Amicus Curiae Brief — Dow Chemical Co. v. Stephenson

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No. 02-271

IN THE

Supreme Court of the United States

DOW CHEMICAL COMPANY, MONSANTO COMPANY, et ai.,

Petitioners,

DANIEL RAYMOND STEPHENSON, ef ai.,

Respondents.

On Wait oF CERTIORARI TO THE

Unirep States Court OF APPEALS FOR THE SECOND CIRCUIT

Brier Awict Curiae oF THE AMERICAN LEGION, VETERANS OF FOREIGN

Wars or THE Unitep States, DisaBLeD AMERICAN VETERANS,

VIETNAM VETERANS OF America, Catuotic War Veterans, USA,

Inc., Minitary Orper oF THE Purpte HEART, AMERICAN Ex-

PRISONERS OF War, BLINDED VETERANS ASSOCIATION, PARALYZED

VETERANS OF AMERICA, ITALIAN AMERICAN WAR VETERANS OF THE

U.S.A., AMERICAN War Moruers, LEGION OF VALOR OF THE UNITED

States oF America, INc., THe Micirary Orricers ASSOCIATION OF

AMERICA, FLEET RESERVE ASSOCIATION, NON COMMISSIONED OFFICERS

ASSOCIATION, ENLISTED ASSOCIATION OF THE NATIONAL GUARD OF THE

Unitep States, THE VETERANS OF THE VIETNAM War, INc., MILITARY

CHAPLAINS ASSOCIATION, NATIONAL ASSOCIATION OF MiLiTary Wipows,

New JERSEY AGENT ORANGE COMMISSION, OKLAHOMA AGENT ORANGE

FOUNDATION, AND AGENT ORANGE Victims AND Wipows

Support NETWORK IN SUPPORT OF RESPONDENTS

P.B. ONDERDONK, JR. WILLIAM A. RossBACH

NaTIONAL JUDGE ADVOCATE Counsel of Record

THE AMERICAN LEGION ROSSBACH BRENNAN P.C.

P.O. Box 1055 401 North Washington

Indianapolis, IN 46206 Missoula, MT 59802

(406) 543-5156

Attorneys for Amici Curiae

(Additional Counsel for Amici Curiae listed on inside cover)

Tuomas A. O'CONNOR

O’Connor, MacDonaLcp & Maza

FOR VETERANS OF THE VIETNAM Wak, INC.

61 North Washington Street

Wilkes-Barre, PA 18703

TABLE OF CONTENTS

Table Of Cited Authorities ....................

Statement Of Interest ....................005.

Nee aces

Class Certification And The Settlement Class ..

The State Of Medical Knowledge ............

Chemical Company Knowledge Of Agent Orange

Pt Mirth eeedukbeceseebeseeesec

EEE ES

Il.

Because Petirioners Knew At Tue Time OF

SETTLEMENT THaT IT Was UNPRECEDENTED AND

SEVERELY FLAwepD, Tuat It VioLaTeD THE

Due Process RiGuts Or ABSENT, FuTURE

CLAIMANTS, AND FaiLep To Satisrty THE

REQUIREMENTS OF Rute 23, PETITIONERS

Cannot Now Ciaim Tuat Tuey Hap A RIGHT

To Rety On Tuat SettLement AND Expect

Finaity AND No CoLLaTEeRAL Review WHEN

VETERANS Mape C aims For Diseases THaT

Devetopeo Arter 1994 .................

Petitioners Hap Tue Ricut ANnp Duty To

Attempt To Cure Tue Derects THEY KNew

FLAWED THis SETTLEMENT ................

