00-7455(L)

00-9120 (C)

                    

 

          UNITED STATES COURT OF APPEALS

         FOR THE SECOND CIRCUIT

                                                   

 

           DANIEL RAYMOND STEPHENSON, SUSAN STEPHENSON

           DANIEL ANTHONY STEPHENSON, EMILY ELIZABETH STEPHENSON

           JOSEPH ISAACSON AND PHYLLIS ISAACSON,

 

Plaintiffs-Appellants,

                 VS.

 

               DOW CHEMICAL CO., MONSANTO CO.; AMERICAN HOME PRODUCTS, INC., HERCULES INC., OCCIDENTAL CHEMICAL CORP., ULTRAMAR DIAMOND,

      CHEMICAL LAND HOLDINGS, INC., MAXUS ENERGY CORP.,

          HACROS CHEMICAL, INC., SHAMROCK, CORP., AND DOES 1-100

 

Defendants-Appellees.

 

    THOMPSON HAYWARD CHEMICAL CO.,

                 T-H AGRICULTURE & NUTRITION CO., INC.  UNIROYAL, INC. and

             C.D.U. HOLDING, INC.  and UNIROYAL CHEMICAL,

 

Defendants

                                                   

 

On Appeal from the United States District Court

  for the Eastern District of New York

           No. 381

                                                     

                      

             BRIEF AMICUS CURIAE OF TRIAL LAWYERS FOR

          PUBLIC JUSTICE IN SUPPORT OF APPELLANTS

                                                  

 

      


STEVE JENSEN

Counsel of Record

BRENT M. ROSENTHAL

BARON & BUDD, P.C.

3102 Oak Lawn Ave.

Dallas, TX  75219

(214) 521-3605

LESLIE BRUECKNER

TRIAL LAWYERS FOR PUBLIC        JUSTICE

1717 Massachusetts  Ave.,  N.W., Suite 800

Washington, D.C. 20036-2001

(202) 796-8600                      

 

ARTHUR BRYANT

TRIAL LAWYERS FOR PUBLIC      JUSTICE

One Kaiser Plaza

Suite 275

Oakland, CA 94612

(510) 622-8150


MOTION OF TRIAL LAWYERS FOR PUBLIC JUSTICE

FOR LEAVE TO FILE BRIEF AMICUS CURIAE

       IN SUPPORT OF APPELLANTS

 

Trial Lawyers for Public Justice ("TLPJ") is a national public interest law firm that specializes in precedent‑setting and socially significant civil litigation and is dedicated to pursuing justice for the victims of corporate and governmental abuses.  Litigating throughout the federal and state courts, TLPJ prosecutes cases designed to advance consumers' and victims' rights, environmental protection and safety, civil rights and civil liberties, occupational health and employees' rights, the preservation and improvement of the civil justice system, and the protection of the poor and the powerless.


As part of its efforts to ensure the proper working of the civil justice system, TLPJ has established a Class Action Abuse Prevention Project dedicated to monitoring, exposing, and preventing abuses of the class action device nationwide.  Through this work, TLPJ has become especially concerned about efforts by corporate defendants to use the class action device as a tool for capping their liability in mass tort cases and depriving injured victims of their rights.  One means to this end is to expand the scope of a class action to include not just those individuals who  have known injuries from contact with the defendant's product, but all individuals who have been exposed to the product, whether or not they have yet manifested any injury or disease.


In the case at bar, Defendants-Appellees successfully argued in the district court that the Agent Orange class action judgment, entered almost seventeen years ago, is res judicata on and bars Plaintiffs-Appellants' individual claims for damages based on injuries alleged to be related to Agent Orange that have just now developed.  TLPJ believes that two cases recently decided by the United States Supreme Court--in which TLPJ also participated as amicus curiae--indicate that this result does not comport with Rule 23 and due process.  In Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (1997), the Court expressed doubt that notice of a class action directed to persons who were unaware that they had sustained any injury from the tortious conduct alleged in the class action could ever be effective and adequate to bind such persons to the class action judgment.  And in both Amchem and Ortiz v. Fibreboard Corp., 527 U.S. 815 (1999), the Court recognized that the interests of class members with unaccrued "future claims" inherently conflict with the interests of class members who allege current injury, and that future claimants cannot be adequately represented by counsel that represent both groups of claimants. 


TLPJ seeks leave of Court to file this Brief to amplify the contentions of Plaintiffs-Appellants that under Amchem and Ortiz,  they received inadequate notice of and representation in the class action, and therefore cannot constitutionally be barred from asserting their common law claims at this time.  In compliance with Rule 29 of the Federal Rules of Appellate Procedure, the proposed brief is annexed to this Motion.

Respectfully submitted,

 

 

 

                            

STEVE JENSEN

BRENT M. ROSENTHAL

BARON & BUDD, P.C.

