Petition — Chapman v. Dow Chemical Co.

8 0 -f882 Olfice- Supreme Court, U.S.

— — — — — )/

IN THE APR 28 1981

Supreme Court of the Hftde tates

OCTOBER TERM, 1980 ‘acum

>

CHARLES CHAPMAN, et al.,

Petitioners,

THE DOW CHEMICAL COMPANY, et al.,

Respondents.

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

VICTOR JOHN YANNACONE, JR.

(Counsel of Record for Petitioners)

ALBERT J. FIORELLA

IRVING LIKE

EDWARD F. HAYES, IIl

YANNACONE & ASSOCIATES

Post Office Drawer #109

Patchogue, New York 11772

(516) 654-2299

Counsel for Petitioners

QUESTIONS PRESENTED

Does an action brought by the plaintiff veterans and their

families against the several stateless, multi-national, conglom-

erate, corporate war contractor defendants to redress the

poisoning of approximately 2.4 million American Servicemen'

who served as combat soldiers during the war in Southeast

Asia raise “federal questions” the resolution of which is

properly before the federal courts under 28 U.S.C. § 1331 and

the determination of which should be governed by some

uniform rule of federal common law?

l There are additional suits before the District Court brought by

Australian and other SEATO soldiers and their famities. See 506 F.

Supp. 756 (E.D.N.Y. 1980).

ii

PARTIES

More than 100 actions involving over 5,000 individual vet-

erans, their wives, widows and children, and in certain cases

their parents, were filed in federal district courts throughout

the United States and appear betore this Court as consolidated

under docket MDL 381 pursuant to 28 U.S.C. § 1407. The lead

case, under MDL procedures, is:

“CHARLES GHAPMAN, individually and on behalf of all

those so unfortunate as to have been and now to be

similarly situated at risk from the toxic effects of phenoxy

herbicides such as the 2, 4, 5 trichloro phenoxy aliphatics

manufactured, formulated, advertised, promoted, mar-

keted and sold, individually and collectively by the cor-

porate defendants herein, although known to be contami-

nated with toxic synthetic organic chemical 2, 3, 7, 8-te-

trachloro dibenzo p.-dioxin (*TCDD” or “Dioxin”) and

KUNIKO CHAPMAN, individually and on behalf of all

those so unfortunate as to have been similarly affected as

a result of the toxic effects of phenoxy herbicides such as

the 2, 4, 5 trichloro phenoxy aliphatics manufactured,

formulated, advertised, promoted, marketed and sold,

individually and collectively by the corporate defendants

herein, although known to be contaminated with toxic

synthetic organic chemical 2, 3, 7, 8-tetrachloro dibenzo

p.-dioxin (“TCDD” or “Dioxin”),

VS.

THE DOW CHEMICAL COMPANY, HERCULES INCORPO.

RATED, NORTHWEST INDUSTRIES, INC., DIAMOND

SHAMROCK CORPORATION, MONSANTO COMPANY, and

NORTH AMERICA PHILIPS CORP,

Plaintiffs,

Defendants,’

and

THE UNITED STATES OF AMERICA, VETERANS ADMINIS.

TRATION, DEPARTMENT OF DEFENSE, SOCIAL SECURITY

ADMINISTRATION, DEPARTMENT OF HEALTH, EDUCA

TION AND WELFARE,

as their several interests may appear.”

2 After the arguments before the Court of Appeals and as a result of

disclosures by the government, Ansul Company, Riverdale Chemical

Co., Uniroyal, Inc., Occidental Petroleum Co., have been included as

additional defendants. Their counsel will be served with copies of this

Petition.

TABLE OF CONTENTS

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TABLE OF CASES AND AUTHORITIES

Cases: PAGE

In re Agent Orange Product Liability Litigation, 506 F.

Fe Es OS SMe a beec ene setsnenns i(n), 5, 8, 9

In re Agent Orange Product Liability Litigation, 506 F.

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Day and Zimmerman, Inc. vy. Challoner, 423 U.S. 3

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Feres v. United States, 340 U.S. 135 (1950)........... 5

Miree v. DeKalb County, 433 U.S. 25 (1977). ......... 4

Owens v. Haas, 601 F.2d 1242 (2d Cir. 1979), cert. den.

SEL UNO TN <6 5°45 4 4.6.0 0'e 6000650 b00 2060000 7

Stencel Aero Engineering Corp. v. United States, 431

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United States v. Kimbell Foods, Inc., 440 U.S. 715

SEE SES ER LONS dass Len ebeseeKeheceaeeaes ee 7

United States v. Little Lake Misere Land Co., 412 U.S.

SSA ery rere ere ere 7

United States v. Standard Oil Co., 332 U.S. 301 (1947). 5, 7,

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Wallis v. Pan American Petroleum Corp., 384 U.S. 63

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United States Constitution:

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Statutes and Rules:

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IN THE

Supreme Court of the United States

OCTOBER TERM, 1980

CHARLES CHAPMAN, et al.,

Petitioners,

VS.

THE DOW CHEMICAL COMPANY, et al.,

Respondents.

>

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

Petitioners, veterans of United States military service in Viet

Nam, their wives and widows, children, representatives, and

survivors, respectfully pray that a writ of certiorari issue to

review the decision of the Court of Appeals for the Second

Circuit in these cases.

OPINIONS BELOW

The opinion of the Second Circuit from which a writ of

certiorari is sought is reported at 635 F.2d 987 (2d Cir. 1980).

That decision by a divided court, Chief Judge Feinberg dissent-

ing, reversed a decision by the District Court, George C. Pratt,

J., reported at 506 F. Supp. 737 (E.D.N.Y. 1979),°

3 Subsequent to the decision of the Court of Appeals, the District

Court gave limited class certification to those actions which, because

of diversity jurisdiction or other reason, were not dismissed as a result

of the action of the Court of Appeals. /n Re Agent Orange Product

Liability Litigation, 506 F. Supp. 762, 787 (E.D.N.Y. 1980). There were

approximately 800 individuals named plaintiffs at the time of the

tv

JURISDICTION

The decision and order sought to be reviewed was entered by

the clerk of the Court of Appeals on November 24, 1980,

without time notation. A Petition for Rehearing en banc was

denied by order entered January 28, 1981. This Petition is

being filed within 90 days of that order and no extension of

time for filing this Petition has been sought. Jurisdiction of

this Court is therefore invoked under 28 U.S.C. § 1254(1).

STATUTORY PROVISION INVOLVED

Section 1331(a) of Title 28, United States Code, provides:

The district courts shall have original jurisdiction of all

civil actions wherein the matter in controversy exceeds the

sum or value of $10,000, exclusive of interest and costs

and arises under the Constitution, laws, or treaties of the

United States.

STATEMENT OF THE CASE

This litigation arises out of the use of phenoxy herbicides,

including a certain “Agent Orange,” which were manufac-

tured, formulated, advertised, marketed, promoted and sold

by the multinational, conglomerate, corporate defendant war

contractors. The plaintiffs are the class of all those United

States veterans who served in Southeast Asia during the “Viet

Nam War” and were exposed to chemical defoliants such as the

“dioxin” contaminated phenoxy herbicides, together with their

wives and children, and, in certain unfortunate cases, their

widows, orphans, and parents.

Court of Appeals decision, Because of the immense burdens being

placed on the clerk's office by individual filings, the District Court had

requested counsel to refrain from filing further actions, pending class

action certification. The District Court designated one case, Chapman

v. Dow, 79 C. 1195 (N.D. IIL, 1979), as lead case for the purposes of

these motions,’

The phenoxy herbicides supplied by the defendant War

Contractor were admittedly contaminated with polychlorinated

dibenzo p-dio (PCDDs), including 2,3,7,8-tetrachloro-dibenzo

p-dioxin (TCDD “Dioxin”), a compound conceded to be one

of the most toxic substances ever developed by man. As a

result of exposure to these contaminated herbicides, individual

veterans have suffered genetic and somatic damage, including

neoplastic disease (cancer). Children of the plaintiff veterans

have been born with catastrophic polygenetic birth defects,

while others have died in utero, been stillborn, or succumbed

as infants.

In addition to compensatory, general and punitive damages

the plaintiff veterans demand declaratory judgment and equi-

table relief including the creation of a trust fund for the benefit

of the afflicted victims out of the current earnings of the

corporate defendants rather than the public treasury.‘

Jurisdiction is invoked under 28 U.S.C. § 1331 (“federal

question”), because the claims of the more than two million

soldier-veterans who fought shoulder-to-shoulder for the

United States of America in Southeast Asia by command of

the Federal Government should not be subject to the vagaries

of disparate state laws and the inevitable inconsistent results

which would allow recovery to some and deny it to others

solely because of the accident of their residence. Put another

way, the plaintiff veterans and their families assert “federal

question” jurisdiction because the several states ( which cannot

agree on principles of substantive tort law, choice of law, or

statutes of limitations, and which would readily allow compen-

sation to some and deny it out of hand to others) are inappro-

priate forums to resolve the fundamentally federal interests

determining the relationships between members of the armed

forces of the United States and their country.

4 Such a trust fund is necessary to assure restitution to, among others,

the American taxpayers for benefits paid those victims through the

United States Department of Health and Welfare, the social services

agencies of the several states and the Veterans Administration, The

trust fund may also provide the means for the corporate defendants to

avoid economic disaster should the plaintiff veterans and their families

ever recover damages consistent with the magnitude of their injuries,

REASONS FOR GRANTING THE WRIT

The federal interest in the “Agent Orange” cases

mandates “Federal Question” Jurisdiction.

Quite apart form the legal issues raised, the claims of the

plaintiff veterans and their families should command the

attention of this Court because of the national concern for

their plight and the widespread public interest in having the

issues of fact aired in the essentially apolitical atmosphere of

the federal courts.

In a formal sense, Petitioners contend that there is an

acknowledged, direct, and continuing federal interest in the

unique relationship between soldiers and their government;

and that there is an abiding and deep concern of the American

people who want to know how the federal courts are going to

deal with the legitim#e and substantial claims of these combat

veterans.

This Court has already seen fit to review issues of less

significance arising out of isolated claims (Day and Zimmer-

man, Inc. v. Challoner, 423 U.S. 3 (1975). It would seem all the

more appropriate to consider them in the context of a mass

toric tort committed upon more than two million young

Americans who answered their country’s call to protect Ameri-

can interests in Southeast Asia.

The legal issues are no less substantial and important than

the moral and philosophical questions which haunt the nation

about the “Vietnam War”. The District Court and, it is

submitted, even the Court of Appeals, correctly, reviewed the

principles of law contained in Miree v. DeKalb County, 433

U.S. 25 (1977) and Wallis v. Pan American Petroleum Corp.,

384 U.S. 63 (1966) and synthesized the criteria into a three-pro-

nged test to establish whether the Court should assume “fed-

eral question” jurisdiction and whether a federal common law

rule should determine the veterans claims:

“

. « « (I) the existence of a substantial federal interest in

the outcome of a litigation; (2) the effect on this federal

interest should state law be applied; and (3) the effect on

State interests should state law be displaced by federal

common law.” 635 F.2d at 990; 506 F. Supp. at 746.

The majority opinion in the Court of Appeals, written by

Judge Amalya Lyle Kearse, while disparaging “uniformity” as

a basis for federal interest, nonetheless agreed that substantial

federal interests existed in the relationship of a soldier to his

government [Feres v. United States, 340 U.S. 135 (1950);

United States v. Standard Oil Co., 332 U.S. 301 (1947)] and,

of equal importance, also in the relationship of the government

to its war suppliers [Stencel Aero Engineering Corp. v. United

States, 431 U.S. 666 (1977)}.

Standard Oil, (supra), recognized that the relationship be-

tween the government and its servicemen was “distinctly fed-

eral in character,” and conferred rights and duries on members

of the armed forces of the United States that were distinctly

federal in nature. (/d. at 305). The Second Circuit acknowl-

edged that “the government has an interest in the welfare of its

veterans [who] have given of themselves in the most fundamen-

tal way possible in the national interest.” 635 F.2d 994.

Similarly, Stencel Aero Engineering Corp., (supra), es-

tablished that the relationship between the government and

those with whom it contracts is also distinctly federal in

character. (/d. at 672). Liability here, as the Second Circuit

observed (635 F.2d at 994), could well affect not only the

government’s ability to secure military equipment, but also the

prices, terms and conditions upon which it could be procured.

Notwithstanding their agreement that the “Agent Orange”

cases involve substantial federal interests, Judges Kearse and

Van Graafeiland, however, found these interests in conflict and

6

held that the federal courts were incapable of resolving con-

flicts between competing federal interests.

The notion that federal courts are unable to, or simply

cannot, select a rule of federal common law from among

federal policies and interests is not only novel but fundamen-

tally inconsistent with the concept that each citizen has an

obligation to serve in the Armed Forces of the United States,

but no such obligation to serve in the militias of the several

states. Put another way, the plaintiff veterans are soldiers who

went to Vietnam not at the behest of any individual state, but

by compulsion of the federal government.

