The opinion of the court was delivered by: LOWELL A. REED, JR.
This lawsuit is a class action for asbestos-related personal injuries. This memorandum opinion addresses whether this Court has subject matter jurisdiction over this case.
On January 15, 1993, counsel for the plaintiff class (or the "Carlough class") filed the complaint in this action along with motions for class certification and for approval of a proposed settlement agreement ("proposed settlement" or "settlement") between the plaintiff class and the defendants. The complaint alleges that the defendants, members of the Center for Claims Resolution ("the CCR defendants"), are liable to the plaintiff class under the legal theories of (1) negligent failure to warn, (2) strict liability, (3) breach of express and implied warranty, (4) negligent infliction of emotional distress, (5) enhanced risk of disease, (6) medical monitoring, and (7) civil conspiracy. In their complaint, the named plaintiffs allege that jurisdiction is based upon diversity of citizenship and that the amount in controversy for each member of the plaintiff class exceeds $ 100,000.
On the same day as the complaint was filed, the CCR defendants answered the complaint and joined in plaintiffs' request that the class be certified and the settlement agreement approved.
On January 29, 1993, the Honorable Charles R. Weiner of this Court conditionally certified an opt-out class consisting of:
1. All persons (or their legal representatives) who have been exposed in the United States or its territories (or while working aboard U.S. military, merchant or passenger ships), either occupationally or through occupational exposure of a spouse or household member, to asbestos or to asbestos containing products for which one or more of the defendants may bear legal liability and who, as of January 15, 1993, reside in the United States or its territories, and who have not, as of January 15, 1993, filed a lawsuit for asbestos-related personal injury or damage, or death in any state or federal court against the defendants (or against entities for whose actions or omissions the defendants bear legal liability).
2. All spouses, parents, children, and other relatives (or their legal representatives) of the class members described in paragraph 1 above who have not, as of January 15, 1993, filed a lawsuit for the asbestos-related personal injury, or damage, or death of a class member described in paragraph 1 above in any state or federal court against the defendants (or against entities for whose actions or omissions the defendants bear legal liability).
Also on January 29, 1993, Judge Weiner assigned to me the scheduling and review of settlement procedures and the resolution of objections to the settlement itself. On March 1, 1993, I issued a Rule to Show Cause ordering that a preliminary hearing be held, and memoranda of law submitted, as to, inter alia, the relevant considerations in ultimately evaluating the fairness, adequacy and reasonableness of the settlement. At that time, numerous motions and objections were filed relating to certain threshold matters such as justiciability and diversity jurisdiction.
Because these jurisdictional issues relate to the very power of the Court to hear this case and ultimately bind the parties to the settlement, on June 2, 1993, I issued a Scheduling Order setting dates for briefing and argument on all objections to this Court's subject matter jurisdiction. Various objectors filed memoranda of law explaining the legal bases for their objections, to which the named plaintiffs and the CCR defendants (hereinafter the "settling parties") responded. A hearing was held on August 23, 1993 at which time the objectors and the settling parties were heard.
This memorandum addresses the four principal threshold issues raised by the objectors: standing, collusion, mootness and satisfaction of the amount in controversy for purposes of diversity jurisdiction. I do not address all of the objections raised in the memoranda of law and/or at the August 23, 1993 hearing. However, because of the significance of this lawsuit and the large number of parties claiming an interest, it is necessary to consider these threshold issues in considerable detail.
