March 6, 2024 – Joining a case management order was not enough to bind a group of plaintiffs to summary judgment decisions against other plaintiffs who’d joined the order where no privity between them existed, the U.S. Court of Appeals for the Seventh Circuit has ruled in Cannon et al. v. Armstrong Containers, Inc. et al., No. 22-2636 (Feb. 9, 2024.)

In 2015, the U.S. District Court for the Eastern District of Wisconsin found itself overseeing a spate of lawsuits against the manufacturers of white lead carbonate (WLC). The cases were filed between 2007 and 2011.

WLC is a main ingredient in lead paint, which is common in old houses in Milwaukee. The cases advanced theories of negligent- and strict-liability failure-to-warn claims.

One of the lawsuits, which was filed under Federal Rule of Civil Procedure 20(a)(1) had more than 160 plaintiffs. Maniya Allen was the lead plaintiff. FRCP 20(a)(1) permits multiple plaintiffs to join a single action if certain conditions are met.

Three of the plaintiffs in the Allen lawsuit, one of whom was named Trammell, later severed their claims into a separate lawsuit, to cure a problem with diversity.

Case Management Order

The plaintiffs collectively proposed a case management order (CMO) under which the court would hold several “bellwether trials” of representative cases.

The district court adopted most of the plaintiffs’ proposed CMO, over the defendants’ objections. Under the CMO adopted by the court, the trials would go forward in four waves.

Wave 1 featured three of the oldest cases. Wave 2 was made up of eight cases from the Allen lawsuit that would run concurrently with the trial of the Wave 1 cases.

After a series of motions and an appeal to the Seventh Circuit (Burton v. E.I. du Pont De Nemours and Co., 994 F.3d 791 (7^th Cir. 2021 (Burton II)), the district court separately granted summary judgments to the Wave 1 and Wave 2 defendants.

The defendants then moved for summary judgment against the remaining plaintiffs: 1) the Trammell plaintiffs and the Allen plaintiffs who were not part of Wave 2 (Group 3); and 2) the plaintiffs who’d had no representative in the litigation to date (Group 4).

The plaintiffs appealed.

Wave 2 Plaintiffs

The Wave 2 plaintiffs argued that the district court erred by denying a motion for reconsideration, made at the same time as an objection to the defendants’ motion for summary judgment.

The motion for reconsideration was supported by new evidence and new arguments regarding defendants’ duty relating to a threat not mentioned in the original complaints: lead dust.

The Wave 2 plaintiffs argued that while modern consumers might have known about the dangers of lead paint, they were less aware of the threat posed by lead dust.

Judge Amy St. Eve began her opinion for a three-judge panel by explaining that Seventh Circuit caselaw bars a party from using a motion for reconsideration to introduce new evidence that could have been introduced earlier.

But the Wave 2 plaintiffs argued that a motion for reconsideration was proper after a “controlling or significant change in the law” – a change the Wave 2 plaintiff argued the Seventh Circuit made in the Burton II decision.

In that case, the Seventh Circuit held that under Wisconsin law, a negligence claim over a product’s use requires proof of a defect.

But St. Eve pointed out that Burton II addressed negligence claims, while Wave 2’s remaining claims were premised on strict liability.

Judge St. Eve acknowledged that the Wave 2 plaintiffs may have chosen not to appeal the district court’s ruling on their negligence claims because they thought they’d win on their strict liability claims.

“While that may have seemed a sound strategic decision at the time, the fact that our ruling in Burton II proved that decision costly does not provide grounds for reconsideration,” St. Eve wrote.

Group 3 Plaintiffs

The district court granted summary judgment against the Group 3 plaintiffs based on the law-of-the-case doctrine. The doctrine presumes that a ruling made at an earlier stage of a lawsuit will be followed throughout the lawsuit.

Judge St. Eve reasoned that the doctrine applied to the Group 3 plaintiffs because: 1) they’d joined the Wave 2 plaintiffs under FRCP 20; and 2) the Wave 2 plaintiffs conceded the negligence issue.

“Thus, when the Wave 2 plaintiffs conceded their negligence claims at summary judgment, that concession on a common issue bound the Group 3 plaintiffs,” St. Eve wrote.

The Group 3 plaintiffs pointed out that only some of them engaged in discovery. They argued that the court’s use of the Wave 2 plaintiffs as “bellwethers” in effect severed them from the complaints their case sprang from.

“Here, however, there is no indication that either the district court or the parties intended severance to occur,” Judge St. Eve wrote. “There is also no evidence that the parties understood otherwise.”

Group 4 Plaintiffs

The district court granted summary judgment against the Group 4 plaintiffs on the grounds of issue preclusion.

But Judge St. Eve pointed out that the Group 4 plaintiffs were not part of Wave 2 or Group 3 and filed their own cases, which the district court stayed pending the outcome of the earlier waves, under the terms of the CMO.

Applying Wisconsin law, St. Eve concluded that issue preclusion did not apply to the Group 4 plaintiffs because they were not in privity nor had sufficient identity of interests with the Wave 2 plaintiffs.

The defendants argued that the Group 4 plaintiffs consented to be bound to the ruling against the Wave 2 plaintiffs by joining the CMO.

But reliance on that fact, Judge St. Eve wrote, “is misplaced. Neither the plaintiffs’ motion nor the CMO mentioned preclusion.”

St. Eve also pointed out that federal appellate courts have generally recognized that bellwether trials in separate, aggregated cases are usually non-binding.

The Seventh Circuit reversed the district court’s judgment as to the Group 4 plaintiffs and remanded the case to the district court.