While in Vietnam, the plaintiff veterans were exposed to

toxic synthetic organic chemicals such as TCDD which con-

taminated the “Agent Orange” sold to the United States

Government by the several stateless, multi-national chemical

companies, the defendants in these actions. The plaintiffs can

demonstrate that these war contractors failed to take reason-

able care to reduce or eliminate the dioxin contaminate in the

phenoxy herbicides they manufactured, and that they failed to

warn the Department of Defense during the war, and the

Veterans Administration after the war, about the dangers

associated with the dioxin contamination. Thus, the defendant

war contractors sold the federal government a product which

was not only defective in both design and manufacture but also

lacking the warning necessary to enable the federal government

to make an informed choice. If the contaminated phenoxy

herbicide was a “defective” product, it was “defective” as to

all the American soldiers who were exposed to it in Southeast

Asia regardless of the state of their residence at the time they

joined the armed forces or the state of their residence today.*

Nevertheless, Judges Kearse and Van Graafeiland tell us that

soldiers who fought shoulder-to-shoulder and were exposed to

this poisonous contaminant, without regard for the states from

5 The Third Amended Complaint asserts causes of action in Strict

Product Liability, Negligence, Breach of Warranty, Intentional Tort,

Equity and Nuisance.

which they came, are to be treated in widely disparate fashion

according to the law of their home states or by the exercise of

some esoteric choice of law principle.

As a practical matter, if the decision of the Court of Appeals

is permitted to stand, it means that two judges of the Second

Circuit will have closed the door to the Courthouse and barred

recovery to more than 600,000 veterans from twenty states,

while their comrades in arms from the remaining thirty states

will be permitted to recover compensation for the damages

they have suffered as a result of the defendants’ wrongdoing.

Undoubtedly, the millions of soldiers who heeded the call of

their country to serve and fight in the Viet Nam war, who

endured untold suffering and made incredible sacrifices in the

service of their government, as well as those yet to be called to

served our nation in future wars, will find not only anomalous,

but incomprehensible and disturbing the notion of Judges

Kearse and Van Graafeiland that their right to be heard in a

federal court is something less than that of convicted felons

(see Owens v. Haas, 601 F.2d 1242 (2d Cir. 1980), cert. denied,

444 U.S. 940 (1979).

In Standard Oil, (supra), this Court found authority to

proceed “even though Congress has not acted affirmatively

about the specific question.” 332 U.S. at 307. See, also, United

States v. Kimbell Foods, Inc., 440 U.S. 715 (1979), United

States v. Little Lake Misere Land Co., 412 U.S. 580, 591

593-94 (1973). Indeed, almost by definition, nearly all of the

cases establishing federal common law have proceeded in the

absence of particularized legislation.

Evidence of federal concern can be found in legislation

which provides for re-employment of returning veterans [38

U.S.C. § 2021 (1976)], and for compensation for a service-

man’s death or injury in both peace and wartime [38 U.S.C.

§ 310 et seq. (1976)}.°

6 The federal fiscal interest in servicemen’s welfare is increased by the

eligibility of disabled servicemen for supplemental security benefits. 42

U.S.C. § 1381, et seq.; Id. § 1395, et seq.; and id. § 423, et seq.

Chief Judge Feinberg’s dissent in the Court of Appeals

properly pointed out that any “conflict” between federal poli-

cies was more apparent than real:

“The United States has a clear interest in the protection of

its soldiers from harm caused by defective war material.

What other interests does the United States arguably have

that might conflict with this clear interest?” 635 F.2d at

998.

Analyzing that question and considering such matters as the

interest of the government in ensuring that its contractors get a

fair hearing, the only other interest of the government in the

defense contractors he discerned was that they not be driven to

bankruptcy by a large verdict, an untoward result clearly

within the equity jurisdiction of the federal courts to prevent,

and an issue both speculative and remote at the moment.

Hence, Judge Feinberg argued:

“The conclusion seems inescapable to me that the United

States’ interest in the ‘welfare’ of defendants cannot

approach, either in magnitude or in quality, its interest in

the welfare of the Agent Orange plaintiffs. In short, in the

case before us the paramount interests of the United

States are in the welfare of its veterans and in their fair

and uniform treatment.” 635 F.2d at 998.

Even accepting, arguendo, their determination that the

“Agent Orange” cases create a conflict among federal policies

that should properly be resolved by Congress,’ by this holding,

Judges Kearse and Van Graafeiland leave to the fifty states

courts with their myriad rules of decision the role which they

would assign to Congress, The result of the majority holding is

anomalous to its rationale, since the effect of this mandate is

to relegate the resolution of competing federal interests to state

law.

7 Thus stated, the formulation of the Court of Appeals suffers from

one further practical problem: Congress has not acted (if it should),

but the case is actually before the courts,

9

Thus, the majority opinion contains two serious errors

which call for correction by this Court:

1. Federal prisoners have more rights than United

States soldiers.

2. State courts, but not federal courts, are empowered

to “strike the balance between the conflicting interests of

the veterans and the contractors, and thereby identify

federal policy”.

How state law became an appropriate vehicle for the resolu-

tion of conflicting federal interests was never explained by the

Court of Appeals. However, the notion that the majority

decision has relegated all the soldier-veterans and their familes

to the inconsistent results of local state laws is itself an illusion,

This is so because, according to the defendant war contractors,

the claims of all soldier-veterans in at least twenty states will be

barred by Statutes of Limitations, so that the ultimate effect of

the ruling of Judges Kearse and Van Graafeiland is to close and

lock the doors to the courthouses for all time to more than

600,000 veterans and perhaps even to their widows and de-

formed children.

The fact is that the veterans who petition this Court were

called by the federal government of the United States to fight

in an unpopular war thousands of miles away from home.

While in Southeast Asia, they were exposed to contaminated

phenoxy herbicides sold to the federal government by the

stateless, multi-national defendant war contractors. It was the

federal government that was victimized by the sale. Similarly, it

is the federal government that had the non-delegable duty to

prevent interference by third parties with its relationship with

its soldiers and to protect them (whether conscripts or volun-

teers) from unnecessary harm. That is the correlative of its

right to command their service and their loyalty.

10

CONCLUSION

Federalism is not an issue. There is no conceivable state

interest in the resolution of the claims of the plaintiff veterans

and their families against the corporate defendant war contrac-

tors that outweighs the interest of the federal government or

even seriously contends with it. The question is entirely fed-

eral. The Agent Orange litigation arises out of the mass toxic

tort committed by a number of stateless, multi-national, con-

glomerate chemical companies against the more than two

million Amer.can servicemen and women who served in South-

east Asia from 1962 through 1971.

It is impossible to ignore the unwieldiness and impracticality

of utilizing state choice of laws rules to decide the “Agent

Orange” cases, in which plaintiffs from each of the fifty states

are suing multi-national conglomerate companies incorporated

in several states and maintaining principal places of business in

still other states. Choice of law doctrine today is heavily tied to

State interest analysis and under the rule propounded by

Judges Kearse and Van Graafeiland will require that Courts in

each of the fifty states attempt to work out a balance of state

interests. It requires no profound power of prophecy to realize

that such a venture is doomed to failure. By abdicating

jurisdiction of the “Agent Orange” cases as a “federal ques-

tion,” and turning them over to state law, substantial federal

interests will be subjected to an irrational mix of choice of law

decisions resembling not so much “choice” as chance: a na-

tional “choice-of-law” lottery. If this be the price of federal-

ism, then the Viet Nam combat veterans are entitled to know

why they have been singled out and compelled to pay so high a

price.

The plaintiff veterans were conscripted from all the fifty

states of this Union to serve in Southeast Asia. They were in

Vietnam by federal command. The deadly dioxin which con-

taminated the phenoxy herbicides manufactured by the defen-

dants was shipped to Vietnam under government contract.

They were poisoned by phenoxy herbicides contaminated

with 2,3,7,8-tetrachloro dibenzo p-dioxin (TCDD or

“Dioxin” )—one of the most toxic poisons ever created by man.

Thousands of these soldiers—now veterans—are suffering

and dying. Many have cancer, while others are the fathers of

horribly deformed children.

The “Agent Orange” cases are as federal as the United States

Constitution. Their genesis is the Viet Nam war, a federal

military expedition made possible only by Article I, Section 8,

of the United States Constitution and a host of federal statutes

governing military operations and defense production; statutes

which enable the federal government to raise and support

armies, regulate the land, naval, and air forces, and to provide

for the common defense of this nation. All of which powers

are exclusively reserved to the federal government, not to

individual states."

The outcome of the Agent Orange litigation is important to

the national defense and security.

The problems raised !y the “Agent Orange” cases are of

international concern, multi-state in dimension, and uniquely

federal in character.

8 The authority for federal common law jurisdiction in this case is

twofold. Article 1, Section 8 of the Constitution gives Congress the

power to establish and maintain a military. The ability to make laws

concerning the protection of servicemen is a necessary adjunct of this

power:

“For, as the Federal Government has the exclusive power to estab-

lish and define the relationship [between itself and its soldiers} by

virtue of its military and other powers, equally clearly it has power

in execution of the same function to protect the relationship once

formed from harms inflicted by others.” United States v. Standard

Oil Co,, 332 U.S. 301, 306 (1947).

Similarly, the power to execute jurisdiction at all in cases imbued with

the federal interest implies the authority to fashion rules of decision

appropriate to that function. The application of state law so displaces

legitimate federal interests that the right to employ federal law is

necessarily granted.

12

The decision of this Court will define the rights, duties, and,

inevitably, alter the future course of the lives of more than two

million young Americans who gave their oath, and in some

cases their lives, in defense of this nation.

A decision of this Court that the “Agent Orange” cases are

indeed “federal questions” will assure that a uniform standard

of liability and duty of care will affect war contractors wher-

ever they design and produce war materiel, and wherever that

materiel may be used.

“Federal question” jurisdiction will define the duty of a war

contractor to warn the government of the risks associated with

the use of chemical products supplied under government con-

tracts.

The complex issues of plaintiffs’ rights and defendants’

liability cannot be left for determination to the vagaries and

uncertainties of state tort law and local choice of law rules.

The interstate “choice-of-law” system cannot resolve problems

or issues which are inherently federal in nature.

Where millions of soldiers were exposed to an unsafe

weapon of war and sustained serious, permanent, and irrepara-

ble injuries; and where thousands of those soldiers now carry

within their bodies, like a ticking, toxic time-bomb, the cells

which may break out into virulently malignant, rapidly metas-

tasizing neoplastic disease or be visited upon their children as

catastrophic polygenetic birth defects, then indeed the plight of

the plaintiff veterans and their families becomes a matter of

singular Federal interest.

A government, moreover, cannot think of safe equipment in

terms of the battle it is about to wage, but of those battles yet

to be fought in conflicts not yet joined. The continuing interest

on the part of the Federal Government in equipment safety—

past, present, and future—lies at the very heart of its ability to

raise an army and secure and defend its people.

Indeed, so compelling is the federal interest in the “Agent

Orange” cases that if there were no established doctrine of

13

federal common law, this case would demand that it be

fashioned and enunciated by the Courts.

Wherefore, the plaintiff veterans and their families pray that

this court grant their petition for certiorari to the Second

Circuit Court of Appeals United States Supreme Court all

together with such other and further relief as to this Court

shall seem just and proper under the circumstances.

Respectfully submitted,

VICTOR JOHN YANNACONE, JR.

(Counsel of Record for Petitioners)

ALBERT J. FIORELLA

IRVING LIKE

EDWARD F. HAYES, III

YANNACONE & ASSOCIATES

Post Office Drawer #109

Patchogue, New York 11772

(516) 654-2299

Counsel for Petitioners

la

Opinion of the District Court

Dated November 20,1979

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

MDL No. 381 (ALL CASES)

--

IN RE

“AGENT ORANGE”

PRODUCT LIABILITY LITIGATION

>

Claiming to be the harbinger of thousands of similar claims,

plaintiff veterans and members of their families seek relief

because of injuries claimed to have been sustained from use by

the military in Vietnam of “Agent Orange”, a defoliant chemi-

cal referred to for convenience as 2, 4, 5-T, which defendants

manufactured and sold to the government.

For the second time in the nine month history of this MDL

litigation, lead counsel for plaintiffs' has filed a re-amended

complaint after oral argument on defendants’ motion to dis-

miss a prior amended complaint. While properly criticizing

plaintiffs’ disregard for the filing requirements of the Federal

Rules of Civil Procedure, all defendants indicate, by letter

dated October 23, 1979, that they are “prepared to accept

service of the TAVC [third amended verified complaint] in

Chapman v. Dow, et al, * * * .” Furthermore, defendants have

signed a consent to the TAVC and agreed that:

I Not intended to be included in the term “plaintiffs” are those in any

case filed on or after October 3, 1979 Ur in Kahler v. Dow, 79 C 922.

