holding that no statute, rule, or case allows counsel to make a class-wide objection.
How later courts described this case
- holding that no statute, rule, or case allows counsel to make a class-wide objection.
- applying an abuse of discretion standard in review of a proposed class action settlement.
- fundamental conflict of interest within a class is basis for reversal of class settlement approval
Written by the judges who cited it.
The opinion
STATE OF WEST VIRGINIA
SUPREME COURT OF APPEALS
Virdie Allen, Charles and Eileen Agee, FILED
and Hilman and Erma Raynes, November 22, 2013
RORY L. PERRY II, CLERK
Plaintiffs Below, Petitioners SUPREME COURT OF APPEALS
OF WEST VIRGINIA
vs) No. 13-0418 (Putnam County 04-C-465)
Monsanto Company and Pharmacia Corporation,
Defendants Below, Respondents,
Zina G. Bibb, Vikki Bailey, Herbert W. Dixon,
Norma J. Dixon, Donald R. Rhodes, Wanda M.
Rhodes, Betty Tyson, and Charles S. Tyson, et al.,
Plaintiffs Below, Respondents
MEMORANDUM DECISION
Petitioners Virdie Allen, Charles and Eileen Agee, and Hilman and Erma Raynes, by
counsel Thomas F. Urban II, appeal the Circuit Court of Putnam County’s “Order Approving
Final Settlement” entered on January 25, 2013 that found the settlement in this class action to be
fair, adequate, and reasonable. Respondents and defendants below Monsanto Company and
Pharmacia Corporation, by counsel Charles M. Love, III, Leonard Knee, Fazal A. Shere, Floyd
E. Boone, and Patrick C. Timony, filed a response supporting the approval of the settlement.
Respondents and plaintiff class representatives Zina G. Bibb, Vikki Bailey, Herbert W. Dixon,
Norma J. Dixon, Donald R. Rhodes, Wanda M. Rhodes, Betty Tyson, and Charles S. Tyson, by
counsel W. Stuart Calwell, John H. Skaggs, David H. Carriger, Rudolph DiTrapano, Sean
McGinley, and Katherine R. Snow, also filed a response supporting the approval of the
settlement. Petitioners filed replies to both respondents’ briefs. Petitioners, a group of plaintiffs
below, object to the settlement and consequent dismissal of the case.
This Court has considered the parties’ briefs and the record on appeal. The facts and legal
arguments are adequately presented, and the decisional process would not be significantly aided
by oral argument. Upon consideration of the standard of review, the briefs, and the record
presented, the Court finds no substantial question of law and no prejudicial error. For these
reasons, a memorandum decision is appropriate under Rule 21 of the Rules of Appellate
Procedure.
Facts and Relevant Procedural History1
1
As the circuit court’s order and the parties’ briefs point out, this case involves more than
seven years of litigation, over fifty hearings, the exchange of over one million pages of
discovery, over sixty expert witness depositions, over ninety fact witness depositions, the
1
This appeal stems from the circuit court’s approval of two settlement agreements2 in the
class action complaint, styled Zina Bibb, et al. v. Monsanto, et al., Civil Action No. 04-C-465,
filed on December 17, 2004, against Monsanto Company and Pharmacia Corporation3
(collectively hereinafter “Monsanto”) that alleged negligence, nuisance, strict liability, and
trespass. Plaintiffs alleged damages as a result of Monsanto’s operation of the 2,4,5-T process,
which resulted in the by-product of a toxic dioxin, 2,3,7,8-TCDD.4 Specifically, plaintiffs’
allegations centered on the production of 2,4,5-T by Monsanto’s corporate predecessor (referred
to as “Old Monsanto”) between approximately 1948 and 1969. Plaintiffs alleged that the burning
of 2,4,5-T waste materials resulted in air inhalation exposure to dioxin and elevated blood serum
dioxin levels to individuals in the Class Affected Area, defined as the area encompassed within a
five-mile radius from the Old Monsanto chemical plant in Putnam County. Plaintiffs also alleged
the burning resulted in dioxin being deposited on the ground and in houses within the Class
Affected Area.
Plaintiffs sought to represent two distinct, but overlapping, classes: (1) the medical
monitoring class, and (2) the property class. The complaint was signed by attorney Stuart
Calwell for the Calwell Practice PLLC (hereinafter “Class Counsel”) and by attorney James F.
Humphreys on behalf of James F. Humphreys, LC. Below Mr. Humphrey’s signature, the
complaint also listed his then-associate, Thomas F. Urban II, petitioners’ counsel herein.5
issuance of more than two-hundred orders, all culminating in a three-hundred eighty-six page
order by the circuit court approving the settlement. Monsanto contends that this appeal can be
boiled down to whether the circuit court abused its discretion in: (1) maintaining the certification
of classes, and (2) finding that the settlement was fair, adequate, and reasonable.
2
The two settlements involved are the “Medical Monitoring Class Settlement Agreement”
and the “Property Class Settlement Agreement.” Unless referring to one of the specific
agreements, this decision will refer to the two settlements collectively as “the settlement.”