3102 Oak Lawn Avenue

Suite 1100

Dallas, Texas 75219

(214) 521-3605

 

Counsel for Amicus Curiae

  Trial Lawyers for Public Justice

 

 

Of Counsel:

 

LESLIE BRUECKNER

TRIAL LAWYERS FOR PUBLIC JUSTICE

1717 Massachusetts Avenue, N.W.

Suite 800

Washington, D.C. 20036-2001

(202) 797-8600

 

ARTHUR BRYANT

TRIAL LAWYERS FOR PUBLIC JUSTICE

One Kaiser Plaza, Suite 275

Oakland, CA 94612

(510) 622-8150


TABLE OF CONTENTS

 

 

TABLE OF AUTHORITIES..... v

 

INTEREST OF THE AMICUS CURIAE. 1

 

SUMMARY OF ARGUMENT 2

 

PROCEDURAL BACKGROUND...... 4

 

ARGUMENT 5

 

I..... PLAINTIFFS MAY CHALLENGE THE ADEQUACY OF NOTICE AND REPRESENTATION IN THE AGENT ORANGE CLASS ACTION TO ESTABLISH THAT THE DOCTRINE OF RES JUDICATA DOES NOT BAR THEIR CLAIMS.... 5

 

II..... NOTICE TO AGENT ORANGE CLASS MEMBERS WHO DID NOT HAVE DISCERNABLE INJURIES WAS NOT ADEQUATE UNDER THE CONSTITUTION AND RULE 23.... 10

 

A..... In a Class Action That Undertakes To Resolve Claims for Latent Personal Injuries, Notice to “Future Claimants” (Persons Without Clinically Detectable, Compensable Injuries) Is Inherently Deficient.... 10

 

B..... Even If It Is Theoretically Possible To Give Adequate Notice of a Class Action to Future Personal Injury Claimants, It Was Not Given in the Agent Orange Class Action.... 14

 

III. .... THE CLASS ACTION JUDGMENT DOES NOT PRECLUDE THE ASSERTION OF CLAIMS BASED ON CLINICAL INJURIES DEVELOPED AFTER 1994, BECAUSE CLASS MEMBERS WITH UNKNOWN INJURIES DID NOT RECEIVE ADEQUATE REPRESENTATION IN THE CLASS ACTION.... 18

 

CONCLUSION..... 23

 

CERTIFICATE OF COMPLIANCE..... 24

 

CERTIFICATE OF SERVICE 26

 

 

 

 


TABLE OF AUTHORITIES

 

 

    CASES

 

Amchem Prods., Inc. v. Windsor,

521 U.S. 591 (1977) . 2,10,12

 

In re "Agent Orange” Prod. Liab. Litig.,

100 F.R.D. 718 (E.D.N.Y 1983) .. 10,14

 

In re "Agent Orange" Prod. Liab. Litig.,

597 F. Supp. 740 (E.D.N.Y. 1984) .. 4,22

 

In re "Agent Orange” Prod. Liab. Litig.,

818 F.2d 145 (2d Cir. 1987), cert. denied,

487 U.S. 1234 (1988) .. 4,14

 

Carlough v. Amchem Prods., Inc.,

158 F.R.D. 314 (E.D. Pa. 1993) .. 17

 

Childs v. Haussecker,

974 S.W.2d 31 (Tex. 1998) .. 16

 

Ivy v. Diamond Shamrock Chems. Co.

(In re “Agent Orange” Prod. Liab. Litig.),

996 F.2d 1425 (2d Cir. 1993),   cert. denied,

510 U.S. 1140 (1994).. passim

  

Metro‑North Commuter R. v. Buckley,

521 U.S. 424 (1997) .. 15

 

Mullane v.  Central Hanover Bank & Trust Co.,

339 U.S. 306 (1950) .. 16

 

In re Nissan Motor Corp. Antitrust Litig.,

552 F.2d 1088 (5th Cir. 1977) .. 16

 

Ortiz v. Fibreboard Corp.,

527 U.S. 815 (1999) .. 2,10,18,19, 22

  

Phillips Petroleum Co. v. Shutts,

472 U.S. 797 (1985) .. 10

 

Ryan v. Dow Chem. Co. (In re “Agent Orange”

Prod. Liab. Litig.), 781 F. Supp. 902 (E.D.N.Y. 1991) .. 6

 

v


CASES (CONT.)

 

 

Twigg v. Sears, Roebuck & Co.,

153 F.3d 1222 (11th Cir. 1998) .. 8,16

 

 

RULES

 

Fed. R. Civ. P. 23 .. passim

  

Fed. R. Civ. P. 23(a)(4) .. 19

 

Fed. R. Civ. P. 23(b)(1)(B) .. 19

 

Fed. R. Civ. P. 23(c)(4)(B) .. 20

 

 

 

SECONDARY SOURCES

 

 

Patrick Woolley, The Availability of Collateral Attack for

Inadequate Representation in Class Suits,

79 Tex. L. Rev. 383 (2000).. 8,9

 

Susan D. Glimcher, Note, Statute of Limitations and the

Discovery Rule in Latent Injury Claims: An Exception or

the Law?, 43 U. Pitt. L. Rev. 501(1982) .. 16

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

vi


BRIEF OF AMICUS CURIAE

    TRIAL LAWYERS FOR PUBLIC JUSTICE

       IN SUPPORT OF APPELLANTS

 

 

INTEREST OF THE AMICUS CURIAE

 

Amicus Curiae Trial Lawyers for Public Justice ("TLPJ") respectfully refers the Court to the accompanying motion for leave to file this brief, ante at i-iii, which sets forth its interest in this case.  In brief, TLPJ is a national public interest law firm that specializes in precedent-setting and socially significant civil litigation and is dedicated to pursuing justice for the victims of corporate and governmental abuses.  Through this work, TLPJ has become especially concerned about efforts by corporate defendants to use the class action device as a tool for limiting personal injury victims’ rights to obtain a full and fair recovery for their injuries.  Of particular concern are cases that attempt to restrict the recoveries of so-called “future victims” whose injuries may not even have manifested themselves at the time of the victims’ proposed inclusion in a massive class action settlement that seeks to severely restrict – or even eliminate – their right to compensation.


