CORONAVIRUS: CLASS ACTION
Erin Brockovich to the Rescue on Covid-19? The World Waits
The very tangible disaster being wreaked upon national economies as a whole, and the harm to millions of wage earners and businesses would seem particularly fertile ground for a whole raft of class action suits.
There is that moment in American legal dramas in film or on television, where poor but honest folks and mendacious polluters, the latter sitting in their hand-tailored suits, are in court, awaiting the verdict in a momentous class-action suit. The jury foreman stands and says, “Guilty! And we award the plaintiffs eighty gazillion dollars in damages” — and the courtroom crowd has witnessed virtue triumph over naked power. Already, Covid-19 has opened the floodgates for class action lawsuits and by the time the pandemic ebbs, there will surely be enough damage to go around for a whole court system’s worth of class action suits.
Surely many readers will remember the film Erin Brockovich. In its delightful but Hollywood-style, melodramatic way, it depicts some heroic heavy lifting by an unorthodox consumer advocate who took the lead role in a spectacular class-action lawsuit against energy behemoth Pacific Gas and Electric. The company had been secretly poisoning the groundwater around the town of Hinkley, California with some highly toxic hexavalent chromium, instead of more typical, and somewhat less toxic pollution.
This toxic metal’s uncontrolled leaching into the town’s soil and groundwater was causing tumours and other life-threatening illnesses, but the company had been falsifying the incriminating evidence of their crime. Brockovich’s unflagging doggedness, her deep, instinctive rapport with ordinary people, a seductive smile, and a real sixth sense for the truth of things all helps her win the day — and gain an Oscar, among other hardware, for the actress’s exertions.
Class action lawsuit, you mumble? What’s that? Class actions are unfamiliar to most South Africans because they have only been part of the local legal agenda since a major case from 1994.
The Helen Suzman Foundation’s journal explains that in the South African context, “The Children’s Resources Centre Trust case sets out procedure for certification of class actions. The court must consider the existence of a class identifiable by objective criteria; a cause of action raising a triable issue; that the right to relief depends upon the determination of issues of fact, or law, or both, common to all members of the class; that the relief sought, or damages claimed, flow from the cause of action and are ascertainable and capable of determination; that where the claim is for damages there is an appropriate procedure for allocating the damages to the members of the class; that the proposed representative is suitable to be permitted to conduct the action and represent the class; whether given the composition of the class and the nature of the proposed action a class action is the most appropriate means of determining the claims of class members.”
While new to South Africa, class action suits have long been part of the US legal landscape, and, in fact, they have common law roots in English legal tradition stretching back for hundreds of years.
In essence, rather than one party suing another over some infraction of law or the causing of injury or harm, or a tort, a class action means a group of individuals who, having all been harmed in the same way, band together to have an attorney represent them all, together, in the same matter.
If they win their case, the lawyer – usually operating on a contingency basis – is compensated from the money paid by the losing party and the class action winners then divide the remaining funds that have been paid in settlement. Similarly, those rapidly mounting legal bills are also paid from the winning payment, and the individual plaintiffs also agree not to settle independently with the offending party – and, generally, not to pursue further legal action once the settlement is reached. If the loser was a private party, as I understand it, some element of the government may also elect to pursue separate criminal charges, if they are relevant to the circumstances of the now-decided class-action suit.
All this sounds pretty simple, in theory, but, often, the challenges come in proving the causal relationship between the acts (and their decisions) of the offending party and their direct responsibility in the events, and the tangible and avoidable harms suffered by the plaintiffs. Often, such legal battles can make the front pages of newspapers, especially when the harm is something terrible that anyone could have suffered, and if the settlement comes with plenty of zeros attached.
In all likelihood, there may be lots of wringing of hands by the losers, saying that such an outrageous decision will drive the loser-victims out of business or into the poor house. Bankrupt. Kaput. And with all those lost jobs, and with the destruction of their industry, and the consequent wreckage to the entire national economy. There may well be appeals up through the courts for years.
