State ex rel. Surnaik Holdings of WV, LLC v. The Honorable Thomas A. Bedell ( 2020 )

No. 19-1006 – State ex rel. Surnaik Holdings of West Virginia, LLC v. Bedell
FILED
November 20, 2020
Workman, Justice, dissenting: released at 3:00 p.m.
EDYTHE NASH GAISER, CLERK
SUPREME COURT OF APPEALS
OF WEST VIRGINIA
For seventeen years, West Virginia’s trial courts have been guided by this
Court’s seminal decision in In re West Virginia Rezulin Litigation, 214 W. Va. 52, 585
S.E.2d 52 (2003), and its progeny, in deciding class certification issues arising under Rule
23 of the West Virginia Rules of Civil Procedure. And for seventeen years, the Rezulin
analysis has guided our courts to fair, just, and equitable results in determining which cases
are suitable for certification and which are not. Today, however, the Court announces that
Rezulin “utilized a vague, all things considered test that does not give the circuit courts any
real guidance,” and determines, in a lengthy advisory opinion, 1 that henceforth we will be
guided by “the federal courts’ interpretation of its Rule 23(b)(3).” Then, in its rush to fix
something that isn’t broken, combined with its zeal to subordinate established West
Virginia law to federal law, the majority has erected a bureaucratic mountain of fact-
finding and legal analysis which a circuit court must climb prior to certifying a class, all
for the benefit of corporate defendants, while completely ignoring the other side of the
equation, that “[t]he class action device allows plaintiffs with individually small claims the
opportunity for relief that would otherwise not be economically feasible, allowing them to
collectively share the otherwise exorbitant costs of bringing and maintaining the lawsuit.”
1
See text infra.
1
Salem Int’l Univ., LLC v. Bates, 238 W. Va. 229, 237, 793 S.E.2d 879, 887 (2016)
(Workman, J., concurring).
I.
I begin with the actual holding of this case: that “the circuit court has exceeded
its legitimate powers by certifying the class while failing to undertake a thorough analysis
in its determination of whether the class certification requirements of Rule 23 . . . were
satisfied.” I have no quarrel with the proposition that “[b]efore certifying a class under
Rule 23 of the West Virginia Rules of Civil Procedure [1998], a circuit court must
determine that the party seeking class certification has satisfied all four prerequisites
contained in Rule 23(a) – numerosity, commonality, typicality, and adequacy of
representation – and has satisfied one of the three subdivisions of Rule 23(b).” Syl. Pt. 8,
in part, Rezulin, 214 W. Va. at 56, 585 S.E.2d at 56. Additionally, I agree that in making
this determination, the court is required to undertake a “thorough analysis,” and that its
failure to do so “amounts to clear error.” State ex rel. Chemtall Inc. v. Madden, 216 W.
Va. 443, 454, 607 S.E.2d 772, 783 (2004). I part company with the majority, however, in
its conclusion that the experienced circuit court judge handling this litigation did not
undertake a thorough analysis of the evidence and the governing law in crafting his
decision. The court’s certification order – 14 pages of findings of fact, conclusions of law,
and a trial plan, plus 3 pages of appended material delineating the geographical area of the
class – demonstrates that the court had a comprehensive understanding of the evidence and
how it fit within the framework of a Rule 23 analysis. The only fault I can find in the order
2
– and it is a fault, not a fatal flaw -- is that the court did not organize all of its findings and
conclusions under specific headings: numerosity, commonality, typicality, adequate
representation, predominance, and superiority of the class action mechanism. Rather, it
made succinct, but not merely conclusory, findings under those headings, and then
discussed the application of law to the facts at length in the portion of its order styled
“Conclusions of Law.” 2
Based upon the record before this Court, and on the factual findings and
legal conclusions set forth in the circuit court’s order, it is difficult to envision a case better
suited for resolution pursuant to the mechanism set forth in Rule 23 of the West Virginia
Rules of Civil Procedure. Respondent’s complaint alleges that in the early morning hours
of October 21, 2017, a warehouse in the 3800 block of Camden Avenue in Parkersburg,
West Virginia, caught fire, and thereafter burned until October 29, 2017. The complaint
further alleges that during this 8-day period of time, smoke and particulate matter from the
fire and smoldering ruins constituted a nuisance and health hazard to residents and workers
(in both private businesses and government offices) within an 8.5 mile radius of the
warehouse. In the complaint and also in his deposition testimony, Respondent also alleges
2
The majority does find the organization of the circuit court’s analysis to be a fatal
flaw, concluding that “[a]lthough the circuit court’s order does contain a bit more analysis
in the ‘Conclusions of Law’ section by intertwining the predominance and superiority
requirements together, this discussion does not cure the defects of its initial analysis.” This
bit of analysis to which the majority sarcastically refers is 6 pages of findings and
conclusions, supported by citations of numerous legal authorities.
