Amicus Curiae Brief — Dow Chemical Co. v. Stephenson

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a | YAN 24

No. 02-271 | my

IN THE

Supreme Court of the United States

IN RE AGENT ORANGE PRODUCT LIABILITY LITIGATION:

Dow CHEMICAL COMPANY, MONSANTO CHEMICAL, ET AL.,

Petitioners,

V.

DANIEL RAYMOND STEPHENSON, ET AL.,

Respondents.

On Writ Of Certiorari to the

United States Court of Appeals

for the Second Circuit

AMICUS CURIAE BRIEF OF

THE ASSOCIATION OF TRIAL LAWYERS OF

AMERICA

IN SUPPORT OF THE RESPONDENTS

MARY E. ALEXANDER JEFFREY ROBERT WHITE*

1050 31st St., N.W. 1050 31st. St., N.W.

Washington, DC 20007 Washington, DC 20007

(202) 965-3500 (202) 965-3500

President, * Counsel of Record

The Association of Attorney for Amicus Curiae

Trial Lawyers of America

TABLE OF AUTHORITIES... seeseenne . iii

IDENTITY AND INTEREST OF AMICUS

CURIAE - seinabunueemennmenmmemmees a

SUMMARY OF THE ARGUMENT. ........ccccccccccseceeees 2

ARGUMENT re Eee 5

I. THE SETTLEMENT OBTAINED IN

VIOLATION OF THE FUNDAMENTAL

CONSTITUTIONAL RIGHTS OF

FUTURE VICTIMS OF AGENT

ORANGE Is SUBJECT To

COLLATERAL ATTACK. .ncccccccccccccccccccccccccseces 5

A. The Settlement Was Obtained In

TABLE OF CONTENTS

Violation of the Constitutional

Right To Trial By Jury of Future

Victims. ..

The Principles Set Forth By This

Court In Amchem and Ortiz are

applicable to this Settlement

11

A CLASS ACTION THAT PURPORTS

TO INCLUDE THOSE WHO WILL

SUFFER COMPENSABLE PERSONAL

INJURY ONLY IN THE FUTURE IS

STRUCTURALLY AND

PROCEDURALLY INCAPABLE OF

AFFORDING THOSE VICTIMS DUE

PROCESS.

14

A. Meaningful Notice Cannot

Be

Provided To Unknown Future

Personal Injury Victims.

- 16

ii

B. Named Representatives Cannot

Provide Adequate Representation

of Future Personal Injury Victims..... 17

C. Future Personal Injury Victims

Cannot Be Provided With A

Meaningful Opportunity At

Settlement To Opt Out of the Class... 21

III.CLASS ACTION SETTLEMENTS THAT

INCLUDE FUTURE PERSONAL

INJURY CLAIMANTS CAN PROTECT

DUE PROCESS RIGHTS BY

PROVIDING A DELAYED OPT-OUT. ......0000-24

CONCLUSION 27

TABLE OF AUTHORITIES

CASES

Amchem Products, Inc. v. Windsor, 521 U.S. 591

ES Se 11, 17, 18, 25

Beacon Theatres, Inc. v. Westover, 359 U.S. 500

EEE SS EET 10

Bowling v. Pfizer, Inc., 143 F.R.D. 141 (S.D. Ohio

1992), appeal dism. 995 F.2d 1066 (6th Cir. 1993)

a aed eecr premnentcesnnsnenssnnsseeseet 26

Brown v. Ticor Title Ins. Co., 982 F.2d 386 (9th Cir.

1992), cert. dism. as improvidently granted, 511

EE TTT 21

Causey v. Pan Am World Airways, Inc., 66 F.R.D.

Ee 21

Chauffeurs, Teamsters and Helpers, Local No. 391 v.

Terry, 494 U.S. 558 (1990)...........cccccccseceeeeeeeeees 10

Curtis v. Loether, 415 U.S. 189 (1974)................... 11

Dimick v. Schiedt, 293 U.S. 474 (1935)................. 10

Dincher v. Marlin Firearms Co., 198 F.2d 821 (2d

EEL EES TLL 23

Georgine v. Amchem Products, Inc., 83 F.3d 610

EE ELE 17

Granfinanciera, S.A. v. Nordberg, 492 U.S. 33 (1989)

ES EEE TEE 11

Griffin v. Griffin, 327 U.S. 220 (1946)................... 16

Hansberry v. Lee, 311 U.S. 32, 42 (1940). . 15, 18, 19

Harper v. Virginia Dep’t of Transp., 509 U.S. 86

aac rsiccricecetennsssnsccnacsess 12,14

iv

Hobbs v. Northeast Airlines, 50 F.R.D. 76 (E.D. Pa.

1970). ...c.cccceccseccosccessccescssesseeseesessssesssrsensssssenssnsens 21

Huckle v. Money, 2 Wils. 205, 95 Eng.Rep. 768 (C.P.

17GB). ....ecceccceccecsssccenccesssscsesecssnssenssssrsnssnsssssnsensennses 9

In re “Agent Orange" Prod. Liab. Litig., 996 F.2d

1425 (2d Cir. 1993), cert. den., 510 U.S. 1140... 23

In re AH. Robins Co., Inc., 880 F.2d 709 (4th Cir.),

cert. denied, 493 U.S. 959 (1989) ......-----eeeeees 26

In re Agent Orange Prod. Liab. Litig., 611 F. Supp.

1223 (E.D.N.Y. 1985).........:::ccccceseeeeerseeennsenennnenes 5

In re Agent Orange Prod. Liab. Litig., 597 F. Supp.

140 (E.D.N.Y. 1984)........cccccceeeeeeseereneenennnnennes 5, 22

In Re Agent Orange Product Liab. Litig., 818 F.2d

145 (2nd Cir. 1987), cert. denied, 484 U.S. 1004

(1988)...........eeecccesscccsserrsessnessssnnessnnnsssensssnnsens 6, 18

In re Diet Drugs Products Liab. Litig., 2000 WL

1222042 (E.D.Pa. 2000)........-..::eseecsseeereereenennnnens 26

James B. Beam Distilling Co. v. Georgia, 501 US.

