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

197 B.R. 568, 1994 Bankr. LEXIS 2320
CourtDistrict Court, E.D. Virginia
DecidedAugust 16, 1994
DocketNo. 84-01307-R
StatusPublished
Cited by2 cases

This text of 197 B.R. 568 (Welch 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
Welch v. Dalkon Shield Trust (In re A.H. Robins Co.), 197 B.R. 568, 1994 Bankr. LEXIS 2320 (E.D. Va. 1994).

Opinion

MEMORANDUM

MERHIGE, District Judge.

This matter is before the Court on motion by Daikon Shield Claimants Laura Welch and Kenneth Welch for permission to use certain documents in their pending lawsuit against the Daikon Shield Claimant’s Trust (“Trust”). The Trust has responded in opposition, the Court has heard oral argument, and the matter is ripe for decision. For reasons which follow, the Court will deny the motion.

Claimants Laura and Kenneth Welch in 1984 filed suit in a Vermont court against A.H. Robins Co. to recover for injuries purportedly resulting from Laura Welch’s use of the Daikon Shield. The suit was stayed as a result of the bankruptcy petition of A.H. Robins Co. and this Court’s blanket injunction channeling all Daikon Shield-related litigation through an approved claims resolution process. See In re A.H. Robins Co. (Confirmation Memorandum), 88 B.R. 742, 751, 754 (E.D.Va.1988); Order Confirming Debtor’s Sixth Amended and Restated Plan' of Reorganization (Confirmation Order) ¶34, Docket No. 5714 (July 26, 1988).

The express purpose of the claims resolution process is settlement. The process is designed to promote rapid and efficient settlement of the many thousands of Daikon Shield claims by offering full payment of valid claims. See Daikon Shield Trust Claims Resolution Facility (CRF) § A, found at Exh. C to Debtor’s Sixth Amended and Restated Plan of Reorganization (Plan) (March 28, 1988). A claimant who is not satisfied with the Trust’s final settlement offer may choose to resolve her claim through any of a number of optional methods, including traditional litigation.

Laura and Kenneth Welch were not satisfied with the Trust’s final settlement offers and chose to resolve their claims through traditional litigation. This Court certified them to proceed with their litigation in Vermont, substituting the Trust as defendant.

During trial preparations a dispute arose as to whether the Welches could use certain documents as evidence. The Welches sought to use portions of forms they received from the Trust during the claims resolution process. They sought to introduce in evidence portions of what is commonly called the “Claim Form” — a standardized, pre-printed questionnaire that the Trust sends to every claimant in order to elicit enough medical information to make a responsible settlement offer. The Claim Form was designed with unrepresented claimants in mind. It seeks to simplify and explain matters relevant to settlement considerations, as well as to elicit relevant information about the claim.

The Trust opposed use of any portion of the Claim Form at trial on the basis that the form was in the nature of settlement discussions and on the basis that disclosure of the form is prohibited under the confidentiality provision in the Claims Resolution Facility (“CRF”) of the A.H. Robins Reorganization Plan (“Plan”). The Vermont court continued trial to August 23, 1994, to allow the parties to bring the dispute to this Court.

The Welches move this Court to authorize use of the Claim Form as evidence at trial. The Court deems this to be a motion pursuant to its exclusive jurisdiction to interpret the meaning of the Plan and its instruments. See Plan § 8.05; Confirmation Order ¶ 45; Amended Administrative Order Number 1 Governing Daikon Shield Arbitration and Litigation ¶ 3 (July 1,1991).

[571]*571This motion calls on the Court to interpret the meaning of the Plan’s confidentiality provision, found in the CRF. Section G.4 of the CRF states:

Claim files and all communications between the Trust and a Claimant or between the Trust and any other person about any Claimant are in the nature of settlement discussions and shall be strictly confidential.

The issues raised by Movants and by the Trust concern: (1) what communications are covered by this provision; and (2) whether the requirements of this provision can be waived.

1. Scope of the Confidentiality Provision

Claimants first contend that the standard language in the pre-printed Claim form is not covered by the confidentiality requirement in section G.4. They argue that the phrase “about any Claimant” modifies the phrase “all communications.” They contend that the Claim Form is not a communication “about any Claimant” within the meaning of the confidentiality provision because it is a standard form using generic language applicable to all claimants.

The Trust argues that the phrase “about any Claimant” modifies only the phrase “all communications between ... the Trust and any other person.” Therefore, it concludes, the “all communications between the Trust and a Claimant,” without restriction, are confidential.

The Trust’s position goes too far. The Trust’s interpretation of section G.4 would prohibit disclosure of such innocuous items as newsletters or announcements that the Trust from time to time may send to claimants. The Trust’s interpretation of section G.4 would prohibit the Trust from defending against a state lawsuit on the basis that a plaintiff has already communicated acceptance of a settlement offer made by the Trust.

The Court finds that a communication between the Trust and a claimant must be “about any Claimant” to be covered by the confidentiality provision in section G.4 of the CRF. However, the term “about any Claimant” does not have so narrow a meaning as that urged by the Movants. Any communication that is between the Trust and a particular claimant and that offers or seeks information for the purpose of resolving a claim is a communication “about a Claimant.”

The Welches contend that the Claim Form sent to them by the Trust was a standard, pre-printed form, sent to all claimants, and therefore cannot be “about” them or any other claimant. The Welches would have the confidentiality provision apply only to communications whose form and content are tailored to the particular recipient. It is absurd to suggest that the Trust can tailor its communications to each of thousands of claimants, while also satisfying its duty to operate expeditiously. The fact that a communication is standard and pre-printed is immaterial. The Claim Form sent to each of the Movants was a communication from the Trust, which sought information and offered information for the purpose of resolving Movants’ claims. The Claim Form is covered by the confidentiality provision.

2. Waiver

Movants argue that, even if the Claim form is covered by the confidentiality provision, the Trust has waived confidentiality by: (1) using the Claim form during a deposition; and (2) stating on the form itself that it might be used in litigation.

The Trust argues, first, that the parties to the deposition were the parties to the communication—the Trust and the Claimant. Therefore, use of the Claim Form in deposition was not a waiver because it was not a .disclosure. Second, the Trust argues, the language on the Claim Form suggesting future use in litigation is one small passage in a larger context of language encouraging claimants to be accurate and truthful. Therefore, according to the Trust, the language at issue must be read as cautionary and not permissive.

Both arguments miss the mark. The confidentiality requirement established by the CRF is not a privilege residing in the parties which they are free to waive. The confidentiality at issue here is a duty im[572]

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Bluebook (online)
197 B.R. 568, 1994 Bankr. LEXIS 2320, Counsel Stack Legal Research, https://law.counselstack.com/opinion/welch-v-dalkon-shield-trust-in-re-ah-robins-co-vaed-1994.