It is fundamental that a federal court lacks jurisdiction to hear any matter that is not a justiciable case or controversy under Article III of the U.S. Constitution, and that an action is not justiciable if the plaintiff does not have standing to sue. Bender v. Williamsport Area School District, 475 U.S. 534, 541-42, 89 L. Ed. 2d 501, 106 S. Ct. 1326 (1986). "In essence the question of standing is whether the litigant is entitled to have the court decide the merits of the dispute or of particular issues." Warth v. Seldin, 422 U.S. 490, 498, 45 L. Ed. 2d 343, 95 S. Ct. 2197 (1975). This question is answered by determining whether the plaintiff has a "personal stake in the outcome of the controversy." Id. at 498-99. Such a personal stake assures "'concrete adverseness which sharpens the presentation of the issues.'" Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 804, 86 L. Ed. 2d 628, 105 S. Ct. 2965 (1985) (quoting Baker v. Carr, 369 U.S. 186, 204, 7 L. Ed. 2d 663, 82 S. Ct. 691 (1962)). The Supreme Court has held that a party has the requisite personal stake if s/he can demonstrate that: (1) s/he personally has suffered a concrete injury in fact, (2) the injury is fairly traceable to the challenged conduct, and 3) the injury is likely to be redressed by a favorable decision. Allen v. Wright, 468 U.S. 737, 751, 82 L. Ed. 2d 556, 104 S. Ct. 3315 (1984) (citing Valley Forge Christian College v. Americans United for Separation of Church and State, Inc., 454 U.S. 464, 472, 70 L. Ed. 2d 700, 102 S. Ct. 752 (1982)).
The plaintiff always bears the burden of establishing the elements of standing. Lujan v. Defenders of Wildlife, 119 L. Ed. 2d 351, 112 S. Ct. 2130, 2136 (1992). And, these elements "are not mere pleading requirements but rather an indispensable part of the plaintiff's case[.]" Id. As such, "each element must be supported in the same way as any other matter on which the plaintiff bears the burden of proof, i.e., with the manner and degree of evidence required at the successive stages of the litigation." Id.
Although these three elements appear straightforward, the Supreme Court has more than once acknowledged that "the concept of 'Article III standing' has not been defined with complete consistency in all of the various cases decided by [the] Court which have discussed it[.]" Whitmore v. Arkansas, 495 U.S. 149, 155, 109 L. Ed. 2d 135, 110 S. Ct. 1717 (1990) (quoting Valley Forge, 454 U.S. at 475). The Article III policies which are served by the standing requirement, however, have remained clear and constant. It is thus helpful to look to these policies when applying the elements of standing to a particular case.
First and foremost, the standing requirement preserves the separation of powers by limiting the matters that the judicial branch may address. Lujan, 112 S. Ct. at 2136; Allen, 468 U.S. at 752. In essence, standing doctrine is "founded in concern about the proper -- and properly limited -- role of the courts in a democratic society." Warth, 422 U.S. at 498. Under our tripartite system of government, pronouncements about general social problems are left to the legislature. Thus, if a plaintiff lacks a personal stake in the litigation at hand, the court finds itself in the position of extending its role beyond that intended for the judiciary under Article III. Allen, 468 U.S. at 750.
Second, the standing requirement improves judicial decision-making because it "assures a factual setting in which the litigant asserts a claim of injury in fact[.]" Valley Forge, 454 U.S. at 472. This factual setting prevents a federal court from passing judgment on ill-defined issues or controversies which could "pave the way for lawsuits which have some, but not all, of the facts of the ease actually decided by the court." Id. In other words, the injury complained of must be sufficiently concrete to inform the court of the consequences of its decision. Indeed, the Supreme Court has recognized that judicial review is effective largely because it avoids issues presented in an abstract form. United States v. Richardson, 418 U.S. 166, 194, 41 L. Ed. 2d 678, 94 S. Ct. 2940 (1974) (Powell, J., concurring).
Third, the standing requirement assures that the federal courts do not become "a vehicle for the vindication of the value interests of concerned bystanders." United States v. Students Challenging Regulatory Agency Procedures(SCRAP), 412 U.S. 669, 687, 37 L. Ed. 2d 254, 93 S. Ct. 2405 (1973). The federal courts are reserved for litigants whose lives will be directly affected by the outcome of the lawsuit. And, the injury-in-fact requirement serves to distinguish those litigants from others with a mere interest in the issue. Id. at 689 n.14. Without this requirement, the federal courts would be reduced to "publicly funded forums for the ventilation of public grievances[.]" Valley Forge, 454 U.S. at 473. Connected with this policy, of course, is the notion that those directly concerned with the questions at issue are likely to present their cases more effectively.