3
that he and all other residents and workers suffered property damage in the form of smoke
and particulates from the fire invading homes “at levels that interfered with the comfort,
use, and enjoyment of their property,” together with inchoate damages such as annoyance
and inconvenience; and further that he and at least some other residents and workers
suffered personal injuries as well. In summary, in this case we have a large number of
plaintiffs (estimated to be 57,000), experiencing harm in different degrees, 3 arising from a
single event which took place in a defined location over a short period of time.
In support of his motion for class certification, Respondent submitted expert
testimony from three individuals whose credentials are not disputed. The first expert
delineated the geographical boundary of the area allegedly impacted by the emission of
smoke and particulate matter; specifically, the class area was defined as the area within
3
In this regard, the circuit court wrote that that “[b]ecause any questions relate
solely to the issues of damages, at the very least, the proposed class action should be
certified on the issues of liability and causation under Rule 23(c)(4).” (Emphasis added.)
Thus, all of Petitioner’s complaints that 90% of the class suffering no damages at all – a
highly misleading statement which reflects Petitioner’s apparent belief that the only
damages recoverable in this action would be for bodily injury and/or noticeable alterations
to property – are, if not a complete red herring, certainly not a death blow to the
maintenance of a class action. “‘That class members may eventually have to make an
individual showing of damages does not preclude class certification.’” Rezulin, 214 W.
Va. at 72, 585 S.E.2d at 72 (citing Smith v. Behr Process Corp., 54 P.3d 665, 675 (Wash.
2002)). Further, “[a] circuit court’s consideration of a motion for class certification should
not become a mini-trial on the merits of the parties’ contentions[,]” Rezulin, 214 W. Va.
at 63, 585 S.E.2d at 63, which is exactly what Petitioner seeks and what the majority has
gifted it.
4
which individual would have had exposure within a 24-hour average of at least 3
micrograms per cubic meter of fine particles less than 2.5 microns in size. The second
expert did disbursement modeling to draw the isopleths 4 within which individuals would
have had exposure at this 3 micrograms per cubic meter level. Finally, the third expert, a
physician, gave evidence tending to show that this level of exposure to particulate matter
increased the risk of various health problems ranging in severity from discomfort to death.
Ultimately, the circuit court certified a class consisting of all residents and
businesses within an 8.5 mile radius of Petitioner’s warehouse. The court concluded that
there were
many common questions of law and fact, including to name
only a few of the most important: questions concerning
industry standards for fire protection systems; questions
relating to what was stored in the warehouse; how the decision
not to maintain the fire protection system [was] made; who
made it; which of those chemicals burned; what the
decomposition products of the waste chemicals was; the area
of dispersion of smoke and particulate matter; and the potential
for harm from contact, inhalation, or ingestion of the smoke
and particulate matter.
The court also concluded that “[b]ecause any individual questions relate solely to the issues
of damages, at the very least, the proposed class action should be certified on the issues of
liability and causation under Rule 23(c)(4).”
4
An isopleth is defined as a line on a map connecting points having equal
incidence of a specified meteorological feature.
5
Reviewing the circuit court’s common questions of law and fact, it is hard to
fathom the majority’s dismissive conclusion that the court’s order is “woefully inadequate”
to demonstrate that those common questions predominate. In a recent case, we affirmed
the guidance set forth in Rezulin that “[i]n deciding predominance, the ‘central question
[is] whether “adjudication of the common issues in the particular suit has important and
desirable advantages of judicial economy compared to all other issues, or when viewed by
themselves.” 2 Newberg on Class Actions, 4th Ed., § 4.25 at 174.’” State ex rel. U-Haul Co.
of W. Va. v. Tabit, No. 17-1052, 2018 WL 2304282, at *8 (W. Va. May 21, 2018)
(memorandum decision) (citing Rezulin, 214 W. Va. at 72, 585 S.E.2d at 72)). We went
on to explain that,
[t]he predominance requirement does not demand that
common issues be dispositive, or even determinative; it is not
a comparison of the amount of court time needed to adjudicate
common issues versus individual issues; nor is it a scale-
balancing test of the number of issues suitable for either
common or individual treatment. 2 Newberg on Class Actions,
4th Ed., § 4.25 at 169-173. Rather, ‘[a] single common issue
may be the overriding one in the litigation, despite the fact that
the suit also entails numerous remaining individual questions.’