To a non-lawyer like this writer, the Covid-19 pandemic, the very tangible disaster being wreaked upon national economies as a whole, and the harm to millions of wage earners and businesses would seem particularly fertile ground for a whole raft of class action suits. And such considerations would not even include any medical disasters to victims now, and – potentially – any that are the result of any unanticipated but deleterious side effects or claimed harms from treatments and vaccines quickly rushed into service. And then there will be all those culprits responsible for the quackery offered as cures.
Then there can be the real afflictions suffered by first responders, nurses, doctors, and other frontline personnel. Think of all those claims of illnesses by US military personnel from that country’s use of Agent Orange during the Vietnam War, or the suits on behalf of those who suffered from toxic materials released in the immediate aftermath of the collapse of the Twin Towers attacks on 9/11. In the US, Republicans in Congress are pressing for liability protection that will protect businesses from lawsuits once they reopen, if their workers get sick.
All of these problems can generate whole classes of people who will be tempted to join in class action suits. Now, just for the exercise of it, multiply that total of victims by the number of countries whose respective legal systems permit class-action suits and one can begin to calculate just how big an area of litigation this will become worldwide.
Determining who to name as the offending parties can also become a minefield. Will pharmaceutical firms, researchers and other scientists be named as the major culprits for proceeding swiftly (as circumstances rightly demanded, obviously), but without the kind of cautions that are the norm for new treatments, vaccinations and curatives, if side effects come to light both quickly or eventually? Or, will all of the epidemiologists, medical modellers, and economists who helped shape the US national responses both to the disease itself and the resulting economic heart attack become liable? Or, will the object of some of these suits aim even higher, attempting to name President Donald Trump and his closest advisers as the ultimate guilty parties, along with state-level officials across the US, on the grounds that the various national policies and state closures were woefully mishandled and caused the avoidable deaths of thousands?
Normally, the rule is that the president cannot be sued on grounds of sovereign immunity in the pursuit of his duties and legal obligations and president. But as an editorial on 12 May in The New York Times put the issue:
“Presidents have a difficult job. They may enjoy certain protections the rest of us don’t, including immunity from indictment while in office (though that is a matter of legal interpretation, not law). But that doesn’t mean they are free to ignore the law as they see fit. Presidents Nixon and Clinton both got that message loud and clear, from a unanimous court. It’s doubtful that the court under Chief Justice John G. Roberts Jr., which is as polarized as it has been in a century, will see eye to eye. But Tuesday’s cases [about prosecutorial access to Donald Trump’s tax returns] shouldn’t be difficult, and for a simple reason: Presidents are not, and cannot be, above the law.”
Historically, sovereign immunity in the US at both the state and federal levels has meant the government must agree to be a party to a legal proceeding in which it is to be named. But perhaps the current dolorous circumstances may demand new interpretations? Might this be the case at the present time in which there is much public opprobrium towards the Trump administration’s erratic, confused, contradictory, dilatory, and even duplicitous responses (as well as those of various state governments)? Might this background even push the government into demonstrating a willingness to participate in some suits in order to contest charges? These would need to be legal actions in which vast groups of people allege real harms suffered by those people on the basis of demonstrated government decisions, or even the lack of decisions.
Consider this possibility: What would happen as states progressively lift restrictions on people’s movements and gatherings, and a virulent second viral wave ensues, leaving officials vulnerable to charges they failed to take sound medical and epidemiological advice into consideration before making such decisions? Alternatively, consider the possibility that others may push for class action suits over tangible harms that derived from the way the government waited a month after the initial notifications from China and the WHO about the new virus, before they embarked on real courses of actions. All of this will be new territory.
Now, speaking of China, here is another avenue where class action suits might well become fertile legal (although not necessarily successful) action. South African readers may be familiar with the long-running, so far unsuccessful, effort by the Khulumani Support Group to claim reparations from international corporations operating in the US that also had significant presences in South Africa during apartheid.