In this lawsuit, the objectors claim that many of the members of the Carlough class do not have Article III standing because they have not sustained an "injury in fact." The objectors note that the Carlough class includes those who have been occupationally exposed to asbestos but who do not manifest any asbestos-related condition (hereinafter "the exposure-only plaintiffs"). And, in their memoranda of law, the objectors point to several state and federal cases which have held that "subclinical injury resulting from exposure to asbestos is insufficient to constitute actual loss or damage to a plaintiff's interest required to sustain a cause of action under generally applicable principles of tort law." Schweitzer v. Consolidated Rail Corp., 758 F.2d 936, 942 (3d Cir.), cert. denied, 474 U.S. 864 (1985); see also Alim v. Vaughn, 1992 U.S. Dist. LEXIS 12503 (E.D. Pa. Aug. 18, 1992); Hannibal v. Lyons, 1990 U.S. Dist. LEXIS 8261 (E.D. Pa. July 2, 1990); Giffear v. Johns-Manville Corp., 1993 Westlaw 349881 (Pa. Super. Sept. 16, 1993); Marinari v. Asbestos Corp., 417 Pa. Super. 440, 612 A.2d 1021 (Pa. Super. 1992). The objectors argue that the lack of a cause of action under applicable state tort law mandates a finding that the exposure-only plaintiffs have alleged no injury in fact for purposes of Article III standing.
In response, the settling parties argue that exposure to a toxic substance is sufficient injury in fact and that, for purposes of Article III standing, it is irrelevant whether the plaintiffs' injuries support a valid legal claim.
It is true that prior to 1970, the test for Article III standing was the so-called "legal interest" test. See Alabama Power Co. v. Ickes, 302 U.S. 464, 478-80, 82 L. Ed. 374, 58 S. Ct. 300 (1938); G. Nichol, Injury and The Disintegration of Article III, 74 Calif. L. Rev. 1915, 1920 (1986). Under that test, a plaintiff only had Article III standing "if the actions of the defendant harmed a 'legal interest' of the plaintiff." Alabama Power Co., 302 U.S. at 478-80. In other words, plaintiffs had to show injury sufficient to sustain a valid cause of action to have standing to sue in federal court.
In Association of Data Processing Service Organizations, Inc. v. Camp, 397 U.S. 150, 25 L. Ed. 2d 184, 90 S. Ct. 827 (1970), however, the Supreme Court jettisoned the "legal interest" test and adopted the "injury in fact" test. According to the Supreme Court in Camp, "the 'legal interest' test goes to the merits" and is thus "quite distinct from the problem of standing." Id. at 152-53 & n.1. With the adoption of the injury in fact test, the Supreme Court "intended the injury standard to insulate the case or controversy determination from the sway of the claim on the merits." Nichol, supra, at 1923-24. In the years since the Camp decision, the Supreme Court has stressed that the requirement of standing "focuses on the party seeking to get his [or her] complaint before a federal court and not on the issues s/he wishes to have adjudicated." Valley Forge, 454 U.S. at 484 (quoting Flast v. Cohen, 392 U.S. 83, 99, 20 L. Ed. 2d 947, 88 S. Ct. 1942 (1968) (emphasis added)). For example, in Davis v. Passman, 442 U.S. 228, 60 L. Ed. 2d 846, 99 S. Ct. 2264 (1979), the Supreme Court reversed the lower court's holding as to standing, and stated:
The Court of Appeals appeared to confuse the question of whether petitioner had standing with the question of whether she asserted a proper cause of action. . . . The nature of petitioner's injury . . . is relevant to the determination of whether she has "alleged such a personal stake in the outcome of the controversy . . ." And under the criteria we have set out, petitioner clearly has standing to bring this suit. . . . Whether petitioner has asserted a cause of action, however, depends not on the quality or extent of her injury, but on whether the class of litigants of which petitioner is a member may use the courts to enforce the right at issue.
Id. at 239-40 n.18 (citations omitted).
In sum, the Supreme Court has made clear that the Article III determination "in no way depends on the merits of the plaintiff's [claim]." Whitmore, 495 U.S. at 155 (quoting Warth, 422 U.S. at 500).
As one commentator put it:
The terminology employed -- injury "in fact" rather than "in law," layperson's injury rather than lawyer's injury -- suggests the Court's desire to convert the case or controversy hurdle to a straightforward and objective measurement uninfluenced by the attractiveness of the cause of action . . .