3
Monsanto Company and Pharmacia Corporation were formed in 1999, after Old
Monsanto entered into an agreement with Pharmacia and Upjohn, Inc., to merge their
agricultural products business and their pharmaceuticals and nutrition business. The merger
eventually created two separate companies, Monsanto Company and Pharmacia Corporation.
Pharmacia held the assets of the pharmaceuticals and nutrition business, while Monsanto
Company held the assets of the agricultural products business.
4
2,4,5-Trichlorophenoxyacetic (“2,4,5-T”) is a herbicide that was produced at
Monsanto’s Nitro, West Virginia site. The production of 2,4,5-T results in the by-product
2,3,7,8-Tetrachlorodibenzo-p-dioxin (“2,3,7,8-TCDD”).
5
In or around June of 2007, Mr. Urban dissociated with Mr. Humphreys and formed the
law firm of Urban & Falk, located in Alexandria, Virginia. Mr. Urban filed a substitution of
counsel naming himself, James Falk, and Urban & Falk as counsel for the five plaintiffs who are
the named petitioners in this case. The notice was accompanied by letters from each of the five
petitioners stating that they were now represented by Urban & Falk. After multiple disputes
between plaintiffs’ counsel, the circuit court appointed Mr. Calwell as Class Counsel and
2
The circuit court certified both classes on January 8, 2008, after substantial briefing and
approximately six days of hearing following the initial filing for class certification in June of
2006. The court defined the medical monitoring class to comprise “[t]hose persons who have
resided, worked full-time, attended school full-time, in the Class Affected Area during the period
1948 to the present.”6 The property class was defined to comprise “[c]urrent owners of real
property in whole or in part with the Class Affected Area shown in Exhibit 1.” Both classes are
linked to the same Class Affected Area, defined by reference to a map that was developed by
Class Counsel’s expert in order to predict where dioxins may have been distributed by the Old
Monsanto plant. On August 6, 2010, the court substantially approved the class notices and
dissemination campaign presented by Class Counsel and ordered that the campaign be completed
by October 19, 2010.
Certification of the property class was the subject of continued attack by Monsanto, as
evidenced by its filing of at least twenty-three separate summary judgment motions. One such
motion attacked the opinions of Robert J. Carr, P.E., offered by Class Counsel to prove the
amount of funds potentially needed to remediate the real property encompassed within the Class
Affected Area. The circuit court ultimately excluded Mr. Carr’s opinions on the basis that they
were: (1) based on an engineering methodology not intended to support expert opinions; (2) only
based upon five to ten percent of the data needed for an accurate opinion; (3) subject to a margin
of error too broad to be admissible; and (4) not sufficiently based on objective data. The
exclusion of Mr. Carr’s opinions deprived the property class members of the only basis upon
which a jury could find for them on a class-wide basis, prompting Monsanto to request summary
judgment, or in the alternative, decertification of the property class. The circuit court opted to
decertify the property class.7
authorized him to “be the lead counsel who shall speak on behalf of all Plaintiffs and represent
the class as a whole.” Mr. Urban asserted that his firm represented an additional approximately
1,600 clients, most of whom allegedly resided in the Class Affected Area. The circuit court
ultimately found this number to be unsupported by the documentation submitted at the June 18,
2012, Fairness Hearing.
6
Monsanto challenged the court’s certification order with respect to the medical
monitoring class and persuaded the court to narrow the scope to exclude persons alleging
exposure after 1970 based on a lack of exposure evidence after that year. However, as a result of
Class Counsel’s motion for reconsideration that provided additional exposure evidence, the court
re-adopted the original class definition on March 26, 2010.
7
Class Counsel appealed the decertification of the property class to this Court on
December 12, 2011, along with a motion to hold the appeal in abeyance. That appeal was
docketed as Zina Bibb, et al. v Monsanto, et al., W.Va. Supreme Court Docket No. 11-1665. By
Order entered March 2, 2012, this Court directed that the matter be held in abeyance pending
further order from this Court. Given the present decision affirming the approval of the settlement
and dismissal of the underlying civil action, we hereby dismiss Class Counsel’s appeal, Zina
Bibb, et al. v. Monsanto, et al., Docket No. 11-1665, as moot.
3
After Monsanto’s efforts to have the medical monitoring class decertified failed, the case
was scheduled to proceed to trial on September 6, 2011. However, the matter was reassigned to
the Honorable Derek Swope, sitting by assignment, and the trial was rescheduled for January 3,
2012. The parties participated in two mediations, the first in October of 2011, conducted by
attorney Thomas Flaherty, and the second in December of 2011, conducted by the Honorable
Judges Alan Moats and Booker Stephens. The mediations were not successful, and the case
proceeded to trial as scheduled. However, around the time of completion of voir dire, on January
17, 2012, the parties advised the court that they reached a tentative global settlement.
