Starting on Aug. 8, wildfires swept through the Hawaiian island of Maui, devastating the city of Lahaina, killing more than 100 people and causing an estimated $5.5 billion in property damage.
Only four days later, on Aug. 12, the Circuit Court of the First Circuit, State of Hawaii, proposed a class action seeking related damages, which was filed against Hawaiian Electric Industries Inc. and others.
Multiple lawsuits have followed, including a federal securities class action filed against Hawaiian Electric in the U.S. District Court for the Northern District of California.
On Feb. 3, a Norfolk Southern Railway Co. train derailed in East Palestine, Ohio, resulting in a fire and the release of toxic chemicals. Within one week of the derailment, Norfolk Southern had been named in three federal class action complaints, each seeking more than $5 million in damages.
Approximately six months later, Norfolk Southern estimated cleanup costs at $803 million, and faced 30 proposed class actions brought by individuals and businesses, lawsuits from three Pennsylvania school districts, and a securities class action led by the Bucks County Employees Retirement System, a Pennsylvania-based benefits fund.
The foregoing damage catastrophes and ensuing litigation, i.e., crisis contests, are not isolated incidents. Consider the following analogous matters, some of which have not yet ended: the opioid crisis; forever chemicals, i.e., PFAS, in everything; the Flint, Michigan, water crisis; the BP PLC oil spill; and, the Sept. 11 terrorist attacks.
Each event can be considered a localized mini-asbestos, spawning a mass of lawsuits, ballooning court dockets and consuming limited judicial resources, while the associated liabilities and exponential damages lead to massive financial losses and transfers of capital.
It is a matter of when, not if, the next disaster — whether natural, artificial or a combination of both — will strike.
The time is now for attorneys representing potential target organizations to formulate plans that can minimize the existential risks associated with the litigation sure to follow.
Do Not Remain Silent
There is a natural tendency to advise clients not to make public statements upon being sued, and to take the position that the case will be tried in the courtroom and not in the press.
Following a large-scale damages event — where today’s society demands almost instantaneous answers to the questions of whom, what, why, when and where — there will be individuals readily available to fill any information vacuum.
Take for example the following comments made by Ohio Gov. Mike DeWine within five days of the Norfolk Southern derailment: “They’re [Norfolk Southern] the ones who created the problem. It’s their liability. They’re the ones who ought to pay for it.”
Also notable are these statements from an August Law360 article from Frank Pitre of Cotchett Pitre & McCarthy LLP, on planning to file lawsuits on behalf of victims of the Maui wildfires:
It’s despicable for a utility to not implement a power safety shutoff program knowing the devastation and loss of property. The people at the highest levels … need to be held accountable, and the decision makers who chose not to implement what was necessary — let them see a jail cell.
Many organizations have a marketing department, public relations department or, at the least, someone with highly effective communication skills on the payroll. Those resources should be tapped when it appears the organization will be the target of large-scale litigation following a calamity.
This does not mean anyone should volunteer for a “60 Minutes” interview or offer to give congressional testimony.
Instead, concise statements — reviewed by legal counsel — should be prepared for press inquiries, conveying subjects like: concern for anyone negatively affected, the organization’s participation or cooperation in any ongoing investigation, and mitigation efforts taken or to be taken.
It is better to compete with messaging from those possessing directly divergent interests, rather than saying nothing at all.
Take Subsequent Remedial Measures
Measures to alleviate damage or prevent future harm should be taken when it is within the control of an organization to do so.
To the extent there are concerns that those measures will constitute an admission of liability, there is a rule for that, viz., Federal Rule of Evidence 407 and its state counterparts.
Although evidence of remedial actions may be admitted for other purposes, such as impeachment, the risk of admission is unlikely to outweigh the benefits of doing the right thing when it counts.
Moreover, there is a substantial risk that a failure to remedy harm or correct a known danger may be construed as outrageous conduct supporting an award of punitive damages.
Hit the Pause Button
If the pace of litigation following the Maui wildfires and Norfolk Southern derailment is any indication, lawsuits will pile up fast and furious following a future widespread damages event.
It is highly unlikely that the specific cause or causes of such an event will be known upon
the filing of those initial actions. For instance, the National Transportation Safety Board tries to complete an investigation within 12 to 24 months.
Also, the Occupational Safety and Health Administration has up to six months to investigate a work-related fatality. Accordingly, a defendant named in an action filed mere days after the subject occurrence should seek to stay the litigation until it and any applicable governmental authorities have finished their fact-finding missions.