B29 (1991)........eccccceesscessseeceesrecsesennsssrssennneens 12, 13

Kremer v. Chemical Construction Corp., 456 U.S. 461

(1982)........cc.ccecccorcesscsssssssenreesesessssssnsenssnsenrssnossnsess 7

Marbury v. Madison, 5 U.S. (1 Cranch) 137 (1803).6

Martin v. Wilks, 490 U.S. 755 (1989). ....-.-.---+0-00+ 21

Mullane v. Central Hanover Bank & Trust Co., 339

U.S. 306 (1950). ..........cccccceseseeeeeeeeeessennennnnnenannnes 17

Ortiz v. Fibreboard Corp., 527 U.S. 815 (1999)..... 11

Ortiz v. Fibreboard Corp., 527 U.S. 815 (1999)passim

Parklane Hosiery Co. v. Shore, 439 U.S. 322 ey

Parsons v. Bedford, 28 U.S. (3 Pet.) 433, 445 (1830)9

Vv

Phillips Petroleum Co. v. Shutts, 472 U.S. 797 (1985)

Richards v. Jefferson Cty, 517 U.S. 793 (1996) 16, 18

Ryan v. Dow Chemical Co., 781 F. Supp. 902

ea: Tt iainbesendccinesnnenndecnensineninabanianninsuinen 19

Urie v. Thompson, 337 U.S. 163 (1949)................. 23

Wilkes v. Wood, 98 Eng. Rep. 489 (K.B. 1763)........ 9

Yandle v. PPG Indus. Inc., 65 F.R.D. 566 (E.D. Tex.

ETE eee aoe oe ane 21

CONSTITUTIONS AND STATUTES

8 LESSER Cee nT oT 8

4 FB ) EE ESEETE Ere 14

OTHER AUTHORITIES

Amar, Akhil Reed, Fourth Amendment First

Principles, 107 Harv. L. Rev. 757 (1994). ............ 9

Bone, Robert G.., Rethinking the “Day in Court” Ideal

and Nonparty Preclusion, 67 N.Y.U. L. Rev 193

Coffee, John C., Jr., Class Wars: The Dilemma of the

Mass Tort Class Action, 95 Colum. L. Rev. 1343

ESAS EPCRA eine ae eron 13, 22, 26

Cramton, Roger C., Individualized Justice, Mass

Torts, and “Settlement Class Actions”: An

Introduction, 80 Cornell L. Rev. 811 (1995)

SE SIE se NER Ce SE Ce aE SO 17, 22, 26

Declaration of Independence (1776) ................:+0++ 9

Henderson, Edith Guild, The Background of the

Seventh Amendment, 80 Harv. L. Rev. 289 (1966)9

vi

Landsman, Stephan, The Civil Jury In America:

Scenes From an Unappreciated History, 44

Hastings L.J. 579 (1993). ........--sseceresererereeenens 8,9

Guinther, John, THE JURY IN AMERICA (1988)........ 8

National Academy of Sciences, Institute of Medicine,

“Veterans and Agent Orange: Health Effects of

Herbicides Used in Vietnam (1994)................+++++ 5

Newberg, Herbert B., CLASS ACTIONS (1992)....... 23

Restatement of Judgments (1942)................::eee000 20

Schuck, Peter H., Mass Torts: An Institutional

Evolutionist Perspective, 80 Cornell L. Rev. 941

Sa ah AE AS SE SOR 26

Scott, Austin, Trial by Jury and the Reform of Civil

Procedure, 31 Harv. L. Rev. 669 (1918). .............. 9

Siegel, David D., Commentary on 1988 and 1990

Amendments, reprinted in 28 U.S.C.A. (1991).. 14

Trangsrud, Roger H., Mass Trials in Mass Tort

Cases: A Dissent, 1989 U. Ill. L. Rev. 69............ 21

Wolfman, Brian and Alan B. Morrison, Representing

The Unrepresented In Class Actions Seeking

Monetary Relief, 71 N.Y.U. L. Rev. 439 (1996). ..23,

26

Wolfram, Charles W., The Constitutional History of

the Seventh Amendment, 57 Minn. L. Rev. 639

ITT scitnienteinntiaaindainitaiihiieatitasiatataiaahutibiieaiaatianeai y

Woolley, Patrick, Rethinking the Adequacy of

Adequate Representation, 75 Tex. L. Rev. 571

Woolley, Patrick, The Availability Of Collateral

Attack For Inadequate Representation In Class

Suits, 79 Tex. L. Rev. 383 (2000). ............:.cceeeees 20

--

No. 02-271

IN THE

Supreme Court of the United States

IN RE AGENT ORANGE PRODUCT LIABILITY LITIGATION:

Dow CHEMICAL COMPANY, MONSANTO CHEMICAL, ET AL.,

Petitioners,

v.

DANIEL RAYMOND STEPHENSON , ETAL.,

Respondents.

On Writ Of Certiorari to the

United States Court of Appeals

for the Second Circuit

AMICUS CURIAE BRIEF OF

THE ASSOCIATION OF TRIAL LAWYERS

OF AMERICA

IN SUPPORT OF THE RESPNDENTS

; The Association of Trial Lawyers of America

[ erent heen anyon submits this brief as amicus

curtae. Consent of the parties to the filing of thi

brief has been filed with the Court.1 ~— :

1 Pursuant to Rule 37.6, Amicus discloses that no counsel for

a party authored any part of this brief, nor did any person or entity

other than Amicus Curiae, its members, or its counsel make a

aed nY Sontemation to he poapasation er cubuitesten ef Gis

— 2

ATLA is a voluntary national bar association

whose approximately 50,000 trial lawyer members

primarily represent individual plaintiffs in civil

actions.

The Seventh Amendment right to trial by jury,

along with the due process right of access to the

courts to seek legal redress, has served as the

cornerstone of the civil justice system. Those rights

provide Americans with the means for vindicating all

others.

The companies responsible for mass torts

present the justice system with severe challenges.

ATLA has never blindly opposed class action

settlements as an intelligent means of addressing

those challenges, provided that the members of the

class are afforded the opportunity to make a knowing

and intelligent choice between the settlement offer

and a tort remedy. In ATLA’s view, the court of

appeals in this case correctly held that a class action

settlement that did not protect the rights of future

victims of Agent Orange is subject to collateral

attack by those victims seeking to exercise their

constitutional right.