In this case, the lower court dismissed the personal injury lawsuit of an Agent Orange victim on the ground that his claims were barred by a class action settlement that, by its own terms, stopped paying any compensation two years before he became ill and provided him with no recovery for his injuries.  TLPJ files this brief to explain why, under the circumstances presented here, this outcome cannot withstand constitutional muster.

 

  SUMMARY OF ARGUMENT

 

The Agent Orange class action settlement promised to resolve a massive volume of complex, time-consuming, expensive, and emotionally wrenching litigation.  The settlement was approved by the district after an extensive fairness hearing and affirmed by this Court on direct appeal.  And in Ivy v. Diamond Shamrock Chems. Co. (In re “Agent Orange” Prod. Liab. Litig.), 996 F.2d 1425 (2d Cir. 1993), cert. denied, 510 U.S. 1140 (1994) the Court ruled that the class action judgment is res judicata on claims of  persons who did not know that they were injured at the time of certification of the Agent Orange class.  Thus, reluctance to reconsider the preclusive effect of the Agent Orange judgment and to reopen the litigation for individuals who now develop and are diagnosed with ailments related to their exposure to Agent Orange is certainly understandable.


But two recent United States Supreme Court opinions--Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (1977)and Ortiz v. Fibreboard Corp., 527 U.S. 815 (1999) require this Court to do exactly that.  The Amchem decision casts grave doubt on the Court's conclusion in Ivy that Vietnam veterans who were unaware of any injury associated with their exposure to Agent Orange at the time of certification were effectively and adequately notified that their potential future claims could be resolved in the Agent Orange class action.  And both Amchem and Ortiz virtually compel the conclusion that the named plaintiffs and class counsel in the class action had interests that unavoidably conflicted with those of the future claimants and did not adequately represent those absent class members in the class action.

Amchem and Ortiz make clear that Ivy is simply wrong and should not be applied as precedent.  Class members who had not developed a discernable injury at the time of certification of the Agent Orange class did not receive adequate notice of the class action, and did not receive adequate representation of their discrete interests within the action.  Because these future claimants received inadequate notice of and representation in the class action, the black-letter law of claim preclusion establishes that the class action cannot bar their claims.  Inconvenient and unsettling as it may be, due process requires that these class members be afforded a fair opportunity to pursue their claims.


PROCEDURAL BACKGROUND

 

In 1984, Chief Judge Jack Weinstein of the United States District Court for the Eastern District of New York approved a class action settlement purporting to resolve all personal injury and wrongful death claims asserted by persons who served in the United States Armed Forces and their families against the makers and sellers of Agent Orange.  In re "Agent Orange" Prod. Liab. Litig., 597 F. Supp. 740 (E.D.N.Y. 1984).  Although the class definition included only those "who were injured while in or near Vietnam by exposure to Agent Orange," the parties clarified in their settlement agreement approved by the court that the class "specifically includes persons who have not yet manifested injury."  Id. at 865.  In affirming Judge Weinstein's certification of the class and approval of the settlement, this Court found that notice of the class action satisfied Rule 23 of the Federal Rules of Civil Procedure, noting that any class member “who believed that he or she had suffered injury as a result of exposure to Agent Orange in Vietnam was on notice of the pendency of a lawsuit and was thus alerted to seek advice from counsel."  In re "Agent Orange” Prod. Liab. Litig., 818 F.2d 145, 169 (2d Cir. 1987), cert. denied, 487 U.S. 1234 (1988).  The Court also ruled that despite the "diverse interests" of the class members, the class was adequately represented.  Id. at 167.


After the settlement was affirmed and implemented, several Vietnam veterans who developed Agent Orange-related injuries after certification and approval of the Agent Orange class action settlement, and survivors of such veterans, filed product liability suits against the sellers of Agent Orange in state courts in Texas.  The defendants removed the suits to federal court.  They then successfully moved for transfer of the cases to the district court that had approved the class action settlement on the theory that the settlement had resolved and extinguished these claims and the district court that approved the settlement had jurisdiction and authority to effectuate its judgment.  The plaintiffs argued that the Agent Orange class action settlement could not be asserted as a bar to their claims, because, as persons who had no known "injury" related to their exposure to Agent Orange at the time that  the court certified the class, they were not part of the class and in any event had not received notice of the class action sufficient to bind them to the result.  They also argued as holders of only  unaccrued "future claims" at the time of certification and settlement, they were inadequately represented by the class representatives, who possessed ripe claims.  Judge Weinstein entertained the plaintiffs' collateral attack on the adequacy of notice and representation, but rejected the attack on the merits and dismissed the case based on res judicata.  Ryan v. Dow Chem. Co. (In re “Agent Orange” Prod. Liab. Litig.), 781 F. Supp. 902 (E.D.N.Y. 1991).


