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  State Class Action Cases That Could Be Adversely Affected by S. 353/H.R. 1875
In the following sampling of typical class action cases a substantial majority, if not all, of the plaintiffs are in-state residents but one or more of the primary defendants are out-of-state defendants. Under the diversity rules proposed in S. 353 and H.R. 1875, the defendant(s) would be permitted to remove these cases to federal court even though the plaintiffs are all, or nearly all from one state, the cases are tried in a single state and they are based on that state's unique law. Fundamentally, there is no federal interest in these class action cases. Removals to federal court are detrimental to consumers because:
If H.R. 1875 or S. 353 had been enacted, the following claims based on state law could have been removed to federal court if the defendant determined that removal would be advantageous:
Class is current and former employees of Abex Corp. who claimed they had been exposed to asbestos while using a grinding wheel made by The Carborundum Co. to cut steel and sharpen hard-steel tools. A Texas jury found for the plaintiffs in the amount of $15.6 million in compensatory damages and $100 million in punitive damages. The case later settled for an undisclosed amount. The majority of plaintiffs were Texas residents, but the defendant is an out-of-state corporation.
Class is the owners of approximately 2,500 parcels located along a 15-mile industrial strip in Texas. The class alleged that years of discharge from a number of corporations located in this area, including Amerdad Hess Corp., Citgo Petroleum Corp., and Mobil Corp., contaminated the air, damaging some properties directly and decreasing the value of others. Most of the class are Texas residents, but the defendants are incorporated in a variety of states.
Class is approximately 75,000 owners of affected Chrysler cars (late 1988, 1989, and 1990 models) registered or purchased in Pennsylvania with driver's-side air bags with vents. The class alleged that the air bags had vent holes that released hot gases toward the three and nine o'clock positions on the steering wheel during deployment and caused burns. A jury found that the air bags were defectively designed, that Chrysler breached the implied warranty of merchantability for both the air bags and the cars, and that the breach was a substantial factor in causing harm to the plaintiffs. The jury awarded each plaintiff $730 (total $58.5 million), the cost of buying a safer air bag. Most of the plaintiffs are Pennsylvania residents, but DaimlerChrysler is an out-of-state corporation.
Class is all Florida citizens and residents, and their survivors, who have suffered smoking-related illnesses. The class alleged that their addiction to cigarettes was caused by the tobacco industry which "has distorted the clear medical and scientific data for their own selfish pecuniary gain and for decades has played statistical and semantic shell games with the lives and health of the American public." In the first part of the trial, the jury found that the cigarette makers "engaged in extreme and outrageous conduct." All of the plaintiffs are residents of Florida, but the defendant tobacco manufacturers are all out-of-state corporations.
Class is comprised of all people in Kentucky who, from the time of introduction to the date of recall, received fenfluramine and dexfenfluramine from Bariatrics Inc. of Kentucky and/or clinics operated by Dr. Duff. The class alleged that the defendants were deceptive in manufacturing, marketing, and selling drugs they knew to have adverse health consequences and seek medical treatment and monitoring. Most, if not all, of the plaintiffs are Kentucky residents, but the defendants are out-of-state corporations.
Class is all borrowers of the bank who were forced to take insurance from Progressive as part of their property loans. The class alleged that the bank unfairly signed them up for superfluous insurance which included additional non-property coverage and was more expensive than basic coverage that could have been bought on the open market. Most, if not all, of the plaintiffs are residents of Tennessee, but Progressive Casualty is an Ohio corporation.
Class is all persons who made successful car insurance claims to the defendant insurance companies but were improperly charged a deductible. The class alleged that a third party (i.e., people who stole their cars or caused accidents involving their cars) was responsible for paying the deductible due on their claims and that state law required the insurance companies to file suit against those third parties to recover their deductibles. Most, if not all, of the plaintiffs are residents of Texas, but two of the defendants are out-of-state corporations.
These are two similar class actions. The classes are comprised of New Jersey (Lemelledo) and Pennsylvania (Gartland) Beneficial customers who had been tricked into paying for credit insurance included with their loans from Beneficial. The classes alleged that Beneficial's practice of pre-completing the loan forms so as to include the unwanted and unrequested insurance created the impression that such insurance was required in order for the consumer to obtain the loan. The class also alleged that Beneficial received undisclosed commissions from selling the insurance, but charged consumers amounts that did not reflect the actual amounts paid for the insurance. Most of the plaintiffs are in-state (New Jersey and Pennsylvania) residents, but under these bills the defendants could have removed these cases to federal court since Beneficial is a Delaware corporation.
