrongful death claims. The again-vetoed Grieving Families Act would have allowed wrongful death plaintiffs to recover for their own grief and suffering in connection with their loss. Additionally, the Act would have vastly increased the universe of potential claimants to anyone deemed by the factfinder to be a “close family member,” a relationship the Act only vaguely defined.
Preliminary Approval of $13.68 Billion Settlement in AFFF MDL
In re Aqueous Film-Forming Foams Prods. Liab. Litig., MDL 2873, D.S.C., No. 18-mn-02873
In 2016, courts nationwide saw an influx of lawsuits, many brought by municipal water suppliers, alleging aqueous film-forming foams (“AFFFs”) containing perfluorooctanoic acid (“PFOA”) and/or perfluorooctanesulfonic acid (“PFOS”), two types of per- or polyfluoroalkyl substances (“PFAS”), contaminated groundwater near various military bases, airports and other industrial sites where AFFFs were used to extinguish liquid fuel fires. The plaintiffs alleged that, as a result, they sustained personal injury, property damage, or other economic losses, or required medical monitoring.
In December 2018, the Judicial Panel on Multidistrict Litigation created an AFFF multidistrict litigation (“MDL”) and assigned it to the District of South Carolina, Judge Richard Gergel. As of November 2023, the MDL included 6,627 pending claims brought against approximately 36 alleged AFFF manufacturers.
After extensive litigation, in August 2023, the court preliminarily approved settlements totaling approximately $13.68 billion between two defendants (one to pay approximately $1.18 billion, the other approximately $12.5 billion) and public water authorities and providers. The proposed $1.18 billion settlement excludes, among others, claims for personal injury or by state attorneys general for alleged damage to natural resources. The proposed $12.5 billion settlement pertains to: “Every Active Public Water System in the United States of America that (a) has one or more Impacted Water Sources as of the Settlement Date (June 22, 2023); or (b) does not have one or more Impacted Water Sources as of the Settlement Date, and (i) is required to test for certain PFAS” under the “Fifth Unregulated Contaminant Monitoring Rule,” which the U.S. Environmental Protection Agency is required to promulgate under the Safe Drinking Water Act, 42 U.S.C. §300(f) et seq.
On November 21, 2023, class counsel filed a brief in support of a motion for final approval of the $1.18 billion settlement. Several water agencies and cities opposed, arguing the release was unreasonable because it encompassed unalleged wastewater and stormwater claims, and too broad because it would resolve claims for thousands of PFAS beyond the 29 specific PFAS compounds to be tested under the Fifth Unregulated Contaminant Monitoring Rule (“UCMR 5”). To date, opposition to the $12.5 billion settlement has not yet been filed.
On December 14, 2023, the court conducted a fairness hearing as to the first settlement for $1.18 billion. Final approval of the settlement is pending. A fairness hearing as to the second settlement for up to $12.5 billion is set for February 2, 2024.
Preliminary approval $13.68 billion AFFF settlement – implications for future cases:
Final approval of these settlements is pending. The settlements exclude many other claims still in the MDL, including claims for personal injury due to alleged PFAS exposure and claims by state attorneys general that PFAS contamination has damaged natural resources. The settlements will likely influence the widespread PFAS personal injury, consumer class action and other regulatory/public litigation across the country.
United States Supreme Court Decision on General Personal Jurisdiction (Mallory)
Mallory v. Norfolk Southern Railway Co., 142 S. Ct. 2646 (2023)
In June 2023, the United States Supreme Court reversed the Pennsylvania Supreme Court’s decision in Mallory v. Norfolk Southern Railway Co. In a 5-4 opinion authored by Justice Neil Gorsuch, the United States Supreme Court upheld the constitutionality of Pennsylvania’s statutory scheme, whereby registration to do business is treated as consent to general personal jurisdiction. Under the scheme, essentially any company registered to do business in Pennsylvania is amenable to suit there, regardless of the connection of the dispute to Pennsylvania. However, further litigation is likely, including resolution of challenges based on the Commerce Clause and federalism principles that are already being brought in Pennsylvania trial courts.
Plaintiff, a Virginia resident, sued his former employer in Pennsylvania, claiming he sustained workplace injuries from on-the-job exposures that occurred in Ohio and Virginia. Defendant employer was incorporated and maintained its principal place of business in Virginia. The sole basis for exercising personal jurisdiction over Defendant was its registration to do business in Pennsylvania. Pennsylvania’s registration statute treats registration to do business as a consent to general personal jurisdiction.