SUMMARY OF THE ARGUMENT

1. Petitioners mischaracterize this case as one of

mere dissatisfaction with the outcome of a long-

closed settlement by litigants seeking a “second bite

at the apple” by way of collateral attack. The truth is

that by the time the Vietnam veterans in this case

showed any signs of cancer allegedly caused by

Agent Orange, the apples had all been consumed and

the tree chopped down and hauled away.

Respondents challenge the settlement as

constitutionally infirm frqm the start. The presently

3

harmed named plaintiffs, with the active

participation of the district court, bargained away

not only their own rights to seek damages in a jury

trial, but also the rights of unknown and unaware

class members who would not manifest any symptom

of disease until sometime in the future. As to the

members of that “futures. class,” including

Respondents, the right to trial by jury was not

“preserved” as commanded by the Seventh

Amendment. The historical background of that

amendment demonstrates the importance of jury

trial as a fundamental right. Its denial entitled

Respondents to collaterally attack the prior

settlement and pursue their legal remedies.

Petitioners also err in their contention that, if

collateral attack is permitted, it must ignore the

decisions of this Court, rendered after the class was

certified and the settlement approved, regarding the

due process requirement of adequacy of

representation of absent class members. This Court

~has made clear that its decisions must be applied

retrospectively to actions taken prior to the date of

those decisions. In civil actions, this rule applies to

collateral attacks as well as direct appellate review.

2. Judgments that are obtained in violation of due

process are clearly subject to collateral attack. In the

context of class actions, due process requires that

absent members be given meaningful notice, that

named representatives adequately represent the

interests of absent members at all times, and, where

claims are for money damages, that class members

be afforded the opportunity to opt out of the class.

The class action proceedings in this case failed

to satisfy any of the three essential due process

requirements. More broadly, a class that is

4

structured to include the personal injury claims of a

large number of unknown persons who may manifest

injury sometime in the future, cannot satisfy the

requirements of due process using the procedures

adopted here.

The problems of giving notice to a class of

unknown persons who are themselves unaware that

they are “injured” are insurmountable. Class

representatives and class counsel cannot represent

both presently harmed claimants and future victims

due to their inherently conflicting interests.

Providing the opportunity to opt out is a meaningless

gesture for a class member who may manifest some

injury sometime in the future. Inherently, members

of a futures class lack the crucial information that is

essential to making a knowing and intelligent

decision whether to opt out of the settlement.

3. Preserving the due process and Seventh

Amendment rights of future injury victims need not

destroy the usefulness of class-actions in addressing

the challenges of mass torts. Provision in the

settlement for a delayed opt-out —- by which a

member of a futures class can choose between the

settlement plan and a tort remedy — places future

victims in greater parity with class members with

present harms and ameliorates the conflicts of

interest between the classes. Also referred to as a

“back-end opt-out,” this procedural device is feasible

and has gained support among some courts and

commentators. It should be employed in class action

settlements such as this case to protect the due

process rights of a class of unknown and unknowable

future victims of mass torts.

ARGUMENT

I. THE SETTLEMENT OBTAINED IN VIOLATION

OF THE FUNDAMENTAL CONSTITUTIONAL

RIGHTS OF FUTURE VICTIMS OF AGENT

ORANGE IS SUBJECT TO COLLATERAL

ATTACK.

Daniel Stephenson and Joe Isaacson, while

serving their country in Vietnam, were exposed to

Agent Orange. In 1996, Isaacson was diagnosed with

non-Hodgkin’s lymphoma; Stephenson was

diagnosed with multiple myeloma, a bone marrow

cancer, in 1998. Both diseases are associated with

exposure to Agent Orange.”

2 The district court’s rulings were colored by the court’s firm

belief that the veterans’ suits were “so weak as to be virtually

baseless,” Pet. at 3, based on extant studies that there was no

evidence of “a causal connection between exposure to Agent

Orange and the serious adverse health effects claimed by

plaintiffs.” In re Agent Orange Prod. Liab. Litig., 611 F. Supp.

1223, 1231 (E.D.N.Y. 1985). See also, In re Agent Orange Prod.

Liab. Litig., 597 F. Supp. 740, 782-83 (E.D.N.Y. 1984) (same).

That belief, given the long latency period of cancers and

some other diseases, proved premature. The National Academy

of Sciences, at the direction of Congress, undertook an ongoing

study of the health effects in veterans who were exposed to

Agent Orange. See Pub. L. No. 102-4 (1991). The peer-reviewed

study concluded that there is positive evidence of causation of

three types of cancer, including non-Hodgkin’s lymphoma.

There is also evidence of a limited association between Agent

Orange and multiple myeloma. National Academy of Sciences,

Institute of Medicine, “Veterans and Agent Orange: Health

Effects of Herbicides Used in Vietnam (1994), excerpted in Joint

Appendix at 319. Full text available online at

nttp://books.r du/boo! 9048877/htmVindex.html, along

6

Most Americans in similar circumstances are

entitled to seek legal redress in court and present

their case before a jury to hold the manufacturers

accountable. Those rights are guaranteed by the

Constitution that soldiers fight to defend. Early in

our nation’s history, Chief Justice Marshall declared:

[T]he very essence of civil liberty certainly

consists in the right of every individual to claim

the protection of the laws, whenever he receives

an injury. One of the first duties of government

is to afford that protection.

Marbury v. Madison, 5 U.S. (1 Cranch) 137, 163

(1803).

The district court in this case, however,

delivered more tragic news to Stephenson and

Isaacson. Their constitutional rights had been

bargained away, years before either had any

symptom of disease, in a private deal between

lawyers representing victims of Agent Orange and

the herbicide’s manufacturers. With the district

court’s approval, they traded the constitutional

rights not only of those suffering in 1984 from

diseases allegedly linked to Agent Orange — who

were given a choice to opt out — but also the rights of

all veterans who would develop diseases in the

future. In exchange, they received a settlement that

the lower court characterized as “essentially a

payment of nuisance value.” In re Agent Orange

Product Liab. Litig., 818 F.2d 145, 151 (2-4 Cir.

