MacLeod v. Dalkon Shield Trust (In re A.H. Robins Co.)

213 B.R. 468, 1997 Bankr. LEXIS 1480
CourtDistrict Court, E.D. Virginia
DecidedSeptember 12, 1997
DocketNo. 85-01307-R
StatusPublished
Cited by4 cases

This text of 213 B.R. 468 (MacLeod v. Dalkon Shield Trust (In re A.H. Robins Co.)) is published on Counsel Stack Legal Research, covering District Court, E.D. Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
MacLeod v. Dalkon Shield Trust (In re A.H. Robins Co.), 213 B.R. 468, 1997 Bankr. LEXIS 1480 (E.D. Va. 1997).

Opinion

MEMORANDUM

MERHIGE, Senior District Judge.

This matter is before the Court on Breland Claimant Eileen MacLeod’s (“MacLeod”) Motion To Vacate Arbitrator’s Decision and Motion To Interpret Rules. MacLeod seeks an Order of this Court (1) vacating the decision of Arbitrator James R. Miller, Jr., dismissing her claim, and (2) interpreting the First Amended Rules Governing Arbitration. The Breland Insurance Trust (the “Breland Trust”) opposes MacLeod’s motion. On September 3, 1997, the Court took evidence and heard argument on the motion and the matter was taken under advisement. For the reasons which follow, the Court will DENY MacLeod’s motion.

I.

MacLeod is a Breland Trust claimant who alleges that she suffered injuries as a result of her use of the Daikon Shield IUD. Mac-Leod had a Daikon Shield inserted on August 4, 1972. Shortly thereafter, she began experiencing pain and vaginal bleeding, but did not have the Daikon Shield removed. In 1973, allegedly while the Daikon Shield was still in place, MacLeod became pregnant and gave birth to a child with severe and permanent congenital birth defects.

Despite the unplanned pregnancy, Mac-Leod did not file a Daikon Shield claim until the A.H. Robins Company entered into bankruptcy proceedings in 1986. This Court subsequently disallowed that claim, however, because MacLeod had failed to return the required Court-ordered Questionnaires. MacLeod then joined in the Breland class action settlement. After rejecting the Bre-land Trust’s settlement offer, MacLeod elected to resolve her claim through binding arbitration. Breland. Trust Ex. A. In her arbitration ease, MacLeod asserted that her sole theory of recovery rested on a fraud claim — namely that A.H. Robins had misrepresented the efficacy rate of the Daikon Shield and that she had detrimentally relied on this alleged false representation in choosing the Daikon Shield as her contraceptive.

On February 12, 1997, the Breland Trust filed a Motion For Summary Judgment with Arbitrator James R. Miller, Jr. (“Judge Miller”), retired United States District Judge. Concluding that MacLeod’s claim was barred by the three-year statute of limitations period provided in Rule 40 of the Arbitration Rules, Judge Miller granted the Breland Trust’s motion on April 15, 1997. MacLeod Ex. 1. On May 15, 1997, MacLeod filed the present motion seeking relief from Judge Miller’s decision.

MacLeod’s motion alleges three separate grounds to set aside the arbitrator’s decision. First, MacLeod contends that Judge Miller exceeded his authority and usurped this Court’s exclusive jurisdiction by interpreting the statute of limitations provision in Arbitration Rule 40. Second, MacLeod argues that Judge Miller disregarded the plain provisions of Arbitration Rule 40 by mistakenly applying the three-year limitations period to her fraud claim. Third, MacLeod asserts that she is entitled to relief from Judge Miller’s decision under Rule 60(b)(6) of the Federal Rules of Civil Procedure and Bankruptcy Rule 9024 because of the “extraordinary circumstances” of her case or, in the alternative, “to accomplish justice.” Finally, MacLeod moves the Court to interpret the three-year statute of limitations provision in Arbitration Rule 40 as not applying to a fraud cause of action. The Breland Trust [470]*470opposes MacLeod’s motion, and argues that none of her assertions rises to the level required to vacate an arbitration decision.

II.

In order to vacate an arbitrator’s decision on a Daikon Shield claim, the Court must find at least one of the four grounds identified in Rule 44(a) of the Arbitration Rules:

1. The award was procured by corruption, fraud or undue means.
2. The arbitrator was biased or corrupt.
3. The arbitrator was guilty of abuse of discretion in refusing to postpone the hearing, refusing to admit competent and relevant evidence, or engaging in misconduct that prejudiced the moving party.
4. The arbitrator exceeded his or her powers, or so exercised them such that he or she failed to make a final, definite, and unambiguous award.

Arbitration Rule 44(a).1 Throughout these bankruptcy proceedings, this Court has emphasized that a Daikon Shield arbitrator’s decision will receive substantial deference on review. E.g. In re A.H. Robins Co. (Germany v. Dalkon Shield Claimants Trust), 197 B.R. 525, 527 (E.D.Va.1995). This is because an overly expansive review of arbitration decisions would undermine the efficiencies which arbitration seeks to achieve. Id. at 528 n. 2. Recently, in In re A.H. Robins Co. (Dalkon Shield Claimants Trust v. Gaither), 210 B.R. 527 (E.D.Va.1997), this Court reiterated the standard under which it reviews the decision of an arbitrator. The Court stated:

An arbitrator’s decision receives substantial deference on review, and may only be vacated for the grounds stated in the Arbitration Rules, § 10 of the Federal Arbitration act, or where the arbitrator acted in manifest disregard of the law. This Court will not overturn an arbitration decision merely because the Court would . have reached a different conclusion if presented with the same facts. Instead, the Court’s role is limited to determining whether the arbitration process was itself flawed.

Id. at 529 (citing Germany, 197 B.R. at 527-28, and In re A.H. Robins Co. (O’Connor v. Dalkon Shield Claimants Trust), 158 B.R. 640 (Bkrtcy.E.D.Va.1993)).

III.

MacLeod seeks relief under subsection (4) of Arbitration Rule 44(a). In addition, Mac-Leod moves the Court for an interpretation of the statute of limitations provision in Arbitration Rule 40. The Court will address each request separately.

A. Motion To Vacate Arbitrator’s Judg-. ment

The gravamen of MacLeod’s motion is that Judge Miller exceeded his authority by impermissibly interpreting or, in the alternative, ignoring the plain language of Arbitration Rule 40 by applying to her fraud cause of action. As a general rule, arbitrators do not have the authority to interpret the A.H. Robins’ Plan of Reorganization and its related documents; that power is reserved exclusively for this Court. An arbitrator does, however, have the authority to “read[], understand[ ], apply[], or assess[] the local effect of the plain, ordinary meaning of language.” In re A.H. Robins Co. (Besag v. Dalkon Shield Claimants Trust), 197 B.R. 590, 595 (E.D.Va.1994) (emphasis added). Thus, an arbitrator usurps this Court’s exclusive interpretative authority only if he or she “ascrib[es] any meaning to the Plan, CRF, or related instruments that is neither plain on the face of the words nor pronounced by this Court.” Id. (emphasis added).

Applying these principles to the instant case, the Court finds that Judge Miller neither impermissibly interpreted the statute of limitations provision nor did he act in manifest disregard of the Arbitration Rules. The plain, ordinary meaning of the language of Arbitration Rule 402 is clear: the three [471]*471year statue of limitations period applies to all causes of action irrespective of label and begins to run when the claimant discovers some form of injury.

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