2a

{T]o avoid further delay arising from the necessity for a

new motion addressed to the TAVC, we would ask the

Court to deem our motion with respect to the SAVC

[second amended verified complaint] as having been made

with respect to the TAVC. We do not contemplate, how-

ever, that any further briefing will be required with

respect to our motion.

Accordingly, defendants’ motion to dismiss or strike the

SAVC in whole or in part, a motion argued to the court on

October 3, 1979, is deemed directed against the TAVC filed

October 22, 1979. For reasons set forth below, defendants’

motion to dismiss for lack of subject matter jurisdiction is

denied, as is defendants’ motion to dismiss or strike various

allegations of the complaint.

MOTION TO DISMISS

FOR LACK OF SUBJECT MATTER JURISDICTION

The TAVC alleges two bases for jurisdiction: (1) the “equita-

ble jurisdiction” of the federal courts; and (2) “federal ques-

tion” jurisdiction under 28 USC § 1331.

The first basis is without merit. Federal courts have no

independent “equity jurisdiction”; they may grant equitable

relief, but not unless there is an independent statutory basis for

federal jurisdiction, which is conferred only by specific con-

gressional enactment. See 7 Moore, Federal Practice,

€ 65.03[2.] (1979).

The second basis, federal question jurisdiction under 28

USC § 1331, is alleged to arise under “the common law and/or

the statutory laws of the United States of America.” The court

will first consider whether a private cause of action may be

implied from statutory law, and then will turn to plaintiffs’

claims under federal common law.

Implied Causes of Action Under Federal Statutes

The TAVC lists four statutes “from which a cause of action

can be implied”: the Federal Insecticide, Fungicide and Roden-

3a

ticide Act (FIFRA), 7 USC §§ 135-135k; the Federal Environ-

mental Pesticide Control Act (FEPCA), 7 USC §§ 136-136y;

the Toxic Substances Control Act (TOSCA), 15 USC §§ 2601

et seq.; and the Consumer Product Safety Act (CPSA), 15

USC §§ 2051 ef seq.

The federal statute regulating herbicides, including defo-

liants such as 2, 4, 5-T, is FIFRA. Before 1972, FIFRA

regulated “economic poisons”, which were defined to include:

“any substance or mixture of substances intended for use as a

plant regulator, defoliant, or dessicant.” 7 USC § 135(a)(2). In

1972, Congress amended FIFRA by, enacting the Federal En-

vironmental Pesticide Control Act (FEPCA).? FEPCA regu-

lates “pesticides”, which are similarly defined to include “any

substance or mixture of substances intended for use as a plant

regulator, defoliant, or dessicant ** *.” 7 USC § 136(u).

Thus, FIFRA, as amended by FEPCA, treats defoliants as

“pesticides”, which has led the parties to refer to 2, 4, 5-Tasa

pesticide, and leads the court to do likewise, although common

usage would undoubtedly categorize 2, 4, 5-T and other defo-

liants as herbicides, not pesticides.

Because of FIFRA, the other two statutes under which

plaintiffs ask the court to imply a private right of action,

TOSCA and CPSA, are inapplicable to this litigation. TOSCA,

enacted in 1977, regulates “chemical substances”. However,

“Such term does not include * * * any pesticide (as defined in

the Federal Insecticide, Fungicide, and Rodenticide Act) when

manufactured, processed or distributed in commerce for use as

a pesticide * * * .” 15 USC § 2602(2)(B)(ii). CPSA, enacted in

1976, regulates, “consumer products”. However, “such term

does not include * * * pesticides (as defined by the Federal

Insecticide, Fungicide, and Rodenticide Act) * * * .” 15 USC

§ 2052(a)(1)(D). TOSCA and CPSA clearly exclude FIFRA

pesticides from coverage. Since FIFRA pesiticides include

2 Plaintiffs incorrectly treat FEPCA as a statute separate and apart

from FIFRA. As stated in the text, FEPCA is an amendment to

FIFRA, and thus is properly cited under the statute (FIFRA) which it

amends.

4a

defoliants such as 2, 4, 5-T, TOSCA and CPSA are patently

inapplicable to this case.

This leaves plaintiffs with only FIFRA, as amended by

FEPCA, on which to base an implied private right of action.

Plaintiffs’ argument is set forth succinctly in their memoran-

dum opposing defendants’ motion to dismiss (plaintiffs’ mem-

orandum):

While federal pesticide legislation [viz. FIFRA] does not

specifically provide civil remedies for the plaintiff vet-

erans and their families, nevertheless, it is manifest that

such laws establish regulatory schemes within the context

of which it is intended that a remedy be fashioned by the

Courts.

Plaintiffs’ memorandum at 22.

Plaintiffs cite no legislative history and offer no detailed

statutory interpretation to support their argument, resting

instead on the “legislative purpose” and “broad federal policy”

said to underlie federal legislation concerned with toxic chemi-

cals.

The test for implying a private cause of action under a

federal statute is set forth in the leading case of Cort v. Ash,

422 US 66 (1975):

In determining whether a private remedy is implicit in a

statute not expressly providing one, several factors are

relevant. First, is the plaintiff “one of the class for whose

especial benefit the statute was enacted,” [citation omit-

ted, emphasis supplied by the Supreme Court] that is,

does the statute create a federal right in favor of the

plaintiff? Second, is there any indication of legislative

intent, explicit or implicit, either to create such a remedy

or to deny one? [citation omitted]. Third, is it consistent

with the underlying purposes of the legislative scheme to

imply such a remedy for the plaintiff? [citations omitted].

And finally, is the cause of action one traditionally rele-

gated to state law, in an area basically the concern of the

States, so that it would be inappropriate to infer a cause

of action based solely on federal law?

Ja.at 78.

Sa

Here, the plaintiffs qualify under the first part of the Cort v.

Ash test, as persons meant to be protected by FIFRA, How-

ever, plaintiffs fail the next part of the test, since there is clear

indication that Congress intended not to allow suits by private

citizens under FIFRA:

While it is true that nowhere on the face of the statute is it

stated that the enforcement powers of the administrator

of the EPA or the Attorney General are or should be

exclusive, the legislative history of the statute in question

clearly indicates that Congress considered and rejected on

more than one occasion proposed amendments which

would have provided for citizens’ civil actions to enjoin

violations, * * * ,

We recognize that changes in a statute in the course of

enactment must be observed with caution in determining

legislative intent. However, rejection of specific provi-

sions is in our view more significant, may be properly

considered and is more persuasive in the circumstances

here found. [citations omitted]. Thus, the Congressional

intent to us at least is clear enough: Enforcement of

FIFRA is reserved by Congress to the Environmental

Protection Agency and to the Office of the Attorney

General, and violations thereof are not the proper subject

of civil actions by citizens.

People For Environmental Progress v.

Leisz, 373 F Supp 589, 592 (CD Cal 1974)

See also Kelly v. Butz, 404 F Supp 925 (WD Mich 1975),

upholding the standing of a state attorney general to bring suit

under FIFRA, but noting that “the Court is convinced from its

review of the authorities that there are significant manifesta-

tions of a legislative intent to exclude suits by private citizens

under the statute.” /d, at 940,

Recognizing the force of these cases, plaintiffs would distin-

guish them away:

Each of these cases was properly brought in the Federal

District Court because of its jurisdiction over enforcement

6a

, of the federal pesticide laws. The fact that the courts

denied the plaintiffs therein standing to enforce the provi-

sions of those laws is immaterial here, because in none of

these cases was there a claim similar to that brought by

the plaintiff veterans and their families in this case. The

“Agent Orange” cases are unique on their facts and

hopefully, as was the case with thalidomide, not likely to

occur again,

Plaintiff's memorandum at 23.

Plaintiffs’ argument reduces to a claim that the large num-

ber of potential claims and the unique circumstances surround.

ing this litigation justify implying a private cause of action

under federal pesticide legislation, But the number of claims

and the nature of the injuries, unique as they may be, are not

proper factors to be considered under the Cort v. Ash test,

which focuses on Congressional intent and displacement of

state law,

Moreover, under each of the federal pesticide statutes, Con-

gress provided explicitly for suits by the EPA administrator to

protect the public interest. The circumstances underlying the

instant litigation, involving large numbers of claims arising

from widespread exposure to toxic chemicals, seem more likely

to generate a suit by public officials, such as the EPA adminis-

trator, and thus, if anything, present a less compelling case for

implying private causes of action than smaller cases involving

fewer plaintiffs and more limited exposure. The court con-

cludes that a private cause of action should not be read into

FIFRA, or any other toxic chemical statute, and that plain-

tiffs’ claims asserted thereunder must be dismissed. '

Gonzalez v, Vireinia-Carolina Chemical Co,, 239 F Supp $67 (EDSC

1965), a case relied on by plaintiffs, is not to the contrary, Gonzales

was a diversity case involving negligence claims against a pesticide

manulacturer, The Gonzalez court held that defendant, by tailing to

attach proper labels, had violated the terms of FIFRA, and thus was

negligent per se under South Carolina law, Gonzales did not suggest,

much less hold, that plaintiff had a cause of action directly under

FIFRA, itself, which would independently support federal jurisdiction,

7a

Jurisdiction Under Federal Common Law

Paragraph 3 of the TAVC alleges that “the corporate defen-

dants have violated the common law * * * of the United

States * * *."” Recognizing that application of federal common

law is the exception rather than the rule, plaintiffs’ memoran-

dum sets forth in some detail the argument for applying federal

common law in this litigation,

According to plaintiffs, the governing standard is that of

Clearfield Trust Co, v. United States, 318 US 363 (1943),

which according to plaintifis applies federal common law:

1. Where the question at bar is one arising from or

bearing upon a federal program or affecting a federal

interest;

2. Where a federal interest would be subjected to uncer-

tainty by application of disparate state rules; or

3. Where federal interests can best be effectuated by the

adoption of a uniform federal rule.

Plaintiffs’ memorandum at 8.

To satisfy the first prong of the Clearfield standard, plain-

tiffs, relying on United States v. Standard Oil Co., 332 US 301

(1974), argue that:

Since the claims of the plaintiff veterans and their families

arise out of the defendants’ activities in that significant

federal enterprise known as the Viet Nam war, it is hard

to conceive of any claim which more clearly involves

substantial federal interest and which more clearly satis-

fies the jurisdiction requirement of 28 U.S.C, § 1331(a).

Plaintiffs’ memorandum at 9-10,

Plaintiffs note that the outcome of this litigation may affect

claims for “service-related” benefits from the Veterans Ad-

ministration, Plaintiffs add that federal interests are implicated

because “the corporate defendants acted as war contractors to

the U.S. government pursuant to federal procurement laws

administered by the Department of Defense.” Plaintiffs’ mem-

orandum at 10,

Sa

To satisfy the second prong of the Clearfield standard,

plaintiffs note that the states have different statutes of limita-

tions, and different rules governing liability for defective

products, differences which might “lead to contrary and even

contradictory results among the individual cases”, a result

deemed “intolerable” by Clearfield. Plaintiffs’ memorandum

at 13.

To satisfy the third and final prong of the Clearfield stan-

dard, plaintiffs list various questions presented by this litiga-

tion which should, they say, be governed by a uniform federal

rule:

How are soldiers of the United States to be compensated

for toxic torts inflicted by multi-national conglomerate

corporations? How are principles of “fitness” and

“safety” to be applied to the paraphernalia of the battle

field? In the absence of statutory direction, how are the

policies enunciated in federal pesticide and toxic sub-

stances legislation to be effectuated?

Plaintiffs’ memorandum at 15.

According to plaintiffs, each of these questions implicates

federal interests, and should be answered under uniform fed-

eral standards.

Defendants disagree. To begin, defendants dispute the appli-

cability of Clearfield, which sets forth the standard for apply-

ing federal common law only when the United States is a party

to the litigation. Here, the government is not a party, and

defendants insist that the governing rule is supplied instead by

other cases, such as Miree v. DeKalb County, 433 US 25 (1977)

and Wallis v. Pan American Petroleum Corp., 384 US 63

(1966).

Defendants further contend that, even if Clearfield governs,

plaintiffs fail to meet any of its three standards, First, accord-

ing to defendants, “no federal interest will be impaired by the

application of state law to what are, in essence, claims for

personal injury.” Defendants’ reply memorandum at 2. Al-

though the litigation does involve soldiers and war contractors,

9a

Claims for personal injury by American servicemen

against manufacturers that allegedly harmed them by

selling defective products to the military have, in the past,

been governed by state law. See e.g., Whitaker v. Harvell-

Kilgore Corp., 418 F.2d 1010 (Sth Cir. 1969); Boeing

Airplane Co. v. Brown, 291 F.2d 310 (9th Cir. 1961);

Adams yv. General Dynamics Corp., 405 F. Supp. 1020

(ND Cal 1975), affirmed, 535 F.2d 489 (9th Cir, 1976).

Id, at 3.

