A federal appellate court ruled this week that class action plaintiffs who find their federal cases thrown out can't turn around and re-file in a state court.
The decision, rendered by the Eighth Circuit Court of Appeals on Tuesday, involved a class action against Bayer regarding its prescription medication Baycol. The drug was intended to lower cholesterol and fight cardiovascular disease, but was taken off the market in 2001 after being linked to 31 deaths.The plaintiffs, led by West Virginia resident George McCollins, filed a class action lawsuit in a West Virginia county court in 2001. The suit was later removed to federal court, and heard by a multidistrict litigation (MDL) panel in Minnesota.
The MDL panel denied class certification in 2008, holding that, to state a proper claim for economic injury under the West Virginia Consumer Credit and Protection Act (WVCCPA), McCollins would need to "demonstrate Baycol was something other than what he bargained for," which was impossible since he hadn't been injured by the drug, and had in fact benefited from it. The court subsequently granted an injunction preventing the plaintiffs from bringing an action in state court. The appeals court's decision affirmed that injunction.
The Eighth Circuit agreed with the MDL panel's ruling, ruling that "economic loss alone is insufficient" to state a claim under the WVCCPA. Judge Diana Murphy went on to hold that "[r]e-litigation in state court of whether to certify the same class rejected by a federal court presented an impermissible 'heads-I-win, tails-you-lose situation.'" The court cited a Seventh Circuit decision, In re Bridgestone/Firestone, which similarly held that unsuccessful federal class actions couldn't be reheard in state court.
The plaintiffs contended that their individual economic damages were so small that bringing individual actions would be a waste of time and money, and that a class action was thus their only practical option. Judge Murphy recognized this concern, but said that the plaintiffs "have no absolute right to litigate their claims as a class ... only a right, preserved by the district court's narrowly tailored injunction, to litigate their own claims."
The decision could have far-reaching implications in other circuits. Dorsey & Whitney LLP, one of the firms representing the defendants, highlighted the decision on its website as one that "could limit class action exposure for product liability defendants." Whether the plaintiffs plan to appeal is unclear.
The Eighth Circuit appeals court is dominated by Republican-leaning judges, who are regarded as relatively hostile to civil plaintiffs and class action suits. Nine of its 11 judges were appointed by Republican presidents. Judge Murphy was appointed by President Bill Clinton, while the other two judges deciding the case -- Duane Benton and Lavenski Smith -- were both appointed by President George W. Bush.