Importantly, as the negotiations involved the property class plaintiffs, on January 25, 2012, the
court agreed to conditionally vacate its prior decertification order for the purpose of facilitating
settlement.8
The main terms of the Medical Monitoring Class Settlement Agreement are summarized
as follows: (1) creation of a fund that would provide testing for class members over a thirty-year
period; (2) contribution by Monsanto of at least $3 million for each of the seven screening
periods, resulting in an obligation to provide at least $21 million in funding for screening; (3)
contribution by Monsanto of an additional $63 million if certain benchmarks are triggered, i.e., if
more than twenty-five percent of the participants in the medical monitoring program have blood
serum dioxin levels greater than the background range, provided that at least 100 participants
have serum samples drawn that are capable of analysis; (4) repeated blood testing every five
years for a period of thirty years, unless the triggering event occurs, in which case, every two
years; and (5) medical monitoring be limited to class members who resided, attended school, or
worked for minimum periods of time in a smaller area subsumed within the larger Class Affected
Area, referred to as the Settlement Area.
The main terms of the Property Class Settlement Agreement are summarized as follows:
(1) creation of a fund to be used to pay for cleaning the interior surfaces of living spaces within
eligible residences within the Settlement Area; (2) contribution by Monsanto of $3 million per
year over a three-year period, for a total contribution of $9 million; and (3) unused funds would
be returned to Monsanto.
With respect to the attorney fees and costs, Class Counsel petitioned the circuit court for
payment of fees in the amount of $22.5 million and costs in the amount of approximately $7
million, all payable by Monsanto from a fund separate than the funds required under the
settlement. Monsanto agreed to this amount. By separate order entered contemporaneously with
the order under appeal herein, the circuit court granted Class Counsel’s petition for fees and
expenses.9
8
Petitioners state that they objected to the recertification of the property class without a
proper hearing and opportunity to opt out of the class, but the court rejected their arguments.
9
The court’s award of fees and expenses was broken down by specific settlement and
included conditions upon which payment of certain fees would be made, none of which are
relevant for the determination of this appeal. In the end, the circuit court approved a total
potential payment of $29.5 million in fees and expenses to Class Counsel.
4
The circuit court preliminarily approved the settlement and the class notification
documents submitted by Class Counsel and directed that dissemination begin by April 5, 2012.
The court scheduled a fairness hearing10 for June 18, 2012.
Petitioners, through Mr. Urban, requested broad discovery about the settlement, both
before and after the circuit court’s preliminary approval, and the circuit court directed Class
Counsel and Monsanto to respond so that it could make a proper determination as to whether the
settlement was fair, adequate, and reasonable. Class Counsel and Monsanto complied. However,
the circuit court denied petitioners’ request for discovery relating to the mediations.
The circuit court received three categories of objections to the proposed settlement: (1)
from attorney Urban on behalf of the five named petitioners herein, as well as on behalf of
approximately 1,600 class members he purported to represent; (2) from attorney Ruth McQuade
who represented three purported class members;11 and (3) forty-four objections from individual
class members. In addition to receiving voluminous briefing by the parties, the court heard from
Monsanto, Class Counsel on behalf of the classes, Mr. Urban, Ms. McQuade, several objecting
class members, and proposed settlement administrator, attorney Thomas Flaherty, at the June 18,
2012, Fairness Hearing.
10
Rule 23(e) of the West Virginia Rules of Civil Procedure provides that a class action
“shall not be dismissed or compromised without the approval of the court.” See also Bd. of Educ.
of County of Monongalia v. Starcher, 176 W.Va. 388, 343 S.E.2d 673 (1986). While the fairness
hearing is not expressly required by Rule 23 of the West Virginia Rules of Civil Procedure, the
circuit court found such a requirement to be “universally accepted,” stating
The fairness hearing is critical because it is the point at which the [proposed
settlement] is put to a public test, where the judiciary lends its moral force to the
deal. Given that so much rides on the fairness hearing, it remains a relatively
underdeveloped and undertheorized aspect of civil adjudication.
William Rubenstein, A Transnational Model of Adjudication, 89 Geo. L.J. 371, 436 (2001). The
circuit court stated that the fairness hearing is a tool for the proponents of the settlement to
convince the court that the settlement is “fair, adequate, and reasonable.” See Starcher, supra.
Likewise, it is also a vehicle by which class members can object to the proposed settlement.
11
Attorney McQuade appealed the circuit court’s final order approving the settlement to
this Court on February 20, 2013, on behalf of Jane Murdock, Nel Cox, and Patricia Holstein.
That appeal was docketed as Jane Murdock, et. al. v. Zina Bibb, et. al., No. 13-0194. On April 1,
2013, Monsanto moved to dismiss the appeal for lack of jurisdiction, arguing that there was no
evidence that the three petitioners were parties to the underlying action, and if they were parties,
their appeal would be subsumed by the present appeal filed by Mr. Urban. We granted
Monsanto’s motion and dismissed Attorney McQuade’s appeal by order entered on June 12,
2013.