As for the alleged federal interest in compensating injured

soldiers, defendants urge that “there already exists a statutory

scheme that is designed to accomplish just this result. See 38

USC §§ 310 et seq.” Id. at 3-4. And the rights and liabilities of

the United States, itself, are not directly involved in this

litigation, since plaintiffs “have chosen not to bring this action

against the United States.” /d. at 4. Thus, according to defen-

dants, plaintiffs have failed to carry their burden of showing a

substantial federal interest involved in this litigation.

Furthermore, according to defendants, plaintiffs fail to

show that this litigation will affect “a federal program” con-

cerned with regulation of toxic substances, Even if disparate

state laws were applied, “differing judgments rendered on

plaintiffs’ damage claims because of supposedly differing state

i» t laws [footnote omitted] will simply have no effect upon

the outcome of the EPA's administration of the present version

of FIFRA.” Defendants’ reply memorandum at 7.

Finally, defendants argue that the failure of plaintiffs to

show how this litigation would impair a federal interest or a

federal program disposes of the second and third branches of

the Clearfield test, since no federal interest “would be sub-

jected to uncertainty by application of disparate state rules” or

would “best be effectuated by the adoption of a uniform

federal rule.” Thus, defendants urge, plaintiffs have failed in

every respect to justify application of federal common law to

this litigation.

There is merit to many of defendants’ contentions. The test

for applying federal common law in suits between private

10a

parties is that of Miree and Wallis, not Clearfield; under Miree

and Wallis, suits by soldiers against war contractors do not

necessarily implicate federal programs or substantial federal

interests; and the federal interest in compensating soldiers for

service-related iniuries is the object of an existing statutory

scheme, 38 USC §§ 310 ef seq. However, for reasons discussed

below, the court concludes that this litigation does, nonethe-

less, affect substantial federal interests, and that federal com-

mon law must be applied,

Analysis must begin with Miree v. DeKalb County, 433 US

25 (1977), in which the Supreme Court explained the limited

grounds for applying federal common law in a suit between

private parties. Miree was a diversity suit with plaintiffs seek-

ing recovery under state law as third party beneficiaries to a

contract between defendant and the Federal Aviation Adminis-

tration (FAA). After its panel applied state laws, the Fifth

Circuit en banc reversed, finding that a third party benefi-

ciary’s right to sue should be determined under federal com-

mon law, The Supreme Court reversed once again, concluding

that state law, not federal common law, applied.

Writing for the Court, Mr. Justice Rehnquist began by

noting that the United States was not a party to the suit, and

that “the resolution of petitioner's breach of contract claim

against respondent will have no direct effect upon the United

States or its treasury.” 433 US at 29. For this reason, the

solicitor general waived his right to participate in the appeal.

Not only was there no direct federal financial interest, but

there was also no federal program threatened by the litigation:

The operations of the United States in connection with

FAA grants such as these are undoubtedly of considerable

magnitude. However, we see no reason for concluding

that these operations would be burdened or subjected to

uncertainty by variant state-law interpretations regarding

whether those with whom the United States contracts

might be sued by third-party beneticiaries to the con-

tracts. Since only the rights of private litigants are at issue

here, we find the Clearfield trust rationale inapplicable.

Id. at 30,

lla

The court quoted from an earlier case, Wallis v. Pan Ameri-

can Petroleum Corp., 384 US 63, 68 (1966), which had dis-

cussed “the nature of a federal interest sufficient to bring forth

the application of federal common law”:

In deciding whether rules of federal common law should

be fashioned, normally the guiding principle is that a

significant conflict between some federal policy or interest

and the use of state law in the premises must first be

specifically shown, \t is by no means enough that, as we

may assume, Congress could under the Constitution read-

ily enact a complete code of law governing transactions in

federal mineral leases among private parties. Whether

latent federal power should be exercised to displace state

law is primarily a decision for Congress.

Miree at 31-32 (emphasis added

by the Supreme Court).

The Miree court concluded that with respect to an airplane

crash caused by birds flying over a dump established near an

airport in violation of an agreement with the Federal Aviation

Administration, there was no significant conflict between fed-

eral policy and state law, and that “any federal interest in the

outcome of the question before us ‘is far too speculative, far

too remote a possibility to justify the application of federal law

to transactions essentially of local concern.’ [citation omit-

ted]”. /d. at 32-33.

Scrutiny of Miree reveals several different formulations of

the standard that governs application of federal common law

in a suit between private parties having “no direct effect upon

the United States or its treasury”. Federal common law might

be applied when federal programs or operations “would be

burdened or subjected to uncertainty by variant state-law

interpretations”, 433 US at 30; or when there is “a significant

conflict between some federal policy or interest and the use of

state law in the premises”, /d. at 31, quoting Wallis; or when

“substantial rights or duties of the United States hinge on [the

suit’s}] outcome.” /d. And in his concurrence, Chief Justice

Burger suggests that federal common law might be applied:

where the rights and obligations of private parties are so

dependent on a specific exercise of Congressional regula-

12a

tory power that “the Constitution or acts of Congress

‘require’ otherwise than that state law govern of its own

force.” [citation omitted].

Once it has been determined that it would be inappro-

priate to apply state law and that federal law must govern,

“the inevitable incompleteness presented by all legislation

means that interstitial federal law making is a basic

responsibility of the federal courts.” [citation omitted].

Id. at 34-35.

Thus, Miree formulates in various ways the standard that

governs application of federal common law. One point, how-

ever, is clear: federal common law is to be the exception not the

rule, and the question of “whether to displace state law * * * is

primarily a decision for Congress.” /d. at 32.

Analyzing the law after Miree, the Fifth Circuit has provided

a helpful synthesis of the principles governing application of

federal common law developed in Supreme Court cases:

Together these cases produce a balancing test. See gener-

ally Comment, “Adopting State Law As The Federal Rule

of Decision: A Proposed Test,” 43 U. Chi. L.Rev. 799

(1976). On one side is the federal interest in carrying out a

program in the most efficient and effective manner possi-

ble. On the other is a state’s interest in the preservation of

its control over local interests, particularly traditional

interests such as family law and real property trans-

actions, and in preventing displacement of state law. Of

course, the ultimate goai of the creation of federal law by

the courts is to carry out the federal program in question.

{citations omitted]. Thus, if state law would actually

frustrate rather than only hinder a federal program,

federal common law must be applied regardless of state

interests [citation omitted]. On the other hand, the Su-

preme Court has demonstrated a growing desire to

minimize displacement of state law. See Miree v. DeKalb

County, [supra].

Georgia Power Co. v. 54.20 Acres

of Land, 563 F2d 1178, 1189

(CAS), cert. denied —US—,

99 SCt 1213 (Feb. 21, 1979).

l3a

As is clear from the Fifth Circuit's analysis and from the

Supreme Court cases discussed above, courts have not yet

developed a precise standard to govern application of federal

common law in suits between private parties. However, the

precedents and the parties seem to agree that at least three

factors are crucial to applicability of federal common law

under any test: (1) the existence of a substantial federal interest

in the outcome of a litigation; (2) the effect on this federal

interest should state law be applied; and (3) the effect on state

interests should state law be displaced by federal common law.

Accordingly, the court will consider how each of these factors

might affect the application of federal common law in this

litigation.

Federal Interests

There are substantial federal interests at stake in these

lawsuits. As pointed out in United States v. Standard Oil Co.,

332 US 301, 305-306 (1947):

Perhaps no relation between the Government and a citi-

zen is more distinctively federal in character than that

between it and members of its armed forces. To whatever

extent state law may apply to govern the relations between

soldiers or others in the armed forces and persons outside

them or non-federal governmental agencies, the scope,

nature, legal incidence and consequences of the relation

between nersons in service and the government are funda-

mentally derived from federal sources and governed by

federal authority [citations omitted]. So also we think are

interferences with that relationship such as the facts of

this case involve. For, as the Federal Government has the

exclusive power to establish and define the relationship by

virtue of its military and other powers [footnote omitted]

equally clearly it has power in execution of the same

functions to protect the relation once formed from harms

inflicted by otlicrs. [footnote omitted].

Soldiers serving in the armed forces are government charges,

entitled to government protection. Torts committed by war

l4a

contractors against soldiers in action constitute “harms in-

flicted” on the soldiers and “interference” with the relationship

between soldiers and the government. Such harms and interfer-

ences implicat’ federal interests identified in Standard Oil.

Defendants argue that 38 USC § 310 e7 seq. gives sufficient

federal protection to veterans injured in active service. How-

ever, 38 USC § 310 ef seq., insofar as it may apply,’ furnishes

limited monthly benefits which may not fully compensate

plaintiffs for the serious injuries alleged in the complaint. Nor

does 38 USC § 310 ef seq. provide compensation to veteran's

spouses, or their children who are alleged to have suffered

genetic damage due to defendants’ activities. The limited

nature of compensation provided by 38 USC § 310 ef seq.

makes it an insufficient guardian of the rights at stake in this

litigation, viz. the rights of soldiers to be protected from

“harms inflicted by others” and to be compensated for harms

already inflicted. The existence and extent of these contested

rights necessarily are intertwined with the relationship between

government and soldier and thereby implicate federal interests.

Nor is the federal interest in this litigation confined to the

rights of soldiers; it includes as well the rights of the war

contractors. The government has an interest in the liability of

war contractors to soldiers, since the extent of a contractor's

liability may, undoubtedly will, affect future dealings between

the contractor and the government. In Miree, the Supreme

Court discounted the effect that third-party suits might have

on relations between the FAA and its contractors:

[W]e see no reason for concluding that these operations

would be burdened or subjected to uncertainty by variant

state-law interpretations regarding whether those with

whom the United States contracts might be sued by

third-party beneficiaries to the ‘ontracts.

433 US at 30.

4 38 USC § 310 ef seg. compensates for service-related injuries.

Whether Agent Orange injuries are service-related appears to be the

subject of separate litigation. White v. Cleland, Civil Action No.

79-1426 (DDC, filed May 31, 1979).

lSa

However, suits by civilian third-party beneficiaries to FAA

contracts with municipalities for injuries received in a private

plane crash are quite different from product liability suits by

soldiers against government war contractors for injuries re-

ceived while serving in the armed forces. FAA relations with

municipalities would be only slightly disrupted by sporadic

third party suits seeking to enforce diverse contractual provi-

sions. In contrast, government relations with war contractors

might well be drastically altered by changes in the rules

governing liability of war contractors to soldiers for injuries

caused by inherently “dangerous” war materials.’

This does not mean that there is a substantial federal interest

in every product liability suit brought by a veteran against a

government war contractor. A lone veteran suing the supplier

of a single piece of defective military machinery would impli-

cate only a minimal federal interest. Such were the facts in

Whitaker v. Harvell-Kilgore Corp., supra; Boeing Airplane

Co. v. Brown, supra; and Adams v. General Dynamics Corp.,

supra, cases cited by defendants in each of which state law was

5 Speculative federal interests in the obligations of war contractors are

numerous. War contractors might be expected to increase the price of

war materials to correspond to any extension in their potential liability.

Such adjustments might have a significant effect on the federal

treasury. If potential liability increased dramatically, future war con-

tractors might attach conditions to the use of their products, or balk at

supplying the military with any products whatsoever. Thus, the govern-

ment’s military capabilities might be affected by this litigation. Finally,

the importance of large government war contractors to the national

economy might implicate a federal interest. Defendants are five of the

nation’s largest chemical manufacturers, facing aggregate claims which

may eventually amount to billions of dollars. Defendants note that:

plaintiffs do not have the temerity to argue that the aggregate

claims of the purported class exceed the total assets of the five

named defendants. Such an argument would be ludicrous on its

face.

Dow's Memorandum in Opposition

to Class Certification at 20.

But, with such large corporations, the sudden onset of substantial

liabilities, even if they fell far short of defendants’ total assets, might

well affect federal interests, as shown by the recent events involving the

federal government and the Chrysler Corporation.

l6a

applied to a tort claim brought by a veteran against the

supplier of explosives or airplanes. But this litigation, in

contrast, involves suits by many veterans against five war

contractors who supplied a product used for some nine years in

military Operations across large portions of Vietnam. The

estimated number of involved veterans ranges from thousands

to millions, and the estimated potential liability of the five war

contractors ranges from millions to billions of dollars. As the

number of veterans and the size of the claims against the war

contractors increase so the federal interest in this litigation

expands.°

Effect on Federal Interests Should State Law Be Applied

If this litigation were governed by state law, different state

laws would be applied to essentially similar claims by Vietnam

veterans and their families against the five defendant war

contractors. As plaintiffs’ remark,

There is, of course, no uniformity of product liability law

throughout the 50 states absent this Court's application of

the federal common law. Were the corporate defendants

to have their way, each of the plaintiffs would be rele-

gated to some local notion of “products liability”. Neces-

sarily, this would lead to contrary and even contradictory

results among the individual cases. In the end, a granting

of defendants’ Motion would lead to the spectre of young

servicemen who fought a difficult war shoulder-to-

shoulder and who were exposed to virtually identical risks

coming home to widely varying systems of compensation

for their injuries under different systems of jurisprudence

6 The number of veterans and the size of their claims involved in this

litigation implicate substantial federal interests in the rights of vet-

erans. However, the unprecedented number and size of the claims also

suggest more speculative, but nonetheless vital, federal interests. The

number of veterans potentially involved in this litigation may suffice to

raise broad questions about the conduct of military operations which a

single veteran plaintiff might not have standing to raise. The resolu-

tion, and indeed the cognizability, of such questions implicate signifi-

cant federal interests, to say the least.

