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Introduction

COMES NOW, objecting class member Kenneth Rowe, represented by Trial Lawyers for Public Justice ("TLPJ"), and files this Opposition to the Joint Motion for Reaffirmance of Preliminary Certification of a Mandatory Settlement Class and Preliminary Approval of Amended Class Action Settlement Agreement. Mr. Rowe is a current resident of Dallas, Texas and is a former smoker of "Chesterfield" cigarettes, which were manufactured by defendants Liggett Group, Inc. ("Liggett"). See attached Affidavit of Kenneth Rowe. TLPJ is a national public interest law firm headquartered in Washington, D.C. and dedicated to advancing consumer and victims' rights, environmental protection and safety, civil rights and civil liberties, occupational health and employee rights, and the protection of the poor and the powerless.
Since its inception, TLPJ has prosecuted numerous class actions as part of its public interest litigation efforts. To date, TLPJ has employed the class action device in over 20 different cases in such matters as workers' rights, environmental protection, civil rights, and consumer fraud. Our experience in these cases has been that class actions, properly utilized, can be a powerful tool for the vindication of victims' rights.
At the same time, TLPJ recognizes that, improperly utilized, class actions can be a powerful tool for the elimination of victims' rights. Accordingly, over the years, TLPJ has regularly challenged egregious class actions when they came to light – particularly class actions that deprive class members seeking money damages of their right to opt out or that purport to settle future, unaccrued claims. In that context, through the undersigned counsel here, TLPJ recently represented class member Cydne Westmoreland in objecting to the class certification and settlement in Walker v. Liggett Group, Inc. – the case in which the Hon. Charles Haden rejected essentially the same class action and settlement that has again been proposed here. See 175 F.R.D. 226 (S.D.W.Va. 1997). Now, in a blatant example of forum shopping, the settling parties have asked this Court to sidestep Judge Haden's ruling and permit Liggett to cut off the vast majority of tobacco-related claims against it.
TLPJ files this opposition because this settlement is so fatally defective that it should not even receive preliminary approval from this Court. As explained below, recent decisions of the U.S. and Alabama Supreme Courts make crystal clear that this proposed settlement could not possibly meet the requirements of Alabama Rule 23. Permitting any further proceedings in this case would be a waste of time and resources, since no evidence exists that could justify approval of the settlement and class certification under any provision of Rule 23. For this reason, we urge the Court to reject this settlement outright.

Background
This is the third attempt by Liggett to use the judiciary to help it avoid liability for injuries caused by its tobacco products. First, on March 20, 1997, Liggett announced the filing of a class action settlement in this case that purported to resolve all tobacco-related claims against Liggett that presently exist, as well as any future claims that accrue over the course of the next 25 years. Eight days after that filing, the Alabama Supreme Court handed down its decision in Ex parte Holland, 692 So.2d 811 (Ala. 1997), which held that that Ala. R. Civ. P. 23(b)(1)(B) is "inappropriate as a basis on which to certify a mandatory class action" due to the possibility that tort liabilities will render a defendant insolvent. Id. at 822. On April 23, certain members of the Fletcher class moved to stay dissemination of the class notice and to set aside the proposed settlement on the ground that Holland established that the proposed class certification in Fletcher was not proper. At that point, the original Fletcher settlement was stalled in its tracks.
Less than a month later, in an attempt to avoid the death-knell of Holland, the settling parties filed a virtually identical class settlement in West Virginia federal court. See Walker v. Liggett, et al., 2:97-0102 (S.D.W.Va.). Like the original Fletcher deal, the proposed settlement in Walker included everyone in the country who has ever been exposed to smoke from any cigarette, whether manufactured by Liggett or not – either by smoking or via second-hand exposure – and everyone who may suffer from such exposure anytime within the next 25 years. Thus, the class not only included "exposure-only" victims who have not yet gotten sick from tobacco smoke, but it also included individuals who had not yet been exposed to Liggett's tobacco products.
Although Walker received preliminary approval on May 19, 1997, the settlement was quickly scuttled as a result of the intervening U.S. Supreme Court decision in Amchem Products, Inc., et al., v. Windsor, 117 S. Ct. 2231 (1997), which was handed down on June 25, 1997. There, the Supreme Court rejected a enormous class settlement of millions of present and "exposure-only" asbestos victims on the ground that the "sprawling class" could not possibly meet the various certification criteria of Federal Rule of Civil Procedure 23. In the wake of Amchem, TLPJ moved to vacate the preliminary certification of the Walker settlement on the ground that Liggett's deal was unapprovable on its face. The district court agreed, and Liggett's settlement – once again – was dead in the water. See 175 F.R.D. 226. Although Liggett filed an appeal of that decision, it has repeatedly staying briefing of the appeal on the ground that it was attempting to work out a new deal with the plaintiffs.
Liggett has now abandoned the federal courts of West Virginia and renewed its request to this Court to approve yet a third version of its unprecedented, nationwide, no-opt-out, present-and-future-victim settlement class. Having made only minor improvements in the substance of the settlement and a cosmetic restructuring of the class through nominal subclassing, Liggett asks this Court to bless essentially the same agreement it first filed in this Court in March 1997. Critically, like the prior versions of this settlement, the new agreement does not provide any details regarding how settlement proceeds will be distributed among the various conflicting subclasses that have supposedly received separate representation here. Thus, rather than actually addressing the conflicts within this class, Liggett's efforts at subclassing reflect no more than the appointment of new representatives to bless the same settlement that had previously been reached by a single set of counsel purporting to represent the entire class.
This Court should reject Liggett's request outright. As we now explain, under the law announced by the Alabama Supreme Court in Holland and by the U.S. Supreme Court in Amchem, the class action settlement proposed here cannot survive even minimal scrutiny.