1987).

Because the settlement violated Respondents’

fundamental constitutional rights, the court of

appeals correctly permitted Stephenson and Isaacson

to collaterally attack the judgment so they could

7

assert their constitutional rights to seek legal

redress.

A. The Settlement Was Obtained In

Violation of the Constitutional Right To

Trial By Jury of Future Victims.

Petitioners mischaracterize Respondents’

challenge to the Agent Orange settlement as simple

disappointment that, “as matters turned out, they

did not receive benefits from the settlement as great

as those received by certain other class members.”

Pet at 2. Petitioners’ primary argument is that

“after-the-fact dissatisfaction with the outcome of

litigation” cannot justify a collateral attack on the

judgment, and that “parties do not get a second bite

at the apple simply because they are unhappy about

how the judgment played out over time.” Pet. at 22.

Of course, when Stephenson and Isaacson

were first diagnosed with cancer, the apples had all

been eaten and the tree chopped down and hauled

away.

Their challenge is that the settlement was

constitutionally infirm from the _ start and

“compromise[d] their Seventh Amendment rights

without their consent.” Ortiz v. Fibreboard Corp.,

527 U.S. 815, 846 (1999). Petitioners rely on this

Cour‘t’s decision in Kremer v. Chemical Construction

Corp., 456 U.S. 461 (1982) that a litigant may not

seek a redetermination of the merits of a legal claim

that has been decided by a court of competent

jurisdiction. See Pet. at 20. However, the Court also

made clear that courts “may not grant preclusive

effect . . . to a constitutionally infirm judgment.” 527

U.S. at 482.

8

The importance of trial by jury as a

fundamental right must not be undervalued if it is to

be “preserved,” as commanded by the Founders. ?

Sadly, Americans’ right to trial by jury has

suffered a “gradual process of judicial erosion.”

Parklane Hosiery Co. v. Shore, 439 U.S. 322, 339

(1979) (Rehnquist, C.J., dissenting). At times the

jury has even become the object of disparagement,

perhaps because its history has become overlooked or

unappreciated. See Stephan Landsman, The Civil

Jury In America: Scenes From an Unappreciated

History, 44 Hastings L.J. 579 (1993).

A war was fought, and soldiers’ lives were lost,

to win this right. The American colonists treasured

the jury as essential to democratic self-government

and a check against oppression. They admired the

heroism of Edward Bushnell and the other jurors

who refused to convict Quaker William Penn in 1670,

though the jurors were harassed, fined, and jailed by

the trial judge. See John Guinther, THE JURY IN

AMERICA ch. 1 (1988).

They rejoiced when a jury in 1688 acquitted

seven Anglican bishops of seditious libel for opposing

James II. The case confirmed their view of the jury

“as a bulwark of liberty, as a means of preventing

oppression by the Crown.” Austin Scott, Trial by

3 In Suits at common law, where the value in controversy

shall exceed twenty dollars, the right of trial by jury

shal] be preserved, and no fact tried by a jury, shall be

otherwise reexamined in any Court of the United

States, than according to the rules of common law.

U.S. Const., amend vii.

9

Jury and the Reform of Civil Procedure, 31 Harv. L.

Rev. 669, 676 (1918). “Treatises extolling the jury

flooded the market and profoundly influenced

eighteenth century American as well as English

views about jury trial.” Jd.

They cheered the jury verdicts — including

large punitive damage awards - in civil suits by

John Wilkes and his printer against officials who

conducted an illegal search in their effort to suppress

Wilkes’ criticism of the government. Wilkes v. Wood,

Lotft 1, 98 Eng. Rep. 489 (K.B. 1763), and Huckle v.

Money, 2 Wils. 205, 95 Eng.Rep. 768 (C.P. 1763).

Wilkes’ case was “a matter of keen interest in the

American colonies.” Landsman, supra, at 591, and

“was probably the most famous case in late

eighteenth century America, period.” Akhil Reed

Amar, Fourth Amendment First Principles, 107

Harv. L. Rev. 757, 772 (1994).

Among grievances the colonists lodged against

King George III in the Declaration of Independence

was: “For depriving us in many cases, of the benefits

of Trial by Jury.”

When the Constitutional Convention finished

its work without an express guarantee of the right to

trial by jury in civil cases, the omission very nearly

doomed ratification of the entire constitution. Edith

Guild Henderson, The Background of the Seventh

Amendment, 80 Harv. L. Rev. 289, 295-98 (1966).

Charles W. Wolfram, The Constitutional History of

the Seventh Amendment, 57 Minn. L. Rev. 639, 672

n.89 (1973). Ultimately, as Justice Story recounts,

the Federalists’ agreement to adopt a Bill of Rights

that included a guarantee of jury trials in civil cases,

‘won support for the new constitution. Parsons v.

Bedford, 28 U.S. (3 Pet.) 433, 445 (1830).

10

Mindful of this history, this Court has

repeatedly emphasized:

Maintenance of the jury as a fact-finding body is

of such importance and occupies so firm a place

in our history and jurisprudence that any

seeming curtailment of the right to a jury trial

should be scrutinized with the utmost care.

Dimick v. Schiedt, 293 U.S. 474, 486 (1935), quoted

in Beacon Theatres, Inc. v. Westover, 359 U.S. 500,

501 (1959) and in Chauffeurs, Teamsters and

Helpers, Local No. 391 v. Terry, 494 U.S. 558, 565

(1990). This Court “has carefully preserved the right

to trial by jury where legal rights are at stake.”

Terry, supra, at 565.

The rights of Stephenson and Isaacson, who

had no meaningful opportunity to opt out of the

settlement nor to exercise a knowing and intelligent

waiver, were not “preserved.”

Petitioners respond that without the authority

to bind all class members, defendants will not enter

into such global settlements, depriving the public of

the efficiencies of such arrangements. Pet. at 38-40.

Administrative efficiency, though laudable,

does not trump the Seventh Amendment. The Court

emphasized this point in holding that Congress may

not transfer legal claims from Article III courts to

non-jury bankruptcy tribunals:

It may be that providing jury trials in some

fraudulent conveyance actions . . . would impede

the swift resolution of bankruptcy proceedings

and increase the expense of Chapter 11

reorganizations. But ‘these considerations are

insufficient to overcome the clear command of

the Seventh Amendment.’ :

ee Se

11

Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 63

(1989), quoting Curtis v. Loether, 415 U.S. 189, 198

(1974).