On appeal, this Court, like Judge Weinstein, considered the merits of the plaintiffs' collateral attack on the adequacy of the notice and representation afforded them in the class action.  Ivy v. Diamond Shamrock Chems. Co. (In re “Agent Orange” Prod. Liab. Litig.), 996 F.2d 1425 (2d Cir. 1993), cert. denied, 510 U.S. 1140 (1994)(hereafter “Ivy”.  It concluded that the plaintiffs were members of the class because the plaintiffs were "injured" within the meaning of New York law upon exposure to Agent Orange, even though clinical injuries from the exposure did not appear until much later.  Id. at 1433-34.  It also concluded that the published notice to persons with unaccrued "future claims" was adequate because providing individual notice to such persons "would probably do little good" and because such persons would be better served by insuring that they receive adequate representation and access to "fair and just recovery procedures."  Id. at 1435. It found that representation of "future claimants"-- or at least, of the future claimants in Ivy -- was adequate, because the Ivy claimants were eligible for benefits under the class action settlement.  Id. at 1435.  Thus, according to the Court, conflicts between present and future claimants "never materialized" in the class action.  Id. at 1435. It affirmed Judge Weinstein's dismissal of the Ivy plaintiffs' product liability claims.


In 1996, plaintiff Joe Isaacson developed cancer that his experts have linked to Agent Orange.  By that time, monetary compensation was no longer available from the settlement fund created by the parties and the  district court.  Isaacson filed suit against the makers and sellers of Agent Orange in state court in New Jersey.  Defendants removed the case and, as in Ivy, successfully sought transfer to the Eastern District of New York for disposition by Judge Weinstein.  In moving to dismiss the case, defendants argued that all of Judge Weinstein's rulings in the class action--including his general rulings that notice to and representation of the class were adequate under Rule 23 and the Due Process Clause--were binding on Isaacson and could not be reconsidered even though he did not actually appear in the class action proceeding.  See, e.g., Memorandum of Law in Support of Defendants' Motion To Dismiss at 11-17.  They also argued that notice to and representation of future claimants was adequate in any event.  After a hearing, the district court ordered the case dismissed. Isaacson timely appealed.

 

 

 

 

 

 

 

 

ARGUMENT

 

I.     PLAINTIFFS MAY CHALLENGE THE ADEQUACY OF NOTICE AND REPRESENTATION IN THE AGENT ORANGE CLASS ACTION TO ESTABLISH THAT THE DOCTRINE OF RES JUDICATA DOES NOT BAR THEIR CLAIMS.

 



Despite defendants' arguments below, it is beyond legitimate dispute that Isaacson, as an absent class member, can challenge in this case the findings in the class action that he received adequate notice of, and representation in, that action.  It is axiomatic that, "[b]efore the bar of claim preclusion may be applied to the claim of an absent class member, it must be demonstrated that invocation of the bar is consistent with due process, and an absent class member may collaterally attack the prior judgment on the ground that to apply claim preclusion would deny him due process."  Twigg v. Sears, Roebuck & Co., 153 F.3d 1222, 1226 (11th Cir. 1998) (citations omitted) (refusing to apply res judicata to bar absent class member's suit because notice of the class action was inadequate).  Similarly, as one commentator has recently noted in a comprehensive law review article, the "understanding that absent class members may collaterally attack a judgment based on inadequate representation is deeply entrenched in the law."  Patrick Woolley, The Availability of Collateral Attack for Inadequate Representation in Class Suits, 79 Tex. L. Rev. 383, 388 (2000) [hereafter "Woolley, Collateral Attack"].  Indeed, in Ivy this Court expressly recognized the absent class members' "right of collateral attack" before concluding, based on its own de novo analysis, that the notice to and representation of future claimants satisfied Rule 23 and the Due Process Clause.  Ivy, 997 F.2d at 1433, 1435-37.  Therefore, neither defendants nor the district court are correct that in this case, the Court may simply defer to the class action findings that notice to and representation of future claimants complied with Rule 23 and constitutional requirements.

Nor can the Court adopt defendants' suggestion that Isaacson is somehow bound by this Court's disposition of similar challenges advanced by other absent class members in Ivy.  The court did not certify a class action in Ivy and never authorized the plaintiffs in Ivy to represent anyone other than themselves.  Moreover, the "use of representatives to litigate adequacy ignores the principle that class members have an individual right to challenge the representation they have received in a class action" which "cannot be extinguished by a judicial decision to allow a self-selected objector or even a court-appointed one to litigate the issue of adequacy."  Woolley, Collateral Attack, 79 Tex. L. Rev. at 414.


