On December 6, 2022, the Sixth Circuit affirmed a $40 million jury award against a manufacturer Defendant, holding that a district court trial judge correctly applied collateral estoppel to preclude the manufacturing Defendant from relitigating several issues that just three prior juries had found in Plaintiffs’ favor.

• Background: In the 2000s and 2010s, this manufacturer Defendant faced sprawling litigation involving more than 3,000 claims related to alleged health effects from PFOA water contamination in Ohio and West Virginia. Those claims were consolidated into an MDL, with three trials (two non-binding bellwether cases and one non-bellwether case) all resulting in plaintiff jury verdicts. The remaining cases were resolved in 2017.

• This Case – District Court: Plaintiffs in this case brought their claims against the manufacturer Defendant in late 2017, after the MDL cases had been resolved. Before trial, the district court granted Plaintiffs’ motion for partial summary judgment on duty, breach, and foreseeability elements of Plaintiffs’ negligence claims, among other issues. The juries in the three prior MDL trials had each found unanimously in plaintiffs’ favor on those three elements. This case then proceeded to trial and the jury found for Plaintiffs.

• This Case – Sixth Circuit Majority: The Sixth Circuit majority affirmed the district court’s application of collateral estoppel preventing the manufacturer Defendants’ from contesting the duty, breach, and foreseeability elements of Plaintiffs’ negligence claims. The majority noted that courts are afforded broad discretion in determining whether to apply nonmutual offensive collateral estoppel, and should weigh four factors—

• • Avoid application of the doctrine when it would encourage a “wait and see” attitude among potential plaintiffs hoping that a result in the first action will result in a favorable judgment;
  • Do not apply the doctrine if the defendant did not have a reason to defend the initial suit vigorously, particularly if future suits are not foreseeable;
  • The doctrine should not apply if it conflicts with one or more previous judgments in favor of the defendant; and
  • Avoid the doctrine if the later action would give the defendant procedural opportunities unavailable in the first action that could readily cause a different result.

The majority reviewed these issues de novo and found that—on the basis of just three prior jury verdicts—the application of collateral estoppel on these elements was appropriate.

The majority also considered and rejected the manufacturer Defendant’s argument that nonmutual collateral estoppel cannot apply to mass tort claims (based on a footnote stating just that in a 1984 Sixth Circuit decision). District courts must simply review and apply the four factors above, according to the majority.

• Partial Dissenting Opinion: Circuit Judge Alice M. Batchelder disagreed with the majority and argued that due process requires an inquiry into the representativeness of the plaintiffs (which was not done) before a court can issue a collateral estoppel order against a defendant based upon a small number of cases. Judge Batchelder also raised concerns that the majority’s application of non-mutual collateral estoppel against MDL defendants essentially guts the benefits of informational bellwether trials as there is now nothing parties can do to prevent such trial from becoming binding on defendants.

This newsletter will continue to monitor any next steps with respect to this case as the collateral estoppel holding could have significant implications for a variety of mass actions—not just PFAS—moving forward.