5
In reaching its decision as to whether the settlement was fair, adequate, and reasonable,
the circuit court first weighed the evidence in light of nine factors12: (1) the posture of the case at
the time settlement was proposed; (2) the extent of discovery that had been conducted; (3) the
circumstances surrounding the negotiations; (4) the experience of counsel in the area of class
action litigation; (5) the relative strength of the plaintiff’s case on the merits; (6) the existence of
any difficulties of proof or strong defenses the plaintiffs would likely encounter if the case would
go to trial; (7) the anticipated duration and expense of additional litigation; (8) the solvency of
the defendants and the likelihood of recovering on a litigated judgment; and (9) the degree of
opposition to the settlement. In addition, the circuit court examined five additional factors it
deemed unique to this case: (1) the historical success of medical monitoring actions in West
Virginia; (2) the historical success of actions against Monsanto on claims arising from its 2,4,5-T
operation; (3) the public interest; (4) ease of claims processing; and (5) government involvement.
In applying the factors listed above, the circuit court found that when the parties reached
the proposed settlement, the case had been vigorously litigated for over seven years; that the
parties had engaged in extensive discovery, with the court even concluding that “[a]nything that
was knowable was known;” that despite Mr. Urban’s assertion that the settlement was the result
of collusion, the negotiations represented nothing more than the normal “give and take” that
occurs in negotiation; that Class Counsel has great experience in handling class actions and
complex litigation; that over time, Class Counsel determined that there were conflicts between
his original theory of the case and the experts’ opinions as to the breadth of dioxin exposure; that
Monsanto was well-prepared to dispute the class members’ evidence; that the trial could have
lasted four to six months; that more important than Monsanto’s solvency was, absent the
settlement, whether class members would live to see a favorable conclusion; that Mr. Urban’s
claim to represent 1,600 objecting class members was inflated, and that he could establish
representation of only twenty-six objectors, who were part of the forty-four individual objections
considered; that with the exception of Perrine, plaintiffs in this State have not been very
successful in medical monitoring cases at trial or on appeal; that prior claims against Monsanto
for its 2,4,5-T production have been uniformly unsuccessful; that the public interest favored
resolution of the case; that the court was very satisfied with Attorney Flaherty’s plan to
administer the settlement; and finally, that the government entities contacted by plaintiffs had
declined to direct any remediation in the Class Affected Area, other than at the Monsanto site
itself.
After weighing the arguments of the proponents of and objectors to the settlement in light
of the above factors, the court found the settlement to be fair, adequate, and reasonable,
overruled all objections to the settlement, dismissed all claims of the plaintiff classes, and
released Monsanto from any and all liability associated with the litigation. The court entered its
order approving the settlement on January 25, 2013. From this order, petitioners appeal to this
Court.
12
To establish the factors for its analysis, the circuit court looked primarily to the
decisions of the Honorable Joseph R. Goodwin in Groves v. Roy G. Hildreth and Son, Inc., 2011
WL 4382708 at 4-5 (S.D. W.Va. 2011) and the Honorable Thomas A. Bedell, 15th Judicial
Circuit of West Virginia, in Perrine, et al. v. E.I. du Pont de Nemours and Company, Final
Order Approving Settlement, January 4, 2011 at 10-11 (dkt. No. 04-C-296-2).
6
Standard of Review
Circuit court decisions related to class certification are reviewed under an abuse of
discretion standard. Syl. Pt. 1, In re: West Virginia Rezulin Litigation, 214 W.Va. 52, 585 S.E.2d
52 (2003). With respect to the review of a lower court’s approval of a class action settlement, the
United States Supreme Court has stated that it “rel[ies] primarily on the sound discretion of the
district courts to appraise the reasonableness of particular class-action settlements on a case-by
case basis, in the light of all the relevant circumstances.” Evans v. Jeff D., 475 U.S. 717, 742
(1986); See also In re: Prudential Ins. Co. America Sales Practice Litigation Agent Actions, 148
F.3d 283, 299 (3rd Cir. 1998) (applying an abuse of discretion standard in review of a proposed
class action settlement.) However, a circuit court’s interpretation of the West Virginia Rules of
Civil Procedure presents a question of law and is reviewed de novo. Syl. Pt. 4, Keesecker v. Bird,
200 W.Va. 667, 490 S.E.2d 754 (1997). Under the unique circumstances presented in this case,
unless otherwise noted herein, we will review the circuit court’s decision to approve the
settlement under an abuse of discretion standard.13
Discussion
On appeal, petitioners raise ten assignments of error.14 First, petitioners argue that the
circuit court erred by refusing to conduct a hearing when it vacated the decertification of the
property class on January 25, 2012. Petitioners rely on the United States Supreme Court’s
decision in Amchem Products, Inc. v. Windsor, 521 U.S. 591 (1997), for the proposition that the
circuit court must hold a hearing under Rule 23 of the West Virginia Rules of Civil Procedure15
13
We note that petitioners couch each of their assignments of error as pure questions of
law, or mixed questions of law and fact, and therefore, seek complete de novo review. With the
exception of their first and second assignments of error, we disagree with petitioner and believe
that the actual issue presented is whether the circuit court erred in finding the settlement to be
fair, adequate, and reasonable, rather than turning on an interpretation of law. Nevertheless, even
if we were to apply a de novo standard of review to all of petitioners’ assignments of error, we
still see no reversible error in the circuit court’s decision.