Under America’s Alien Tort Claims Act of 1789 (the ATCA), according to Christin Gowar, writing in Speculum Juris:
“The ATCA confers subject matter jurisdiction on a Federal Court when a plaintiff, who is an alien, sues for a tort based on an act that violates either the law of nations or a treaty of the US. In this context, ‘tort’ means wrongs people have suffered or ‘personal injuries such as piracy theft’…. Victims from around the world have brought claims in the U.S. courts, under the ATCA, for human rights violations including torture, genocide, summary execution, and arbitrary detention.”
While this law was largely dormant for two centuries, following the 1980 decision in the matter of Filartiga v Pena-Irala, the Supreme Court held “that courts must interpret international law not as it was in 1789, but as it has evolved and exists among the nations of the world today”. That made aspects of modern interpretations of human rights violations viable grounds for pursuing justice.
More recent court decisions have limited the range of the ACTA and suits brought to courts under it. However, given the incendiary rhetoric of these days, and the Trump administration’s charges that the Chinese government or WHO, or both, are implicated in nurturing, spreading, or failing to notify the rest of the world about the virus, this might encourage class-action suits for damages pursued against the Chinese government and other Chinese organisations and institutions with assets in the US. Similarly minded American groups might join in support as well.
In fact, as Erica Rutner noted for the American Bar Association on 7 April, there are already class action suits directed against China. “…[T]here is no question that various governmental entities will face class actions arising from COVID-19. Perhaps the most attenuated of the class suits filed thus far is that of Alters v. People’s Republic of China, No. 1:20-cv-21108 (S.D. Fla.), brought against the People’s Republic of China and various other Chinese government entities. The plaintiffs allege that the defendants ‘knew that COVID-19 was dangerous and capable of causing a pandemic, yet slowly acted, proverbially put their head in the sand, and/or covered it up for their own economic self-interest.’ The plaintiffs further expound that China’s failure to report and contain the COVID-19 virus more quickly, or disclose the actual number of cases, created ‘essentially a giant Petri dish’ in the region near Wuhan, sparking the global COVID-19 outbreak. Thus, the plaintiffs conclude, the defendants’ conduct caused and will continue to cause personal injuries and deaths, as well as other damages.”
Turning to South Africa’s own circumstances, as noted earlier, it is only since the mid-1990s that class action suits have become a feature of South African jurisprudence. As the Dentons law firm noted, “…in South Africa, class actions were only introduced after 1994. The Bill of Rights, as set out in Chapter 2 of the Constitution of the Republic of South Africa 1996 (the Constitution), entrenches certain fundamental human rights, which include the recognition of a class action.
“Section 38(c) of the Constitution provides ‘…anyone listed in this section has the right to approach a competent court, alleging that a right in the Bill of Rights has been infringed or threatened, and the court may grant appropriate relief, including a declaration of rights. The persons who may approach a court are —… (c) anyone acting as a member of, or in the interest of, a group or class of persons…’ ”
In fact, it was the Treatment Action Campaign’s (TAC) efforts to ensure low-cost medicines and treatment for all South Africans were made available in response to the nation’s HIV/AIDS pandemic that gave life to this guarantee.
While the original impetus for the TAC’s efforts focused on the high cost of critical drugs, according to activist Mark Heywood writing in a review article in the Journal of Human Rights Practice, “…Over the coming years, TAC’s experience in campaigning for the right to health demonstrated that health rights, when seriously pursued, cannot be narrowly contained or their violation blamed solely on profiteering from medicines. The responsibility to protect and promote human rights in countries that have made them justiciable has implications for the conduct of government in most spheres of life. The rights to dignity and equality, for example, impact (positively or negatively) upon almost every sphere of social life and political governance. TAC also learned in developing countries that governmental neglect of public health, even by democratic pro-poor governments such as the African National Congress (ANC) in South Africa, can be as much of a barrier to the right to health as profiteering by pharmaceutical companies or the consequences of some aspects of economic globalization.…”
In keeping with already ongoing class action suits outside South Africa and the now-entrenched right to pursue them, is it impossible to imagine such suits in South African courts over tangible harms suffered by classes of people ranging from the owners of small and medium enterprises in nearly every business category to now-unemployed, poverty-stricken individuals?
