Stephenson v. Dow Chemical Co.

273 F.3d 249
CourtCourt of Appeals for the Second Circuit
DecidedNovember 30, 2001
DocketDocket Nos. 00-7455(L), 00-9120(CON)
StatusPublished
Cited by17 cases

This text of 273 F.3d 249 (Stephenson v. Dow Chemical Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Stephenson v. Dow Chemical Co., 273 F.3d 249 (2d Cir. 2001).

Opinion

PARKER, Circuit Judge.

This appeal requires us to determine the effect of the Supreme Court’s landmark class action decisions in Amchern Products, Inc. v. Windsor, 521 U.S. 591, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997), and Ortiz v. Fibreboard Corp., 527 U.S. 815, 119 S.Ct. 2295, 144 L.Ed.2d 715 (1999), on a previously settled class action concerning exposure to Agent Orange during the Vietnam War. Daniel Stephenson and Joe Isaacson are two Vietnam War veterans who allege that they were injured by exposure to Agent Orange while serving in the military in Vietnam. In the late 1990s, Stephenson and Isaacson (along with their families) filed separate lawsuits against manufacturers of Agent Orange. These lawsuits were eventually transferred to Judge Jack B. Weinstein in the Eastern District of New York by the Judicial Panel on Multidistrict Litigation (“MDL Panel”).

In 1984, however, some twelve years before these suits, virtually identical claims against these defendants, brought by a class of military personnel who were exposed to Agent Orange while in Vietnam between 1961 and 1972, were globally settled. The Isaacson and Stephenson actions were brought in 1998 and 1999 respectively. Judge Weinstein, who presided over the 1984 settlement, dismissed the claims of Stephenson and Isaacson, concluding that the prior settlement barred their suits. On appeal, plaintiffs chiefly contend, citing Amchern and Ortiz, that they were inadequately represented and, therefore, due process considerations prevent the earlier class action settlement from precluding their claims. Because we agree that Amchern and Ortiz prevent applying res judicata to bar plaintiffs’ claim, we vacate the district court’s dismissal and remand for further proceedings.1

I. BACKGROUND

A. Prior Agent Orange Litigation

The Agent Orange class action litigation has a lengthy and complicated history, [252]*252which we set forth in some detail below in order to convey the magnitude of this decision.

The first Agent Orange litigation began in the late 1970s, when individual veterans and their families filed class action suits in the Northern District of Illinois and Southern and Eastern Districts of New York, alleging that exposure to Agent Orange caused them injury. In re “Agent Orange” Prod. Liab. Litig., 635 F.2d 987, 988 (2d Cir.1980) (“Agent Orange I”). By order of the MDL Panel, these actions were transferred to the Eastern District of New York and consolidated for pretrial purposes. Id. Plaintiffs asserted claims of negligent manufacture, strict liability, breach of warranty, intentional tort and nuisance. In re “Agent Orange” Prod. Liab. Litig., 597 F.Supp. 740, 750 (E.D.N.Y.1984) (“Agent Orange III”); aff'd 818 F.2d 145 (2d Cir.1987).

In 1983, the district court certified the following class under Federal Rule of Civil Procedure 23(b)(3):

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 in or near Vietnam by exposure to Agent Orange or other phenoxy herbicides, including those composed in whole or in part of 2, 4, 5-trichlorophenoxyacetic acid or containing some amount of 2, 3, 7, 8-tetra-chlorodibenzo-p-dioxin. The class also includes spouses, parents, and children of the veterans born before January 1, 1984, directly or derivatively injured as a result of the exposure.

In re “Agent Orange” Prod. Liab. Litig., 100 F.R.D. 718, 729 (E.D.N.Y.1983) (“Agent Orange II”). To support class certification, the district court specifically found:

(1) that the affirmative defenses [including the “military contractor” defense] and the question of general causation are common to the class, (2) that those questions predominate over any questions affecting individual members, and (3) given the enormous potential size of plaintiffs’ case and the judicial economies that would result from a class trial, a class action is superior to all other methods for a “fair and efficient adjudication of the controversy.”

Id. at 724. The court also ordered notice by mail, print media, radio and television to be provided to class members, providing in part that persons who wished to opt out must do so by May 1, 1984. Id. at 729-32.

Trial of the class claims was to begin on May 7, 1984. In re “Agent Orange” Prod. Liab. Litig., 818 F.2d 145, 154 (2d Cir.1987) (“Agent Orange V”). On the eve of trial, the parties reached a settlement. Agent Orange III, 597 F.Supp. at 746. The settlement provided that defendants would pay $180 million into a settlement fund, $10 million of which would indemnify defendants against future state court actions alleging the same claims. See id. at 863-65. The settlement provided that “[t]he Class specifically includes persons who have not yet manifested injury.” Id. at 865. Additionally, the settlement specifically stated that the district court would “retain jurisdiction over the Fund pending its final disposition.” Id. at 866.

The district court held fairness hearings throughout the country, and approved the settlement as fair, reasonable and adequate. See id. at 746-47; see also Ryan v. Dow Chem. Co. (In re “Agent Orange” Prod. Liab. Litig.), 618 F.Supp. 623 (E.D.N.Y.1985) (approving final settlement and dismissing merits). The court rejected the motion to certify a subclass of those class members who objected to terms of the settlement. Agent Orange III, 597 F.Supp. at 757. The court concluded that “[n]o purpose would have been served by [253]*253appointing counsel for a subclass of disappointed claimants except to increase expenses to the class and delay proceedings.”2 Id.

Seventy-five percent of the $180 million was to be distributed directly “ ‘to exposed veterans who suffer from long-term total disabilities and to the surviving spouses or children of exposed veterans who have died.’ ” Agent Orange V, 818 F.2d at 158. “A claimant would qualify for compensation by establishing exposure to Agent Orange and death or disability not ‘predominately’ caused by trauma....” Id. Payments were to be made for ten years, beginning January 1, 1985 and ending December 31, 1994:

No payment will be made for death or disability occurring after December 31, 1994. Payment will be made for com-pensable deaths occurring both before and after January 1, 1985. Payments will be made for compensable disability to the extent that the period of disability falls within the ten years of the program’s operation.

Ryan v. Dow Chem. Co. (In re “Agent Orange” Prod. Liab. Litig.), 611 F.Supp. 1396, 1417 (E.D.N.Y.1985) (“Agent Orange TV”), rev’d in part on other grounds, In re “Agent Orange” Prod. Liab. Litig.,

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Stephenson v. Dow Chemical Co
273 F.3d 249 (Second Circuit, 2001)

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273 F.3d 249, Counsel Stack Legal Research, https://law.counselstack.com/opinion/stephenson-v-dow-chemical-co-ca2-2001.