Class Action Dilemmas: Pursuing Public Goals for Private Gain

By Deborah R. Hensler; Nicholas M. Pace et al. | Go to book overview
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As part of our research on this litigation, we conducted interviews with a number of the key plaintiff attorneys, and attorneys and corporate counsel for the defendants. We also interviewed representatives of public interest groups. Finally, we reviewed many of the pleadings and papers filed in the class actions cited here, as well as other documents including newspaper and magazine articles, newsletters, press releases, and internet web site postings.
Cox v. Shell Oil Co., No. 18,844 (Tenn. Ch. Ct. Obion Coun 1995) and related cases Beeman v. Shell Oil Co., No. 93-047363 (Tex. Dist. Ct. Harris County filed Sept. 1993); Spencer v. Shell Oil Co., No. CV-94-074 (Ala. Cir. Ct. Greene County filed Nov. 1994).
Six million units is a commonly cited "worst-case" figure and comes from a U.S. Brass advertisement. In a response to an interrogatory, outside counsel for Shell Oil Company stated, "Based on limited information, using a variety of assumptions, it is our best estimate that approximately three million mobile homes, one million single family dwellings and 700,000 units in multiple unit structures were built from 1978 through 1993 containing polybutylene pipe and acetal insert fittings." Answers and Objections of Shell Oil Company to Intervenors' Second Set of Interrogatories, Exhibit A to Intervenors' Memorandum Specifying the Incomplete Nature of the Settlement Agreement ( Aug. 21, 1995) (hereinafter Intervenors' Memorandum).
See, for example, the Texas Supreme Court's decision in Amstadt v. U.S. Brass, 919 S.W.2d 644, 647 ( Tex. 1996) discussing failures of the fittings. The court notes, "Cracks developed in the Celcon fittings that eventually caused leaks. At trial, the parties vigorously disputed what caused the fittings to fail. Some of the experts testified that degradation of the Celcon from exposure to the households' chlorinated water caused the cracks in the fittings. Others testified that inadequate design, defective manufacture, and improper installation, or a combination of these problems along with chemical degradation. . . caused the fittings to crack."
Hoechst Celanese stopped selling Celcon for use in plumbing systems in site-built homes in 1986.
A number of these municipalities were experiencing quite extensive problems. For example, a Chicago Tribune article reported that San Antonio had installed about 60,000 plastic service pipes between 1966 and 1978 and was experiencing failures at the rate of 1500 a month. Casey Bukko, "Suit Adds Twist to Plastic-Pipe Issue: $50 Million San Antonio Case May Give City Lawmakers Pause", Chicago Tribune, Nov. 13, 1986, at 3.
Michael Diehl v. General Homes Corp., No. 87-21479 (Tex. Dist. Ct. Harris County 1988).
The trial court ruled that the statute of limitations barred the negligence claim of many of the homeowners, but rendered judgment for most households under the Deceptive Trade Practices Act. Appeal of the DTPA claims in this and two other polybutylene actions went all the way to the Texas Supreme Court. It found, in 1996, for the defendants on the grounds that the DTPA was designed by the legislature to protect consumers from any deceptive trade practices made in connection with the purchase or lease of any goods or services, but was not intended to reach upstream manufacturers and suppliers when their misrepresentations are not communicated to the consumer. Amstadt v. U.S. Brass, 919 S.W.2d 644 ( Tex. 1996). Many of the homeowners settled their claims with the defendants early in the appeals process.
Both Moriarty and Fleming later participated in polybutylene class actions, and Fleming brought some statewide class actions.
One of our interviewees noted that algorithms are often used in mass torts to help determine the aggregate settlement. But he also noted that if the underlying values of the individual claims are wrongly estimated because of missing or inaccurate information about those claims or about the population that would be covered by the settlement (such as in many class actions where the number of potential claimants is not known with any certainty), the aggregate settlement dollars may end up not being a good reflection of the true aggregate value of the injury.
Lorie Hearn, "Problem Pipes Trace Suspect Plastic Plumbing in Attic, Garage and Bath Walls", San Diego Union-Tribune, July 11, 1993, at H-1.
We requested, but did not receive, records of the activity of the PCG, such as how many claims were handled a month, how many leaking systems were repaired, and how many systems were actually replaced.
The PCG still exists and responds to consumers with polybutylene plumbing problems who are not covered by the main class action settlement of the polybutylene litigation. It subcontracts


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Class Action Dilemmas: Pursuing Public Goals for Private Gain
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