I. Amchem Precludes Certification of This Settlement-only Class Action.

Under the United States Supreme Court's decision in Amchem Products, Inc. v. Windsor, 117 S. Ct. 2231 (1997), the monstrously broad class proposed here cannot possibly satisfy the typicality or adequacy of representation requirements imposed by Rule 23.
A. Amchem Demonstrates that this Class Could Never Meet the Typicality Requirement of Rule 23(a)(3).
Because this class encompasses a huge number of people who possess (or someday in the future will possess) an astonishing variety of claims raising inherently individual issues, Rule 23(a)'s requirement of "typicality" could never be satisfied. Liggett basically acknowledges that the only "typicality" among the class members' claims is supplied by their joint interest in obtaining a fair settlement. See Joint Memo. of Law at Pt(A)(1)(c) ("all class members' claims are typical because . . . they create a common interest in the benefits of the Amended Class Action Settlement Agreement"). But such bootstrapping of the certification inquiry to a court's review of the fairness of a proposed settlement is exactly the approach that was repudiated in Amchem, which established that "it is not the mission of [a] Rule 23(e) [fairness inquiry] to assure the class cohesion that legitimizes representative action in the first place." 117 S. Ct. at 2249.
In Amchem, the Supreme Court held that the common interest of the asbestos-exposed individuals who were members of that nationwide class in securing a "fair" settlement could not constitute a "common question" for purposes of Rule 23(b)(3)'s predominance requirement; instead, the predominance "inquiry trains on the legal or factual questions that qualify each class member's case as a genuine controversy, questions that preexist any settlement." 117 S. Ct. at 2249 (emphasis added). In an accompanying footnote, the Supreme Court added that, "[i]n this respect, the predominance requirement of Rule 23(b)(3) is similar to the requirement of Rule 23(a)(3) that ‘claims or defenses' of the named representative must be ‘typical of the claims or defenses of the class.' The words ‘claims or defenses' in this context . . . ‘manifestly refer to the kinds of claims or defenses that can be raised in courts of law as part of an actual or pending lawsuit.'" Id. at 2249 n.18 (quoting Diamond v. Charles, 476 U.S. 54, 76-77 (1986)) (emphasis added). Thus, Amchem makes clear that Rule 23(a)(3)'s typicality requirement -- which applies to all class actions under Rule 23, including this one -- cannot be met by class members' allegedly common interest in maximizing their recoveries under a settlement; instead, it must be measured according to the actual claims asserted in the complaint as part of an actual lawsuit.
Under this analysis, this class could never satisfy the typicality requirement of Rule 23(a). To begin with, the class includes everyone in the country who has ever been exposed to smoke from any cigarette, whether manufactured by Liggett or not – either by smoking or via second-hand exposure – and everyone who may be so exposed anytime within the next 25 years. Some of these individuals already suffer from tobacco-related disease; some have not yet manifested any injury from cigarette smoke; and some have not yet even inhaled the smoke that could form the basis of some future claim against Liggett. Not only do these claims vary widely in character, in terms of exposure, smoking history, types of injuries, and differences in state law, but the "future" claims of the exposure-only and pre-exposure class members have not yet even accrued. Moreover, the class includes any entity (except the states) that has (or will have) a tobacco-related economic-loss claim against Liggett. Given this unique and varied mix, the only "typical" interest conceivably shared by the class members is in maximizing their respective recoveries via a settlement. Yet Amchem teaches that typicality must be measured according to the "claims or defenses that can be raised in courts of law as part of an actual or impending lawsuit" (117 S. Ct at 2249 n.18) – a test that cannot possibly be met in a case where, as here, many of the claims have not even accrued and, in any event, are riddled by factual and legal differences.
This result is supported by the lower court proceedings in Amchem. In its decision decertifying the class, the Third Circuit held that the class of asbestos victims, which included a "hodgepodge of factually as well as legally different plaintiffs," could not satisfy the typicality requirement of Rule 23(a)(3). Georgine v. Amchem Products, Inc., 83 F.3d 610, 632 (3d Cir. 1996). The Court of Appeals wrote that, "[e]ven though the named plaintiffs include a fairly representative mix of futures and injured plaintiffs, the underlying lack of commonality necessarily destroys the possibility of typicality." Id. Although the Supreme Court did not ultimately reach the question of typicality when it affirmed the Third Circuit's decision in Amchem, it wholeheartedly endorsed the Court of Appeals' approach of restricting the typicality inquiry to the claims and defenses raised in the class complaint. See 117 S. Ct. at 2249 n.18. That approach, applied here, yields the inevitable conclusion that this class could never meet the typicality requirement of Rule 23(a)(3).

