Friday, May 29, 2009

Tort Reform in Oklahoma and Ysbrand

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 . Lo and behold, the legislation does address multi-state class actions – by essentially prohibiting them in with the following language:


For actions filed after November 1, 2009, class membership shall be limited, unless otherwise agreed to by the defendant, only to individuals or entities who are:
a. residents of this state, or
b. nonresidents of this state who:
(1) own an interest in property located in this state where the property is relevant to the class action, or
(2) have a significant portion of the nonresident’s cause of action arising from conduct occurring within the state;
Section 16(D).

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 removing plaintiffs' choice of forum from forum non consideration, a 24-month grace period from pre-judgement interest in personal injury cases, certificates of merit in malpractice cases, an appeal bond cap, no appeal bonds for punitive damages, interlocutory appeals of class action determinations, frivolous lawsuit provisions, broader summary judgment procedure, expert witness disclosure, but correcting the Ysbrand problem was something we're interested in and we hadn't seen specifically discussed.

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