As then-Justice Rehnquist once observed:

[NJo amount of argument that the device

provides for more efficiency or more accuracy or

is fairer will save it if the degree of invasion of

the jury’s province is greater than allowed in

1791. To rule otherwise would effectively permit

judicial repeal of the Seventh Amendment .. .

[T}he civil jury was surely a burden to the

English governors who, in its stead, substituted

the vice-admiralty court. But, as with other

provisions of the Bill of Rights, the onerous

nature of the protection is no license for

contracting the right secured by the Amendment.

Parklane Hosiery Co. v. Shore, 439 U.S. 322, 346

(1979) (Rehnquist, C.J., dissenting).

B. The Principles Set Forth By This Court

In Amchem and Ortiz are applicable to

this Settlement |

Anticipating that this Court may uphold the

court of appeals in allowing collateral attack on the

settlement, Petitioners present a second question. In

determining whether the settlement meets the due

process requirement of adequacy of representation

under Phillips Petroleum Co. v. Shutts, 472 U.S. 797

(1985), Petitioners contend the court may not apply

the principles enunciated by this Court in Amchem

Products, Inc. v. Windsor, 521 U.S. 591 (1997), and

Ortiz v. Fibreboard Corp., 527 U.S. 815 (1999). Pet.

at 46-50. Rather, Petitioners argue the Court must

12,

limit itself to case law existing at the time of class

certification and settlement in 1983-84. Pet. at 46.4

This Court has clearly mandated:

When this Court applies a rule of federal law to

the parties before it, that rule is the controlling

interpretation of federal law and must be given

full retroactive effect in all cases still open on

direct review and as to all events, regardless of

whether such events predate or postdate our

announcement of the rule.

Harper v. Virginia Dep’t of Transp., 509 U.S. 86, 97

(1993).

Petitioners place great emphasis on the

Court’s qualification “still open on direct review.” Pet.

at 24 n.5. The Court explained, however, that this

proviso was animated by “our view of retroactivity in

the criminal context.” 509 U.S. at 97. The Court

referred to Justice Souter’s plurality opinion in

James B. Beam Distilling Co. v. Georgia, 501 US.

529, 541 (1991), stating that, although “new rules

must apply retroactively to all criminal cases

pending on direct review, we have since concluded

that new rules will not relate back to convictions

challenged on habeas corpus.” Id. at 540. That

distinction, Justice Souter stated, does not apply “in

the civil arena.” Jd. Consistent with that view, the

Court in Harper held, without qualification, “we now

prohibit the erection of selective temporal barriers to

the application of federal law in noncriminal cases.”

509 U.S. at 97. For that reason, Petitioners’ heavy

reliance on habeas corpus decisions, see Pet. at 48 &

49. n.13, is inapposite.

4 Presumably, Petitioners also reject the application of this Court’s

1985 decision in Shutts.

13

Petitioners’ reliance on this Court’s sensible

rule that “once suit is barred by res judicata... a

new rule cannot reopen the door already closed.” Pet.

at 24 n.5, quoting James B. Beam Distilling Co. v.

Georgia, 501 U.S. 529, 541 (1991) (opinion of Souter,

J.), is similarly misplaced. Where a party is not

barred by res judicata by virtue of the due process

clause and may therefore collaterally attack a prior

judgment, that attack is governed by the current

decisions of this Court.

It is difficult to discern any principled basis for

rejecting this rule in this instance. Petitioners

certainly cannot claim to have relied on settled law

permitting class litigants to extinguish the

constitutional rights of unknown future victims.

The 1966 Advisory Committee expressed

doubt that class actions were appropriate at all in

mass accident cases. See Ortiz, 527 U.S. at n.20. As

one scholar has pointed out, the Agent Orange

settlement and the asbestos settlements involved in

Amchem and Ortiz are the only global settlements of

mass tort class actions involving large numbers of

unknown future victims. John C. Coffee, Jr., Class

Wars: The Dilemma of the Mass Tort Class Action, 95

Colum. L. Rev. 1343, 1451-52 (1995).

Nor can it be argued that this Court’s holding

— that the Rules Enabling Act precludes a court from

applying Rule 23 in a manner that violates the jury

rights of future victims — erected a new principle of

law. The right to trial by jury, as described above, is

deeply rooted in our historical tradition. Moreover, at

the time this settlement was crafted, the Rules

Enabling Act provided that the rules of civil

procedure

14

shall not abridge, enlarge or modify any

substantive right and shall preserve the right of

trial by jury as at common law and as declared

by the Seventh Amendment to the Constitution.

28 U.S.C. § 2072 (1958 ed.) (emphasis added).®

The Due Process guarantee is flexible, but it

does not “shift and spring” in and out of existence

according to the settlement calendars of the district

courts. Cf. Harper, supra, at 97.

Il. A CLAss ACTION THAT PURPORTS TO

INCLUDE THOSE WHO WILL SUFFER

COMPENSABLE PERSONAL INJURY ONLY IN

THE FUTURE IS STRUCTURALLY AND

PROCEDURALLY INCAPABLE OF AFFORDING

THOSE VICTIMS DUE PROCESS.

Despite their strenuous argument concerning

the importance of res judicata and finality,

Petitioners admit, as they must, that “lo]f course,

any judgment may be attacked if enforcing it would

violate due process.” Pet. at 26. Petitioners further

state that, looking at the procedures used, not the

result obtained in an individual case, id. at 30-31,

“this Court is justified in saying that there has been

a failure of due process only in those cases where it

cannot be said that the procedure adopted fairly

insures the protection of the interests of absent

5 The Rules Enabling Act was amended in 1988, and the

specific reference to the jury right was omitted. The clause

apparently was deemed superfluous; Congress could not and

did not authorize rules of procedure that violate the Seventh

Amendment. “[T]he Constitution needs no statute to remind us

that neither a rule nor a statute can upset a constitutional

requirement.” David D. Siegel, Commentary on 1988 and 1990

Amendments, reprinted in 28 U.S.C.A. § 2072 (1991).