The defendant may be cleared by the investigation, or, if blamed, be in a better position to evaluate the risks of current and future claims.
The odds are high that a federal, state and local authority will have some form of purview over an incident involving significant damages given the breadth of the administrative state.
Two related doctrines may prove useful in putting pending litigation on hold while an authority exercises its associated functions: exhaustion of administration remedies and primary jurisdiction.
The “exhaustion doctrine is a ‘long settled rule of judicial administration [which mandates] that no one is entitled to judicial relief for a supposed or threatened injury until the prescribed administrative remedy has been exhausted,'” according to the U.S. Supreme Court’s ruling in Myers v. Bethlehem Shipbuilding Corp. in 1938.
The federal government has successfully employed this defense in response to claims arising from water contamination at Marine Corps Base Camp Lejeune, flooding caused by Hurricane Katrina and al-Qaida’s bombing of the U.S. embassy in Nairobi, Kenya, in 1998.
The Supreme Court provided the following description of the primary jurisdiction doctrine in Meat Cutters v. Jewel Tea in 1965:
The doctrine … applies where a claim is originally cognizable in the courts, and comes into play whenever enforcement of the claim requires the resolution of issues which, under a regulatory scheme, have been placed within the special competence of an administrative body; in such a case the judicial process is suspended pending referral of such issues to the administrative body for its views.
It is not uncommon for environmental contamination claims to be stayed or deferred in favor of the primary jurisdiction of state environmental agencies.
Unsurprisingly, it can be an uphill battle to convince a court that it should defer legally cognizable claims to the expertise of a separate administrative authority.
An alternative basis for seeking a stay is to rely on “the power inherent in every court to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants,” according to the Supreme Court’s 1936 decision in Landis v. North American Co.
This inherent authority has been cited in support of staying litigation against pharmaceutical manufacturers relating to the marketing of opioids, a claim that exposure to per- and polyfluoroalkyl substances caused bladder cancer, and claims arising from an explosion and fire at an oil facility that spawned a multitude of lawsuits.
Arguments invoking a court’s discretion to stay proceedings based on judicial economy, avoidance of duplicative proceedings and comity may find traction when relief under the doctrine of administrative exhaustion or primary jurisdiction is unavailable.
Consolidate Significant Claims
There are many benefits to consolidated proceedings, including economies of scale, judicial efficiency and convenience, avoidance of inconsistent results, centralized appellate review, and global settlements.
Accordingly, several mechanisms exist for joining parties and/or claims, such as:
- Rule 19, or required joinder;
- Rule 20, or permissive joinder;
- Rule 22, or interpleader;
- Rule 23, or class actions, and 42(a), or consolidation, of the Federal Rules, and any corresponding state rules;
- Multidistrict litigation pursuant to Title 28 of the U.S. Code, Section 1407; and
- Transfer of venue pursuant to Title 28 of the U.S. Code, Section 1404(a), for purposes of consolidation with a related proceeding.
Consolidation, however, is not advisable for all types of actions.
Most individual claims supporting nominal damages — such as slack-fill, which is excess space in containers, or deceptive labeling, i.e., “natural,” “pure,” “healthy,” etc., claims — are only economically feasible to pursue when they can be joined en masse. Thus, the preceding mechanisms for aggregation should be reserved for defending against serious damage cases.
Fight or File for Bankruptcy
The automatic stay, claim funneling and reorganization aspects of a Chapter 11 bankruptcy proceeding make it an attractive option for entities facing a mountain of claims and limited resources to resolve them.
Consider the following mass tort-related bankruptcies, some of which remain ongoing:
- Bestwall LLC, with asbestos-related liabilities as to Georgia-Pacific LLC;
- LLCDBMP LLC, with asbestos-related liabilities as to CertainTeed;
- Mallinckrodt PLC, with opioids;
- Endo International PLC, with opioids;
- Pacific Gas & Electric Co., with liabilities associated with the California wildfires; and
- The Boy Scouts of America, with sexual abuse claims.
However, a mass tort defendant can expect many objections to such a proceeding — usually from claimants — which will be expensive and time-consuming to rebut and may ultimately result in termination.
See headlines from this summer regarding Johnson & Johnson and 3M’s failures to resolve mass tort exposures through the Chapter 11 proceedings of subsidiaries.
The successes — at least for debtors — still far outnumber the well-publicized failures, making bankruptcy a viable alternative.