14
On July 8, 2013, Monsanto filed a motion to dismiss four of petitioners’ ten
assignments of error. Class representatives joined in Monsanto’s motion. Specifically, Monsanto
argues that with respect to the third and fourth assignments of error, petitioners can show no
actual injury, and therefore, lack standing to raise the arguments therein. With respect to
petitioners’ ninth and tenth assignments of error, Monsanto argues that the assigned errors rely
on conjectural or hypothetical injuries, and therefore, petitioners lack standing to raise those
arguments as well. Because we affirm the circuit court’s decision to approve the settlement as
fair, adequate, and reasonable, and because we see no merit in petitioners’ four assignments of
error challenged by Monsanto on standing principles, we find it unnecessary to address
Monsanto’s motion to dismiss.
15
Petitioners acknowledge that Amchem involved the federal Rule 23, but state that our
State version of Rule 23 was nearly identical at the time of the decision.
7
anytime there is a change in the class’s certification, even if the lower court vacates a prior
decertification or creates a “settlement-only” class. Similarly, in their second assignment of
error, petitioners argue that the circuit court erred by refusing to allow members of the property
class to opt-out of the class when it vacated the decertification of that class, erroneously finding
the request to be for a second opportunity to opt-out.16 Additionally, petitioners allege these two
errors violated their right to due process.
We address these two assignments of error together and apply a de novo standard of
review because they present questions of law. See Keesecker, supra. To begin, we believe the
reason for the decertification of the property class to be important to our analysis. The record
amply demonstrates that the circuit court decertified the property class based on the exclusion of
class representatives’ expert’s opinions, which rendered it impossible for the property class to
prove damages. Contrary to petitioners’ assertion, the court did not decertify the class because
the prerequisites for class certification under Rule 23 had changed. Simply put, the
decertification was based on the merits of the class’s claim, not prerequisites for certification
under Rule 23.
With the above in mind, under the facts of this case, we find that a second Rule 23
hearing was not required where the court vacated the prior class decertification. In Amchem, the
parties presented a pre-litigation settlement for court approval and requested class certification
simultaneously for the first time. Settlement-only classes usually come to the court without any
adversarial process and little to no discovery, therefore the courts must approve the settlement
and certify the class at the same time. Such is not the case here. The decertification of the
property class was vacated after years of litigation, discovery, and multiple hearings related to
the certification. Amchem simply does not call for the conclusion petitioners seek under the facts
presented in this case.
With respect to the circuit court’s refusal to grant petitioners an opportunity to opt-out of
the property class after the decertification was vacated, petitioners’ argument is based on a false
premise, that is, that the vacatur of the decertification created a new class that never existed.
Given the vacatur, the decertification essentially never happened. We fail to see how the class
changed after the vacatur. Additionally, all class certification orders are essentially tentative and
subject to modification before a decision on the merits. See W.Va. R. Civ. P. 23(c)(1).
Finally, as to petitioners’ assertion that their due process rights were violated by the
court’s failure to conduct a hearing after vacating the decertification and its refusal to allow a
second opt-out opportunity, the record shows that Mr. Urban appeared at the original
certification hearings and did not opt-out petitioners. Moreover, the property class definition has
always stayed the same and never promised any class member relief. Petitioners simply object to
the settlement terms, and that is not grounds for a second opt-out of the class. Finally, we find
that petitioners’ due process rights were adequately protected by the notice and opportunity to
object at the fairness hearing, and petitioners did so in this case. Therefore, we see no error in the
16
Petitioners concede that whether to allow a second opportunity to opt-out is within the
circuit court’s discretion.
8
court (1) refusing another certification hearing after vacating the decertification of the property
class, or (2) refusing petitioners’ request for a second opt-out of the property class.
In their third and fourth assignments of error, petitioners challenge the medical
monitoring and property class settlements, respectively, by arguing that the settlements provide
benefits for only a small fraction of class members. Specifically, petitioners contend that the
medical monitoring class settlement provides benefits for only approximately 5,000 class
members out of more than 80,000 alleged class members.17 Petitioners contend that the property
class settlement provides clean-up benefits to less than forty percent of the residences included in
the class. Petitioners allege that every class member forever gives up their right to sue Monsanto
while receiving no benefit from the settlement. To petitioners, the settlement creates two sub
classes: one that will receive benefits and one that will not. Therefore, to petitioners, it follows
that Class Counsel could not adequately represent the interests of both the class who will benefit
and the class who will not, the settlement should be struck pursuant to Ortiz v. Fibreboard Corp.,
527 U.S. 815 (1999), Amchem, supra, and Dewey v. Volkswagen Aktiengesellschaft, 681 F.3d.
170 (3rd Cir. 2012) (fundamental conflict of interest within a class is basis for reversal of class
settlement approval).