Id. at 172.
U-Haul., 2018 WL 2304282, at *9 (citation omitted). In the instant case, can there be any
serious question that the predominant issues are those enumerated by the circuit court?
And as a corollary proposition, can there be any serious question that thereafter, the court
has a “variety of procedural options under Rule 23(c) and (d), to reduce the burden of
6
resolving individual damage issues, including bifurcated trials, use of subclasses or
masters, pilot or test cases with selected class members, or even class decertification after
liability is determined[]”? U-Haul., 2018 WL 2304282, at *9. 5
Even more difficult to fathom is the majority’s conclusion that the circuit
court’s finding with respect to superiority, Rule 23(b)(3), is “conclusory in that it listed
cases where class certification was found to be appropriate in mass accident cases without
giving any explanation as to why those particular cases fit the facts of this matter.” Again,
the majority is parsing the court’s order paragraph by paragraph, without considering its
findings and conclusions as an integrated whole. With respect to superiority, the court
stressed the fact that “the damages suffered by most class members are too small to warrant
the associated costs of pursuing such cases, such as basic filing fees, deposition fees,
attorney time in processing, and expert witness fees.” And again, inasmuch as the court
certified a class only as to liability and causation – essentially, was Petitioner negligent or
reckless, and did that negligence or recklessness cause the warehouse fire which belched
smoke and particulates for 8 days over an 8.5 mile radius – I am hard pressed to come up
with any rationale which could possibly support the conclusion that a better way to handle
the matter would be to require anyone claiming to have suffered injury and damage to file
an individual lawsuit. Even accepting Petitioner’s claim that only 10% of those within the
5
See supra note 3.
7
8.5 mile radius suffered actual harm, 6 the result would be 5,700 individual lawsuits –
enough to force the judicial system to its knees, notwithstanding the $1,140,000.00 in filing
fees that would be generated.
In summary, the majority’s decision in this case exalts form over substance,
and requires that a circuit court’s order granting class certification must contain far more
than the “detailed and specific showing” previously deemed sufficient. E.g., State ex rel.
Municipal Water Works v. Swope, 242 W. Va. 258, 267-68, 835 S.E.2d 122, 131-32 (2019).
Rather, the order will have to contain a level of claim-by-claim, issue-by-issue, defense-
by-defense analysis somewhere between a blue book essay and a law review article in
length. Here, where the class parameters have been so well defined by the testimony of
expert witnesses, and the analysis of the circuit court is so clear and so evidently correct,
one can only read the majority opinion as a result-driven attempt to steer the circuit court,
on remand, in Getting to No.
6
The majority follows Petitioner down this particular rabbit hole, criticizing the
circuit court’s finding that “owning or residing in a house that is invaded by noxious or
harmful levels of smoke negligently released from a fire is a cognizable injury [to all class
members],” by setting up a straw man argument as to whether the essential elements of the
various causes of action alleged in the complaint “are capable of individualized or even
generalized proof.” This is a merits question more properly addressed on motion for
summary judgment; a certification inquiry under Rule 23 does not require plaintiff to prove
his or her case, only to establish that the issues fall within the framework established in
subsections (a) and (b) of the rule.
8
II.
Having expressed my disagreement with the majority’s holding, I now turn
to the lengthy advisory opinion 7 which precedes the relatively brief discussion of the actual
issue in this case. Petitioner raised five issues in its brief: that common issues do not
predominate in this case because only 10% of the class is likely to have been injured; that
mass accident and toxic tort cases are inappropriate for class adjudication; that plaintiff
cannot satisfy the certification requirements of standing and typicality because he concedes
that he has not suffered any property damage; that the class members are not readily
identifiable by reference to objective criteria; and that the circuit court failed to conduct a
thorough analysis of the Rule 23 factors. In this latter regard, Petitioner’s entire argument
7
More than half of the majority’s “Discussion” could be classified either as (a) dicta,
(b) an advisory opinion, or (c) the use of a backhoe to dig a one inch hole. This Court has
defined dicta as language “which, by definition, is . . . unnecessary to the decision in the
case and therefore not precedential. Black’s Law Dictionary 1100 (7th ed. 1999).” State
ex rel. Med. Assurance of W. Va., Inc. v. Recht, 213 W. Va. 457, 471, 583 S.E.2d 80, 94
(2003). With respect to advisory opinions, we have held that “the requirement of a
justiciable controversy and the prohibition against advisory opinions are two sides of the
same coin. We explained this in Syllabus Point 2 of Harshbarger v. Gainer [184 W. Va.