In December 2021, the Pennsylvania Supreme Court ruled this statute unconstitutional on the basis that it violates the Due Process Clause of the Constitution as interpreted by United States Supreme Court precedent in Daimler AG v. Bauman, 571 U.S. 117 (2014). Daimler held a corporation is only subject to general personal jurisdiction where it is “at home” (i.e., the state of incorporation and the state of the principal place of business), or where there are “exceptional” facts to render the corporation “at home” in some other forum. The court also held that the purported “consent” to jurisdiction was in fact compulsory, imposed as a consequence of registration.
The United States Supreme Court granted certiorari in February 2022, and heard argument in November 2022.
The majority decision authored by Justice Gorsuch upheld Pennsylvania’s registration statute and overturned the Pennsylvania Supreme Court’s holding and interpretation of the limits of the Due Process Clause of the Fourteenth Amendment. The majority relied on the Court’s 1917 decision in Pennsylvania Fire Ins. Co. of Philadelphia v. Gold Issue Mining & Milling Co., 243 U.S. 93 (1917), where the Court upheld a Missouri statute according to which defendant agreed to accept service of process as a condition of doing business in Missouri. The Court reasoned the Pennsylvania consent-by-registration statute is analogous and therefore also constitutional.
The majority rejected defendant’s position that International Shoe v. Washington, 326 U.S. 310 (1945), which introduced the now-dominant “contacts” analysis for personal jurisdiction, overruled Pennsylvania Fire Ins. Co. (1917). The majority held that International Shoe did not overrule Pennsylvania Fire Ins. Co., but supplemented it.
Justice Alito’s Concurrence
In his partial concurrence, Justice Alito stated he is not convinced that Constitutional federalism principles permit a state to impose a submission-to-jurisdiction requirement on entities wishing to do business in the state, particularly where there is no real connection between the dispute and the state. Justice Alito argued the Constitution restricts a state’s power to regulate conduct that has little, if any, connection to the state’s interests, citing the Court’s decision in Pennoyer that long ago recognized a state’s exercise of jurisdiction over a non-resident could encroach upon the independence of other states. That being said, the issue had not been addressed below so he declined to vote to overturn the law on this basis.
Justice Alito also analyzed Pennsylvania’s consent-by-registration statute in the context of the Dormant Commerce Clause. Justice Alito suggested Pennsylvania’s assertion of jurisdiction over an out-of-state defendant, in a suit brought by an out-of-state plaintiff, on claims wholly unrelated to Pennsylvania, could violate the Commerce Clause. Justice Alito observed the statutory regime might discriminate against out-of-state companies and significantly burden interstate commerce by requiring companies to defend against any lawsuit brought in Pennsylvania (in-state defendants would not be burdened, since they are not equally amenable to suit elsewhere). Pennsylvania would not have a legitimate local interest in hearing such a suit to justify this discrimination and burden. As with the federalism issue discussed above, Justice Alito observed that the Commerce Clause issue likewise had not been addressed below.
The dissenting opinion, written by Justice Amy Coney Barrett and joined by Chief Justice John Roberts and Justices Elena Kagan and Brett Kavanaugh, argued the majority’s decision “flies in the face of [the Court’s] precedent.” Justice Barrett noted the Pennsylvania registration by consent statutory regime allows states to “manufacture consent” to personal jurisdiction, undermining the Court’s recent personal jurisdiction jurisprudence largely limiting general jurisdiction to (1) the place in which it is incorporated or (2) the place where it has its principal place of business. Further, Justice Barrett opined that under Pennsylvania’s statutory regime, a business’s “consent” to jurisdiction was in effect compulsory.
Unlike the majority, the dissent argued the Court’s transformative decision in International Shoe (1945) overruled, insofar as it was inconsistent and incompatible with, Pennsylvania Fire Ins. Co. (1917).