Contents

Page

Ill. Amcuem AND Ortiz Dip Not CHANGE THE

Wet Setttep Due Process PRINCIPLES

UNDERLYING THE REQUIREMENTS OF RuLe 23

Wuicu Have Atways Requirep THat CLass

REPRESENTATIVES S*'s .¢ IDENTICAL INTERESTS

With Assent CLass Mempers Berore THE

ABSENT MemBers Can Be Bounp ......... 24

IV. Any UNFAIRNESS THAT WouLpD Resutt To

PETITIONERS By AFFIRMING THE SECOND CIRCUIT

Paces In ComParRiISON TO THE UNFAIRNESS TO

RESPONDENT VETERANS IF THis Court SHOULD

Reverse More THAN 50 Years Or SetTLep

Crass ACTION PRECEDENT AND DENY

THem THeir Day IN Court ............... 28

a ae ae ee eae 30

TABLE OF CITEDAUTHORITIES

Cases: Page

Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (1997)

phwbe bebbhbeeeeeesnanenuce es 9, 18, 24, 25, 26, 28

Boyle v. United Technologies Corp., 487 U.S. 500

Di tectkeen snadedteesesddéstkeakasnesueds 10, 15

Califano v. Yamaski, 442 U.S. 682 (1979) ........ 27

Crown Cork & Seal Co., Inc. v. Parker, 462 U.S.

PD cab babuddddssvadebhidsddesuseeus 19

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

DL dtuccactheusedehedebueesaeeinnes 18

East Texas Motor Freight System v Rodriguez, 431

DD cekudhonkenddesuekeutndeewas 26

Eisen v. Carlisle & Jacquelin, 417 U.S. 156 (1974)

jidaéeweeeenens (dean tibendetddnidanesnee

Fuentes v. Shevin, 407 U.S. 67 (1972) (quoting

Stanley v. Illinois, 405 U.S. 645 (1972)) ....... 21

General Telephone Co. of Southwest v. Falcon, 457

i D <ccbaneut niktandadedasetenel 26, 27

Hansberry v. Lee, 311 U.S. 32 (1940) ...... 20, 24, 25, 27

In re Agent Orange Product Liability Litigation, 100

De Ce GED écdescsenccesses 5

In re Agent Orange Product Liability Litigation, 597

F. Supp. 740 (E.D.N.Y. 1984) .............. 6, 9, 10

Cited Authorities

Page

In re Agent Orange Product Liability Litigation, 506

F. Supp. 762 (E.D.N.Y. 1986) ............... 4

In re Agent Orange Products Liability Litigation,

818 F.2d 145 (2d Cir. 1987) ................. 8

In re: General Motors Corp. Engine Interchange

Litigation, 594 F.2d 1106 (7th Cir. 1979) cert.

denied, 444 U.S. 870 (1979) ..............5. 21

lvy v. Diamond Shamrock Chem. Co. (In re Agent

Orange Products Liability Litigation), 996 F.2d

PD ED nudencdctatecoscnddsduct 7

Keister v. Dow, 723 F. Supp. 117 (E.D. Ark. 1989)

penaedhuesebedeeséeecsadasanedeensaseebes 13

Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992)

Jocdecsceucecdudbsonshinnecdtecinsbédesess 17

Mace v. Van Ru Credit Corp., 109 F.3d 338 (1997)

poeabedeuebedcesteuesbececeneescausacunne 26

Marbury v. Madison, | Cranch 137, 162, 2 L. Ed. 60

DNA cb abdeadadcesesdacunsentednendein 29

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

U.S. 306 (1950) .......... Seuéenssocnnéanecs 18

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

segesncetounssececonseresasanni 24, 25, 27, 28, 29

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

TITITITI TTT TTT 19, 23, 27

Cited Authorities

Sternhagen v. Dow Co., CV-88-158-GF-PGH

PPD vectdeadacedeeadeeesss beeeesees

Warth v. Seldin, 422 U.S. 490 (1975) ............

Western Life Indemnity Co. v. Rupp, 235 U.S. 261

DED dhGinsdedesthentesadennedescedoéees

Other Authorities:

Ericksson, Hardell, et al.: “Case Control Study on

Malignant Mesenchymal Tumors of the Soft

Tissue and Exposure to Chemical Substance”

Lakartidningen, 76:3872-75 (1979) ...........

