Vekic v. Shell Pipeline Co. LP, et al., 2008-1469 (La. App. 4 Cir. 1/29/09), 2009 WL 213105.
Plaintiffs were Louisiana oyster farmers (oh yea, I said “oyster farmers”) and lessees of state water bottoms for the purpose of bedding and growing oysters. Shell came along and constructed a hydrocarbon pipeline through the leaseholds. All was going well until a little thing we like to call “Hurricane Katrina” came along in August 2005 and disturbed life in general in Louisiana, along with rupturing Shell’s pipeline, spilling hydrocarbons. For some reason, hydrocarbons don’t’ taste as good as Tabasco on oysters.
According to their complaint, Shell caused damage to the water bottoms while repairing the pipeline and cleaning up the hydrocarbons, which led to oyster mortality. We’re real serious about our oysters down here in Louisiana, so the plaintiffs filed a lawsuit in Louisiana state court against Shell.
However, before they filed their lawsuit, a few other plaintiffs with the same problem filed a federal class action. The federal class action settled, and the settlement agreement barred any further litigation.
This left the state courts with the question of whether the federal class action settlement barred the plaintiffs’ claims under a theory of res judicata. The court determined that Congress intended to essentially preempt the field of class action law through the enactment of the Class Action Fairness Act. Thus, the plaintiffs were obligated to conform with the requirements of the federal judge’s order for the proper procedure to opt out of the class action suit.
The official notice advising putative class members how to opt out specifically stated that the party opting out must send a letter saying that they intend to opt out. Any failure to opt out resulted in them being bound by the class action settlement in the federal courts. The burden was on the plaintiffs, who had received proper notice of the class action and failed to take the affirmative step, to opt out.
The court expressed its concern of allowing the plaintiffs “two bites at the apple” by permitting them to wait until the terms of the settlement were reached before deciding whether to proceed with their state claim. Plaintiffs’ failure to opt out of the federal class action made them class members and, therefore, they were bound by the settlement agreement.