17a

and before disparate forums. Such a result was deemed

intolerable in Clearfield Trust Co. v. United States and in

United States v. Standard Oil Co. and it should be

deemed intolerable in the “Agent Orange” cases.

Plaintiffs’ memorandum at 13.

Application of varying state laws would burden federal

interests by creating uncertainty as to the rights of both

veterans and war contractors. It would also be unfair in that

essentially similar claims, involving veterans and war contrac-

tors identically situated in all relevant respects, would be

treated differently under different state laws. An extreme

example would be the application of different state statutes of

limitation to claims by veterans who were injured together in

Vietnam, but who lived in different states before or after

service. The court concludes that application of state law in

this litigation would burden substantial federal interests.’

Effect on State Interests Should State Law Be

Displaced By Federal Common Law

As noted by the Fifth Circuit in Georgia Power Co. v. 54.20

Acres of Land, supra, 563 F2d at 1189, “[T]he Supreme Court

has demonstrated a growing desire to minimize displacement

of state law.” This desire is evident in Miree v. DeKalb, supra,

433 US at 32, where the Supreme Court emphasized that “the

issue of whether to displace state law on an issue such as this is

primarily a decision for Congress.” The courts have been

especially reluctant to apply federal common law to matters of

essentially local concern that are usually governed by well-de-

veloped principles of state law. Tort claims are traditionally

7 It might also be argued that unequal treatment of plaintiff veterans

implicates peculiarly federal interests, and unequal treatment of any

person, of course, raises questions of justice to which federal courts

are sensitive. Presumably, state courts are equally sensitive to claims of

inequality and unfairness, but their viewpoints are localized, not

national. However, it is the identity of the parties (veterans and war

contractors), not merely their numbers, which makes equality of

treatment a peculiarly federal concern in this litigation.

18a

matters for state law, which has developed comprehensive

substantive and procedural rules to govern them. According to

defendants, it would be improper te hold in this litigation

“that state law be displaced by an unprecedented federal

common law of products liability * * *.” Defendants’ reply

memorandum at 2.

But negligence and strict product liability claims in this

litigation do not fall under the developed body of state tort

law.* State tort law has not yet evolved rules to govern the

duties of federal war contractors to federal soldiers. True, state

law has been occasionally applied to claims by veterans against

war contractors. Whitaker v. Harvell-Kilgore Corp., Boeing

Airplane Co. v. Brown, and Adams v. General Dynamics

Corp., supra. But those suits were by individual soldiers and

dealt with claims of manufacturing defects in airplanes and

explosives, objectives whose misuse is frequently regulated by

state tort law. In contrast, this litigation involves defoliants

and other toxic chemicals, whose use and misuse is increasingly

governed by federal law; comprehensive federal legislation has

in large part taken these products out of the domain of state

regulation; injuries to large numbers of veterans are claimed to

have been incurred while overseas in a combat area; and the

injuries themselves are claimed to be an inevitable consequence

of the federal government’s use of defendants’ products.

In sum, state law has not considered the complex question of

a war contractor’s liability to soldiers injured by toxic chemi-

cals subject to federal regulation while engaged in combat and

serving abroad. Because state law is no more or less developed

as to such claims than federal common law, application of

federal common law thereto would not significantly displace

state law.

8 The TAVC alleges causes of action not only in negligence and strict

product liability, but under theories of breach of warranty, intentional

tort, equity, and nuisance, Because the focus of the litigation appears

to be negligence and strict product liability, only these claims have been

considered for application of federal common law. At this point, it is

unnecessary to decide whether the other claims should be governed by

federal common law, or rather should be treated as pendent state law

claims.

19a

It appears, then, that there are significant federal interests in

this litigation, that the application here of varying state laws

would impair these federal interests, and that application of

federal common law would not significantly displace state law,

This showing justifies application of federal common law

under even the strictest reading of the sometimes enigmatic

language of Miree and Wallis, If, as defendants insist, applica-

tion of federal common law to mass tort claims is unprece-

dented, the reason may be that no tort claim has heretofore

implicated such significant federal interests involving so many

persons in an area so little regulated by state law. This court is

satisfied that there is ample justification for application of

federal common law for this legislation,

MOTION TO DISMISS OR STRIKE

VARIOUS ALLEGATIONS

Defendants move to strike certain claims for relief asserted

in the TAVC. Defendants argue that the claims for various

forms of declaratory relief and for creation of a trust fund seek

relief unavailable from a federal court under current federal

law. It may well be that this or any other court ultimately will

grant none of the requested relief, However, defendants are not

prejudiced by allowing these requests for relief to remain in the

TAVC, since defendants have no obligation to admit or deny

plaintiffs’ requests for relief, which therefore place no pleading

burden on defendants. Accordingly, defendants’ motion to

strike these requests for relief is denied.

Defendants’ motion to strike allegations regarding phenoxy

herbicides and the corporate history of the defendants is moot,

since such allegations have been omitted from the TAVC,

20a

CONCLUSION

Defendants’ motion to dismiss or strike the SAVC in whole

or in part is deemed, on consent, to be directed against the

TAVC, The claims in the TAVC alleged to arise, by implication,

under FIFRA, FEPCA, TOSCA, and CPSA are dismissed,

and defendants need not respond to paragraph 4 of the TAVC.

The claims in the TAVC alleged under federal common law are

held to state a claim on which relief can be granted, and to

provide a basis for federal jurisdiction under 28 USC § 1331.’

Accordingly, defendants’ motion to dismiss for lack of subject

matter jurisdiction is denied, as is defendants’ motion to strike

or dismiss various allegations of the TAVC,

Defendants shall serve and file their answers to the TAVC,

which is no later than 20 days from the date of this memoran-

dum,

Friday, December 21, 1979 at 9:30 a.m. The agenda for

this conference shall include (1) a new timetable for resolution

of plaintiffs’ motion for class certification, and (2) a timetable

for discovery On the merits. Any party may suggest other items

for the agenda by letter to the court served and filed no later

than Friday, December 14, 1979,

SO ORDERED,

Dated: Westbury, New York

November 20, 1979,

GEORGE C, PRATT

U. S. District Judge

9 The parties, without arguing the point, seem to assume that applica-

tion of federal common law provides a sufficient basis for federal

question jurisdiction under 28 USC § 1331. This assumption is con-

firmed by //linois v. City of Milwaukee, 406 US 91 (1972). See Wright,

Federal Courts (3d Ed) at 68.

2la

Opinion of the Court of Appeals

Dated November 24, 1980

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

—+-

No. 1069—September Term, 1979

(Argued May 1, 1980 Decided November 24, 1980)

Docket No, 80-7079

—

In re

“AGENT ORANGE”

Product Liability Litigation

+

Before:

FEINBERG, Chief Judge,

VAN GRAAFEILAND and KEARSE, Circuit Judges,

>

Appeal from an order of the United States District Court for

the Eastern District of New York, George C. Pratt, Judge,

denying defendants’ motion to dismiss product liability action

for lack of subject matter jurisdiction.

Reversed.

a

22a

THOMAS E,. MOSELEY, JOHN C, SABETTA and

LEONARD RIVKIN, New York, N.Y. (Cad-

walader, Wickersham & Taft, New York,

N.Y., Townley & Updike, New York, N.Y.,

Clark, Gagliardi & Miller, White Plains,

N.Y., Kelley Drye & Warren, New York,

N.Y., and Rivkin, Leff & Sherman, Garden

City, N.Y., on the brief) for Defendants-

Appellants.

IRVING LIKE, Babylon, N.Y., and VICTOR JOHN

YANNACONE, JR., Patchogue, N.Y. (Edward

F. Hayes, Ill and Malerba, Abruzzo, Clancy,

Hayes, Downes & Frankel, Huntington, New

York, Reilly & Like, Babylon, N.Y., W. Keith

Kavenagh, Bayport, N.Y., Albert J. Fiorella,

Mineola, N.Y., Yannacone & Yannacone,

Patchogue, N.Y., Paul F. Corcoran, Mineola,

N.Y., Aaron D. Twerski, Far Rockaway,

N.Y., and Dorothy Thompson and

Greenwald & Greenwald, Los Angeles, Cal.,

on the brief) for Plaintiffs-Appellees.

+

KEARSE, Circuit Judge:

This appeal presents the question whether claims asserted by

veterans of the United States armed forces against companies

which supplied the United States government with chemicals

that are alleged to have been contaminated and to have injured

the veterans and their families, are governed by federal com-

mon law. Defendants-appellants Diamond Shamrock Corpora-

tion, Monsanto Company, Thompson-Hayward Chemical

Company, Hercules Incorporated and the Dow Chemical Com-

pany were the manufacturers of various herbicides including

“Agent Orange” (hereinafter collectively referred to as “Agent

Orange”) for use by the military as defoliants in the Vietnam

War. The plaintiffs, veterans of that war and their families,

allege that they have sustained various physical injuries by

23a

reason of the veterans’ .xposure to Agent Orange. Plaintiffs

seek redress of those injuries under federal common law, and

have invoked the “federal question” jurisdiction of the district

court. 28 U.S.C. § 1331(a) (1976). Defendants contest the

existence of a federal common law cause of action, and moved

below to dismiss for lack of subject matter jurisdiction, The

United States District Court for the Eastern District of New

York, George C. Pratt, Judge, denied their motion, Defen-

dants obtained certification of the jurisdiction issue and took

this appeal pursuant to 28 U.S.C. § 1292(b) (1976). '

We agree with defendants that there is no federal common

law right of action under the circumstances of this litigation,

Accordingly, we reverse.

The present litigation began in late 1978 and early 1979,

when several individual veterans and their families commenced

actions in the Northern District ef Ilinois and the Southern

and Eastern Districts of New York, claiming injury from the

veterans’ exposure to Agent Orange and purporting to repre-

sent several classes of injured persons and persons allegedly “at

risk” of injury. The plaintiffs in most of these actions were

represented by the same attorney, who filed substantially iden-

tical complaints in all actions, naming the same defendant

manufacturers. By order of the Judicial Panel on Multidistrict

Litigation, thivteen such actions, involving thirty named plain-

tiffs, were transferred to the Eastern District of New York and

assigned to Judge Pratt for coordinated or consolidated pre-

trial proceedings pursuant to 28 U.S.C. § 1407 (1976). Subse-

quently, additional actions were filed and were transferred to

the Eastern District. It appears that there are presently more

than 800 named plaintiffs in these proceedings.

After the transfer plaintiffs filed an amended complaint in

the action that the district court had designated as the lead

! This Court granted defendants’ motion for leave to appeal by order

dated January 16, 1980,

24a

action for purposes cf pretrial proceedings. Defendants moved

to dismiss on various grounds, and by opinion dated August

14, 1979, the district court dismissed a number of claims’ and

directed that a new complaint be filed. The second amended

complaint was filed on August 20, 1979, asserting causes of

action under the federal common law’ and premising subject

matter jurisdiction on 28 U.S.C. § 1331(a).* Defendants moved

to dismiss for lack of subject matter jurisdiction. The motion

was argued on October 3, 1979, and after argument but prior

to decision plaintiffs proffered a third amended complaint.

Defendants consented to the filing of the new complaint, and

the district court, at the urging of the defendants, treated

defendants’ motion to dismiss as having been made with

respect to that complaint. Accordingly, it is the third amended

complaint (hereinafter sometimes referred to as the “Com-

plaint”) that is before us on this appeal.

A. The Third Amended Complaint

The basic thrust of the Complaint is relatively simple:

defendants manufactured a phenoxy herbicide, “Agent

2 These included a claim for injunctive relief against further manufac-

ture of certain herbicides (which, the district court concluded, lay

within the primary jurisdiction of the Environmental Protection

Agency), as well as claims asserted under 42 U.S.C. § 1983 (1976) and

various provisions of the antitrust and trademark laws.

3 Plaintiffs also sought to assert a cause of action under the Federal

Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. § 135 ef seq.

(1976) (“FIFRA”). The district court declined to infer such a cause of

action for reasons we believe to be correct. See note 9 infra.

4 = - 28 U.S.C. § 1331(a) provides in part as follows:

The district courts shall have original jurisdiction of all civil

actions wherein the matter in controversy exceeds the sum or value

of $10,000, exclusive of interest and costs, and arises under the

Constitution, laws, or treaties of the United States. .

A cause of action which is founded on federal common law “arises

under” the laws of the United States within the meaning of § 1331(a).

Illinois v. City of Milwaukee, 406 U.S. 91, 99-100 (1972); lve Broad-

casting Co. v. American Tel. & Tel. Co., 391 F.2d 486, 492 (2d Cir.

1968).