15

parties who are to be bound by [the judgment].” Jd.

at 26, quoting Hansberry v. Lee, 311 US.

(1940). aii

This is exactly that case.

This Court set forth the minimum procedural

due process requirements necessary if res judicata is

to bind an absent class action plaintiff:

If the forum State wishes to bind an absent

plaintiff concerning a claim for money damages

or similar relief at law, it must provide minimal

procedural due process protection. The plaintiff

must receive notice plus an opportunity to be

heard and participate in the litigation, . . . The

notice must be the best practicable, “reasonably

calculated, under all the circumstances, to

apprise interested parties of the pendency of the

action and afford them an opportunity to present

their objections.” The notice should describe the

action and the plaintiffs’ rights in it.

Additionally, we hold that due process requires

at a minimum that an absent plaintiff be

provided with an opportunity to remove himself

from the class by executing and returning an "opt

out” or “request for exclusion" form to the court.

Finally, the Due Process Clause of course

requires that the named plaintiff at all times

adequately represent the interests of the absent

class members.

Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 811-

12 (1985) (citations omitted).

ATLA submits that the class action settlement

in this case failed to satisfy any of these three

procedural safeguards. Indeed, by certifying a class

that purports to adjudicate the personal injury

claims of a large number of unknown persons who

may develop some disease at some time in the future,

16

the court made it structurally impossible for the

procedures adopted to satisfy minimum due process

requirements.

A. Meaningful Notice Cannot Be Provided

To. Unknown Future Personal Injury

Victims.

In ordinary litigation, failure to provide notice

and an opportunity to be heard renders a judgment

vulnerable to collateral attack. See, e.g., Griffin v.

Griffin, 327 U.S. 220, 228 (1946) ("Because of the

flack of notice], and to the extent that petitioner was

thus deprived of an opportunity to raise defenses .. .

there was a want of judicial du2 process, and hence

want of that jurisdiction over the person of petitioner

prerequisite to the rendition of a judgment in

personam against him.”). The Court’s Shutts opinion,

quoted above, makes clear that the same rule applies

in class actions. See eg., Richards v. Jefferson

County, 517 U.S. 793, 798 (1996), in which a

unanimous Court held that it violated due process to

bind plaintiffs by a prior judgment of which they had

inadequate notice. Justice Stevens wrote, “We have

long held, however, that extreme applications of the

doctrine of res judicata may be inconsistent with a

federal right that is ‘fundamental in character.” Id.

at 797. See generally, Patrick Woolley, Rethinking

the Adequacy of Adequate Representation, 75 Tex. L.

Rev. 571 (1997).

The inherent difficulties of conveying

meaningful notice to large numbers of unknown,

exposure-only class members are immediately

apparent. There is no reliable assurance that notices

and media announcements actually reach a

substantial portion of the class. Even more

problematic is the fact that, by definition, the

17

members of the class have no symptoms of disease.

Many are likely to disregard notices they assume are

inapplicable to them:

Finally, as a means of apprising such healthy

class members of their opportunity to be heard and

participate in the proceedings, notice at this time is a

meaningless gesture. Basic information that is

crucial and typically available at the time a

plaintiffs cause of action accrues — the nature and

seriousness of the disease, the medical and other

costs it will entail, its impact on plaintiffs life and

livelihood — is lacking.

The lower court in the Amchem settlement

litigation found that these obstacles to providing

adequate notice to future’ victims were

“insurmountable.” Georgine v. Amchem Products,

Inc., 83 F.3d 610, 633 (1996). Accord, Roger C.

Cramton, Individualized Justice, Mass Torts, and

“Settlement Class Actions”: An Introduction, 80

Cornell L. Rev. 811, 828 (1995). Although this Court

was not required to rule on that issue definitively,

Justice Ginsberg, for the Court, recognized “the

gravity of the question whether class action notice

sufficient under the Constitution and Rule 23 could

ever be given to legions so unselfconscious and

amorphous.” Amchem, 521 U.S. at 628.

ATLA submits that notice to such a class is an

empty exercise. This Court has warned, “when notice

is a person’s due, process which is a mere gesture is

not due process.” Mullane v. Central Hanover Bank

& Trust Co., 339 U.S. 306, 314-15 (1950).

B. Named Representatives Cannot Provide

Adequate Representation of Future

Personal Injury Victims.

18

Petitioners concede that it “is, to be sure, a

fundamental tenet of due process that a party may

not be bound by a judgment in a representative suit

if he or she was not ‘adequately represented’ in the

proceedings leading to that judgment.” Pet at 26.

This Court has consistently so held. See, e.g.,

Richards v. Jefferson County, 517 U.S. 793, 794

(1996); Shutts, 472 U.S. at 812; Hansberry, 311 US.

at 41-42.

As this Court made clear in both Amchem and

Ortiz, a class that includes both presently injured

plaintiffs and those who will manifest harm only in

the future is riven by inherently conflicting interests.

Those conflicts make it impossible for the named

representatives and counsel for the entire class to

provide adequate representation to the members of

the futures class. Amchem, 521 U.S. at 625-28; Ortiz,

527 U.S. at 853.

This conflict is starkly exemplified in this

case. The district court initially ruled that

representation was adequate, and the court of

appeals affirmed based almost entirely on “the

centrality of the military contractor defense,” which

applied to all class members equally, in the class

trial, following which individual issues, such as

damages, “were to be left to individual trials.” Jn Re

Agent Orange Product Liab. Litig., 818 F.2d 145, 150

& 164-65 (2nd Cir. 1987), cert. denied, 484 U.S. 1004

(1988).

When Petitioners agreed to a settlement,

offering a fund of $180 million to be distributed

among the class, the sole basis for that finding of

adequate representation vanished. The district court

itself indicated that its distribution plan involved a

zero sum game in which funds allocated to future

19

claimants necessarily diminished funds available to

those presently injured. Pet. at 9. The court’s

distribution plan provided that those manifesting

injury after Dec. 31, 1994 would receive nothing,

expressly to provide greater compensation “to acutely

ill veterans who were most in need of assistance.”

