Federalism and mass tort litigation.

• Author: Trangsrud, Roger
• Position: Mass Torts Symposium

I largely agree with the burden of Tom Willging's paper assessing the use and misuse of the Manual on Complex Litigation.(1) Thus, I will say less about that paper than I will about the assertions of those speakers and participants at this Symposium(2) and others in different fora who have asserted that dramatic changes in federal law are appropriate to deal with the problem of mass tort litigation.(3) I am utterly unpersuaded that anything argued today--or during the last fifteen years of this debate--provides a plausible basis for displacing state law by substantial changes in federal law, since tort law and insurance law traditionally and properly have been the province of state and not federal law.

The cluster of problems associated with mass tort litigation today are not problems that result in the frustration of any federal substantive policy. Is any statute of Congress going unenforced? Is any executive decision going unimplemented? The principal problem of mass tort litigation for the federal government and federal policy today is due to congestion in the federal district courts caused by the avalanche of state tort claims that have found their way there.(4) How did that come about? Did Congress change the law? No. Did the federal courts change their jurisdiction or procedures in a dramatic way? No. In fact, the current slate of congestion arose largely for two reasons. First, as a result of the more adventurous nature of our medicine, we now put devices in our bodies that we never did before, and we now use drugs and products that we either did not have before or dared not use before.(5) Second, state legislatures and state supreme court justices have changed state tort law and state insurance law. They have expanded available claims and remedies to include such things as medical monitoring claims,(6) fear of cancer claims,(7) and emotional distress claims.(8) They have adopted market share theories(9) and revised the plaintiff's burden of proof in other situations with respect to proof of fault or causation.(10) Were those good decisions or bad decisions? I think most of them were good, but as a proceduralist and as a professor who is in no position to change those decisions, that does not matter. They were properly made by state legislatures and state supreme court justices interpreting the common law of their state. It is not clear why any of us believe we have any mandate for reversing those decisions or for changing federal law because of these changes in state law.

Moreover, many proponents of changing federal law have neglected to mention the major roles that insurance and insurance law play in mass tort litigation. Unlike antitrust or securities fraud claims, where the loss largely falls on the wrongdoer, in mass tort litigation the loss is largely shifted to a third party insurance carrier,(11) and by them, through facultative and treaty reinsurance to reinsurance syndicates in London.(12) Because it is the source of the money that pays the plaintiff's bar, the defense bar, and the plaintiffs, the insurance industry is a very important player in mass tort litigation. The law of insurance has been--just like state tort law--the appropriate province of state legislatures and state supreme courts for a very long time.(13) The direct regulation of insurance companies remains today almost entirely a state responsibility.(14)

In other words, as we debate what to do about mass tort litigation, we are intruding into two areas that for two centuries have been left to the states. That this is so is not because of an idle or passive deference to state law: since the 1930s we have been willing to regulate all sorts of behavior through the federal government. But while doing so, Congress has scrupulously, and with very few exceptions,(15) respected the right of the states to develop, enforce, and apply state norms as to what kinds of behaviors give rise to a private action for damages in tort.(16) So while the Federal Aviation Administration comprehensively regulates the airline industry,(17) passengers injured in crashes sue under state law.(18) The safety and efficacy of prescription drugs are regulated by the federal Food and Drug Administration, but state law provides the remedy for those hurt by such products,(19) OSHA regulates working conditions of buildings and construction sites, but injuries are remedied under state law.(20)

Federal courts have long respected this province of states to make tort law, even in the most extreme cases. The Second Circuit some years ago held that state, not federal law, governs the claims of soldiers fighting in the same battalion in Vietnam who were exposed to Agent Orange. Even though the federal government had purchased this arguably toxic and dangerous herbicide for use in a foreign war into which many plaintiffs had been conscripted, the Second Circuit concluded that the claims of the plaintiffs against the suppliers of this war material were governed by state tort law.(21) If the rights of conscripted veterans in a foreign war are properly measured under state law--not federal law--then it hardly seems plausible that because of congestion in the federal district courts, we should abandon our traditional deference to state, tort law in favor of a federal law solution. Yet some suggest that Klaxon(22) be reversed,(23) that Van Dusen(24) be reversed,(25) that Lexecon(26) be reversed,(27) that federal subject matter jurisdiction be expanded to facilitate the aggregation of state tort claims in federal court,(28) that state laws regarding attorneys' fees be replaced by federal law,(29) that state choice-of-law mites be replaced by federal choice-of-law rules,(30) that state tort law should give way to a national tort law,(31) and that federal--not state-law govern punitive damages.(32) What federal interest justifies such a displacement of state tort law? Or state conflicts law? Or punitive damages law? Are crowded federal dockets a sufficient predicate for putting aside centuries of federal deference to state lawmaking in torts and insurance law? Would not a more rational response to crowded federal dockets due to state tort claims be changes intended to reduce--not increase--the volume of state tort claims in federal court?

We have crowded federal district court dockets because state governments have been imposing this burden on a branch of the federal government and not the other way around. In other contexts, the federal government has been active over the past ten years in passing legislation in which people are given rights where the cost of providing those rights is borne by someone else. For example, with the Americans with Disabilities Act of 1990(33) Congress created a new set of entitlements, but the accommodations thus mandated are paid for by employers and property owners.(34) Likewise, Congress passed the Family and Medical Leave Act of 1993(35) conferring various rights on employees, but private employers must pay for the accommodations required under the Act.(36)

What has happened in mass tort litigation, by contrast, is that state legislatures and state courts have expanded state tort remedies, while the burden of providing those remedies has fallen partly on the state courts and partly on the federal courts. This situation is the reverse of what happens when the federal government legislates benefits that must be provided at the expense of the states, state agencies, or others. Still, it is not clear that that is a reasoned basis for changing all the law that has been proposed to be changed in this room and elsewhere.

There is nothing in the history of the aggregation devices we have been discussing that gives any basis for believing that there is an existing federal mandate to make the kind of dramatic changes that have been proposed.(37) Rule 23 plainly was adopted to facilitate the...