25a

Orange,” for use by the military in Vietnam. The herbicide was

allegedly contaminated with certain toxic organic chemi-

cals, including 2,3,7,8-tetrachlorodibenzo-p-dioxin (“dioxin”),

which plaintiffs describe as “one of the most toxic substances

ever developed by man.” (Plaintiffs’ Brief on Appeal at 2.) The

plaintiff veterans assert that they were exposed to Agent

Orange, and thus to the dioxin it contained, while serving in

Vietnam. They claim to have sustained various physical inju-

ries, or to be “at risk” of such injuries, by reason of that

exposure. Plaintiffs seek relief on a number of theories, includ-

ing strict product liability, negligence, and breach of warranty.

What marks these proceedings as somewhat extraordinary

are the size of the plaintiff class and the scope of the relief that

is sought. Plaintiffs purport to represent the 2.4 million vet-

erans who served as combat soldiers in Southeast Asia from

1962 through 1971, as well as most of the families or survivors

of those veterans. Fifteen plaintiff subclasses are identified;

many of these subclasses consist of persons who are “at risk”

of, but have yet to sustain, various physical injuries. Plaintiffs

have alleged that “the combined liquid assets of the ‘corporate

defendants’ will be insufficient to fully compensate the entire

class of plaintiffs.” (Complaint 415.) Plaintiffs therefore seek,

in addition to unspecified damages,’ a decree requiring defen-

dants, upon a determination of liability, to establish

a trust fund out of the current earnings of the defendants

in the nature of a reserve against the claims of all the

individual members of the plaintiff class to insure that the

compensation of any group of individual plaintiffs will

not impair the rights of those not before the Court at that

time.

(Complaint 49.) Plaintiffs also seek a permanent injunction

against further manufacture of Agent Orange.

5 The third amended complaint alleges no specific ad damnum, The

second amended complaint, however, asserted damages “in the range

of $4 billion to $40 billion.”

26a

Defendants deny that there is any causal connection between

exposure to Agent Orange and the injuries that plaintiffs claim

to have sustained, and vigorously contest the propriety of the

various remedial measures that plaintiffs seek to impose on

them. This case, however, is still at the pleading stage, and for

purposes of deciding the jurisdictional question before us,

plaintiffs’ factual allegations must be accepted as true.

B. The Decision of the District Court

Plaintiffs argue that federal common law should be applied

to their claims principally because of the unique federal nature

of the relationship between the soldier and his government,

relying chiefly on United States v. Standard Oil Co., 332 U.S.

301, 305 (1947) (“Perhaps no relation between the Government

and a citizen is more distinctively federal in character than that

between it and members of its armed forces”). They contend

that this interest brings the case within the doctrine of Clear

field Trust Co. v. United States, 318 U.S. 363, 366 ('943),

which held that, in order to ensure uniformity and certainty,

“{t}he rights and duties of the United States on commercial

paper which it issues are governed by federal rather than local

law.” Plaintiffs argue that the government similarly has an

interest in having all of its veterans compensated by govern-

ment contractors who manufactured or marketed Agent

Orange, and that application of the respective state laws would

impede recovery on a uniform basis.

The district court rejected the contention that Clearfield

Trust stated the controlling principle, recognizing that the

United States, a party to Clearfield Trust, is not party to the

plaintiffs’ claims here.* Rather, the court recognized that since

the present action involves only private parties, the federal

common law issue is controlled by the principles set forth in

6 We note that the defendants have impleaded the United States in the

present action. It is clear, however, that the jurisdiction of the district

court over the claims of the plaintiffs is not enhanced by third party

complaints. Cf. Louisville & Nashville RR. Co. v. Mottley, 211 U.S.

149 (1908),

27a

Miree v. DeKalb County, 433 U.S. 25 (1977), and Wallis v. Pan

American Petroleum Corp., 384 U.S. 63 (1966). After re-

viewing the latter decisions, the district court applied a three-

factor test to determine whether federal common law governs

plaintiffs’ claims:

(1) the existence of a substantial federal interest in the

outcome of a litigation; (2) the effect on this federal

interest should state law be applied; and (3) the effect on

State interests should state law be displaced by federal

common law.

Slip op. at 17.

With respect to the first factor, the district court recognized

two principal federal interests that may be affected by the

present lawsuits: the federal government's interest in its rela-

tions with members of the armed forces, and its interest in its

relations with suppliers of war materiel. As to the govern-

ment’s interest in the welfare of its veterans, the court stated

that:

Soldiers serving in the armed forces are government

charges, entitled to government protection. Torts commit-

ted by war contractors against soldiers in action constitute

“harms inflicted” on the soldiers and “interference” with

the relationship between soldiers and the government.

Such harms and interferences implicate federal interests

identified in [United States v. Standard Oil, supra}.

Id. at 18. The court rejected defendants’ contention that these

interests were already protected by the Congressionally-enacted

scheme of veterans’ benefits, 38 U.S.C. § 310 et seg. (1976),

opining that

7 —- 38: U.S.C. § 310 et seq., entitled “Compensation for Service-Con-

nected Disability or Death,” establishes for veterans a basic entitlement

to compensation from the government for injuries resulting from

military service, and sets rates of compensation for specific types and

degrees of disability. These provisions do not address issues of the

liability of third parties to injured service personnel,

28a

{t}he limited nature of compensation provided by 38

U.S.C. § 310 ef seq. makes ii an insufficient guardian of

the rights at stake in this litigation, viz. the rights of

soldiers to be protected from “harms inflicted by others”

and to be compensated for harms already inflicted. The

existence and extent of these contested rights necessarily

are intertwined with the relationship between government

and soldier and thereby implicate federal interests.

Slip op. at 18-19. Finally, the court reasoned that because of

the large number of veterans claiming injury, and the large

potential liability of the five defendants, the foregoing federal

interests were “substantial” fer purposes of the federal com-

mon law analysis:

The estimated number of involved veterans ranges from

thousands to millions, and the estimated potential liability

of the five war contractors ranges from millions to bil-

lions of dollars. As the number of veterans and the size of

the claims against the war contractors increase so the

federal interest in this litigation expands.

Id. at 20.

As to the government's interest in its relations with its

military suppliers—the court referred to a number of “specula-

tive” ways in which lawsuits such as the present ones might

adversely affect that interest, pointing out that in response to

any increase in their potential liability, military suppliers might

raise their prices, attach conditions to the use of their products,

or stop dealing with the government altogether." The court

concluded that

government relations with war contractors might well be

drastically altered by changes in the rules governing liabil-

ity of war contractors to soldiers for injuries caused by

inherently “dangerous” war materials.

Id, at 19-20.

8 The court also noted that if defendants are eventually held liable for

massive damages awards, the resulting blow to their financial health

could have serious repercussions in the national economy.

29a

Turning to the second part of its test, the court found that

the federal interest it had identified would be adversely af-

fected if the issues in these lawsuits were adjudicated under

state law:

Application of varying state laws would burden federal

interests by creating uncertainty as to the rights of both

veterans and war contractors. It would also be unfair in

that essentially similar claims, involving veterans and war

contractors identically situated in all relevant respects,

would be treated differently under different state laws.

Id. at 21.

Finally, as to the third part of its test, the court determined

that application of federal common law would not have any

significant adverse impact on state interest. While noting that

“{t}ort claims are traditionally matters for state law, which has

developed comprehensive substantive and procedural rules to

govern them,” /d. at 22, the court distinguished the instant tort

actions, finding that

state law has not considered the complex question of a

war contractor's liability to soldiers injured by toxic

chemicals subject to federal regulation while engaged in

combat and serving abroad.

Id. at 23. The court concluded:

Because state law is no more or less developed as to such

claims than federal common law, application of federal

common law thereto would not significantly displace state

law.

Id.

Having found substantial federal interests that would be

adversely affected by application of state law to the instant

claims, and having determined that there were no substantial

state interests in having state law applied, the district court

ruled that plaintiffs had stated valid causes of action under the

federal common law.’ The court therefore held that it had

9 The district court correctly determined that there is no private right

of action under FIFRA, 7 U.S.C. § 135 ef seq. (1976). The current

30a

Pub. L. No. 80-104, 62 Stat. 163 (1947) (codified at 7 U.S.C,

§§ 135-135K (1976)), and the Federal Environmental Pesticide Control

Act (“1972 Act"), Pub. L. No. 92-516, 86 Stat. 973 (1972) (codifed at 7

U.S.C. §§ 136-136y (1976)), which amended, and has now superseded,

the original Act. See Pub. L. No. 92-516, § 4(b), 86 Stat, 998 (1972).

Following the four-pronged analysis set forth in Cort v. Ash, 422 U.S.

66 (1975), we conclude that neither enactment gives rise to a private

right of action.

The four factors to be considered under Cort v. Ash are (1) whether

the plaintiff is “one of the class for whose especial benefit the statute

was enacted,” (2) whether there is “any indication of legislative intent,

explicit or implicit, either to create such a remedy or to deny one,” (3)

whether a right of action would be “consistent with the underlying

purposes of the legislative scheme,” and (4) whether the cause of action

is “one traditionally relegated to state law, in an area basically the

concern of the States, so that it would be inappropriate to infer a cause

of action based solely on federal law.” /d. at 78.

As to the original FIFRA, which was in effect during the entire

period that plaintiff veterans served in Vietnam, we see no essential

satisfaction of any of the Cort v. Ash tests. First, there is no indication

that the bill was enacted for the especial benefit of military men. It is

clear that Congress's intent was to protect the public in general, with

perhaps some special consideration for “agricultural producers and

other users” of pesticides and rodenticides, See [1947] U.S. Code

Cong. Serv. 1200, 1202 (quoting the Report of the House of Repre-

sentatives Committee on Agriculture), FIFRA makes no special men-

tion of soldiers; and the House report, which states that the bill was

considered by the United States Departments of Agriculture and the

Interior, does not indicate that the bill was considered by any military

or defense agency. /d. As to the second (and most important, see Leist

v. Simplot, No, 79-7402, -7464, -7482 (2d Cir. July 8, 1980)) of the

Cort factors, we see no clear indication of legislative intent to create a

private remedy. Plaintiffs have cited no legislative history on this point,

nor have they presented any deiuiled statutory analysis, The Act itself

is primarily concerned with establishing an administrative scheme of

labeling, registration and enforcement; there are indications that Con-

gress expected that scheme to be the exclusive means of enforcement.

See [1947] U.S. Code Cong. Serv. supra, at 1202. We conclude that

this factor cuts against the plaintiffs. The third Cort factor is of little

assistance here, While a private right of action might enhance enforce-

ment of the Act's substantive provisions to some extent, it would also

increase the burden on manufacturers (without commensurately in-

creasing protection of injured persons who can recover damages under

state product liability law), something which the administrative scheme

of registration was specifically intended to avoid. See [1947] U.S. Code

Cong. Serv., supra at 1202. Finally, the fourth Cort factor cuts

strongly against the plaintiffs. The area of product liability has been

“traditionally relegated to state law,” and this is no less true of the

products regulated by the FIFRA. See, e.g., Muncy v. Magnolia

3la

subject matter jurisdiction over the case, and denied defen-

dants’ motion to dismiss.'* This appeal followed.

Chemical Co., 437 S.W.2d 18 (Tex. Civ. App. 1968). Thus, we

conclude that the district court was correct in ruling that there is no

private right of action under the original FIFRA.

As to the 1972 Act, the unavailability of a private right of action is

even clearer. We find no more positive indications in the first, third and

fourth Cort factors. More importantly, we find a negative indication as

to the second Cort factor, i.e., legislative intent, since Congress

considered and explicitly rejected amendments that would have author-

ized citizen suits to enforce the 1972 Act's prohibitions. See People for

Environmental Progress v. Leisz, 373 F. Supp. $89, $92 (C.D. Cal,

1974) (discussing legislative history); see also Kelly v. Butz, 404 F.

Supp. 925, 940 (W.D. Mich, 1975). It is not for us to override that

Congressional determination,

The court also denied defendants’ motion to strike portions of the

Complaint relating to plaintiffs’ demand that defendants be required

to establish a trust fund. The court premised the denial on its

conclusion that

defendants are not prejudiced by allowing these requests for relief

to remain in the [Complaint], since defendants have no obligation

to admit or deny plaintiffs’ requests for relief, which therefore

place no pleading burden on defendants.

Slip op. at 24, In addition, it appears that the court declined to rule on

a motion to strike portions of the Complaint relating to class members

who have not yet been injured, but are said to be merely “at risk” of

injury by reason of a veteran's exposure to Agent Orange. Defendants

argue here, as they have in moving for reargument below, that the

district court should have granted both motions to strike. We decline to

reach these questions, The district court, in granting certification under

§ 1292(b) was primarily concerned with the question of subject matter

jurisdiction; the certification mentions only that issue. While we are

not restricted by the district court's limited certification, see Bersch vy.