Class is comprised of individuals who entered rent-to-own contracts after April 7, 1986, that provide for ownership at the end of a predesignated term. The class alleges that DEF, Colortyme's parent corporation, violated various Minnesota consumer protection statutes by charging an excessive amount of interest on rent-to-own purchases in their stores. Most, if not all, of the plaintiffs are Minnesota residents, but under these bills the defendants could have removed this case to federal court since Colortyme is a Texas corporation.
Class is customers of Bell Atlantic-West Virginia, Inc. who paid for inside wire maintenance service. The class alleged that Bell Atlantic illegally "bundled" inside wire maintenance service with their regular phone service and charged their customers a monthly service charge. Most, if not all, of the plaintiffs are residents of West Virginia but Bell Atlantic is an out-of-state corporation.
These are two related class actions. Hollis class is comprised of CIGNA patients who reside in Connecticut and had begun treatment with the physicians who brought an action against CIGNA in Napoletano. Napoletano class is comprised of nine Connecticut physicians who had treated the plaintiffs in Hollis and were terminated from their contract for allegedly not following review procedures. The plaintiffs assert that the doctors were unjustifiedly removed from the CIGNA list of participating doctors and brought claims alleging unfair and deceptive acts of misrepresentation, false advertising, and breach of contract. Most of the plaintiffs are Connecticut residents, but under these bills the defendant could have removed these cases to federal court since CIGNA is an out-of-state corporation.
Five individual statewide medical monitoring class actions where the classes are comprised of all people in Pennsylvania, Texas, Washington, Illinois, and West Virginia who have used fenfluramine (Pondimin) and/or dexfenfluramine (Redux) and have not been diagnosed with any injury. The classes allege that the defendants, American Home Products Corporation (comprised of Wyeth Laboratories, Wyeth Ayerst Laboratories Division, and A.H. Robins Company) and Interneuron Pharmaceuticals, failed to exercise reasonable care in designing, manufacturing, selling, testing, promoting, and distributing the drugs. The classes seek funds to continue medical monitoring for the plaintiffs. Each class is made up of in-state residents, but at least one "primary" defendant is an out-of-state corporation in each case. Consequently, under these bills defendants would be able to remove these cases to federal court.
Class is all residents of Western Washington State who own log homes, wood siding, or fencing treated with the defendant's sealers. The class alleged that they purchased and used the defendant's wood sealer products but that the products caused significant damage to their homes. All of the plaintiffs are residents of Washington State, but Behr Process is a California corporation.
Class is all Louisiana residents who were smokers on or before May 24,
1996 and want to participate in a smoking cessation program and/or monitor
their medical condition for diseases caused by cigarette smoking. The
class alleged that the defendants sold defective cigarettes after
concealing the addictive nature of nicotine. All of the plaintiffs are
residents of Louisiana, but the defendant tobacco companies are
out-of-state corporations.
This is a group of five class actions brought by residents of New York
who purchased cigarettes manufactured, promoted, and sold by the
defendants. The class alleged that defendants intentionally
misrepresented, concealed, and acted deceptively based on the knowledge
that nicotine is addictive. Most, if not all, of the plaintiffs are New
York residents, but the defendants are incorporated in a variety of
different states.
Class is subscribers of Family Health Plan's "Senior Plan," a
coordinated care plan designed for Medicare beneficiaries. The class
alleged that Family Health Plan violated California law by engaging in
unfair and misleading advertising practices in soliciting subscribers. The
majority of class members are California residents, but Family Health Plan
is an out-of-state corporation.
Class is comprised of all people who subscribed to cellular telephone
services from LA Cellular between June 25, 1990 and the present. The class
alleges that LA Cellular's representations about its calling area are
inaccurate, misleading, and intentionally deceptive due to known gaps in
the advertised coverage area. Most, if not all, of the plaintiffs are
California residents, but many of the defendants are out-of-state
corporations.
Class is comprised of individuals and entities who own homes or other
structures in California on which Weyerhaeuser hardboard siding has been
installed from January 1981 to the present. The class alleges that the
hardboard siding is inherently defective and prematurely fails when
exposed to normal weather conditions. Most of the plaintiffs are
California residents, but Weyerhaeuser is a Washington corporation.
Class members are those who brought third-party claims against the motorist who caused the accident but were denied the claim due to the cancellation of the at-fault driver's Dairyland policy (or they did not bring a claim after being told there was no insurance coverage on the driver at fault). The class alleged that the insurance companies issued insurance and then improperly failed to pay claims. Most, if not all, of the plaintiffs are residents of West Virginia but the defendants are Wisconsin corporations.
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