We address petitioners’ third and fourth assignments of error together and find no merit
in petitioners’ arguments therein. Petitioners conflate the singular requirement in Rule 23(a)(4)18
of “adequate representation” for class certification with the multiple factors to be considered in
determining if a settlement is “fair, adequate, and reasonable” as part of the circuit court’s
settlement approval process under Rule 23(e).19 Petitioners erroneously contend that a settlement
cannot be approved unless all class members benefit. Petitioners’ argument misunderstands class
actions. Class membership entitles just that - membership - but, not necessarily benefits.
With respect to the medical monitoring class settlement, the court determined that the
ultimate evidence established that only about 5,000 people had significant exposure to qualify for
benefits under Syllabus Point 3 of Bower v. Westinghouse, 206 W.Va. 133, 522 S.E.2d 424
(1999), which states:
In order to sustain a claim for medical monitoring expenses under West Virginia
law, the plaintiff must prove that (1) he or she has, relative to the general
population, been significantly exposed; (2) to a proven hazardous substance; (3)
through the tortious conduct of the defendant; (4) as a proximate result of the
17
We presume petitioners refer to the fact that the settlement provides benefits to an area
subsumed within the larger Class Affected Area.
18
Rule 23(a)(4) states that “[o]ne or more members of a class may sue or be sued as
representative parties on behalf of all only if . . . (4) the representative parties will fairly and
adequately protect the interests of the class.”
19
Rule 23(e) states “[a] class action shall not be dismissed or compromised without the
approval of the court, and notice of the proposed dismissal or compromise shall be given to all
members of the class in such manner as the court directs.”
9
exposure, plaintiff has suffered an increased risk of contracting a serious latent
disease; (5) the increased risk of disease makes it reasonably necessary for the
plaintiff to undergo periodic diagnostic medical examinations different from what
would be prescribed in the absence of the exposure; and (6) monitoring
procedures exist that make the early detection of a disease possible.
There is no fundamental conflict among the medical monitoring class members as they
all asserted the same factual predicate, all sought to prove the same evidence of liability against
Monsanto, all sought the same relief, and all relied on the same evidence in the case. The only
difference between class members who qualify for medical monitoring, and those who do not, is
that ultimately there was insufficient evidence for some to prove that “as a proximate result of
the exposure, [they] suffered an increased risk of contracting a serious latent disease[.]” Syl. Pt.
3, in part, Bower, supra.
The analysis is the same with respect to petitioners’ fourth assignment of error
challenging the property class settlement. There is no fundamental conflict between the class
members. The only difference between those who qualify for property remediation, and those
who do not, is that the evidence was ultimately insufficient to show an entitlement to relief for
those located farther from the Monsanto plant. As the circuit court found, the final settlement
area (subsumed within the larger Class Affected Area) approximated the area supported by the
ultimate evidence in the case.20
In sum, we believe the record demonstrates that the settlement is based on objective
evidence and was reached only after extensive discovery. The settlement results from zealous,
rigorous advocacy by both parties. Therefore, we cannot conclude that the circuit court abused its
20
Specifically, in its order approving the settlements, the circuit court stated the following
in overruling petitioners’ objection and with respect to the evolution of the evidence:
[A]ll parties understood that by the time of trial, the number of persons who
would actually be eligible for medical monitoring would be fewer as a result of
the development of the evidence. The plaintiff’s demographic expert concluded
that approximately 5,000 people could actually meet all the criteria established by
[Class expert] Dr. Sawyer to qualify for [Class expert] Dr. Werntz’s medical
monitoring program. The same limitation applies to the number of homes that
could be subject to cleanup. As the original estimate of the class size was based
on an isopleth that was not [ultimately] adopted by the experts as probative . . .
the ultimate area actually affected is . . . appreciably smaller than that originally
projected by Mr. Auberle on the basis of the flawed estimate of 2,3,7,8-TCDD
waste produced and burned. Therefore, the large number of Class members and
properties initially projected [to be eligible for medical monitoring and property
remediation, respectively,] was not supported by the evidence. This potential
development was clearly recognized by the Court and all parties. Further, Class
members were fully informed that they might not qualify for benefits, even if the
case was won by the plaintiffs at trial. Their recovery, if any, was dependent on
the evidence. Therefore, this objection is overruled.
10
discretion in finding it to be fair, adequate, and reasonable. Accordingly, we reject petitioners’
third and fourth assignments of error.
Fifth, petitioners argue that the circuit court erred in permitting Class Counsel to
negotiate the settlement of the decertified property class at the same time that Class Counsel was
negotiating the settlement for the medical monitoring class that was about to go to trial.
Similarly, in their sixth assignment of error, petitioners argue the circuit court erred in permitting
Class Counsel to negotiate the settlement of additional payments to certain class members who
were also personal injury clients of Class Counsel at the same time that Class Counsel was
negotiating the global settlement for the two classes. As both assignments of error make the same
allegation – a conflict of interest on the part of Class Counsel – we address them together.