By employing a test of simple harm, the justices could free the system of constitutional review from ill-fitting common law forms. Injury in fact . . . could be ascertained without "premature value judgments" about . . . the merits of the claim . . .
Nichol, supra, at 1924. This Court has expressly recognized this principle in the context of another nationwide asbestos case:
Standing, which derives from the article III case or controversy requirement, is met when the plaintiff can demonstrate "injury in fact." To what extent that injury is legally cognizable under the laws of the various jurisdictions is a separate inquiry.
In re Asbestos School Litigation, 104 F.R.D. 422, 425 n.1 (E.D. Pa. 1984) (citation omitted), amended in other respects, 107 F.R.D. 215 (E.D. Pa. 1985), aff'd in part and rev'd in part on other grounds, 789 F.2d 996 (3d Cir. 1986).
Other lower courts have also recognized the distinction between the existence of an "injury in fact" and the legal significance of that injury by holding that, for purposes of determining Article III standing, the plaintiff's legal theories must be accepted as valid. See Chiles v. Thornburgh, 865 F.2d 1197, 1202 (11th Cir. 1989) ("just as we accept the validity of the plaintiff's factual assertions, we must also accept the validity of the plaintiff's theory of a cause of action"); Goldwater v. Carter, 199 U.S. App. D.C. 115, 617 F.2d 697, 701-02 (D.C. Cir.) ("For purposes of the standing issue, we accept, as we must [plaintiff's] pleaded theories as valid."), vacated on other grounds, 444 U.S. 996 (1979); see also United States v. Nichols, 841 F.2d 1485, 1498 (10th Cir. 1988). But see Robinson v. Vaughn, 1992 U.S. Dist. LEXIS 19518 (E.D. Pa. Dec. 2, 1992) (court cited to Pennsylvania tort law and held that prisoner exposed to asbestos did not have injury in fact).
It is because of this distinction that many federal courts have dismissed cases for failure to state a claim only after concluding that they have subject matter jurisdiction over the case. See, e.g., Angus v. Shiley, Inc., 989 F.2d 142 (3d Cir. 1993); LFC Lessors, Inc. v. Pacific Sewer Maintenance Corp., 739 F.2d 4 (1st Cir. 1984); Indiana Hi-Rail Corp. v. CSX Transp., Inc., 818 F. Supp. 1254 (S.D. Ind. 1993); Ronwin v. Smith Barney Harris Upham & Co., 807 F. Supp. 87 (D. Neb. 1992), aff'd without op., 996 F.2d 1221 (8th Cir. 1993); Grant v. Coca-Cola Bottling Co., 780 F. Supp. 246 (D.N.J. 1991); Hough v. Merrill Lynch, Pierce, Fenner & Smith, Inc, 757 F. Supp. 283 (S.D.N.Y.), aff'd without op., 946 F.2d 883 (2d Cir. N.Y. 1991); Wilson v. Briscoe, 1990 U.S. Dist. LEXIS 9514 (D.D.C. July 30, 1990).
Almost directly on point is Bowling v. Pfizer, Inc., 143 F.R.D. 141 (S.D. Ohio 1992). In that case, the defendants were manufacturers of heart valves that later proved faulty. The plaintiff class included those implanted with a heart valve that had not fractured. Those plaintiffs wished to recover for their fear or anxiety that their heart valves might fracture in the future. In its decision approving the proposed settlement, the district court held that these class members might not have had a valid cause of action under applicable tort law. Id. at 147-48. Indeed, before the settlement was reached, the defendants had moved to dismiss the claims of these plaintiffs for failure to state a claim upon which relief could be granted. However, because the district court was informed of the settlement negotiations, it delayed ruling on the defendants' motion. Id. Ultimately, the court approved the settlement and never ruled on the motion to dismiss.