Drexel Firestone, Inc., 519 F.2d 974, 994-95 (2d Cir.), cert. denied, 423

U.S. 1018 (1975), and may review the entire order of the court below,

Capital Temporaries, Inc, v. Olsten Corp., 506 F.2d 658, 660 (2d Cir.

1974), we conclude that review now of the trust fund and “at risk”

issues would be inappropriate. First, our ruling on subject matter

jurisdiction may end the federal court litigation, (It is unclear whether

any plaintiffs will seek to proceed on the basis of diversity jurisdic-

tion.) More importantly, the district judge did not assess the merits of

either motion to strike, and we note that he has reserved decision on

defendants’ motion for reargument of these questions, pending deci-

sion of this Court on the question of jurisdiction. In all, we think the

wiser course is for this Court not to pass on them at this time.

32a

ll

Both plaintiffs and defendants accept the three-part test that

the district court applied to the federal common law issue, and

for purposes of discussion we accept that framework, But,

focusing our consideration chiefly on the first factor of the

test, 4.e., “the existence of a substantial federal interest in the

outcome of the litigation,” we disagree with the district court's

analysis and conclude that the court gave insufficient weight to

the Supreme Court's repeated admonition that

[iJn deciding whether rules of federal common law should

be fashioned, normally the guiding principle is that a

significant conflict between some federal policy or interest

and the use of state law in the premises must first be

specifically shown. . . .

Wallis v. Pan American Petroleum Corp., supra, 384 U.S. at

68, quoted with emphasis in Miree v. DeKalb County, supra,

433 U.S. at 31. Principally we reject the district court's

conclusion that there is an identifiable federal policy at stake in

this litigation that warrants the creation of federal common

law rules.'!

In considering plaintiffs’ contentions, it is essential to delin-

eate precisely the relation of the United States to the claims

here at issue. These claims are brought by former servicemen

and their families against private manufacturers; they are not

asserted by or against the United States, and they do not

directly implicate the rights and duties of the United States.

They are thus unlike the claims in United States v. Standard

Oil Co., supra, in which the government brought suit to

recover for its payments to a soldier injured as a result of the

defendant's negligence, and Clearfield Trust Co. v. United

States, supra, in which the government brought suit to enforce

Il Since we conclude that there is not now an identifiable federal

policy, we need not reach the second and third factors of the test and

speculate as to how state law, if it were already developed, would

affect the federal policy if it were identifiable—or vice versa,

33a

its rights in commercial paper issued by it. In each of those

cases the government was a party seeking to enforce its own

asserted rights, and analysis reveals two federal concerns which

are inherent in such cases. First, the government has an interest

in having uniform rules govern its rights and obligations.

Second, the government has a substantive interest in the

contents of those uniform rules. The first interest prizes uni-

formity for its own sake and is content-neutral; it does not

dictate the substance of the federal common law rule to be

applied. Thus, in United States v. Standard Oil Co., supra, the

Court applied federal common law, recognizing the govern-

ment’s interest in uniformity, but refused to impose the liability

argued for by the United States as the substance of that law.

The present litigation is fundamentally different from Stan-

dard Oil and Clearfield Trust with respect to both uniformity

interest and substantive interest in the content of the rules to be

applied. Since this litigation is between private parties and no

substantial rights or duties of the government hinge on its

outcome, there is no federal interest in uniformity for its own

sake.'’ See e.g., Miree v. DeKalb County, supra, 433 U.S. at

28. The fact that application of state law may produce a

variety of results is of no moment. It is in the nature of a

federal system that different states will apply different rules of

law, based on their individual perceptions of what is in the best

interests of their citizens. That alone is not grounds in private

litigation for judicially creating an overriding federal law.

Indeed, even where a federal statutory program governs the

rights of private litigants and Congress has left gaps to be filled

by the courts, uniformity is not prized for its own sake. For

example, in Auto Workers v. Hoosier Corp., 383 U.S. 696,

701-05 (1966), the Court dealt with a suit under § 301 of the

12. Compare Bank of America Nat'l Trust & Sav. Ass'n v. Parnell, 352

U.S. 29, 32-34 (1956), private litigation involving the issues of whether

certain government bonds were “overdue” and whether the defendant

had taken title to the bonds in good faith. The Court observed that the

question of when a government bond is overdue is a matter of federal

law, but held that questions as to a party's good faith are left to local

law.

34a

National Labor Relations Act, 29 U.S.C. § 185 (1976), to

which federal common law applied. Yet in determining the

timeliness of such suits, the Court ruled that the appropriate

state statutes of limitations should apply, and refused to

impose a uniform federal period of limitations:

(T]imeliness . . . is clearly a federal question, for in § 301

suits the applicable law is “federal law, which the courts

must fashion from the policy of our national labor laws,”

Textile Workers v. Lincoln Mills, 353 U.S. 448, 456... .

We are urged instead [of referfing to state laws,] to devise

a uniform time limitation to close the statutory gap left by

Congress. But the teaching of our cases does not require

so bald a form of judicial innovation.

Id. at 701. Thus, the prospect of uniformity is insufficient

reason to invoke federal common law in private litigation; and

if federal common law were invoked, it would not ensure

uniformity since frequently that law takes its substance from

local law.

The second fundamental difference between the present

litigation and the Clearfield Trust type of case is that in the

latter, the government's substantive interest in the litigation is

essentially monothetic, in that it is concerned only with pre-

serving the federal fisc, whereas here the government has two

interests; and here the two interests have been placed in sharp

contrast with one another. Thus, the government has an in-

terest in the welfare of its veterans; they have given of them-

selves in the most fundamental way possible in the national

interest. But the government also has an interest in the sup-

pliers of its materiel; imposition, for example, of strict liability

as contended for by plaintiffs would affect the government's

ability to procure materiel without the exaction of significantly

higher prices, or the attachment of onerous conditions, or the

demand of indemnification or the like. As plaintiffs’ counsel

has observed, “this litigation will have a direct and lasting

impact on the relationship between the federal government and

war contractors . . . and between the federal government and

veterans.” (Letter dated October 21, 1980, V. J. Yannacone, Jr.

3Sa

to A. D. Fusaro.) It is obvious that the government is in-

terested. But unlike a simple uniformity interest, ne ‘her the

government's interest in its veterans nor its interest in its

suppliers is content-neutral. Each interest will be furthered

only if the federal rule of law to be applied favors that

particular group.

The extent to which either group should be tavored, and its

welfare deemed “paramount” (see dissent of Chief Judge

Feinberg, post), is preeminently a policy determination of the

sort reserved in the first instance for Congress. The welfare of

veterans and that of military suppliers are clearly federal

concerns which Congress should appropriately consider in

setting policy for the governance of the nation, and it is

properly left to Congress in the first instance to strike the

balance between the conflicting interests of the veterans and

the contractors, and thereby identify federal policy. Although

Congress has turned its attention to the Agent Orange prob-

lem,'' it has not determined what the federal policy is with

respect to the reconciliation of these two competing interests.

Thus, this case is unlike Owens v. Haas, 601 F.2d 1242 (2d

Cir.), cert. denied, 444 U.S. 940 (1979), or /vy Broadcasting

Co. v. American Tel. & Tel. Co., 391 F.2d 486 (2d Cir. 1968),

in which the court was asked to supplement with federal

common law a federal statutory program which itself em-

bodied Congressional policy determinations.'* In Owens, as

Chief Judge Feinberg observes, post, the Court “discerned a

13° Congress has directed the Administrator of Veterans’ Affairs to

design and conduct an epidemiological study of veterans who were

exposed to Agent Orange, and to report periodically to Congress until

the study is completed. See Pub. L. No. 96-151, 96th Cong., Ist Sess.

(1979); 38 U.S.C. § 219 note (Supp. 1980),

14 Plaintiffs contend that FIFRA (see note 9 supra) evinces a federal

interest in regulation of herbicides sufficient to call into play the

federal common law. But as this court has noted, FIFRA was not

intended to preempt state law even with respect to those matters it

specifically regulates. Chemical Specialties Mfrs. Ass'n v. Lowery, 482

F.2d 431 (2d Cir. 1971). It is certainly an insufficient basis for a

displacement of the entire body of state product liability law.

36a

‘federal regulatory scheme’ ” for the protection of prisoners. It

is one thing to discern a federal regulatory scheme from the

statutes Congress has enacted, as in Owens; it is another to

devise such a scheme in the face of inaction by Congress. The

dissent finds it anomalous that federal common law may apply

to prisoners but not to veterans. We suggest that the anomaly

lies not with the court in declining to devise a scheme, but with

Congress which has made specific provision for protection of

the government's prisoners but not for its soldiers.

We conclude that in the present case, while the federal

government has obvious interests in the welfare of the parties

to the litigation, its interest in the oufcome of the litigation,

i.e., in how the parties’ welfares should be balanced, is as yet

undetermined.'* The teaching of Wallis and Miree is that

before federal common law rules should be fashioned, the use

of state law must pose a threat to an “identifiable” federal

policy. Wallis v. Pan American Petroleum Corp., supra at 68;

Miree v. DeKalb County, supra at 31-33. In the present

litigation the federal policy is not yet identifiable. We con-

clude, theretore, that the district court erred in ruling that

plaintiffs’ claims were governed by federal common law. The

order denying defendants’ motion to dismiss for lack of

subject matter jurisdiction is accordingly

Reversed.

>

FEINBERG, Chief Judge (dissenting):

This case presents us with a unique set of facts, parties, and

pleadings. Many aspects of plaintiffs’ case are troublesome,

because plaintiffs seek unusual relief, both procedural and

substantive, as to which I express no view. But the issue now

before us is far narrower, and raises more familiar considera-

1s The large number of veterans claimed in the class does not reveal the

content of a federal policy reconciling the competing interests, any

more than does the possibility that the defendant companies would

have to be liquidated to pay the claims of the class.

°

37a

tions. That issue is whether a federal district court has federal

question jurisdiction over the action, see 28 U.S.C. § 1331(a),

because the action arises under federal common law. | agree

with District Judge Pratt that this case should be tried in

federal court under rules of federal common law. | therefore

dissent from the opinion of the majority.

That the present case is sui generis, and national in its

proportions, is evident from the complaint itself. The defen-

dants in this action are five of the largest chemical companies

in the nation, all of which admittedly manufactured “Agent

Orange,” a defoliant, for use by our nation’s armed forces in

Vietnam between 1962 and 1971. Plaintiffs’ suit is brought on

behalf of veterans, living and dead, and their parents, wives,

widows, Orphans, and children, living, dead, and stillborn.

Plaintiffs allege that the Agent Orange supplied by the defen-

dants was “contaminated with. . . polychlorinated dibenzo-p-

dioxins . . and polychlorinated dibenzo furans . . . includ-

ing 2,3,7,8,-tetra-chloro dibenzo p-dioxin (. . . “Dioxin”),

one of the most toxic substances ever developed by man.”

Plaintiffs further allege that as a result of exposure to Agent

Orange, they incurred, or have suffered an increased risk of

incurring, cancer, genetic damage, and an early death. Judge

Pratt noted that the defendants are “facing aggregate claims

which may eventually amount to billions of dollars.” As the

majority notes, the complaint identifies fifteen groups of

plaintiffs, totalling over 800 plaintiffs who, we are told, have

filed complaints in 25 judicial districts all across the country.

By this time it is probable that 30 to 40 districts are affected,

since additional plaintiffs appear daily; plaintiffs’ counsel

assures us that many more complaints would already have been

filed, but for the request of Judge Pratt not to do so until the

question of class certification has been resolved. How many

plaintiffs will ultimately come forward is unclear. Present

plaintiffs assert that as many as 2,400,000 men and women

who served in the armed forces could be eligible to sue

defendants—not to mention their parents, dependents, and

dead or stillborn children. The national dimensions of the case

as pleaded are too obvious to escape notice. Identical com-

38a

plaints have been filed, inter alia, in Massachusetts and Cali-

fornia, in Illinois and Texas, and we are informed that the

Judicial Panel on Multidistrict Litigation has ordered all Agent

Orange cases consolidated before Judge Pratt. The plaintiffs in

these cases complain of injuries sustained as the result of

service in our nation’s military, in a national endeavor in a

foreign land. To the non-legal mind, it would be an odd

proposition indeed that this litigation, so patently of national

scope and concern, should not be tried in federal court.

As for the legal mind, all involved in this case—the parties,

Judge Pratt, and the panel on appeal—appear to agree that

federal question jurisdiction depends upon whether a federal

common law rule of product liability should be applied. See

Illinois v. City of Milwaukee, 406 U.S. 91, 98-101 (1972); Jvy

Broadcasting Company v. American Telephone and Telegraph

Company, 391 F.2d 486, 492-93 (2d Cir. 1968). Whether a

federal rule should be applied, in turn, depends on three

factors, as discerned in Miree v. DeKalb County, 433 U.S. 25

(1977), and Wallis v. Pan American Petroleum Corporation,

384 U.S. 63 (1966):

(1) the existence of a substantial federal interest in the

outcome of the litigation;

(2) the effect on this federal interest should state law be

applied; and

(3) the effect on state interests should state law be

displaced by federal common law.