Petitioners assert that the property class should have started over as a new case with new
counsel because of the disparity between the two classes at the time of settlement. According to
petitioners, the property remediation case was always the better case, until Class Counsel’s
expert erred, his opinions were struck, and the class was decertified. Then from that point, all
attention went to medical monitoring. Also, Class Counsel negotiated with Monsanto to pay
certain personal injury plaintiffs a gross sum of $10 million. This payment affected the
settlements for the classes. Essentially, petitioners allege that Class Counsel and class
representatives could not adequately represent both classes after the decertification. See Amchem
and Ortiz, supra.
We do not agree with petitioners. First, Amchem involved an intra-class conflict between
those suffering presently from asbestos exposure and those who may suffer exposure effects in
the future. The United States Supreme Court struck down the settlement because the interests
among class members were too diverse. And, as noted above, the settlement and class
certification were presented simultaneously for court approval. Such is not the case with the
settlement at issue in the present appeal. Second, petitioners point to no concrete evidence of a
conflict of interest or collusion. See Franklin D. Cleckley, Robin Jean Davis & Louis J. Palmer,
Jr., Litigation Handbook on West Virginia Rules of Civil Procedure § 23 at 598 (4th ed. 2012)
(“Any purported conflict or antagonism between the representatives and the class must be real
and go to the merits of the case. Mere unsubstantiated potential or speculative conflicts will not
suffice . . . .”) Petitioners simply draw unsubstantiated conclusions because the ultimate
settlement was not as beneficial as they believed it could have been. In its order approving the
settlement, the circuit court explained why it directed the parties to pursue a global settlement:
[The court] strongly believed that there was a substantial likelihood that whatever
verdict was reached on the medical monitoring claim could potentially determine
the outcome of all other matters between the parties arising from claims involving
Monsanto’s production of 2,4,5-T, based upon the doctrine of issue
preclusion/collateral estoppel. Specifically, the jury’s answer to the question of
whether the tortious activity of the Defendant significantly exposed the Class to a
proven hazardous substance could have a preclusive effect on all of the other
cases on the issue of liability.
11
As vague evidence of a conflict of interest, petitioners point to the disparity between
Class Counsel’s initial valuation of the case and the ultimate settlement. However, in addition to
being insufficient to establish a conflict, this argument ignores the evolution of the evidence in
the case. It was learned that the significant dioxin contamination within the Class Affected Area
was not as extensive as originally suspected. Therefore, it certainly seems likely that Class
Counsel’s initial settlement demands evidence nothing more than settlement tactic to maximize
damages, and his final demand reflected the ultimate evidence. The circuit court recognized this
in rejecting petitioners’ conflict of interest arguments. The court’s rationale for directing the
parties to seek a global settlement is logical. Accordingly, for the reasons stated above, we
cannot conclude the circuit court abused its discretion in ordering the parties to pursue global
settlement in this case.
In their seventh assignment of error, petitioners argue that the circuit court should have
ordered that the certified classes be reduced in size to include only those who had sufficient
exposure to dioxin to qualify for benefits under the settlement. Petitioners did not raise this
argument before the circuit court. In fact, petitioners’ argument here represents the complete
opposite position from what they argued at the fairness hearing and from what they argue in their
third and fourth assignments of error discussed above. Petitioners neither explain how they
preserved this argument for appeal nor advance any legal authority in support for it.
Nevertheless, we do not find that the circuit court abused its discretion in failing to redefine the
class definitions to comport with the ultimate evidence in the case. The issue of class
certification is distinct from the issue of the settlement merits. Stated another way, the merits of a
case play no role in class certification. See Syl. Pt. 6, In re: Rezulin Litigation, supra.
Petitioners’ eighth assignment of error contends that the circuit court erred in denying
them discovery related to the parties’ mediations that, according to petitioners, would have led to
discovery of admissible evidence of collusion between Class Counsel and Monsanto. Petitioners
argue that the discovery into the mediations would have established the subtle signs of
collusion21 that are set forth in In re: Bluetooth Headset Products Liability Litigation, 654 F.3d
935, 947 (9th Cir. 2011):
(1) “when counsel receive a disproportionate distribution of the settlement, or
when the class receives no monetary distribution but class counsel are amply
rewarded,” [citations omitted]; (2) when the parties negotiate a “clear sailing”
arrangement providing for the payment of attorneys' fees separate and apart from
class funds, which carries “the potential of enabling a defendant to pay class
counsel excessive fees and costs in exchange for counsel accepting an unfair
settlement on behalf of the class,” [citations omitted]; and (3) when the parties
arrange for fees not awarded to revert to defendants rather than be added to the
class fund. [citations omitted].
By order entered on March 20, 2012, the circuit court granted petitioners limited
discovery as to the fairness, adequacy, and reasonableness of the proposed settlement (including
21
In their brief, petitioners contend they demonstrated collusion even without the
discovery.
12
an interrogatory related to the timing of the parties’ negotiation of attorney’s fees and costs), but
denied their attempt to engage in discovery related to the two confidential mediation sessions
ordered by the circuit court that were unsuccessful. This Court has repeatedly held:
A trial court is permitted broad discretion in the control and management of
discovery, and it is only for an abuse of discretion amounting to an injustice that
we will interfere with the exercise of that discretion. A trial court abuses its
discretion when its rulings on discovery motions are clearly against the logic of
the circumstances then before the court and so arbitrary and unreasonable as to
shock our sense of justice and to indicate a lack of careful consideration.
