(The Return of) Ignatz, by Sam Heldman

Monday, February 24, 2003

Supreme Court predictions
The last case to be argued this week, Dow Chemical v. Stephenson, presents fascinating questions of class action law and constitutional law. It's about Agent Orange. As you may know, there was a huge amount of Agent Orange litigation, and it ultimately led to a class action settlement in 1984. The settlement purported to wrap up all Agent Orange cases forever and ever, even for those people who weren't sick yet (and therefore who had no claim yet, or at the very least didn't know that they had a claim yet). But there was a limited amount of money in the "fund" that the settlement created; and that fund ran dry, but still people who turn up sick now are barred from bringing law suits against Dow et al. Question, in non-legal terms: "that's not fair, is it – the settlement gives us nothing but bars us from suing? how can we get so hosed?" Question, in legal terms: "can current plaintiffs collaterally attack the settlement in a new lawsuit, and does the settlement violate their constitutional rights under the Due Process clause, such that they should be allowed to sue even though the settlement says they can't?" The Second Circuit, agreeing with the plaintiffs, said that the settlement could not bar their suits (even though the same court had, years earlier, upheld the settlement itself when the settlement was first agreed). Dow, trying to uphold the finality of the settlement and to bar these suits, wants to overturn that decision.

There have recently been a couple of Supreme Court cases that have, in part, been about the problem of whether class action settlements can bar suits by people who don't have claims yet but will have claims in the future. Those cases (Amchem and Ortiz) have been generally negative towards such settlements. If the Agent Orange settlement was being presented for judicial approval now, Amchem and Ortiz would probably doom it. So the Second Circuit's view certainly has some appeal.

On the other hand, Amchem and Ortiz don't answer the question presented here. There are two big differences: (a) this is a "collateral attack" – i.e., another suit years later – and Dow argues that class action settlements, once they are judicially approved upon being negotiated, can't be attacked later in another suit; and (b) Ortiz and Amchem were mostly just about interpreting the Federal Rules of Civil Procedure, and this case by contrast probably requires the plaintiffs to establish a grand constitutional principle in order to win.

This is a very hard one to call, but there is one fact that tilts me towards an answer: Justice Stevens has recused. Based on his votes Amchem and Ortiz, it seems that Justice Stevens is less troubled in general by class action settlements' impact on future claimants than most other Justices are. But with him out, Dow will have to get 5 of the remaining 8 Justices in order to win. (As you may remember, a 4-4 tie results in an affirmance without opinion). It would be pretty big news for the class action world if they affirm in this case, as it would seriously curtail class settlements in mass tort cases; but I think that I'm going to have to say "AFFIRM." (Technically, if I'm reading the Second Circuit's decision correctly, the decision as to one of the plaintiffs' cases should be "vacated" for lack of federal jurisdiction because his case (we know now, under the recent decision in Syngenta v. Henson) was wrongly removed to federal court; but the Court should reach the merits on the other plaintiff's case).

posted by sam 6:48 AM 0 comments


Post a Comment

Powered by Blogger


email: first name@last name dot net