Apocalypse Again

U.S. Supreme Court Considers Veterans' Agent Orange Claims

MICHAEL FREEDMAN
Forbes, February 25, 2003

This C-123 "Provider" aircraft sprayed Agent Orange over the jungles of Vietnam. Photo from U.S.A.F. archives.

Nearly 30 years after the end of the Vietnam War, the U.S. government is still dealing with the unforeseen consequences. On Feb. 26, the U.S. Supreme Court will hear yet another round of arguments about liability for manufacturers of Agent Orange, the herbicide sprayed by the U.S. Air Force in the 1960s and 1970s. Those who breathed in the material risked diseases like cancer, and after years of litigation, manufacturers shelled out $180 million for a global class action settlement, effectively shutting the door to all future claims.

But now, in a case that is being carefully watched by plaintiff lawyers and corporate counsel alike, the high court will have to decide if that door should be reopened. For victims, this could mean an opportunity to file claims against companies even well after a global settlement has been reached. Depending on the court's ruling, companies such as Dow Chemical, Monsanto and Hercules could also face hundreds if not thousands more Agent Orange claims. Securities, mass tort and antitrust class action settlements once thought to be closed for good, may be reopened, possibly leading to thousands more claims in suits that have already been adjudicated or settled. Moreover, the high court's decision could discourage businesses from entering class settlements, potentially raising the cost of litigation from a record high of $224 billion in 2002, according to consulting firm Tillinghast-Towers Perrin.

This case dates back to 1984, when Jack B. Weinstein, a federal court judge in New York, approved a global class action settlement of present and future Agent Orange claims. The settlement created a $180 million fund, and the class eventually consisted of 2.4 million Vietnam veterans, of whom 240,000 were estimated to have had some exposure to defoliants such as Agent Orange. The cutoff date for the claims was the end of 1994. But in the late 1990s, two Vietnam veterans, Daniel Stephenson and Joe Isaacson, claimed they contracted Agent Orange-related illnesses, and filed suit against Dow, Monsanto and a slew of other chemical companies.

The suits were consolidated and heard by Weinstein, who ruled that both victims were bound by the 1984 settlement even though it provided no compensation for their injuries. The two men claimed in their appeal they had not been adequately represented at the time the class was certified and should not be bound by the settlement. In November 2001, an appeals court reversed Weinstein's decision, ruling the settlement revealed a conflict between current victims and the class because it failed to provide for those whose injuries occurred after the 1994 cutoff date.

Plaintiff lawyers hailed the decision, now in front of the Supreme Court. Brent M. Rosenthal, a lawyer at Dallas plaintiff powerhouse Baron & Budd, says he was pleased the court recognized that personal injury victims cannot be bound by a settlement that does not provide them with any recovery. In an amicus brief on behalf of Trial Lawyers for Public Justice, he argued the two plaintiffs were healthy and unaware they had any reason to make a claim at the time of the settlement. To prohibit them from making a claim now that they are sick, he wrote, is "intolerably unfair, and constitutionally impermissible."

The stakes are enormous for companies that frequently find themselves as defendants. Scott Solberg, a Chicago lawyer who represents petrochemical companies, says the whole purpose of the class action is to provide an effective and efficient way to deal with claims, allowing companies to assess their financial risk and go on with business. If the court allows individuals to attack settlements that have already been approved and finalized, he says it could open the floodgates to litigation.

Andrew Frey, a lawyer for Dow Chemical at Mayer Brown Rowe & Maw, argues that once these settlements have been resolved, you cannot simply reopen them. To do so would create massive uncertainty for companies in the midst of a class action settlement, and risk an onslaught of litigation even decades down the road. "I think if you were an officer at one of these companies you'd be concerned about this," Frey says.