Hardell: “Case Control Study:Soft Tissue Carcinoma

and Exposure to Phenoxyacetic Acids or

Chlorophenols” Br. J. Cancer, 39:711-717 (1979)

Sheila Hoar, et al., “Agricultural Herbicide Use and

Risk of Lymphoma and Soft-Tissue Sarcoma”

J. AMA, 256:9, 1141-47 (1986) ..............

Morrison, et al., “Review: Herbicides and Cancer’

J. Nat. Cancer Inst., Vol. 84, p. 1866 (Dec. 16,

Dn. esduacansqod addasudedeeotennce er

VETERANS AND AGENT OranGe: Health Effects of

Herbicides Used in Vietnam, Institute of Medicine,

(National Academy Press, 1994) .............

Manual for Complex Litigation, Second .........

Page

STATEMENT OF INTEREST

Amici are 22 military and veterans service organizations,

collectively representing more than 7,000,000 members.' Twelve

Amici have been chartered by Congress to represent the interests

of veterans of the Armed Forces and their families. In the context

of this representation, Amici join together in solidarity to urge

this Court to affirm the Second Circuit and allow Vietnam War

veterans who are suffering from fatal diseases caused by their

wartime service for this country which were not diagnosed until

after 1994, and all Agent Orange settlement funds were gone,

to have their day in court.

This unique coalition was inspired by the unstinting

leadership of Admiral Elmo R. Zumwalt, Jr. (USN Ret.), who

served as Special Assistant to the Secretary of Veteran Affairs

and as Chief cf Naval Operations during the V'etnam War.

In his role as chairman of the Agent Orange Coordinating

Council, Admiral Zumwalt provided a forum for many veterans

service organizations to coordinate their interests in representing

Vietnam veterans affected by Agent Orange.

Amici include the following chartered veterans service

organizations: 1) The American Legion, 36 U.S.C. § 41, et seq.,

with 3.01 million members; 2) the Veterans of Foreign Wars

of the United States, § 111, et seg., with 1.86 million members;

3) the Disabled American Veterans, § 90, with 1.2 million

members; 4) the Vietnam Veterans of America, § 3801, et seq.,

with 50,000 members; 5) the Catholic War Veterans, USA, Inc.,

§ 2601, et seg., with 30,000 members; 6) the Military Order of

the Purple Heart, § 821, with 30,000 members; 7) the American

Ex-Prisoners of War, § 2101, et seqg., with 27,000 members;

8) the Blinded Veterans Association, § 851, et seg., with 10,200

members; 9) the Paralyzed Veterans of America, § 1151,

1. The parties have consented to the filing of this brief. Their letters

of consent are on file with the Clerk of the Court. This brief has been

authored in its entirety by undersigned counsel for the amici curiae.

No person or entity, other than the named amici curiae and their counsel,

made any monetary contribution to the preparation and submission of

this brief.

et seq., with 20,500 members; 10) the Italian American War

Veterans of the U.S.A., § 1701, et seg., with 10,000 members;

11) the American War Mothers, § 91, with 1500 members; and

12) the Legion of Valor of the United States of America, Inc.,

§ 631, et seg., with membership restricted to recipients of the

Congressional Medal of Honor, Distinguished Service Cross,

Navy Cross, or Air Force Cross.

Amici also include the following unchartered organizations:

1) The Military Officers Association of America, with 387,000

members; 2) the Fleet Reserve Association, with 170,000

members; 3) the Non Commissioned Officers Association, with

65,000 members; 4) the Enlisted Association of the National

Guard of the United States, with 85,000 members; 5) The

Veterans of the Vietnam War, Inc., with 10,000 members;

6) the Military Chaplains Association, with 1,600 members;

7) the National Association of Military Widows, 8) the New

Jersey Agent Orange Commission; 9) the Oklahoma Agent

Orange Foundation, and 10) the Agent Orange Victims and

Widows Support Network.

Amici do not idly request that this Court affirm the Second

Circuit to permit these veterans access to justice. Many Amici,

especially the American Legion and Vietnam Veterans of

America, for decades have actively pursued scientific research

or have assisted others in developing scientific information

concerning the health effects on Vietnam veterans of their

exposure to Agent Orange and dioxin. Amici have also petitioned

Congress to authorize scientific studies regarding exposure to

herbicides. As the average 20 year latency period for certain

causally related injuries, such as cancer, passes, these studies

are now creating a body of evidence that leaves little doubt that

these Vietnam war veterans were injured by Petitioners’ defective

products in the process of serving our country.