The real question presented by this case is not whether res judicata or any other doctrine of claim preclusion properly applies in this case--clearly, it does not.  Rather, the question is whether Ivy controls as stare decisis in this case.  TLPJ asserts that the Court in Ivy applied legal principles concerning the adequacy of notice and representation afforded to future claimants  that are irreconcilable with the United States Supreme Court's pronouncements on these issues in Amchem Prods., Inc. v. Windsor, 521 U.S. 591(1997)and Ortiz v. Fibreboard Corp., 527 U.S. 815 (1999).  Put simply, Ivy is no longer good law in light of Amchem and Ortiz.  And although that fact alone might not support re-opening the Ivy case itself, it does prohibit application of the holdings of Ivy to persons who were not parties to that case and whose claims are otherwise viable under applicable law.  For this reason, the district court erred in dismissing Isaacson’s case based on res judicata.

 

 

 

II.     NOTICE TO AGENT ORANGE CLASS MEMBERS WHO DID NOT HAVE DISCERNABLE INJURIES WAS NOT ADEQUATE UNDER THE CONSTITUTION AND RULE 23.

 

A.     In a Class Action That Undertakes To Resolve Claims for Latent Personal Injuries, Notice to "Future Claimants" (Persons Without Clinically Detectable, Compensable Injuries) Is Inherently Deficient.

 


For a class action judgment to bind absent class members, Rule 23 and the Due Process Clause require that such persons be given meaningful notice, and an opportunity to opt out, of the class suit.  Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 812 (1985).  In Ivy, this Court found that the Agent Orange notice plan approved by Judge Weinstein (In re "Agent Orange” Prod. Liab. Litig., 100 F.R.D. 718, 728-34 (1983)) provided class members who had not developed clinical injuries at the time of certification with constitutionally adequate notice of the class action.  The court reasoned that because "providing individual notice and opt-out rights to persons who are unaware of an injury would probably do little good" to alert those persons that their future claims were at stake, such notice was unnecessary.  Ivy, 996 F.2d at 1435.  Instead, notice to future claimants by publication was enough; "society's interest in the efficient and fair resolution of large-scale litigation outweighs the gains from individual notice and opt-out rights, whose benefits here are conjectural at best."  Id.

The Supreme Court's opinion in Amchem indicates that although the Ivy court's factual premise is correct--uninjured absent class members probably cannot be effectively notified of a class action that purports to resolve their future claims--its conclusion that effective notice need not be given to these class members to bind them to the class judgment is off the mark.  If the proponents of a class action cannot give uninjured class members meaningful notice that their undeveloped future claims may be decided in the class action, the result under Amchem is not that the case can proceed anyway without the notice, but rather that the case cannot bind these absent class members.


In Amchem, as in Agent Orange, the class action settlement purported to resolve future, as well as existing, claims for personal injury against the defendants.  The class was defined to include all persons occupationally exposed to asbestos--whether or not they had yet sustained a clinical injury as a result of the exposure--and their families.  521 U.S. at 605.  The district court approved a plan for notifying the class by individual notice and publication that the Supreme Court described as "elaborate."  Id. at 606. 


Nevertheless, the Supreme Court questioned "whether class action notice sufficient under the Constitution and Rule 23 could ever be given to legions so unselfconscious and amorphous."  Id. at 628 (emphasis added).  The Court echoed the Third Circuit's concern that the difficulty of providing adequate notice to future claimants "rendered highly problematic any endeavor to tie to a settlement class persons with no perceptible asbestos-related disease at the time of the settlement."  Id.  The Court noted that persons who suffer no clinical injury from a toxic exposure "may not even know of their exposure, or realize the extent of the harm they may incur."  Id.  And, the Court added, "[e]ven if they fully appreciate the significance of the class notice, those without current afflictions may not have the information or foresight needed to decide, intelligently, whether to stay in or opt out."  Id.  Because the Court rejected the class action settlement for other reasons (including the inability of the class representatives to represent both present and future claimants--see Part III below), the Court did not rule "definitively" that notice to the Amchem future claimants was inadequate.  Id.  But the Court's determination to address the issue even though it disposed of the case on other grounds reveals the depth of the Court's skepticism that a class action could resolve the personal injury claims of persons not yet clinically injured.

The concerns expressed by the Court in Amchem apply with at least equal force in the Agent Orange litigation.  Like many servicemen exposed to Agent Orange in Vietnam, Joe Isaacson did not realize "the full extent of the harm" to which he was exposed until he was diagnosed with cancer attributed to Agent Orange in 1996.  R 406a-407a.  And had he received and understood notice of the Agent Orange class action, he would not have had "the information or foresight needed to decide, intelligently, whether to stay in or opt out" of the class.  Because he did not receive meaningful, adequate notice of the class action, it would violate due process to preclude him from litigating his claim now.

 

 

 

 

 

 

 

 

B.     Even If It Is Theoretically Possible To Give Adequate Notice of a Class Action to Future Personal Injury  Claimants, It Was Not Given in the Agent Orange Class Action.

