New Jersey District Court Employs Rigorous Analysis and Denies Plaintiff's Class Certification Motion

Litigation Alert

October 17, 2014

Ronald J. Campione

Ronald J. Campione


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A New Jersey District Court denied class certification to a class representative seeking economic damages allegedly resulting from a cargo train derailment because the putative class was not ascertainable and could not satisfy the numerosity requirement. In re Paulsboro Derailment Cases, 2014U.S. Dist. LEXIS 115542 (D. N.J. August 20, 2014).

The case arose from a cargo train derailment inPaulsboro,New Jersey, which released vinyl chloride into the Mantua Creek and contaminated Paulsboro andWest Deptfordwith airborne chemicals. Many individuals were directed to evacuate or to shelter in place. Donald Wilson filed a putative class action against Consolidated Rail Corporation, Norfolk Southern Railway Company and CSX Transportation.

Plaintiff proposed two sub-classes. The first sub-class would consist of individuals who incurred unreimbursed medical expenses as a result of the evacuation. The second proposed sub-class was the “economic loss sub-class regarding income loss.” The “Income Loss Sub-Class” had two further divisions, one for individuals and one for businesses. The individual Income Loss Sub-Class, was defined in part as “all individuals … [that] had income loss as a result of the train derailment and chemical leak in Paulsboro on November 30, 2012.” The business Income Loss Sub-Class included businesses that had income loss as a result of the derailment and chemical leak.

The District Court, applying a “rigorous analysis,” denied class certification. It found that the business sub-class was not ascertainable and that the entire class failed to satisfy the numerosity requirement of Federal Rule of Civil Procedure 23(a). The Court’s initial focus was on whether the class was ascertainable because “[c]lass certification presupposes the existence of an actual `class.’” The Court found that the Evacuation and individual Income Loss subclasses were ascertainable because a fact-finding was not necessary to determine the class. However, the Court was not satisfied that Plaintiffs had defined an ascertainable class with regard to the business Income Loss Sub-Class. It reasoned that “significant individualized fact-finding would be required to show that a potential class member satisfies all of the elements of Plaintiff’s class definition” of the business sub-class.

The Court next analyzed the requirements of Federal Rule of Civil Procedure 23(a). Taking the prerequisites in order, the Court’s “rigorous analysis” determined that the putative class could not meet the test for numerosity and thus, the proposed class could not be certified. The Evacuation Sub-Class, which consisted of potentially 680 evacuees, was, through discovery, determined to consist of approximately 149 individuals. However, Plaintiff did not proffer evidence to sustain its burden of proving that any of those 149 individuals could have sustained unreimbursed, non-medical expenses. The Court stated, “Plaintiffs have not pointed to anyone, including the named Plaintiffs, who has not had the vast majority of his or her evacuation expenses reimbursed by Defendants.” Likewise, the court found that the individual Income Loss Sub-Class failed to meet the numerosity requirement. Again, the Court reasoned that “Plaintiffs have set forth no evidence that even one resident of the shelter-in-place order has incurred unreimbursed economic losses.”

In failing to demonstrate numerosity in the business sub-class, Plaintiff identified 381 businesses as potential class members. Plaintiff’s evidence, however, demonstrated that the pool of businesses included those companies suspected of being out of business. Plaintiff’s expert testimony revealed that almost ten percent of the business claims were resolved through defendants’ voluntary efforts. The Court found that Plaintiffs offered only speculation about the potential class members, insufficient to survive rigorous analysis applicable to class certification.

The Court went further and found that Plaintiffs could not satisfy the “predominance” requirement of Rule 23(b)(3). Plaintiff failed to demonstrate how “damages can be measured in a uniform manner across the entire sub-class of businesses.” Plaintiff’s proposed damage calculation did not take variables into account which would result in differences in income for some businesses, such as seasonal trends and decreased income due to Superstorm Sandy. Plaintiff fell “short of showing that damages can be proven at trial using methods common to the class.” Thus, Plaintiff also failed to meet the requirements of Federal Rule of Civil Procedure 23(b)(3).

The Wilson opinion provides practitioners with an in-depth analysis of the developing standards for class certification in an economic damage case and demonstrates the importance of meticulously defining a class that is identifiable and ascertainable. It also shows the importance of class discovery and the evidence necessary to satisfy the “rigorous analysis” employed by the federal courts.