STATEMENT OF FACTS

Dan Stephenson and Joe Isaacson are Vietnam veterans who

honorably served their country during wartime. Although both

were exposed to Agent Orange, a potent combination of 2,4-D

and 2,4,5-T and their highly toxic contaminants, dioxins and

furans, both were leading normal, healthy lives in 1984, with

no thought or expectation that they might one day be stricken

with deadly cancers caused by their wartime exposures to Agent

Orange.

Because they had no reason to know that they would ever

suffer any disease from their exposures, and at that time had no

injury from their exposures, they had no reason to know or

receive notice that there was a class action certified on behalf

of veterans who claimed injury from their exposures to Agent

Orange. Likewise, when the class action was settled in May of

1984, neither learned of that settlement or would have had any

reason to know of it. Neither knew that the definition of the

class for purposes of the settlement had been expanded to

purportedly include veterans like themselves, who had no

injuries then, but who might suffer them in the future. Nor did

they know that although the first class that was certified, which

did not include them, provided for an opt out period, the second

class for settlement, which purported to include them, did not.

The purported future claimant class that was settled in May 1984

was not the same class that was certified in December 1983.

The only opt out rights that were provided to any veteran

was a right to opt out of the originally certified class which was

limited to “persons injured” or “persons claiming injury” from

exposure to Agent Orange in Vietnam. JA 84-85. Because neither

Isaacson nor Stephenson claimed any injury, indeed had no

legally cognizable injury at the time this notice went out, they

were not members of that class, nor did they receive notice of

the class certification and opt out deadline. They thus did not

opt out and had no reason to.

It is critical to point out that the class that was certified

only included persons who actually claimed manifest injuries

because the Petitioners insisted on it and the District Court

agreed. At a hearing before the Special Master, in August of

1982, more than a year before class certification, the plaintiffs’

attorney unsuccessfully tried to have the class broadly include

everyone who was in the armed services in Vietnam and exposed

to Agent Orange, potentially up to.2.4 million people. JA 57,

63, 67. Lawyers for the Petitioners made it clear to the court

that any such class definition was improper and failed to meet

the requirements of Rule 23. JA 48, 58-60. The lawyer for

Monsanto insisted that: “to the extent that they plead a ciaim on

behalf of people that are not sick, that is not a claim upon which

relief can be based. It is a defective claim. It should be

dismissed.” JA 60.

Although the attorney representing claimants refused to give

up making claims for persons simply based on exposure, without

manifest injuries, it is apparent from the record that the Special

Master hearing these arguments was critical of that position and

not persuaded.’ JA 62. At that hearing attorneys for Dow pointed

out that if the plaintiffs’ theory about the class were proper that

would mean that individual notice would have to go out to every

one of the supposed 2.4 million that served in Vietnam. JA 56-

57. And, of course, that never happened.

Class Certification And The Settlement Class

A class was conditionally certified by Judge Pratt on

December 29, 1980. See Jn re Agent Orange Product Liability

Litigation, 506 F. Supp. 762 (E.D.N.Y. 1986). That class was

defined as including “persons who claim injury” from exposure

to Agent Orange. /d. at 787-792. Judge Pratt expressly declined

to do any analysis whether the Rule 23(a) requirement of

adequacy had been met by the class representatives because no

class representatives had yet been identified. See id. at 787-88.

The class was finally certified by Judge Weinstein in

December 1983. In the class certification order the class was

2. At one point the Special Master skeptically pointed out that the

attorney’s claim of a broad class membership for even at risk claimants was

adverse to the exposed veterans’ interest because it created statute of

lumitations problems for those individuals who had not yet any manifest

disease or injury which might eventually bar their recovery. JA 67.

defined as persons “who were injured” while in Vietnam by

exposure to Agent Orange or other phenoxy herbicides, JA 107,

see In re Agent Orange Product Liability Litigation, 100 F.R.D.

