[author: Earl Hagstrröm]
“No basis appears for us to cordon off one type of order – a prima facie order on exposure and causation in toxic tort litigation – from the universe of case management orders that a district court has discretion to impose. We decline to do so.” - Avila v. Willits Envtl. Remediation Trust, 633 F.3d 828, 834-35 (9th Cir. 2011)."
In light of sprawling, complex and costly toxic tort claims, courts are turning to case management mechanisms to expedite the resolution of these claims. Federal Rule of Civil Procedure 16(c)(12) provides the courts with the authority to adopt special procedures for managing difficult or protracted actions that involve complex issues, multiple parties, difficult legal questions or unusual problems of proof. Accordingly, federal district courts are afforded broad discretion in crafting case management orders, particularly in large, complex cases. Acuna v. Brown & Root, 200 F.3d 335, 340 (5th Cir. 2000). In managing their dockets, courts have increasingly turned to so-called Lone Pine orders to assure that plaintiffs can establish the necessary elements of a prima facie case, specifically, requiring that each plaintiff show that they suffered an injury, and establishing a causal relationship between those injuries and the defendant’s conduct.
What are Lone Pine orders? Lone Pine orders stem from an unpublished New Jersey state case — Lore v. Lone Pine Corp., a case in which plaintiffs sued for personal injuries and loss in property value purportedly caused by polluted water emanating from a landfill operated by Lone Pine and 463 other generator/transporter defendants. No. L 33606-85, 1986 N.J. Super. LEXIS 1626 (N.J. Super. Ct. Law Div. Nov. 18, 1986). In its case management order, the court required each individual plaintiff to produce evidence of his or her exposure to toxic substances and expert testimony (medical causation) linking the exposure to the bodily injury alleged. In addition, each plaintiff was required to provide expert opinions supporting their claims for diminution in value, including the timing and degree of diminution and a causal link between the diminution and presence of the toxic substances. The plaintiffs were unable to meet these requirements and their complaints were dismissed with prejudice.
Lone Pine orders are an effective tool in managing the complex and costly issues that arise from mass tort litigation. A properly crafted Lone Pine order can weed out meritless claims before the court and defendants invest substantial time and financial resources only to learn on the eve of trial that plaintiffs cannot establish a prima facie case. Lone Pine orders have been successfully used in a variety of tort cases over the past 25 years. Recently they have applied to cases involving hydraulic fracturing.
Interestingly, requests for Lone Pine orders are rare, which is surprising given the increase in hydraulic fracturing litigation. Since August 2009 at least 38 lawsuits have been filed by plaintiffs alleging that hydraulic fracturing has caused groundwater contamination and toxic exposure. Additionally, more than a dozen class actions have been filed alleging that hydraulic fracturing and the improper disposal of flow-back water have been a cause of, or contributing factor to, recent earthquakes. Hydraulic fracturing cases, are replete with complex scientific and medical causation issues, and appear to be tailor made for Lone Pine orders.
Several environmental agencies, governmental organizations and universities have or are conducting studies to determine whether such causal links exist. See, e.g., Ernest J. Moniz, The Future of Natural Gas: An Interdisciplinary MIT Study (MIT ENERGY INITIATIVE, June 2011), available here; USEPA OFFICE OF RESEARCH & DEV., Draft Report: Investigation of Ground Water Contamination near Pavillion, Wyoming (Dec. 8, 2011), available here; Charles Groat, Fact-Based Regulation for Environmental Protection in Shale Gas Development, (ENERGY INST., UNIV. OF TEXAS AT AUSTIN, Feb. 2012), available here. While each hydraulic fracturing suit will have its own individualized and unique proof issues, these large scale causal studies provide defense counsel with guide posts to determine whether causal links between hydraulic fracturing and groundwater contamination or toxic exposures exist in a particular case.
Judicial Acceptance of Lone Pine Orders in Hydraulic Fracturing Litigation
Understanding the factors courts are likely to consider when deciding whether Lone Pine orders are appropriate for a given case is crucial to defense counsel, who anticipate using Lone Pine orders as part of their defense strategy. Courts are more likely to issue a Lone Pine order when the defendants are able to highlight the dearth of scientific or medical evidence linking the defendant’s conduct with the plaintiff’s alleged injuries. As the above-cited studies show, there is a dearth of scientific evidence linking hydraulic fracturing with claims of groundwater contamination, earthquakes or toxic exposure. As causation is the central element that a court looks to in toxic tort and property damage litigation, requiring plaintiffs to surmount the hurdles of specific and general causation at the outset of the litigation will weed out the meritless claims and allow those with merit to proceed.