General personal jurisdiction (Mallory) – potential implications for future cases:
While the Supreme Court upheld Pennsylvania’s consent-by-registration scheme, it left the door open to challenges to Pennsylvania’s and other similar schemes either existing or proposed. Four justices argued the scheme violated Supreme Court precedent, and stated that the precedent the majority relied on, Pennsylvania Fire Ins. Co. (1917), is no longer good law. A fifth justice raised the possibility that federalism or Commerce Clause challenges to the scheme could prevail. It is possible that, if properly briefed, some or all of the justices in the majority would hold that Pennsylvania Fire Ins. Co. is overruled or that the consent-by-registration statute violates other constitutional principles. Therefore, while litigants will still be able to sue defendants in Pennsylvania on claims having little or no connection to Pennsylvania, and other states may attempt to institute schemes that mirror Pennsylvania’s, future litigation may yet result in the law being overturned.
Indeed, since the Supreme Court’s decision, the Pennsylvania Supreme Court remanded Mallory to the originating trial court in Philadelphia. Defendant in Mallory is now seeking a decision from the trial court on the federalism and Commerce Clause issues discussed by Justice Alito. Other out-of-state defendants in Pennsylvania trial courts (many of whom had been dismissed following the Pennsylvania Supreme Court’s decision, then were reinstated after the United States Supreme Court’s decision) have similarly brought challenges on federalism and Commerce Clause grounds to suits by out-of-state plaintiffs on out-of-state facts. Once decided in the trial courts, appeals that may eventually reach the United State Supreme Court will ensue.
Amendments to Federal Rule 702 Governing Expert Witness Testimony
On December 1, 2023, proposed changes to Rule 702 of the Federal Rules of Evidence, which governs testimony by expert witnesses in federal court, became effective. The amendments (1) clarify that the proponent’s burden for admissibility is preponderance of the evidence, and (2) emphasize the court’s duty, through trial, to ensure the expert’s opinions/conclusions, not just methods, are reliable.
The amended rule now reads as follows:
“A witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion or otherwise if the proponent demonstrates to the court that it is more likely than not that:
- the expert’s scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue;
- the testimony is based on sufficient facts or data;
- the testimony is the product of reliable principles and methods; and
expert has reliably appliedexpert’s opinion reflects a reliable application of the principles and methods to the facts of the case.”
Preponderance of the Evidence Necessary
In Daubert, the United States Supreme Court held that questions of admissibility, including expert testimony, should be established by a preponderance of the evidence. See Daubert, 509 U.S. at 592 n.10 (citing Rule 104(a) and Bourjaily v. United States, 483 U.S. 171, 175-76 (1987)). However, as explained by the Committee Notes, “emphasizing the preponderance standard in Rule 702 specifically was made necessary by the courts that have failed to apply correctly the reliability requirements of that rule.” In fact, between 2015 and 2021, nearly 300 federal decisions claimed that questions related to the sources and bases of an expert’s testimony go to credibility/weight, not admissibility. See Lawyers for Civil Justice, Comment to the Advisory Committee on Evidence Rules, 2-3 (Sept. 1, 2021).
Focus on Opinion, not Just Application of Principles and Methods
The amendment to Rule 702(d) also focuses the attention of a court exercising its gatekeeping role on the expert’s opinion, not just the expert’s application of principles and methods. This is also not new law. See General Electric Co., v. Joiner, 522 U.S. 136, 146 (1997) (“[C]onclusions and methodology are not entirely distinct from one another . . . nothing in either Daubert or the Federal Rules of Evidence requires a district court to admit opinion evidence that is connected to existing data only by the ipse dixit of the expert.”) Nevertheless, this change will curtail experts who are overstating their opinions or unreliably arriving at conclusions unjustified by their application of methods to the facts. Additionally, the change from “has reliably applied” (past tense) to “opinion reflects a reliable application” (ongoing) emphasizes that the gatekeeping function continues even after an initial finding of admissibility. See id. at 1039.
Rule 702 amendments – potential implications for future cases:
Since the amendments to Rule 702 only codify existing law, they arguably should not change litigation practice in federal courts. However, defendants accustomed to courts mistakenly treating issues of admissibility as matters of credibility may find relief now that the rule makes more explicit that admissibility must be established by the proponent by a preponderance of the evidence, and that the court should focus on the reliability of opinions, not just application of method and principles. Defendants challenging expert opinion should emphasize (1) there is no presumption of admissibility under the expert rules, (2) in fact, the proponent must establish admissibility by a preponderance of the evidence, (3) the sufficiency of an expert’s factual basis and the reliability of the expert’s methods are admissibility, not credibility, issues, and (4) the expert’s conclusion should be evaluated to determine if they reflect a reliable application of the expert’s method.
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