 


The Agent Orange class action notice announced the certification of a class consisting of "those persons who were in the United States, New Zealand, or Australian Armed Forces at any time from 1961 to 1972 who were injured while or in Vietnam by exposure to Agent Orange or other phenoxy herbicides . . .."  In re “Agent Orange” Prod. Liab. Litig., 100 F.R.D. 718, 729 (E.D.N.Y. 1984) (emphasis added).  The parties must have been concerned that the class definition might not be interpreted to include future claimants, because they found it necessary to specify in the settlement agreement that the class definition "includes persons who have not yet manifested injury."  Id. at 865.  The parties never published notice of this clarification of the class definition.  In affirming the class action settlement on direct appeal, this Court did not hold that the notice was adequate to advise persons without manifest injury that their future claims were included; rather, it found the notice sufficient to alert those persons "who believed that he or she had suffered injury as a result of exposure to Agent Orange in Vietnam" of the pendency of a lawsuit potentially affecting their rights.  In re "Agent Orange” Prod. Liab. Litig., 818 F.2d 145, 169 (2d Cir. 1987), cert. denied, 487 U.S. 1234 (1988) (emphasis added).  The Court's language reflects the common understanding that "injury" and "exposure" are different events.  Only those who believed they had an "injury"--and not those who knew merely of their "exposure"--were adequately notified of the class action.


In Ivy, the Court did not expressly address the argument that the particular language of the notice was insufficient to notify persons without manifest injury of the class action, but merely held generally that the notice was sufficient.  996 F.2d at 1433-35.  In light of the concerns about notice to future claimants expressed by the Supreme Court in Amchem, it is appropriate for this Court to address whether the language of the notice is specific and clear enough to notify persons without known injury that their future claims were being resolved in the Agent Orange class settlement.



No reasonable person reading the Agent Orange notice would have understood that the class included persons whose injuries had not yet appeared.  Mere exposure to a toxic substance itself generally confers no legal rights or obligations on the person exposed.  It ordinarily does not support a claim for damages.  See, e.g., Metro-North Commuter R. v. Buckley, 521 U.S. 424, 432 (1997) (noting that "with only a few exceptions, common-law courts have denied recovery to those who, like Buckley, are disease and symptom free").  And in most states, it does not (and, at the time of the class action, it did not) trigger the statute of limitations on any claim based on the toxic exposure.  Compare Childs v. Haussecker, 974 S.W.2d 31, 37 (Tex. 1998) ("almost every jurisdiction applies  some formulation of the discovery rule, either legislatively or judicially, in latent injury and disease and disease cases") with Susan D. Glimcher, Note, Statute of Limitations and the Discovery Rule in Latent Injury Claims: An Exception or the Law?, 43 U. Pitt. L. Rev. 501, 517 (1982) ("Most jurisdictions now recognize 'the obvious and flagrant injustice' of barring a cause of action before a plaintiff can become aware of an injury.").  It may or may not be true that mere exposure to a toxic substance may constitute an injury "in the technical law of torts," as class counsel has maintained.  Ivy, 996 F.2d at 1433-34.  But to bind absent class members, notice cannot be hypertechnical; rather, it must be delivered in a manner "such as one desirous of actually informing the absentee might reasonably adopt to accomplish it."  Mullane v.  Central Hanover Bank & Trust Co., 339 U.S. 306, 315 (1950); see also In re Nissan Motor Corp. Antitrust Litig., 552 F.2d 1088, 1104 (5th Cir. 1977) (class notice must deliver "an adequate description of the proceedings written in objective, neutral terms, that, insofar as possible, may be understood by the average absentee class member"); Twigg v. Sears, Roebuck & Co., 153 F.3d 1222, 1227 (11th Cir. 1998) (class settlement did not bar class member from asserting individual claim because notice was "insufficient to notify him that claims like his were being litigated in the action").  The language of the notice in the Agent Orange class action simply did not convey to the average class member that claims for unknown injury could be decided or compromised in the case.

In contrast, the notice given to the class of present and future claimants in Amchem was far more precise and accurate.  The class definition included persons "who have been exposed . . . either occupationally or through the occupational exposure to a household member to asbestos . . ."  521 U.S. at 223 n. 5.  The district court found the class "somewhat unusual" because it included as members "persons who have not yet been diagnosed with an asbestos-related injury."  Carlough v. Amchem Prods., Inc., 158 F.R.D. 314, 333 (E.D. Pa. 1993).  Believing it "extremely important that these persons be alerted to their potential membership in the class," the court ordered that "clarifying language be added or made more prominent in some of the notice materials."  Id.  Even with the clarifications, the Supreme Court questioned the efficacy of the notice to future claimants.

It is inconceivable that the Amchem Court would have found the Agent Orange notice sufficient to advise veterans like Isaacson that their unenforceable claims for unknown injury could be resolved in the Agent Orange class action.  Because Isaacson did not receive adequate notice of the potential disposition of his claim in the class action, the judgment in that action cannot serve as res judicata of the claim asserted in this case.

 


III. THE CLASS ACTION JUDGMENT DOES NOT PRECLUDE THE ASSERTION OF CLAIMS BASED ON CLINICAL INJURIES DEVELOPED AFTER 1994, BECAUSE CLASS MEMBERS WITH UNKNOWN INJURIES DID NOT RECEIVE ADEQUATE REPRESENTATION IN THE CLASS ACTION.

