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Tort Reform in Oklahoma and Ysbrand

By James M. Beck and Mark Herrmann

It's already been reported elsewhere that significant tort reform was recently passed in Oklahoma, along with some of the details. But when someone mentions Oklahoma to us in the context of litigation - we free associate "Ysbrand," as in Ysbrand v. DaimlerChrysler Corp., 81 P.3d 618 (Okla. 2003), which is the leading (and nearly only) case in the country to adopt "principal place of business" as a choice of law principle in class action cases. The Ysbrand ruling has made Oklahoma a magnet for all sorts of multi-state class actions that couldn't be certified anywhere else due to manageability problems created by the applicability of multiple state laws.

Even the ALI's Principles of the Law of Aggregate Litigation, hardly a conservative source, characterize Ysbrand as an "outlier" case on this point. PLAL §2.06, Reporters' Notes to comment c.

So we wondered if the recent tort reform addressed Ysbrand. Unfortunately, the posts we read, while tantalizing, didn't say specifically. So we went looking for a copy of the new legislation (called House Bill 1603) itself to see for ourselves. We think we've found it, here (although we're not 100% sure this is the as-passed version - if you know better, please tell us). Lo and behold, the legislation does address multi-state class actions ? by prohibiting them in §23(g):

G. CLASS MEMBERSHIP LIMITATIONS. Class membership shall be limited only to individuals who are:

1. Residents of this state; or

2. Nonresidents of Oklahoma who:

a. own property located in this state, and

b. the property is relevant to the class action.

It doesn't deal with the choice of law question directly, but the prohibition on participation by non-residents in Oklahoma class actions achieves the same result. So unless declared unconstitutional, it looks like Ysbrand-based multi-state class actions are history in Oklahoma.

There's lots more interesting stuff in the bill, such as a ten-year statute of repose, certificates of merit in all tort cases, no appeal bonds for punitive damages, interlocutory appeals of class action determinations, frivolous lawsuit provisions, adoption of federal expert witness standards, consumer protection changes (no personal injuries and a reliance requirement), damages caps (both punitive and compensatory), compliance/approval barring punitive damages, and restrictions on asbestos litigation, but correcting the Ysbrand problem was something we're interested in and we hadn't seen specifically discussed.

Full post as published by Drug and Device Law on May 29, 2009 (boomark / email).