18th Annual Workplace Class Action Report - 2022 Edition

Annual Workplace Class Action Litigation Report: 2022 Edition 431 Court explained that the common law criminal and property-based limitations shaped Oklahoma’s public nuisance statute and without these limitations, businesses would have no way to know whether they might face nuisance liability for manufacturing, marketing, or selling products, i.e. , a sugar manufacturer or the fast food industry for obesity, an alcohol manufacturer for psychological harms, or a car manufacturer for health hazards from lung disease to dementia or for air pollution. Id . at 54. The nature of the nuisance claim pled by the State was the marketing, selling, and overprescribing of opioids manufactured by Defendant. The Supreme Court noted that it had not extended the public nuisance statute to the manufacturing, marketing, and selling of products. The Supreme Court thus ruled that Oklahoma public nuisance law did not apply to Defendant’s conduct in manufacturing, marketing, and selling prescription opioids. For these reasons, the Supreme Court reversed and remanded the trial court’s ruling. Strack, et al. v. Continental Resources, Inc., 2021 Okla. LEXIS 22 (Okla. April 20, 2021). Plaintiffs, a group of Oklahoma royalty owners, brought a class action alleging underpayment of oil and gas royalties. The litigation lasted for over seven years until the parties entered into a settlement agreement. The trial court approved the settlement agreement, which required Defendant to pay $49.8 million into a common fund for Period 1 claims, plus an estimated $7.5 million for Period 2 claims. The settlement further provided for an estimated $50 million for claims during the Future Production Period. The class representatives filed a motion for attorneys’ fees pursuant to Oklahoma’s class action attorney fee statute, § 2023(G), and requested a $400,000 incentive award to the class representatives from the common fund. The class representatives also requested attorneys’ fees per a signed contingency fee contract wherein the class representatives agreed that class counsel would receive 40% of the gross recovery from the common fund. In granting $19 million as a fee award, the trial court calculated the attorneys’ fee amount using the percentage-of-common-fund method pursuant to a contingency fee agreement between the class counsel and the class representatives. An objector, Daniel McClure, appealed the $19 million attorney fee award and the $400,000 incentive award to the class representatives. The Oklahoma Court of Civil Appeals reversed the trial court’s awards, holding that: (i) the attorneys’ fee request was subject to the lodestar method; (ii) the trial court failed to properly calculate the attorneys’ fee award under the lodestar method; and (iii) the trial court abused its discretion in awarding the incentive award to the class representatives. On a further appeal, the Supreme Court of Oklahoma granted certiorari . The Supreme Court held that although Oklahoma’s class action attorneys’ fee statute gives trial courts flexibility and discretion in calculating fee awards under the percentage-of-common-fund method, the trial court abused its discretion when it awarded an unreasonable attorneys’ fee award and an incentive award not supported by evidence. Specifically, the Supreme Court concluded that the amount of attorneys’ fees awarded by the trial court was excessive in relation to the average percentage awarded in other reported cases, the actual work performed by class counsel, and the recovery of each class member. The Supreme Court pointed out that the fees were over 300% of the actual hours worked, and the $19 million equaled a $2,500 hourly rate, which the Supreme Court found to be unreasonable. Moreover, the Supreme Court held that the trial court’s incentive award to the class representatives was not based on evidence of work performed. While the Supreme Court agreed that incentive awards are justified as payment for reasonable services rendered by class representatives on behalf of the class that were helpful to the litigation, in this case the request for an incentive award was not supported by sufficient evidence in the record. The Supreme Court opined that the trial court should use a method to calculate an incentive award similar to the lodestar method and based on the actual time expended on services rendered and other factors similar to those outlined in Oklahoma’s class action attorneys’ fee statute. For these reasons, the Supreme Court vacated the award of attorneys’ fees and the incentive award, and remanded the matter. (xvii) Pennsylvania Abdelaziz, et al. v. B. Braun Medical, Inc., 2021 Penn. Super. Unpub. LEXIS 2071 (Penn. Super. Ct. Aug. 3, 2021). Plaintiff, a resident of Lehigh County, alleged that Defendant’s Allentown, Pennsylvania facility emitted dangerous levels of Ethylene Oxide (“EtO”) to sterilize medical equipment, which resulted in exposure to EtO that can cause cancer. Defendant filed preliminary objections to Plaintiff’s complaint, asserting that venue in Philadelphia County was improper pursuant to Pennsylvania Rules 1006(e) and 2179 because Defendant did not have contacts of sufficient quantity and quality to constitute the regular conduct of business in that county. Id . at *2. The trial court determined that Defendant did not regularly conduct business in Philadelphia County, and accordingly, Philadelphia County was not the proper venue for the matter. On appeal, the Pennsylvania Superior Court affirmed the trial court’s ruling. Defendant offered evidence that: (i) it was a Pennsylvania