 

In Ivy, this Court found that the named plaintiffs in the Agent Orange class action adequately represented the interests of those class members that did not yet have manifest injuries.  The  Court conceded that it could "imagine many genuine conflicts of interest" between present and future claimants, but concluded that the potential conflicts "never materialized" because the settlement provided the same benefits to both classes of claimants.  996 F.2d at 1435.  The Court agreed with Judge Weinstein that the designation of separate counsel or a subclass to represent future claimants was unnecessary "because of the way [the settlement] was structured to cover future claimants."  Id. at 1436, quoting Ryan, 781 F. Supp. at 919. 


The United States Supreme Court's decisions in Amchem and Ortiz v. Fibreboard Corp., 527 U.S. 815 (1999), indicate, however, that the Ivy Court's analysis of the adequacy of representation of class members with unaccrued injuries is seriously flawed.  Both Supreme Court decisions establish that structural conflicts between present and future class members cannot be solved by proposal and approval of a settlement that is "fair" to both groups.  In Amchem, the Court considered the propriety of an opt-out class action settlement of present and future claims of asbestos-related injury against certain defendants.  The same class representatives and class counsel represented all claimants, present and future.  The Court perceived a conflict between present claimants, whose overriding goal is "generous immediate payments," and future claimants, for whom the goal is an "ample" fund for the future.  527 U.S. at 626.  Because the class representatives were burdened by this inherent conflict of interest, the Court held that the class did not satisfy "Rule 23(a)(4)'s requirement that the named parties 'will fairly and adequately protect the interests of the class.'" Id. at 625.


Ortiz involved the settlement of all present and future claims against an asbestos manufacturer in a mandatory, "limited fund" class action certified under Rule 23(b) (1)(B).  As in Amchem, the same class representatives and class counsel represented both groups of claimants, but unlike the Amchem settlement, the Ortiz settlement did not specify a payment schedule but left allocation decisions to a trust that would manage the claims. 527 U.S. at 827.  The Court began its analysis of adequacy of representation class by noting generally that "it is obvious after Amchem that a class divided between present and future claims (some of the latter involving no physical injury and others not yet born) requires division into homogenous subclasses under Rule 23(c)(4)(B), with separate representation to eliminate conflicting interests of counsel."  Id. at 856. The proponents of the Ortiz settlement argued that, unlike the conflict between present and future claimants in Amchem, the conflict in Ortiz was illusory because settlement treated both groups the same.  Id. at 857.  The Court rejected the argument, noting that "the very decision to treat them all the same is itself an allocation decision with results almost certainly different from the results that those with immediate injuries ... would have chosen."  Id.  at 857.  The Court added that the intra-class conflicts would preclude a finding of adequate representation even if the settlement were ultimately found fair to both groups; "Rule 23 requires protections under subdivisions (a) and (b) against inequity and potential inequity at the pre-certification stage, quite independently of the required determination at postcertification fairness review under subdivision (e) in an overriding sense."  Id. at 858.

Amchem and Ortiz make clear that, to put it bluntly, the Ivy Court got it exactly backwards.  It is the existence of structural (what the Ivy Court called "imagined") conflicts, not the actual treatment of present and future claimants in the settlement, that determines whether representation is adequate.


Defendants argued below that the named plaintiffs and their counsel in the Agent Orange class action could adequately represent both present and future claimants because the parties did not make the "essential allocation decisions" relating to the class settlement; rather, those decisions were made by Judge Weinstein.  Reply Memorandum in Support of Defendants' Motion To Dismiss at 7.  This is precisely the argument that the Supreme Court rejected in Ortiz.  Rule 23 and due process require adequate representation at all stages of the litigation, not just in the settlement allocation phase.  Defendants' apparent suggestion that it was permissible to provide future claimants with conflicted representation because no constituency was provided with any representation on allocation issues defies common sense, and has no support in Rule 23.  The allocation plan crafted by Judge Weinstein may or may not have been fair, but future claimants were entitled to unconflicted representation to assist Judge Weinstein in crafting it.



Defendants also argued that the conflicts between present and future claimants in the Agent Orange class action were inconsequential in view of the weakness of evidence that Agent Orange could cause injury and of the strength of their military contractor defense to all claims.  As Defendants put it, "All such claims--current and future--were without merit and had de minimus settlement value."  Reply Memorandum in Support of Defendants' Motion To Dismiss at 9.  The argument begs the question of why adequate and unconflicted class counsel would have asserted future claims at all.  At the time of the class action, persons with unmanifested injury had nonexistent "claims" that had not yet accrued and, under the statutes of limitations of most states, did not have to be asserted.  How could they conceivably be benefitted by accelerating their claims and and settling them for nuisance value?  On the other hand, the benefit to defendants of including "future claims" in the class action is obvious: it would give them the prospect of avoiding or capping their Agent Orange liability "forever."  In re "Agent Orange" Product Liab. Litig., 597 F. Supp. 740, 864 (E.D.N.Y. 1984) (settlement agreement).  And the benefit to class members with known injuries is equally obvious:  resolution of future claims was an additional bargaining chip that could increase the size of the settlement.  Of course, if they were to be released, some provision had to made for future claims.  But, as the Court made clear in Ortiz, the provision of some benefits for future claims does not mean that future claimants were adequately represented.  See Ortiz, 527 U.S. at 863 ("Conflict-free counsel, as required by Rule 23(a) and Amchem, might have negotiated a [higher] figure . . . ."; Rule 23 "requires assurance that claimants are receiving the maximum fund, not a potentially significant fraction less.").  It is not hindsight to suggest that assertion of the future claims by the class representatives stood to benefit everyone concerned but the future claimants themselves.  Under these circumstances, the Court should not accept defendants' proposition that future claimants were not harmed by conflicted, inadequate representation in the Agent Orange class action.