For defendants that consider using Lone Pine orders as part of their strategic plan, reviewing the court’s rationale in Strudley v. Antero Resources Corp., a fracking case in Colorado’s District Court for Denver County. No. 11-2218 (Dist. Denver, Colo., May 9, 2012) is a place to begin. The Strudley Court was persuaded by defendant’s arguments regarding the need to consider judicial economy, namely, the time and cost of discovery in a hydraulic fracturing class action suit, before allowing it to proceed past the pleading stage. Before discovery was allowed to proceed, the Court required plaintiffs to make a prima facie showing of exposure and causation. The plaintiffs were given 105 days to comply with the case management order, and ultimately failed to establish a causal link between the defendant’s operations and plaintiffs’ alleged injuries. Subsequently, “cognizant of the significant discovery and cost burdens presented by a case of this nature” the court dismissed the action . The court explained that its Lone Pine order did not prejudice plaintiffs because they would have been required to bring forth that very evidence at some point in the litigation to prove their claims. Strudley represents a departure from the judicial lenience that plaintiffs are traditionally granted at the pleading stage.
Strudley builds upon line of prior state court decisions involving contamination and toxic exposure that did not hesitate to use Lone Pine orders to require “upfront proof” of the plaintiff’s claims and to reject those that proved to be meritless. A New York state court used a Lone Pine order aggressively in a multi-party landfill contamination case, holding that “prior to the institution of such a cause of action, attorneys for plaintiffs must be prepared to substantiate, to a reasonable degree, the allegations of personal injury, property damages, and proximate cause.” In re Love Canal Actions, 547 N.Y.S.2d 174, 177 (N.Y. Sup. Ct. 1989). When the plaintiffs then failed to comply with the case management order, the court reprimanded the plaintiffs for recommending a settlement when “there is nothing to settle because there is a total and complete lack of information as to causal relationship and damages.” Another example of an efficient use of a Lone Pine order is Bell v. ExxonMobil Corp., where initially 71 plaintiffs alleged personal injury and property damages from defendant’s plant explosion and chemical release. After the trial court issued a Lone Pine order, only 50 plaintiffs chose to proceed with their claims, and ultimately only 27 plaintiffs complied with the Lone Pine order and were permitted to proceed with their claims. The trial court’s dismissal of the non-complying plaintiffs was upheld by the Texas Court of Appeal. No. 01-04-00171-CV, 2005 Tex. App. LEXIS 1680, at *3 (Tex. App. Mar. 3, 2005). Likewise, In re Mohawk Rubber Co., 982 S.W.2d 494, 496 n.1, 499 (Tex. App.1998) the court required the class of plaintiffs to provide medical evidence to support the claim that the defendants caused harm before theplaintiffs could proceed with their claim.
Strudley is also in line with federal appellate court decisions regarding the use of Lone Pine orders. The Ninth and Fifth Circuit Courts of Appeals cite the same concerns raised in Strudley, namely judicial economy, and the need to honor the trial court’s discretion to manage its cases in approving the use of Lone Pine orders. In Avila v. Willits Envtl. Remediation Trust, the plaintiffs alleged property contamination from the defendant’s “hard chrome plating” operations. 633 F.3d 828, 834-35 (9th Cir. 2011). The Ninth Circuit affirmed the district court’s dismissal after plaintiffs failed to comply with the Lone Pine order to show causation and exposure. The court noted that the case raised difficult issues of exposure and causation, stagnated in the district court for five years, and the plaintiffs had seven years to bring evidence establishing causation. Similarly, in Acuna v. Brown & Root, 200 F.3d 335, 340 (5th Cir. 2000), a case oft-cited to support Lone Pine orders, the Fifth Circuit explained that Lone Pine orders are within the broad discretion of district judges to manage discovery and control the course of litigation.
Despite the clear expression of Ninth and Fifth Circuits to the contrary, district courts are split in their interpretation of whether Lone Pine orders are necessary or even authorized. In Hagy v. Equitable Production Co., the Southern District of West Virginia Court concluded that because no federal rule or statute authorizes the entry of Lone Pine orders, no such order was appropriate. No. 10-01372, 2012 WL 713778 (S.D. W.Va. Mar. 5, 2012). The court found that the plaintiff’s groundwater contamination claims could be addressed by motions, sanctions and other rules, and a Lone Pine order was not appropriate. Conversely, the District Court of Nebraska, in Schwan v. CNH Am. LLC, entered a Lone Pine order to require the plaintiffs to define their injuries with precision, and produce evidence of causation before any formal discovery was allowed. 2006 LEXIS 28516 at *9 (D. Neb. May 6, 2006).
As shown by the Ninth Circuit’s decision in Avila just last year, it is clear that courts are increasingly looking to the use of Lone Pine orders as a case management tool. In this age of overcrowded dockets, the use of Lone Pine orders to evaluate the merits of a claim early on in litigation benefits plaintiffs, defendants and the courts by providing a mechanism that allows meritorious cases the opportunity to have their day in court.
Lone Pine orders are merely one subclass of the many orders district courts have discretion to grant, and have proven to be an effective case management tool. Given the complexity of toxic tort and property damage cases and class actions arising from hydraulic fracturing operations, it would come as no surprise if, within a few years, courts increase their use of Lone Pine orders as a useful and efficient way to manage their dockets to eliminate meritless claims and provide those with merit an opportunity to be heard.