Syl. Pt. 1, B.F. Specialty Co. v. Charles M. Sledd Co., 197 W.Va. 463, 475 S.E.2d 555 (1996). In
addition, “[d]iscovery of evidence pertaining to settlement negotiations is appropriate only in
rare circumstances.” Hemphill v. San Diego Association of Realtors, Inc., 225 F.R.D. 616, 620
(S.D. Cal. 2005). Therefore, the issue for this Court is whether the circuit court abused its
discretion by denying petitioners the ability to obtain discovery related to the mediations. Here,
we agree with the circuit court in rejecting petitioners’ argument that collusion is evidenced by
the difference between the opening settlement offer and the final agreement. The circuit court
recognized this disparity for what it was – normal give and take during settlement negotiation.
Certainly, the evolution of the evidence in the case played a part in the parties’ negotiations, and
there is nothing about this aspect of the negotiation that creates the “rare circumstance”
necessary for intrusion into confidential mediations. Therefore, we do not find that the circuit
court abused its discretion in denying petitioners discovery related to the mediations.
In their ninth assignment of error, petitioners argue that the circuit court erred by
rejecting Mr. Urban’s claim at the fairness hearing that he and his firm represented
approximately 1,600 objectors to the settlement. The circuit court found that Mr. Urban
submitted a list of 1,600 purported clients, but he admitted that his list may not have been up to
date. Mr. Urban claimed that all 1,600 individuals should be considered objectors to the
settlement on the basis that he contacted each of them at their last known address, explained the
terms of the proposed settlement, and included a provision stating that they could opt-out from
the objection by contacting him in writing. Only one individual contacted Mr. Urban, and that
was to state his continued objection to the settlement. Mr. Urban then presumably concluded that
all 1,600 should be deemed objectors.
However, the circuit court determined that twenty-six of the forty-four individual pro se
objectors who objected in writing and/or appeared at the fairness hearing were also on Mr.
Urban’s list. Therefore, the circuit court found that Mr. Urban represented at least twenty-six
objectors, but not the full list of 1,600 individuals he claimed.
It is also important to note that petitioners’ argument in their ninth assignment of error
asks us to ignore the court-ordered procedure stated in settlement notice that required that
objections be made in writing to the court before June 7, 2012. As stated above, only twenty-six
individuals on Mr. Urban’s list of purported clients followed this procedure. And, consistent with
the settlement notice, Mr. Urban himself advised all of his purported clients by letter in May of
2012 that they “must write to the [c]ourt” to object to the settlement. Nevertheless, Mr. Urban
sought to object on behalf of all 1,600 individuals, whether they followed the required procedure
13
or not. See Hanlon v. Chrysler Corp., 150 F.3d 1011, 1024 (9th Cir. 1998) (holding that no
statute, rule, or case allows counsel to make a class-wide objection.) Clearly, we cannot find that
the circuit court abused its discretion by following the objection procedure set forth in the
settlement notice.
Petitioners’ final assignment of error challenges the circuit court’s failure to strike
purported agreements that they allege Class Counsel required several of his experts to sign that
prevented these experts from participating in any future actions against Monsanto as a term of
the settlement. Petitioners assert these “Confidentiality, Non-use, and Non-disclosure
Agreements” violate public policy and are unconscionable. The circuit court rejected petitioners’
argument, relying primarily on Syllabus Point 6 of State ex rel. Ward v. Hill, 200 W.Va. 270,
489 S.E.2d 24 (1997), which states:
Absent a formal agreement among defendants in a litigation involving multiple
defendants, the circuit court should not generally permit a settling defendant's
expert witnesses to testify for the remaining defendants. When a settlement
agreement between the settling defendant and the plaintiffs prohibits the
continued use of the settling defendant's expert witnesses by the remaining
defendants, the circuit court, subject to Rule 26(b)(4)(B) [1988] of the West
Virginia Rules of Civil Procedure, should honor that agreement by not permitting
the remaining defendants to use or present such information in the preparation for
or conduct of the trial.
In the present case, the circuit court engaged in a balancing analysis between access to
evidence and the preference for settlement, and determined that “parties may include settlement
terms restricting access to expert testimony as a condition of their settlement” and that “the
silence was bargained for by the parties.” Accordingly, we see no abuse of discretion in the
circuit court’s decision. Moreover, we fail to see how the hypothetical and speculative restriction
imposed on petitioners by these agreements renders the settlement unfair, inadequate, or
unreasonable. For all of these reasons, we reject petitioners’ final assignment of error.
For the foregoing reasons, we affirm.
Affirmed.
ISSUED: November 22, 2013
CONCURRED IN BY:
Justice Robin Jean Davis
Justice Margaret L. Workman
Justice Menis E. Ketchum
Justice Allen H. Loughry II
DISSENTING:
Chief Justice Brent D. Benjamin
14