718, 729 (E.D.N.Y. 1983), and the notice was designed to catch

the attention of persons who “claim injury . . .” /d. at 734. Judge

Weinstein did no independent analysis of whether the adequacy

requirements of Rule 23(a) had been met. Rather, he merely

cited to Judge Pratt’s earlier order, and stated that “[t}he four

prerequisites as they applied to this litigation have already been

carefully analyzed by the court and found to exist.” Jd. at 721.

Once again, an evaluation of adequacy would have been

impossible since the class representatives still had not been

identified.

The opt out period for that class ended on May 1, 1984.

On May 7, 1984, Petitioners and lawyers representing veterans

who actually had injuries settled the original Agent Orange cases,

and in doing so, re-defined and vastly broadened the definition

of the class to include persons who had not even manifested an

injury. JA 88, 96. However, in contrast to the class certification

notice with the narrowly defined class which did not include

Respondents, the notice of class settlement to the much broader

purported settlement class contained no opt out night at all.

JA 96, 106-109. Petitioners are therefore misleading when they

state that all class members had notice of the settlement and the

right to opt out. Pet. Br. 35. The class that was certified did not

include Respondents who had no reason to “claim injury” and

the right to opt out of that class was gone by the time the

settlement was reached. Stephenson and Isaacson only arguably

fit within the definition of the purported class when it was re-

defined, after the opt out time had ended. JA 129-132.

Petitioners state that persons in the settlement class had

notice of the settlement. What they do not state is how the notice

of the settlement was broadcast much more narrowly than the

notice of class certification, even though the settlement class

was defined much, much more broadly than the certified class.

The certified class provided notice by television and other

broadcasting media, as well as direct mail and newspaper, while

the settlement class was provided notice only by direct mail

and print media. /n re Agent Orange Product Liability Litigation,

597 F. Supp. 740, 763 (E.D.N.Y. 1984). The broad reach of

television was bypassed. Although, while broadening the class

definition, the Petitioners and plaintiff lawyers thus reduced the

amount of notice that was given.

Neither Stephenson nor Isaacson received notice of the

settlement class that purportedly now included them. Even if

they had wanted to, without notice, they had no chance to litigate

or object, and they were denied any right to opt out of the

settlement.

It is again critical to point out that lawyers for Petitioner

chemical companies knew before the class was certified that

there would be great Due Process problems if the class definition

changed after the notice of certification. The lawyer for Diamond

Shamrock argued that if, after the notice went out, the class

definition changed, and some people were no longer included,

then there would be “serious dangers of prejudice” to people

who relied on the notice. JA 83. Of course, the opposite situation,

as here, would be equally dangerous and prejudicial. Because

of the change in the class definition after the class was certified,

Stephenson and Isaacson were supposedly included in the class

defined for settlement without notice and without an opportunity

to opt out. In effect, the class had expanded and been converted

into a mandatory, no opt out class.

Petitioners suggest that Respondents’ inability to opt out

or object is irrelevant because the fairness of the settlement was

fully litigated by persons “situated identically,” Pet. Br. 32, the

“risk of error is low,” Pet. Br. 43, and the standard of review

should thus be high. But it is indisputably not true that persons

situated identically fully litigated these same issues: no one has

been before the court in the identical situation before. All the

class representatives at the time of the settlement in 1984 had

manifest injuries. JA 80, 127, 129. All the lawyers involved in

litigating any issue before the court had clients with manifest

injuries. No lawyer ever appeared on behalf of veterans with

unknown or speculative future claims.

In later litigation, plaintiffs Ivy and Hartman’s injuries,

although not present at the time of settlement, were manifest

before 1994. Both therefore were entitled to compensation from

settlement funds that were still available. vy v. Diamond

Shamrock Chem. Co. (In re Agent Orange Products Liability

Litigation), 996 F.2d 1425, 1433-34 (2d Cir. 1993).

Again it is critical to note that before the class was certified,

lawyers for Petitioners expressed clearly and unequivocally their

position that certification of the class was improper because the

class representatives had not even been chosen. The lawyer for

Diamond Shamrock argued that without the identity of the class

representatives, there could be no determination whether the

adequacy and typicality requirements of Rule 23 had been met.