656, 659, 403 S.E.2d 399, 402 (1991)] when we held that ‘[c]ourts are not constituted for
the purpose of making advisory decrees or resolving academic disputes. The pleadings and
evidence must present a claim of legal right asserted by one party and denied by the
other[.]’” State ex rel. Perdue v. McCuskey, 242 W. Va. 474, 478, 836 S.E.2d 441, 445
(2019). I have chosen to refer to the scholarly exposition in this case as an advisory
opinion, since the majority is quite clearly attempting to advise the circuit court with
respect to how it should resolve an issue that has not actually been raised by anyone other
than the majority: the sufficiency of the circuit court’s order with respect to the question of
predominance. See text infra.
9
was that the court’s analysis of typicality and ascertainability 8 was insufficient, not its
analysis of predominance. Although I believe that the first four of these issues are without
merit, based on my review of the evidence contained in the appendix record, this is of no
moment; the fact is that these issues all became moot when the majority decided the case
on the ground that the circuit court’s order was insufficient to demonstrate the “thorough
analysis” required by our case law, and specifically with respect to the circuit court’s
findings of predominance and superiority.
In this regard, the majority could have cited the comprehensive discussion of
predominance set forth in Rezulin and its progeny, and rested its decision thereon.
‘A conclusion on the issue of predominance requires an
evaluation of the legal issues and the proof needed to establish
them. As a matter of efficient judicial administration, the goal
is to save time and money for the parties and the pubic and to
promise consistent decisions for people with similar claims.’
In the Matter of Cadillac V8-6-4 Class Action, 93 N.J. 412,
430, 461 S.E.2d 736, 745 (1983). The predominance
requirement is not a rigid test, but rather contemplates a review
of many factors, the central question being whether
‘adjudication of the common issues in the particular suit has
important and desirable advantages of judicial economy
8
Interestingly, this word is not found in either the text of Rule 23 or in any of this
Court’s class action cases. Rather, it is a formulation discussed in some federal cases,
describing the unremarkable concept that a class and its members must be readily
identifiable with reference to objective criteria, “without extensive and individualized fact-
finding or ‘mini-trials[.]’” Marcus v. BMW of N. Am., LLC, 687 F.3d 583, 592-93 (3rd Cir.
2012) (citation omitted). In the instant case, the testimony of Respondent’s experts most
certainly met any requirement of ascertainability. See text supra.
10
compared to all other issues, or when viewed by themselves.’
2 Newberg on Class Actions, 4th Ed., § 4:25 at 174.
Rezulin, 214 W. Va. at 72, 585 S.E.2d at 72; see also U-Haul, 2018 WL 2304282, at *8
(“In deciding predominance, the ‘central question [is] whether ‘adjudication of the
common issues in the particular suit has important and desirable advantages of judicial
economy compared to all other issues, or when viewed by themselves.’”) (citation omitted).
Undaunted by the fact that Petitioner did not argue insufficiency of the circuit
court’s analysis of predominance (it simply claimed that the court’s decision was erroneous
because the existence or extent of individual damages would vary), or the fact that the issue
of the sufficiency of the court’s analysis could easily be resolved under existing West
Virginia law, the majority devotes pages of text to what is termed a “general review” of
federal cases dealing with predominance. The majority notes with approval those cases
that require the lower court to perform a “rigorous analysis,” or even a “more rigorous
analysis” of class certification motions, as opposed to this Court’s “thorough analysis”
standard. 9 (Emphasis added.) The majority further acknowledges the current trend in
9
In his concurring opinion in State ex rel. Chemtall Inc. v. Madden, 216 W. Va.
443, 458, 607 S.E.2d 772, 787 (2004), then-Justice Starcher commented on the federal
courts’ seeming hostility toward class action lawsuits:
In the instant case, the defendants argued that a ‘class action
. . . may only be certified if the trial court is satisfied, after a
rigorous analysis, that the prerequisites of Rule 23(a) have
been satisfied.’ General Telephone Co. of Southwest v. Falcon,
457 U.S. 147, 161, 102 S.Ct. 2364, 2372, 72 L.Ed.2d 74011
federal courts “toward heightening plaintiffs’ burden . . . [which] has decidedly outpaced
concern over providing a mechanism for litigating low-value claims.” 10 There is no
apparent reason given for the majority’s clear preference for the anti-plaintiff position
espoused by the federal courts cited in its opinion; and whatever the reason, it seems clear
that the Court is signaling a retreat from what the United States Supreme Court once termed
West Virginia’s “declar[ation of] independence from federal courts’ interpretation of the
(1982) (emphasis added). As the majority opinion suggests,
most federal courts have blithely accepted this argument and
require a party seeking class action certification to endure a
‘rigorous’ analysis of their class certification evidence by the
trial court.