Rutner has also explored other class action suits already being pursued in the US. As she writes, “…it is no surprise that mere weeks after COVID-19 began spreading, a host of class actions had already been filed in relation to the virus. Indeed, on March 20, 2020, one week after the United States declared a national emergency concerning the novel COVID-19, over half a dozen class actions relating to the pandemic were on file. As the fallout from COVID-19 deepens, there is little question that more and more cases will be filed. Some cases will be brought by individuals with legitimate grievances. In others, the driving force will be attorneys looking to capitalize on this new reality. But, whatever the motives, one thing is clear: COVID-19 will lead to an avalanche of class disputes.”
She adds, “Among the first suits to be filed, and certainly a hotbed of future disputes, are securities class actions involving COVID-19. At least two securities cases have already been brought. One, Douglas v. Norwegian Cruise Lines, No. 1:20-cv-21107 (S.D. Fla.), was brought against Norwegian Cruise Lines on behalf of investors who bought or acquired stock between February 20, 2020, and March 12, 2020. The plaintiffs claim that the cruise line made false statements in its February Security and Exchange Commission filings, which touted the company’s strong financial performance despite the coronavirus outbreak and the company’s confidence in its preventive measures to reduce exposure and transmission of the virus.”
Rutner also describes issues with the Uber ride-hailing service “because Uber does not acknowledge drivers as employees entitled to paid sick leave, the drivers ‘will feel the need to continue working in order to support themselves, even if they feel ill.’ Thus, the plaintiffs conclude that Uber’s failure to comply with California’s labor law creates an immediate danger to both drivers and the general public.” In fact, businesses across the nation face the prospect of sick employees who should not be coming into work. Although many businesses are closed, there are still millions of people working in businesses considered essential and that therefore remain open to the public.
Moreover, Rutner adds, “The field of consumer rights is another hotbed of class litigation arising from COVID-19. Indeed, several consumer class actions are already pending. Two are against the makers of the hand sanitizers Purell and Germ-X, respectively: Gonzalez v. Gojo Industries, Inc., No. 1:20-cv-00888 (S.D.N.Y), and David v. Vi-Jon Inc., No. 3:20-cv-00424 (S.D. Cal.). The suits are brought on behalf of all purchasers of the products in the relevant jurisdictions (New York and California) and allege that the defendants falsely advertised their hand sanitizer as being effective at preventing the flu and other viral diseases.”
Still, other suits are moving forward on behalf of West Virginia homeowners, facing foreclosures as they could no longer service their loans, with plaintiffs arguing “it is inappropriate to conduct non-judicial foreclosure sales because the public auctions cannot be conducted consistent with the principles of an appropriate time, place and manner of a commercially reasonable public auction, as required under West Virginia law and the parties’ contracts.”
The challenge, of course, is that neither in South Africa nor in the US – nor any other nation, really – are people or governments even close to being out of the woods of Covid-19’s dangerous landscape. People will reasonably (and some not so reasonably) believe they have rights to pursue their grievances because of the harms others have inflicted upon them in this Covid-19-infested world.
Will the courts be able to respond fairly and equitably in these cases? Will governments and senior officials find themselves assailed on all sides in this thicket? How will the damages be evaluated or apportioned? Will courts around the globe be overwhelmed by all this? Will legislatures move to restrict any liability as a result of such questions – just as proposals are already being made in the US Congress over aspects of emergency economic stimulus programs. And will justice – however it ends up being defined in these extraordinary circumstances – be swift and fair?
Or, instead, will it take on the characteristics of Charles Dickens’ infamous fictional legal dispute, Jarndyce v Jarndyce — in his novel, Bleak House? That case dragged on for so many generations, the legal costs had finally consumed the entire disputed estate, leaving the rival claimants with nothing at all. DM
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