Why a judge rejected class action in Paulsboro derailing

While the 2012 Paulsboro train derailment and chemical spill - which forced hundreds from their homes and businesses - may have appeared ripe for a mass lawsuit, a federal judge has ruled against certifying a case as a class action.

The decision this week by U.S. District Judge Robert B. Kugler not only reflects the fragmented legal approach by those affected by the accident, but also the increasingly stringent standards to achieve class status.

The Nov. 30, 2012, derailment occurred over the Mantua Creek when an 82-car freight train crossed the East Jefferson Street Bridge, despite a warning light. Locks holding the swing bridge in place were not secured, federal officials concluded, causing seven tanker cars to fall off the track. One of four cars that fell into the creek ruptured, releasing 20,000 gallons of vinyl chloride, a carcinogen, into the atmosphere.

Scores of claims have been lodged against the rail company, Conrail.

The case in question, brought by Donald Wilson, owner of Don's Barber Shop on North Delaware Street, and resident Tracy Lee, had sought a class action - which allows plaintiffs to represent a larger group with common claims against the same defendant. The suit would have represented others similarly situated to Wilson and Lee: residents with unreimbursed medical expenses and businesses that suffered financially.

But Kugler's decision noted that a number of residents had filed their own suits, reached settlements, or received reimbursements. He questioned whether enough people would remain to constitute the proposed groups in the class.

Rick Swedloff, an associate professor of law at Rutgers-Camden, said obtaining class status is "unequivocally" harder than it once was.

Recent cases underscoring the requirements, Swedloff said, include Wal-Mart Stores Inc. v. Dukes, cited in Kugler's decision. The 2011 U.S. Supreme Court decision ruled claims among women throughout the country who had complained of gender discrimination at the retail company were not common enough to warrant a class.

In the Paulsboro case, Kugler raised doubts about the commonality of potential losses to businesses and the "ascertainability" of class members, let alone if a sizable class exists.

The plaintiffs had sought two subclasses. One group would be made up of residents of Paulsboro and a section of West Deptford who were evacuated and suffered unreimbursed medical expenses. The other, based on income loss, was broken down into two further categories: residents who suffered from sheltering in place and businesses that experienced losses.

But, Kugler wrote, it was unclear if all businesses with mailing addresses in the evacuation or shelter-in-place zones had incurred loss. "For example, it is not clear that the three funeral homes on the list would have sustained income loss if no funerals were scheduled" during the shelter-in-place, he wrote.

Kugler also determined there was not enough information for a proposed "income loss subclass" to show the potential group was "sufficiently numerous." Almost 3,700 residents have settled claims with Conrail, and "nearly 400 have filed their own actions," according to the decision.

Paulsboro's population is approximately 6,100, and the suit estimated that nearly 2,200 West Deptford residents were affected.

Kugler wrote that the rail company had reached settlements with about 490 of approximately 680 residents who were evacuated, and that 45 more had filed separate suits. There was no information presented to show how many of the remaining evacuees had unreimbursed medical expenses.

It was unclear if the plaintiffs would seek to appeal the judge's decision; lawyer James Pettit did not return calls seeking comment Thursday or Friday.

Conrail said in a statement that "we believe Judge Kugler's opinion speaks for itself."