After carefully reading Rule 23 of our Rules of Civil
Procedure, and reading the Rules as a whole, neither I nor my
colleagues can find anything that requires a party to submit any
motion to a ‘rigorous’ analysis by the trial court. Use of the
term ‘rigorous’ suggests that a trial judge must exercise
‘harshness, rigidity, inflexibility,’ or be ‘severely exact or
accurate; . . . stern . . . hard, inflexible, stiff, unyielding.’
Frankly, it is difficult to determine how a litigant could achieve
a ‘just, speedy and inexpensive’ resolution of a dispute when
the trial judge, usually at the initial, pre-trial stages of the case,
is being harsh, inflexible, exacting and unyielding in
considering the parties’ motions.
Chemtall, 216 W. Va. at 458, 607 S.E.2d at 787 (footnote omitted).
Ellen Meriwether, The Fiftieth Anniversary of the Rule 23 Amendments: Are
10
Class Actions on the Precipice?, 30 Antitrust, 23, 24 (Spring 2016).
12
Federal Rules – and particularly of Rule 23.” Smith v. Bayer Corp., 564 U.S. 299, 310
(2011).
I acknowledge that federal law is “the supreme law of the land,” West
Virginia Constitution, article I, section 1, in all matters involving the interpretation of the
United States Constitution and laws enacted by Congress. Further, I agree with the
majority that review of federal cases can be beneficial in analyzing issues that arise under
the West Virginia Rules of Civil Procedure, since our rules are largely consonant with
(although not identical to, as the majority intimates) their federal counterparts. However,
I am not required to, nor will I, march in lockstep with federal decisions that I believe erect
barriers to West Virginia citizens’ right to seek redress for injuries in the courts of this
State, pursuant to the laws of this State. As noted above, the majority acknowledges the
existence of a “current trend toward heightening plaintiffs’ burden[,]” and my question is
this: why does the majority apparently view this as a positive development in the federal
law, and seek to bring West Virginia into line with this view?
In this latter regard, the majority opinion intimates, although it does not
directly state, that in State ex rel. West Virginia University Hospitals, Inc. v. Gaujot, 242
W. Va. 54, 829 S.E.2d 54 (2019), a case in which two members of this Court did not
participate, we effectively adopted federal analytical standards in class certification cases
in lieu of the standards set in our own precedents. If this reading of Gaujot is accurate, then
13
the Court acted under cover of darkness; although several of the syllabus points in the case
cite federal precedents, the concepts have long been established in our own case law. For
example, although the Court in Gaujot cited only federal cases to support the legal
principles set forth in syllabus points five, six and seven – all having to do with the limited
and coincidental scope of merits issues in determining class certification questions – the
Court admitted in the text of the opinion that “[o]ur prior decisions bear that out],]” 242
W. Va. at 63, 829 S.E.2d at 63 (citing Chemtall, 216 W. Va. at 455, 607 S.E.2d at 784;
Ways v. Imation Enterprises Corp., 214 W. Va. 305, 314, 589 S.E.2d 36, 45 (2003)).
In summary, although the majority’s lengthy exposition of federal law makes
for interesting reading, most of it is wholly unnecessary to the decision in this case.
Further, to the extent that the majority is attempting to sub silentio overrule any or all of
the precepts set forth in Rezulin and its progeny, in order to bring West Virginia in line
with the “current [federal] trend toward heightening plaintiffs’ burden[,]” 11 I strongly
object both to the majority’s tactics and to its intentions. This Court’s precedents have
stood the test of time and guided our circuit courts, as well as this Court on appellate
review, to results that are fair to all parties.
11
See supra page 12 & note 10.
14
Indeed, our precedents guided the court below – a very experienced jurist --
to a fair and legally sustainable result: permitting a class action suit to go forward on the
issues of liability and causation, in a case arising from a single event which took place in a
defined location over a short period of time, affecting everyone who lived and/or worked
within the defined location. The majority reverses this decision, demanding that the court
further explain, at great length and in excruciating detail, how these issues could be said to
predominate over issues of damages; and that the court further explain superiority, i.e., how
class certification could possibly be a better framework for resolution of 57,000 cases (or
even 5,700 cases) than requiring each plaintiff to file an individual lawsuit.
The majority opinion is flatly wrong in its analysis of the facts, creates
unnecessary delay in this case, and portends a sea change in our approach to class action
cases – a change for the worse. Accordingly, I dissent.
15