Pet. at 10. The court was aware that at least some

members of the class would be denied compensation,

though the court was hopeful that “almost all valid

claims will be revealed before that time.” Ryan v.

Dow Chemical Co., 781 F. Supp. 902, 919 (E.D.N.Y.

1991). All the named class representatives were

presently injured claimants. Pet. at 9. Quite

obviously, there was not adequate representation —

more precisely, there was no representation — of the

interests of later-injured class members like

Stephenson —_ and Isaacson. The named

representatives did not adequately represent the

absent class members “at all times.” Hansberry v.

Lee, 311 U.S. at 43; Shutts, 472 U.S. at 812.

(emphasis added).

Petitioners’ response is two-fold. First, they

assert that Stephenson and Isaacson were required

to raise any objection to representation at the

proceeding itself or on direct appeal. Having made an

actual determination that representation was

adequate, that determination precludes any attack

in another court. Pet at 26 & 32.

Petitioners ignore the well-settled rule, as

stated by Justice Rehnquist for the Court in Shutts,

that “a court adjudicating a dispute may not be able

to predetermine the res judicata effect of its own

judgment.” 472 U.S. at 895. This rule is equally well-

established in the context of class actions.

20

Where a person is not a party to a class action,

the judgment therein has conclusive effect

against him only if his interests were adequately

represented. ... [A] person as to whom a class

action is ineffective is not required to seek relief

during the continuance of the action.

Restatement of Judgments § 116 comment b, at 563-

64 (1942) (emphasis added).

In the absence of minimum contacts with the

forum, a court cannot constitutionally compel an

absent class member to appear and raise objections

to the adequacy of representation. Nor does Rule 23

compel him to do so. Indeed, “an absent class-action

plaintiff is not required to do anything.” Shutts, 472

U.S. at 510. See generally, Patrick Woolley, The

Availability Of Collateral Attack For Inadequate

Representation In Class Suits, 79 Tex. L. Rev. 383

(2000).

The Advisory Committee’s Note accompanying

the 1966 amendment to Rule 23 confirms that

[The Rule] does not disturb the recognized

principle that the court conducting the [class]

action cannot predetermine the res judicata

effect of the judgment; this can be tested only in

a subsequent action.

Petitioners’ second argument is that for the

district court to have created subclasses and

designated representatives of future victims would

have added little to their protection, because all

parties shared the same “veil of ignorance” as to who

would develop what disease in the future. Pet. at 23.

In this, Petitioners may be correct. If so, however,

they make it all the clearer that the structure of the

class in this case made impossible for the procedures

nan

21

adopted to afford minimal due process protection to

the class of future victims.

C. Future Personal Injury Victims Cannot

Be Provided With A Meaningful

Opportunity At Settlement To Opt Out.

The third essential requirement of due process

is satisfied by “affording absent class members,

whose claims for money damages would be entitled

to a jury trial an opportunity to remove himself from

the class.” Phillips Petroleum v. Shutts, 472 U.S. 797,

811 (1985). Cf. Brown v. Ticor Title Ins. Co., 982 F.2d

386, 392 (9th Cir. 1992), cert. dism. as improvidently

granted, 511 U.S. 117 (1994)where Brown had no

opportunity to opt out of class action, “there would be

a violation of minimal due process if Brown’s damage

claims were held barred by res judicata.”).

The right to opt-out of the class action serves

both the command of the Seventh Amendment and

“our ‘deep- rooted historic tradition that everyone

should have his own day in court,” Ortiz, 527 U.S. at

846, quoting Martin v. Wilks, 490 U.S. 755, 762

(1989).

Tort victims in particular have a “vital

interest” in having some measure of control over

litigation that may affect their lives. Yandle v. PPG

Indus. Inc., 65 F.R.D. 566, 572 (E.D. Tex. 1974);

Causey v. Pan Am World Airways, Inc., 66 F.R.D.

392, 299 (E.D. Va. 1975); Hobbs v. Northeast

Airlines, 50 F.R.D. 76, 79 (E.D. Pa. 1970); Robert G.

Bone, Rethinking the “Day in Court” Ideal and

Nonparty Preclusion, 67 N.Y.U. L. Rev 193, 286-87

(1992). See also Roger H. Trangsrud, Mass Trials in

Mass Tort Cases: A Dissent, 1989 U. Ill. L. Rev. 69,

74 (“the right to control personally the cuit whereby

22

a badly injured person seeks redress from the alleged

tortfeasor has long been valued both here and in

England.”).

Indeed, the district court in this case found in

the course of listening to veterans and their families

during the fairness hearings that, “[mjany veterans

who opposed the settlement did so because they

wanted their ‘day in court.” In re Agent Orange

Product Liab. Litig, 597 F. Supp. 740, 770 (E.D.N.Y.

1984).

Yet, if the court of appeals decision is

reversed, veterans like Stephenson and Isaacson who

develop disease after the prescribed opt-out period

will find their causes of action have been

“kidnapped,” and they have been “deprived of any

freedom of action by being drawn involuntarily into

collective litigation.” Roger oC. Cramton,

Individualized Justice, Mass Torts, and “Settlement

Class Actions”: An Introduction, 80 Cornell L. Rev.

811, 821 (1995).

The very structure of a class action that

purports to include unknown future victims makes it

impossible for the opt-out procedure to protect due

process. In Professor Coffee’s view, “a future claims

class action trivializes the right to opt out.” John C.

Coffee, Jr., Class Wars: The Dilemma of the Mass

Tort Class Action, 95 Colum. L. Rev. 1343, 1446

(1995).

The obstacles to notifying -and informing

future victims of their opt-out rights are, as

described earlier, insurmountable. See Part II., A,

above.

More importantly, one who has not manifested

any present injury, even if notified, lacks the basic

i

23

information needed to make an intelligent decision

whether to remain in the class or to pursue a tort

action that has not, and might not accrue. See Brian

Wolfman and Alan B. Morrison, Representing The

Unrepresented In Class Actions Seeking Monetary

Relief, 71 N.Y.U. L. Rev. 439, 451-55 (1996). Earlier

in this litigation, the appellate court candidly stated

that providing an opt-out right to a person “unaware

of an injury would probably do no good.” In re "Agent

Orange" Prod. Liab. Litig., 996 F.2d 1425, 1435 (2d

Cir. 1993), cert. denied, 510 U.S. 1140 (1994).