Under the standards established in Amchem and Ortiz, future claimants received inadequate representation in the Agent Orange class action.  The class action judgment therefore does not bar their now-ripe claims for damages under the doctrine of res judicata.

 

CONCLUSION

 

For the foregoing reasons, Amicus Curiae TLPJ respectfully urges the Court to reverse the judgment of the district court that Isaacson’s claim is barred by the doctrine of res judicata, and to remand the case for trial on the merits.


Respectfully submitted,

 

 

 

____________________________

STEVE JENSEN

BRENT M. ROSENTHAL

BARON & BUDD, P.C.

3102 Oak Lawn Avenue

Suite 1100

Dallas, Texas 75219

(214) 521-3605

 

Counsel for Amicus Curiae

  Trial Lawyers for Public Justice

 

 

Of Counsel:

 

LESLIE BRUECKNER

TRIAL LAWYERS FOR PUBLIC JUSTICE

1717 Massachusetts Avenue, N.W.

Suite 800

Washington, D.C.

(202) 797-8600

 

ARTHUR BRYANT

TRIAL LAWYERS FOR PUBLIC JUSTICE

One Kaiser Plaza, Suite 275

Oakland, CA 94612

(510) 622-8150


CERTIFICATE OF COMPLIANCE

 

Pursuant to Fed. R. App. P. 32(a)(7)(c) and this Court’s Local Rule 32(b), the undersigned certifies that the foregoing motion for leave to file brief amicus curiae and the brief amicus curiae are entirely double-spaced, except for headings (there are no block quotes or footnotes), and are in nonproportional typeface (Courier New) at 12-point type.  The number of words in the brief amicus curiae is 5208 as calculated by the Corel Wordperfect 9.0 for Windows 95 word processing system.

 

BARON & BUDD, P.C.

 

 

 

By:                           

STEVE JENSEN


CERTIFICATE OF SERVICE

 

I hereby certify that on January 29, 2001, I served one copy of the Motion/Brief by First Class U.S. Mail, postage pre-paid, on the following counsel of record:


Stephen B. Murray

Murray Law Firm

909 Poydras Street

Suite 2550

New Orleans, LA 70112

Attorneys for Appellants

 

Gerson H. Smoger

Smoger & Assoc.

3175 Monterey Blvd.

Oakland, CA 94602

Attorneys for Appellants

 

Mark R. Cuker

Williams, Cuker & Berezofsk

1617 JFK Blvd., Suite 800

Philadelphia, PA 19103

Attorneys for Appellants

 

Ronald Simon

Simon & Assoc.

1814 N. Street, N.W.

Washington, D.C.  20036

Attorneys for Appellants

 

Steven Brock

Rivkin, Radler & Kremer

EAB Plaza

Uniondale, New York 11556

Attorneys for Defendant-Appellee The Dow Chemical Company

 

John C. Sabetta

Seyfarth, Shaw, Fairweather &

 Geraldson

1270 Avenue of the Americas

New York, New York 10020

Attorneys for Defendant-Appellee Monsanto Company

Michael M. Gordon

Cadwalader, Wickersham & Taft

100 Maiden Lane

New York, New York 10038

Attorneys for Defendants Occidental Chemical Corp.

Ultra Diamond Shamrock Corp., Maxus Energy Corp.

Chemical Land Holdings, Inc.

 

Myron Kalish

Parker, Duryee, Rosoff & Haft

EAB Plaza

529 Fifth Avenue

New York, New York 10017

Attorneys for Defendants Uniroyal, Inc.

CDU Holding Inc. & Uniroyal Chemical Inc.

 

William A. Krohley

Kelley, Drye & Warren, L.L.P.

101 Park Avenue

New York, New York 10178

Attorneys for Defendant Hercules Incorporated

 

Lawrence D. Aloise

Clark, Gagliardi & Miller

The Inns of Court

99 Court Street

White Plains, New York 10601

Attorneys for Defendants T.H. Agriculture

Nutrition Co., Inc., Thompson Hayward Chemical Co.,

& Harcos Chemicals, Inc.

 

 


Gregory H. Smoger

Smoger & Associates, P.C.

3175 Monterey Blvd.

Oakland, CA 94602

Attorneys for Plaintiff Joe Isaacson

 


 


I filed 9 copies of the Motion/Brief with the court by depositing same in the U.S. Mail, with first class postage affixed, addressed to the Clerk of the United States Court of Appeals for the Second Circuit.      

 

                            

STEVE JENSEN