Thus, a defendant on the receiving end of waves of lawsuits following a disaster should prioritize estimating the total number of claims that may be filed, valuing the pending and expected actions, and assessing whether sufficient assets exist to settle or litigate those matters to finality.
If the expected liabilities make putting up a fight nonsensical, bankruptcy proceedings should be given serious consideration.
The next crisis contest is inevitable. Consider using the preceding strategies in the event your client finds itself at the center of, or swept up in, the coming storm.
Mark Goldberg is an attorney at Cosmich Simmons & Brown PLLC.
The opinions expressed are those of the author(s) and do not necessarily reflect the views of their employer, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.
 Jonathan Oatis, Maui fires: What to know about Hawaii’s deadliest disaster, damage and death toll, Reuters, Aug. 21, 2023.
 Eder v. Maui Elec. Co., No. 1CCV-23-0001045, Circuit Court of the First Circuit, Hawai’i.
 Bhangal v. Hawaiian Elec. Indus., Inc., No. 3:23-cv-04332, U.S. District Court for the Northern District of California.
 Christine Hauser, How the Ohio Train Derailment and Its Aftermath Unfolded, N.Y. Times, June 23, 2023.
 Hall v. Norfolk Southern, No. 4:23-cv-00257, U.S. District Court for the Northern District of Ohio; Eisley v. Norfolk Southern, No. 4:23-cv-00250, U.S. District Court for the Northern District of Ohio; Feezle v. Norfolk Southern, No. 4:23-cv-00242, U.S. District Court for the Northern District of Ohio.
 Josh Funk, Norfolk Southern says cost of fiery Ohio derailment doubles to $803 million as cleanup continues, AP News, July 27,
 Matthew Santoni, What Attys Should Know 6 Mos. After Ohio Train Derailment, Law360, Aug. 2, 2023.
 David Skolnick, Railway should pay expenses, DeWine says, The Vindicator, Feb. 8, 2023.
 Emily Field & Y. Peter Kank, Maui Wildfire Litigation Could Be ‘A Case Of Epic Proportions,’ Law360, Aug. 17, 2023.
 Care should be taken to ensure that expressions of sympathy or concern do not go so far as to constitute admissions of fault or liability. See, e.g., Galarnyk v. Hostmark Mgmt. Inc., 55 F. App’x 763, 765 (7th Cir. 2003); Nunes v. Duffy, 192 N.E.3d 285, 289-90 (Mass. App. Ct. 2022).
 “When measures are taken that would have made an earlier injury or harm less likely to occur, evidence of the subsequent measures is not admissible to prove: negligence; culpable conduct; a defect in a product or its design; or a need for a warning or instruction.” Fed. R. Evid. 407; accord Ariz. R. Evid. 407; Miss. R. Evid. 407.
 Cf. Leonard v. Trustees of Ind. Univ., No. 1:19-cv-00963, 2019 WL 3306181, at *5 (S.D. Ind. July 23, 2019) (holding that the taking of subsequent remedial measures was an appropriate affirmative defense to the plaintiff’s punitive damages claim); Coulbourn v. Air & Liquid Sys. Corp., No CV-13-08141, 2016 WL 5921255, at *3 (D. Ariz. Jan. 6, 2016) (“Under Arizona law, post-accident conduct is admissible on the issue of punitive damages if the conduct has a reasonable relationship to the state of mind of the tortfeasor at the time of the accident.”); Taylor v. Devereux Found., Inc., 885 S.E.2d 671, 704-05 (Ga. 2023) (discussing evidence of sexual assaults occurring at the defendant’s facilities after the assault at issue, as well as the defendant’s failure to take appropriate steps to help the victim recover from her trauma in affirming the jury’s punitive damages verdict); Gyulakian v Lexus of Watertown, Inc., 56 N.E.3d 785, 798 (Mass. 2016) (“Where the employer’s
failure to remedy the discriminatory conduct is ‘outrageous or egregious,’ … punitive damages may be imposed.”).
 National Transportation Safety Board, The Investigative Process, https://www.ntsb.gov/investigations/process/Pages/default.aspx.
 See Occupational Safety and Health Administration, Fatality Inspection Data, http://www.osha.gov/fatalities.
 See, e.g., Gulf Coast Oil Spill Investigation Report, U.S. Department of the Interior, 13, 2011, https://www.doi.gov/ocl/hearings/112/OilSpillInvestigation_101311; Peter Eavis & Ivan Penn, California Says PG&E Power Lines Caused Camp Fire That Killed 85, N.Y. Times, May 15, 2019.