Judge Pratt, in his thorough and able opinion, analyzed all

these factors and concluded that the fashioning of a federal

common law rule was warranted on the facts of the present

case. In a closely analogous case, Owens v. Haas, 601 F.2d

1242 (2d Cir.), cert. denied, 444 U.S. 980 (1979), this court

recently arrived at the same result. Owens is instructive because

it represents the most recent examination by this court of the

“federal interest” doctrine discussed in Miree and Wallis. A

review of the Owens facts and holding shows that Judge

Pratt's analysis of the factors set forth above was correct.

39a

In Owens, plaintiff was a federal prisoner who was injured

by county jail officials who were working under contract with

the federal government, Plaintiff sued for damages as, inter

alia, a third-party beneficiary of that contract. On that theory,

the “first question” before this court was whether plaintiff's

claims were “a matter of federal law or of state law”; the

question was posed “both as a guide to contract interpretation

and as an alternate basis for jurisdiction in the district court.”

601 F.2d at 1248. Writing for the panel, the late Judge Smith

noted that “the federal government owes a duty of reasonable

care to safeguard the security of prisoners under its control,”

and discerned a “federal regulatory scheme” for maintaining

the health and well-being of such prisoners. /d. at 1249. Judge

Smith then concluded that this regulatory scheme generated “a

federal interest in assuring uniform treatment of federal pris-

oners,” /d., and that that interest, combined with the govern-

ment's duty of reasonable care, meant that “federal rights and

obligations [did] ‘hinge on the outcome’ of litigation in this

area,” id. at 1249-50. As a result, the court held that federal

common law should apply.

Looking, as the Owens court did, to Miree and Wallis, the

first question we must answer is whether the federal govern-

ment has a “substantial interest” in the outcome of this

litigation. It is plain that this question must be answered

affirmatively. As the Supreme Court observed in United States

v. Standard Oil Company, 332 U.S. 301 (1947),

Perhaps no relation between the Government and a

citizen is more distinctively federal in character than that

between it and members of its armed forces. To whatever

extent state law may apply to govern the relations between

soldiers or others in the armed forces and persons outside

them or non-federal governmental agencies, the scope,

nature, legal incidents and consequences of the relations

between persons in service and the government are funda-

mentally derived from federal sources and governed by

federal authority. See Tarble’s Case, 13 Wall. 397; Kurtz

v. Moffitt, 118 U.S. 487. So also we think are interfer-

40a

ences with that relationship such as the facts of this case

involve. For, as the Federal Government has the exclusive

power to establish and define the relationship by virtue of

its military and other powers, equally clearly it has power

in execution of the same functions to protect the relation

once formed from harms inflicted by others.

Id. at 305-06 (footnotes omitted). This obviously federal rela-

tionship does not depend primarily upon any particular stat-

ute, but rather inheres in the federal government's exclusive

capacity to wage war. But in the case before us this relationship

can also be analyzed in terms of Owens. In Owens, the federal

government was found to owe “a duty of reasonable care” to

federal prisoners, a duty stemming from statutory enactment,

specifically 18 U.S.C. § 4042.' Similarly, the federal govern-

ment here is under a statutory obligation to provide ‘'an

improved and uniform program of medical .. . care for

members [of the uniformed services] and certain former mem-

bers of those services, and for their dependents.” 10 U.S.C.

§ 1071. Further, in Owens this court discerned in “the scheme

of regulation of federal prisons [an indication of] congres-

sional intent to provide some general protections for federal

prisoners.” 601 F.2d at 1249. Similarly, in the present case there

is a Statutory scheme to provide “general protections” for

members and veterans of the uniformed services. See 10

U.S.C. §§ 1071-87 (program of medical care for members of

uniformed services and dependents); 38 U.S.C. §§ 310-15

(schedule of compensation to veterans and dependents for

wartime disabilities); §§ 321-22 (schedule of compensation to

survivors of veterans for wartime death); §§ 331-35 (same,

peacetime disabilities); §§ 341-42 (same, peacetime death); 50

U.S.C. § 45(a) (requiring adequate provision of shelter, sani-

tary facilities, water supplies, heating and lighting arrange-

ments, medical care, and hospital accommodations before

| 18 U.S.C. § 4042 provides, in pertinent part, that the “Bureau of

Prisons . .. shall... provide for the safekeeping, care, .. .

subsistence, . . . [and] protection. . . of all persons charged with or

convicted of offenses against the United States... .”

4la

persons can be inducted into military service). See also the

various regulations governing the welfare of soldiers, all of

which are, of course, promulgated under authority granted by

Congress. 10 U.S.C. § 121 (President's power to prescribe

regulations); § 3012(g) (Secretary of Army’s power to prescribe

regulations).’? The Secretary of the Army is required by statute

to be responsible for the “welfare, preparedness, and effective-

ness of the Army.” 10 U.S.C. § 3012(b)(1).

The majority concludes that on the facts of this case “there

is no federal interest in uniformity for its own sake,” and that

there is no federal “substantive interest in the content of the

rules to be applied.” | disagree on both counts. As to uniform-

ity of treatment, this court noted in Owens that “[b]Jecause

there is a federal regulatory scheme, there is a federal interest

in assuring uniform treatment of federal prisoners.” 601 F.2d

at 1249. It is anomalous for this court to hold, on the one

hand, that the federal government has an interest in “uniform

treatment” of its prisoners sufficient to warrant the use of a

federal rule of recovery, and, on the other hand, that the

federal government has no such interest in “uniform treat-

ment” of its soldiers. The majority suggests that the anomaly

here lies “with Congress, which has made specific provisions

for the protection of the government’s prisoners but not for its

- E.g., Army Regulation 40-2, Army Medical Treatment Facilities,

General Administration (effective April 1, 1978) (requiring provision

of highest quality of patient care to soldiers in Army medical facili-

ties); Army Regulation 40-3, Medical, Dental, and Veterinary Care

(effective December 1, 1977) (providing standards of policy, eligibility,

treatment, and administration, inter alia, in Army medical facilities);

Army Regulation 32-15, Clothing and Textile Materiel, Classification

and Inspection (effective October 1, 1976) (providing minimal stan-

dards for serviceability of clothing of Army personnel); Army Regula-

tion 210-16, Bachelor Housing Management (effective September 15,

1975) (providing minimal standards of adequacy for quarters of certain

Army personnel); Army Regulation 30-1, Army Food Service Program

(effective July 1, 1977), (providing standards for food and food

services for Army personnel); Army Regulation 28-1, Army Morale

Support Activities (effective February 15, 1979) (providing programs

for maintenance of morale, esprit, mental and physical fitness, and

combat readiness of Army personnel).

42a

soldiers.” But a review of the statutory and regulatory provi-

sions cited above, especially 10 U.S.C. §§ 1071-87 (medical

care), § 3012(b)(1) (Secretary of Army’s responsibility for

“welfare” of Army personnel), and 38 U.S.C. §§ 310-15,

321-22, 331-35, 341-42 (veterans’ and survivors’ compensa-

tion), as well as myriad, detailed Army Regulations, demon-

strates beyond doubt that Congress has made specific provi-

sions for the protection of its soldiers, both directly and by

delegation.

The majority also concludes that because the government

has arguably conflicting substantive interests in the outcome of

the litigation, “the federal policy is not yet identifiable.” The

allegedly conflicting federal interests are in the welfare of

veterans and in the welfare of suppliers of war materiel. But

that the plaintiff veterans and the defendant contractors have

opposing interests in this litigation hardly means that the

paramount federal interest is somehow divided or self-contra-

dictory. The United States has a clear interest in the protection

of its soldiers from harm caused by defective war materiel.

What other interests does the United States arguably have that

might conflict with this clear interest? One such interest might

be in seeing that defendants, as suppliers of war materiel, are

treated fairly. But that interest cannot be said to conflict with

the government’s interest in the safety of its soldiers. Another

such interest might be in preventing defendants from being

driven to bankruptcy by large damage awards to Agent Orange

plaintiffs, who have already made claims assertedly greater

than defendants’ combined liquid assets. This, I take it, is what

the majority means by its reference to the federal interest in the

“welfare” of defendants. But this interest lies in the future,

and in the realm of speculation. There will be time enough to

deal with the potential impact of defendants’ financial liability

if and when they incur any, if it is truly in the interest of the

United States to do so. By contrast, plaintiffs’ injuries—as-

suming for the moment that plaintiffs have a viable cause of

action—lie in large part in the present, and in the realm of the

concrete. The conclusion seems inescapable to me that the

United States’ interest in the “welfare” of defendants cannot

4a

approach, either in magnitude or in quality, its interest in the

welfare of the Agent Orange plaintiffs. In short, in the case

before us the paramount interests of the United States are in

the welfare of its veterans and in their fair and uniform

treatment.

Having discerned a significant federal interest, we are next

required to determine whether or not a “significant conflict”

exists between that interest and the application of state law.

This factor is not reached by the majority. But that such a

conflict does exist in the present case can hardly be disputed.

Given the “distinctively federal” character of the relationship

between the federal government and its soldiers, there is an

inherent federal interest in the uniform definition of the

aspects of that relationship involved in this case. As noted

earlier, this inherent interest in uniformity was observed by this

court in Owens, 601 F.2d at 1249. The application of state law

to the present case would severely frustrate this federal in-

terest: If state law is applied in the present litigation, and

assuming again that the allegations in the complaint are true,

then veterans may well be subjected to sharply differing rules

of law in the pursuit of their remedies. For example, the law of

the various states is in flux, diverging widely in the definition

of what constitutes a ‘’defective” product—especially with

respect to defectively designed products—and in the availabil-

ity of defenses based on the “state of the art” and technologi-

cal feasibility. See United States Department of Commerce,

Interagency Task Force on Product Liability, Product Liabil-

ity: Final Report I1-6-10 (1977) (varying state law respecting

“defectiveness,” especially in design-defect cases); id. at II-11-

12 (same, respecting defense of “state of the art”). As a result,

if the laws of 30 or 40 state jurisdictions are separately applied,

veterans’ recoveries for Agent Orange injuries will vary

widely—despite the fact that these soldiers fought shoulder to

shoulder, without regard to state citizenship, in a national

endeavor abroad. In sum, the federal interest here in uniform-

ity would be defeated by the application of discrete and

differing state laws. It is thus not necessary to reach the

question whether the other federal interest present in this

44a

case—in seeing that soldiers are not harmed by defective war

materiel—would be frustrated by the application of state law.

Because the federal interest in uniformity would be defeated by

such an application, | conclude that the first two requirements

of Miree and Wallis, as interpreted by this court in Owens, are

satisfied, as Judge Pratt concluded.

The third and last factor involves the extent to which state

interests would be affected, if state law were to be “displaced”

by federal common law in the present case. This factor is also

not reached by the majority. | agree with Judge Pratt's conclu-

sion that the claims made by plaintiffs in this unique and

unprecedented litigation do not fall within the developed area

of state tort law. As noted above, the states’ product liability

law is in flux; with respect to a case as novel as the one before

us, a consistent and established body of state law is even less

discernible. Accordingly, | think that Judge Pratt was correct

in holding that the application of federal common law to the

case before us would not “displace” state law, because there is

no substantial body of state law on this point to be displaced. |

thus conclude that all three factors, accepted by the majority as

the proper analytical framework, point to the use of a federal

common law rule in the present case, giving rise to federal

question jurisdiction.

Because | conclude that the district court does have jurisdic-

tion over the case before us, | dissent from the opinion of the

majority.

45a

Order of the Court of Appeals

Dated January 28, 1981

UNITED STATES COURT OF APPEALS

SECOND CIRCUIT

At a stated term of the United States Court of Appeals, in

and for the Second Circuit, held at the United States Court

House, in the City of New York, on the 28th day of January,

one thousand nine hundred and eighty-one.

No. 80-7079

>

In re

“AGENT ORANGE”

Product Liability Litigation

>

A petition for rehearing containing a suggestion that the

action be reheard in banc having been filed herein by counsel

for the plaintiffs-appellees,

Upon consideration by the panel that heard the appeal, it is

Ordered that said petition for rehearing is DENIED, Chief

Judge Feinberg dissenting.

It is further noted that the suggestion for rehearing in banc

has been transmitted to the judges of the court in regular active

service and to any other judge on the panel that heard the

46a

appeal and that no such judge has requested that a vote be

taken thereon.

A. DANIEL FUSARO

A. Daniel Fusaro,

Clerk

United States Court of Appeals

Second Circuit

Filed January 28, 1981

A. Daniel Fusaro, Clerk

47a

Order of the Court of Appeals Dated February 6, 1981

Granting Motion for Stay Without Bond

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

Docket No. 80-7079

>

In re

“AGENT ORANGE”

Product Liability Litigation

>

It IS HEREBY ORDERED that the motion be and it hereby is

granted.

WILFRED FEINBERG

ELLSWORTH A. VAN GRAAFEILAND

(Signature Illegible)

Circuit Judges

Date: 2/6/81