JA 78. He argued that the class could not be certified because

the court did not have enough information to make such a

determination: “[W]Je should ascertain a full profile of each of

the representative claimants and find out if there are complaints

outstanding, or which indicates there is an area not being

represented.” Jd.

At the same hearing on class certification, the lawyer for

Hercules argued that there was a great problem of class

certification without first identifying the class representatives

because without that information there could be no

determination “as to whether they are representative.” JA 81.

He insisted that “there is no way it should proceed as a class

action until the determinations have been made that they are

representative.” JA 82.

Despite their knowledge that Rule 23’s requirements of

adequacy of representation had not been met when the class

was certified, and despite their knowledge that there was no

class representative that was identically situated as Stephenson

and Isaacson were then, without manifest injuries, lawyers for

Petitioners went ahead and worked together with plaintiffs’

lawyers to broadly define a settlement class to include future

claimants and gave any future claimant no opportunity to opt

out, even if he or she knew they were included in the newly

defined settlement class. Petitioners demanded a provision that

allowed them to walk away from the settlement if too many

veterans opted out. P. Schuck, Agent Orange on Trial 153-154

(1987); JA 96. Veterans with claims were not afforded a similar

opportunity to abandon the settlement, nor an option for a back-

end opt out, nor an option for a renewed opt out. /d. Petitioners

sought to have the class as inclusive as possible, including

unborn children. /d.

Any question why these plaintiff lawyers would collude

with Petitioners and their counsel to broaden the class definition

on the eve of trial to take away the rights of future claimants,

who they did not represent, is answered by the record below.

These lawyers were in desperate financial condition, JA 148-

160, facing a trial before a judge that thought their case was

weak against well heeled chemical companies. See id. And, as

later revealed, they had entered a spurious financial arrangement

that produced great incentive to settle to provide a nuisance

value amount to their clients with present injuries. /n re Agent

Orange Products Liability Litigation, 818 F.2d 145, 156-57

(2d Cir. 1987).

Not only did newly included future claimants have no right

to opt out of the settlement, if they had received notice they

would have been told that the only issue that was to be decided

at any future hearing was the “fairness” of the settlement.

Nothing in the notice told them they could object to the adequacy

of representation. JA 109. However, although the settlement

notice told persons who received it that there was a settlement,

it provided no information whatsoever about what money would

be paid to whom, and for what injuries. The settlement notice

only provided for claim forms to be submitted by persons who

“currently” have health effects. It did promise, however, that

some funds may go to claimants with future injuries after the

numbers of persons with current claims was known and

reviewed. JA 112. Thus, anyone receiving this notice who did

not have any current known health effects would not have any

way to submit a claim or have any knowledge of what the

settlement would provide to him or her in the future.

For veterans such as Stephenson or Isaacson, even if they

had notice of the settlement and understood that it included them,

to take any legal action at that time to object or otherwise try to

contest the settlement would have required an expenditure of

time, effort and money to hire an attorney to investigate and

prepare a response to the court on their behalf. Without any

health problems at the time related to Agent Orange and no

evidence or reason to expect that they would eventually get

cancer associated with Agent Orange exposure, Stephenson and

Isaacson would have had no incentive to suffer the expense of

contesting the settlement. This Court has recognized this

predicament for potential class members. See Amchem Prods.,

Inc. v. Windsor, 521 U.S. 591, 628 (1997). (“Even if they fully

appreciate the significance of the class notice, those without

current afflictions may not have the information or foresight

needed to decide, intelligently, whether to stay in or opt out.”’)

It is apparent from the record of the proceedings below

that even if Stephenson and Isaacson had come forward and

had suffered the expenses of appearing and objecting to the

settlement, it would not have done them any good. The only

opt out period had passed, before they were even in the class.

And, in the face of overwhelming objection to the settlement

from veterans, the District Court approved the settlement.’ Agent

Orange, 597 F. Supp. at 761.

It is also apparent from the record that when one lawyer

objected to the propriety of including future claimants in the

settlement class, the District Court deemed the lawyer making

the argument had no standing to object to the settlement on

behalf of absent future claimants because his clients had injury

claims, had received notice, and most had decided to accept.