A leading scholar in the field of class actions

pointedly agrees:

For class members who cannot currently identify

themselves for purposes of protecting their

interests with respect to a class action

purportedly commenced on their behalf, an opt-

out right within a court-designated period of time

. is of no beneficial use.

1 Herbert B. Newberg, CLASS ACTIONS § 1.23 at 1-55

(1992).

This situation is little more than a new

variation on an old injustice: rigid statutes of

limitations or statutes of “repose” under which a

person’s cause of action in tort can become time-

barred even before any harm occurred or became

manifest. The harsh rule was famously lampooned

by Judge Frank in Dincher v. Marlin Firearms Co.,

198 F.2d 821, 823 (2d Cir. 1952) (“Except in topsy-

turvy land, you can’t die before you are conceived, or

be divorced before ever you marry, or harvest a crop

never planted . . .”). Nearly every jurisdiction has

rejected this harsh result in favor of a “discovery

rule,” under which the limitations period does not

begin to run until the person knows or should have

24

known of his or her injury. See, eg., Urie v.

Thompson, 337 U.S. 163 (1949). Nor is it fair, ATLA

submits, to strip victims of cancer or other long-

latency diseases of the right to legal redress and a

jury trial for failing to opt out of a class action long

before they could have known of their injury.

* * *

In sum, a class action that purports to

extinguish the jury rights of unknown class members

who will manifest injury in the future cannot provide

those class members with the essential procedural

guarantees of due process. They cannot be bound by

the judgment and the court of appeals correctly held

that they may vindicate their rights by collateral

attack.

III.CLASS ACTION SETTLEMENTS THAT

INCLUDE FUTURE PERSONAL INJURY

CLAIMANTS CAN PROTECT DUE PROCESS

RIGHTS BY PROVIDING A DELAYED OPT-

OUT.

Petitioners expend a great deal of energy and

ink warning that affirmance of the court of appeals

decision will rob the civil justice system and the

public of the benefits of global settlements of mass

tort litigation. See, e.g., Pet. at 39-40.

As noted earlier, class actions involving large

numbers of exposure-only class members who may

develop disease in the future have been rare. Nor

may courts exceed their authority under the Rules

Enabling Act and violate the constitutional rights of

absent class members in pursuit of administrative

convenience and efficiency.

—<

25

Most importantly, however, protecting the

constitutional rights of future injury victims need not

lead to a “class action mechanism sapped of much of

its utility” Pet. at 18. The previous analogy to the

discovery rule suggests that class action settlements

such as this one can be made consistent with due

process and the Seventh Amendment.

ATLA suggests that class actions involving

exposure-only class members can safeguard the due

process rights of those class members by providing a

delayed opt-out as part of the settlement plan. In its

simplest form, the opt-out provision is triggered

when a member of the futures class develops a

disease or harm covered by the settlement plan. At

that point, his or her cause of action accrues and the

statute of limitations begins to run. Within that

period, the plaintiff is offered a choice: accept the

compensation offered by the settlement plan or

pursue a legal remedy in court.

Such a procedural device, often referred to as a

back-end opt-out, minimizes the adverse effects of

the time factor. It places those who manifest harms

years after approval of the settlement in close parity

with those who were members of the presently

injured class. It also serves as a check against the

inherent “tug” in favor of the presently injured at the

expense of futures. Amchem at 521 U.S. at 626. A

settling defendant desirous of avoiding a stream of

post-settlement lawsuits has an interest in assuring

that the settlement provisions are sufficiently

generous to future victims that they, like the

presently injured, will waive their tort remedy in

favor of participating in the settlement.

These advantages have persuaded a number of

commentators to recommend the use of a delayed

26

opt-out as a means of preserving the rights of future

claimants. See Brian Wolfman and Alan B. Morrison,

Representing The Unrepresented In Class Actions

Seeking Monetary Relief, 71 N.Y.U. L. Rev. 439, 478

(1996); John C. Coffee, Jr., Class Wars: The Dilemma

of the Mass Tort Class Action, 95 Colum. L. Rev.

1343, 1448-52 (1995); Peter H. Schuck, Mass Torts:

An Institutional Evolutionist Perspective, 80 Cornell

L. Rev. 941, 964-68 (1995). Roger C. Cramton,

Individualized Justice, Mass Torts, and “Settlement

Class Actions,” 80 Cornell L. Rev. 811, 836 (1995).

Use of such a procedural device to protect the

due process rights of a futures class is not simply

feasible; it has been put to use. In Bowling v. Pfizer,

Inc., 143 F.R.D. 141 (S.D. Ohio 1992), appeal dism.

995 F.2d 1066 (6th Cir. 1993), a class action by

patients who received defective artificial heart

valves, the settlement agreement expressly provides

that class members whose heart valves fracture in

the future may opt to reject guaranteed

compensation and sue for damages at that time. /d.

at 150. A class action settlement on behalf of women

injured by the Dalkon Shield contraceptive device

also included a back-end opt-out. In re A.H. Robins

Co., Inc., 880 F.2d 709, 745 (4th Cir.), cert. denied,

493 U.S. 959 (1989). A back-end opt-out was

similarly provided in the settlement agreement

resolving claims by users of the prescription drug

combination known as “fen-phen.” Jn re Diet Drugs

Products Liab. Litig., 2000 WL 1222042 (E.D.Pa.

2000), at *21.

The settlement at issue in Ortiz purported to

include such an opt-out. However, the option was so

qualified and restricted that it offered no true

recourse to the tort system. 527 U.S. at 847 & n.23.

27

This Court suggests, however, that an unrestricted

delayed opt-out would provide sufficient due process

protections for “the legal rights of absent class

members . . . who by definition may be unidentifiable

when the class is certified.” Jd.

CONCLUSION

For the above reasons, the decision of the court

of appeals should be affirmed.

Respectfully submitted,

Jeffrey Robert White

1050 31st St., N.W.

Washington, DC 20007

(202) 965-3500

ATLA Senior Amicus Counsel

Counsel of Record

January 24, 2003