Going beyond the case law, it is easy to understand the logic behind the change from the "legal interest" test to the "injury in fact" test. If federal courts must look to whether plaintiffs in federal court under diversity jurisdiction have stated a valid cause of action in order to find that they have standing to sue in federal court, state law and not federal law would control the scope of Article III standing. Indeed, the same factual injury might be sufficient to confer standing in the federal courts of one state but not in the federal courts of another. Federal standing law, therefore, would not only depend on state law, it would vary from state to state. Because standing is a question of federal constitutional law, Phillips Petroleum Co., 472 U.S. at 804, such a lack of uniformity would be undesirable. Also, if a plaintiff had to show a valid cause of action to confer Article III jurisdiction, federal courts could never entertain diversity cases where the existence of the asserted claim under state law was unclear. This is so because standing to sue must clearly exist before a federal court is permitted to reach the merits of a case. Of course, federal courts are often called upon to decide unsettled issues of state law. See, e.g., Silver v. Mendel, 894 F.2d 598, 606 (3d Cir.), cert. denied, 496 U.S. 926, 110 L. Ed. 2d 641, 110 S. Ct. 2620 (1990).
Therefore, I conclude that the applicable legal precedent requires that the question of whether the exposure-only plaintiffs have standing to bring this lawsuit in federal court does not depend on whether they have stated a valid cause of action under applicable tort law. The standing analysis does not end here, however. I must still determine whether, pursuant to federal precedent, the harm alleged by the exposure-only plaintiffs, namely exposure to asbestos, constitutes injury in fact which is fairly traceable to the defendants' conduct and is likely to be redressed by a favorable decision.
To satisfy the first requirement of standing, the exposure-only plaintiffs must demonstrate that they have suffered an injury in fact which is concrete and particularized, and actual or imminent rather than merely conjectural or hypothetical. Lujan, 112 S. Ct. at 2136. By this the Supreme Court means "that the injury must affect the plaintiff in a personal and individual way." Lujan, 112 S. Ct. at 2136 n.1. Put another way, "an interest need only be expressible in terms of the individuals's satisfactions or experiences; but such satisfaction or experiences need not be unique to the litigant." L. Tribe, American Constitutional Law § 3-16, at 117 (2d ed. 1988) (emphasis omitted).
The severity of the injury is immaterial. The Supreme Court and the Court of Appeals for the Third Circuit have explained that "these injuries need not be large, an 'identifiable trifle' will suffice." Public Interest Research Group, Inc. v. Powell Duffryn Terminals Inc., 913 F.2d 64, 71 (3d Cir. 1990) (quoting United States v. Students Challenging Regulatory Agency Procedures, 412 U.S. 669, 689 n.14 (1973)), cert. denied, 498 U.S. 1109 (1991). Indeed, other kinds of non-economic harm have been accepted as Article III injury in fact, including aesthetic harm and emotional distress. Sierra Club v. Morton, 405 U.S. 727, 734-41, 31 L. Ed. 2d 636, 92 S. Ct. 1361 (1972) (non-quantifiable aesthetic and environmental injuries); Clayton v. White Hall School Dist., 875 F.2d 676, 679 (8th Cir. 1989) (emotional and psychological distress).
In Duke Power, the Supreme Court addressed the issue of whether exposure to a toxin is sufficient to confer Article III standing. In that case, the plaintiffs claimed that the future exposure to radiation from two nuclear power plants under construction constituted injury in fact entitling them to challenge the constitutionality of a statute which limited the liability for accidents at nuclear power plants. At the time the suit was brought, the plants were still under construction, and, therefore, plaintiffs had sustained no radiation-related diseases as a result of future emissions. The district court found "immediate" injury to the plaintiffs in "the production of small quantities of non-natural radiation which would invade the air and water" and "a 'sharp increase' in the temperature of two lakes presently used for recreational purposes . . . ." Duke Power, 438 U.S. at 73-74. The Supreme Court agreed that each of these effects constituted injury in fact for purposes of Article III standing analysis:
Id. at 73-74 (emphasis added, citations omitted).
The objectors point to language in Duke Power which appears to limit its holding on standing. At the beginning of the above-cited paragraph, the Supreme Court cautioned that it:
need not determine whether all the putative injuries identified by the District Court, particularly those based on the possibility of a nuclear accident and the present apprehension generated by this future uncertainty, are sufficiently concrete to satisfy constitutional requirements. It is enough ...