B. Amchem's Holding Regarding Adequacy of Representation Defeats Class Certification Here.

As one federal court has already concluded, the Amchem decision also precludes any finding that the class in this case has been adequately represented. See Walker v. Liggett Group, Inc., 175 F.R.D. 226 (S.D.W.Va. 1997). Like Amchem, this class encompasses both present and future personal injury victims who have conflicting claims to the settlement proceeds. As in Amchem, the presently-injured class members have a strong interest in maximizing current payouts under the fund, whereas the future victims – as the name implies – want to insure that there will be an adequate, inflation-protected fund to pay their damages in the future. Thus the interests of these class members are flatly in conflict, rendering the settlement unapprovable under Amchem. Indeed, this case is even more problematic than Amchem, given that Liggett's proposed class "dwarfs that considered by the Supreme Court." Walker, 175 F.R.D. at 232. As the Walker court put it:
The class is so uniquely expansive as to hold within its confines persons ranging in age from infants in utero to individuals such as All Mohammed Hussein, who currently smokes sixty (60) cigarettes everyday. The various combinations of subclasses within this gargantuan assembly of plaintiffs would appear to defy definition, much less division.

175 F.R.D. at 232 (internal footnote omitted).
Liggett's post-hoc effort to remedy the representational inadequacies inherent in this proposed class by appointing subclass representatives at this point is "equivalent to closing the barn door after the horses have escaped." Walker, 175 F.R.D. at 233 n.12. The newly-proposed subclass representatives and subclass counsel in this case have proposed essentially the same settlement that was initially reached more than a year ago by other counsel that purported to represent the entire class as a whole. Tellingly, the changes that have been incorporated in the new settlement do not include any details that address the conflicting interests of the subclasses, either with respect to distribution of the settlement funds or any other point. Such formalistic substitution of additional counsel and additional representatives does not constitute the "structural assurance of fair and adequate representation" required by Amchem. 117 S. Ct. at 2251.

II. Ex Parte Holland Also Precludes This Court From Certifying a "Limited Fund" Class on The Basis of Liggett's Possible Insolvency.

In Ex parte Holland, 692 So.2d 811 (Ala. 1997), the Alabama Supreme Court issued a writ of mandamus directing this Court to vacate an order certifying a mandatory punitive damages class in a group of cases involving fraud in the sales and financing of automobiles. Holland held that this Court did not have sufficient evidence from which to conclude that the defendant's assets would be exhausted by punitive damages claims against it. 692 So.2d at 820. More significantly, however, Holland added that any inquiry into whether contingent tort liabilities will ever deplete a defendant's resources is "cumbersome" and involves "inherent speculation." Thus, the Court concluded that Rule 23(b)(1)(B) is "inappropriate as a basis on which to certify a mandatory class action" due to the possibility that tort liabilities will render a defendant insolvent. Id. at 822.
Liggett now asks this Court to ignore the directive of the Alabama Supreme Court in Holland by certifying this class under Ala. R. Civ. P. 23(b)(1)(B) on the basis that Liggett's future tort liabilities may someday render it insolvent. Whatever the nature of the evidence proffered by Liggett here to support their allegation of the existence of a "limited fund," under Holland this Court cannot certify a class pursuant to Rule 23(b)(1)(B) under these circumstances. For that reason alone, this Court should refuse Liggett's request for preliminary certification of the class and preliminary approval of the settlement.

Conclusion

For the foregoing reasons, Objector Kenneth Rowe respectfully requests this Court to reject the Joint Motion for Reaffirmance of Preliminary Certification of a Mandatory Settlement Class and Preliminary Approval of Amended Class Action Settlement Agreement.
Respectfully submitted,

____________________________
Steve Baughman
Baron & Budd, P.C.
3102 Oak Lawn Ave., Ste. 1100
Dallas, TX 75219-4281
(214) 521-3605

Henry Brewster
Stein & Brewster
103 Dauphin Street, Ste. 405
Mobile, AL 36602

Leslie Brueckner
Arthur H. Bryant
Trial Lawyers for Public Justice
1717 Massachusetts Avenue, NW
Suite 800
Washington, D.C. 20036
(202) 797-8600

Attorneys for Objector Kenneth Rowe