JA 189-190* Moreover, the District Court believed that under

3. See, e.g. JA 134-136; see also Agent Orange, 597 F. Supp. at 761.

4. The Court: Are you representing those members of the class

who are not your clients in this argument? That is the question that I am

putting to you [7].

(Cont'd)

the settlement veterans who manifested injury later “would

be entitled to compensation in the future.” JA 129. The court

stated that allocation under the distribution plan would have

to “take of care” of the future claimants. JA 129.

When the final distribution plan was developed,

submitted to the court and approved, it failed to meet the

promises made by the court during hearings on the settlement.

The distribution plan did not provide any money at all for

veterans who might contract cancer after 1994, even though

the court knew that latency periods for cancers from toxic

exposure might be as long as 40 years. See Agent Orange,

597 F. Supp. at 795 (“[i]t took almost forty years for solid

tissue cancers to develop in victims of atomic bombing in

Japan”). 7

Nevertheless, the District Court characterized the case

against the chemical companies as weak at the time of the

settlement due to lack of evidence of causation and fraught

with difficulty due the government contractor defense.

The court could not have known what the chemical

companies knew about the true toxicity of their products and

apparently did not fully appreciate that the science and

medicine of Agent Orange was progressing rapidly and that

before the settlement and distribution plan was terminated,

the government contractor defenses that concerned the court

would be restricted by the Supreme Court. See Boyle v. United

Technologies Corp., 487 U.S. 500 (1988).

(Cont'd)

Mr. Taylor: I do not believe that I can do that. I’m only

representing my clients who are members of the class.

The Court: And did you send each one of them written

notice in time to opt out?

Mr. Taylor: That is correct.

The Court: With a suggestion that they do opt out?

Mr. Taylor: That is correct, your Honor.

The Court: I see.

JA 190-191.

The State Of Medical Knowledge

Because of the well known long latency periods for many

diseases, and particularly cancers, from toxic exposures, the

incidence of diseases and cancers in agricultural workers and

in veterans exposed during their service to Agent Orange was

beginning to increase rapidly, making case reports and statistical

studies of these diseases more common and more likely to show

an association between exposure and a particular disease or

cancer. Because the chemical companies had many scientists

and health care professionals on their staff, they were very aware

of this growing association between these chemicals and cancer.

They had to know when they settled the pending Agent Orange

litigation in 1984 that the body of medical evidence of this

association was increasing. See generally JA 137-44, Welch

Affidavit, JA 294-99. That gave them great incentive to push

the settlement to include, and preclude, claims of future victims.

The first public knowledge of the herbicide-cancer linkage

came from Sweden with clinical reports in the late 70’s by

Hardell and others. Ericksson, Hardell, ef a/.: “Case Control

Study on Malignant Mesenchymal Tumors of the Soft Tissue

and Exposure to Chemical Substance” Lakartidningen, 76:3872-

75 (1979). Dow in particular was very aware of this work. These

were followed with epidemiological studies by the same author

and his group. Hardell: “Case Control Study: Soft Tissue

Carcinoma and Exposure to Phenoxyacetic Acids or

Chlorophenols” Br. J. Cancer, 39:711-717 (1979). In the United

States, the Journal of the American Medical Association

published in September 1986 a report of a study of Kansas

farmers exposed to herbicides. The study found that there was a

statistically significant dose response relationship between the

number of days sprayed and an elevated cancer risk. The risk of

Non-Hodgkin’s Lymphoma — the same disease Joe Isaacson

suffers — greatly increased for those who reported exposures

for more than 20 days per year. Hoar, et al., “Agricultural

Herbicide Use and Risk of Lymphoma and Soft-Tissue Sarcoma”

J. AMA, 256:9, 1141-47 (1986).

By 1992 there was a consensus that there was a positive -

association between herbicide exposure and Non-Hodgkin's

Lymphoma. Morrison, et al., “Review: Herbicides and Cancer”

J. Nat. Cancer Inst., Vol. 84, p. 1866 (Dec. 16, 1992).

Finally, as a result of intense political activity by these amici

and others, including individual veterans, Congress mandated

the Department of Veterans Affairs retain the National Academy

of Sciences to study the association of Agent Orange exposure.