 Taylor v. U.S. Treasury Dep’t, 127 F.3d 470, 476 (5th Cir. 1997). Generally, dismissal for failure to exhaust administrative remedies is without prejudice to the suit being refiled upon completion of the administrative prerequisites. See Greene v. Meese, 875 F.2d 639, 643 (7th Cir. 1989).
 Fancher v. United States, No. 5:22-CV-315, 2022 WL 17842896, at *1, 9 (E.D.N.C. Dec. 20, 2022).
 See In re Ingram Barge Co., 435 F. Supp. 2d 524, 525, 528, 531 (E.D. La. 2006), aff’d, 351 F. App’x 842 (5th Cir. 2009).
 Mwani v. Al Qaeda, No. 99-cv-125, 2021 WL 5800737, at *1-2 (D.D.C. Dec. 7, 2021).
 Local Union No. 189, Amalgamated Meat Cutters, & Butcher Workmen of N. Am., AFL — CIO v. Jewel Tea Co., 381 U.S. 676, 684-85 (1965).
 See, e.g., Melton Props., LLC v. Ill Cent. R.R. Co., 539 F. Supp. 3d 593, 599-600, 609- 613 (N.D. Miss. 2021) (staying claims for injunctive relief against the defendant railroad in deference to remediation proceedings before the Mississippi Department of Environmental Quality); Raytheon Co. v. NCR Corp., No. 18-2402, 2019 WL 1367721, at *1, 4 (D. Kan. Mar. 26, 2019) (deferring claims regarding contamination at an industrial site to the Kansas Department of Health and Environment); Read v. Corning Inc., 351 F. Supp. 3d 342, 353 (W.D.N.Y. 2018) (“[T]he Court concludes that under the primary-jurisdiction doctrine, it would be better for the Court to stay its hand here, in favor of the DEC [New York State Department of Environmental Conservation] proceedings.”).
 See, e.g., Parris v. 3M Co., 595 F. Supp. 3d 1288, 1306, 1312-13 (N.D. Ga. 2022) (denying defendant textile mill owner’s motion to dismiss claims regarding the contamination of water with PFAS based on a state agency’s regulatory powers); In re Nat’l Prescription Opiate Litig., 589 F. Supp. 3d 790, 795, 820-23 (N.D. Ohio 2022) (denying pharmacy defendants’ request for the court to refrain from adjudicating public nuisance
claims relating to the overprescription of opioids in favor of the primary jurisdiction of the DEA); City of Chicago v. Purdue Pharma L.P., No. 14 C 4361, 2015 WL 2208423, at *1, 4-5 (N.D. Ill. May 8, 2015) (same as to claims against pharmaceutical manufacturers and the authority of the FDA).
 Landis v. N. Am. Co., 299 U.S. 248, 254 (1936); accord Fairlake Cap., LLC v. Lathouris, 281 A.3d 1240, 1255-56 (Conn. App. Ct. 2022); Jhun v. Imagine Castle, LLC, 856 S.E.2d 24, 28 (Ga. Ct. App. 2021).
 People v. Purdue Pharma, No. 201400725287, 2015 WL 5123273, at *1 (Cal. Super. Ct. Aug. 27, 2015) (tentative ruling).
 See Tibbetts v. 3M Co., No. 21-2400, 2022 WL 252685, at *1-3 (E.D. La. Jan. 27, 2022) (ordering a stay pending the Judicial Panel on Multidistrict Litigation’s transfer decision).
 See Aponte v. Caribbean Petroleum Corp., 141 F. Supp. 3d 166, 167-68 (D.P.R. 2015) (noting prior stay order and providing background facts); Cruz-Aponte v. Caribbean Petroleum Corp., 30 F. Supp. 3d 111, 113-14 (D.P.R. 2014) (ordering a stay until the completion of limitation of liability proceedings).
 “[T]o permit a situation in which two cases involving precisely the same issues are simultaneously pending in different District Courts leads to the wastefulness of time, energy and money that § 1404(a) was designed to prevent.” Ferens v. John Deere Co., 494 U.S. 516, 531 (1990).
 Nicole Sperling, Judge Rejects Johnson & Johnson’s Effort to Limit Talc Related Suits, N.Y. Times, July 30, 2023; Daniel Wilson, Judge Tosses 3M Unit’s Bankruptcy Case As Invalid, Law360, June 9, 2023.