That study, entitled Vererans AND AGENT ORANGE: Health Effects

of Herbicides Used in Vietnam, Institute of Medicine, (National

Academy Press, 1994), on the basis of three years of study of

all available literature and research, concluded in its seminal

report that the evidence was sufficient “to conclude that there is

a positive association between exposure to herbicides 2,4-D,

2,4,5-T and its contaminant TCDD [dioxin] ... and non-

Hodgkin’s lymphoma.” /d. at 548. It also found that the evidence

was suggestive that there was an association with multiple

myeloma.

Chemical Company Knowledge Of Agent Orange Toxicity

The chemical companies had every reason in 1984 to

anticipate that, as time passed, there would be replication of the

early findings of Hardell and other associations would be

increasingly likely as the latency periods of these diseases were

being reached. Moreover, they also knew that their own internal

information showed how toxic these herbicides really were.

After the Agent Orange settlement was approved, in other

litigation against the same chemical companies for injuries

alleged to be caused by exposures to 2,4,5-T and 2,4-D,

documents have been produced which show that Dow and other

manufacturers were engaged in a cover-up to keep their

knowledge of the severe toxicity of these phenoxy herbicides a

secret from the government and the public, and particularly to

hide their knowledge of the contamination of these products

with dioxin. See, e.g., Sternhagen v. Dow Co., CV-88-158-GF-

PGH (D. Mont.).

Dow documents show that Dow had knowledge of serious

health risks posed by chlorinated hydrocarbons long before it

sold Agent Orange to the government to use in Vietnam. Dow

had knowledge since the 1940s that chlorinated herbicides were

toxic to humans and animals.’ Internal memoranda describe

Dow’s history of toxic problems with its chemical herbicides

acknowledging numerous chloracne ovtireaks in various

herbicide production facilities over the years. Report

from Widger to Coulter, Midland Division Research and

Development, 4/25/67. Most notably, that report also made clear

that the problem was more than a simple skin rash: “... we

must keep in mind that chloracne is cosmetic evidence of the

attack and serious liver damage is an invisible effect of the

attack.” Jd.

An internal Dow 1965 report found that “The materials

known to cause chloracne in humans are usually chlorinated

complex organic molecules.” Larry Silverstein, “The Chloracne

Problem — Biochem’s Contribution.” Bates No. 0001 112 (March

10, 1965). Dow’s scientists specifically stated that one of the

chemicals apparently causing chloracne was an impurity in its

herbicides, namely dioxin. The report stated: “This compound

(dioxin) and others which have been shown to cause chloracne

have also been shown by animal tests and some human

experience in other companies to produce liver damage if the

exposure is more extensive.” Ja.

Dioxin was not then unknown to Dow and other chemical

companies. In 1957, the German chemical company, Boehringer,

had written to Dow offering information about the “very,

very toxic” chemical dioxin, about chloracne, and about the

preparation of trichlorophenol. Letter from Dr. Wey, C. H.

Boehringer Sohn, to Dow Chemical Company, Attn: Leonard

Rivkin (Feb. 11, 1957); See also Silverstein, Biochem’s

Contribution.

5. One of the head toxicologists for Dow for 50 years, V.K. Rowe, ~

has admitted in a deposition in other litigation, Keister v. Dow, 723

F. Supp. 117 (E.D. Ark. 1989), that Dow conducted research in the early

1940s on animals to determine the toxicity of certain of these compounds.

During the 1960s while having trouble with chloracne

outbreaks, Dow decided to conduct a series of meetings “to

share our findings” with other herbicide producers about the

toxicity and impurity problems with its chlorinated herbicides.

In a letter to the technical and medical people at Monsanto,

Hooker Chemical, Diamond Alkali and Hercules, V.K. Rowe

from Dow invited them “to come to Midland to discuss the

toxicological problems caused by the presence of certain highly

toxic impurities in certain samples of 2,4,5-T and related

materials.” Letter of V.K. Rowe, Dow Chemical Co., to

Monsanto, Hooker Chemical, Diamond Alkali and Hercules,

(Mar. 19, 1965). At a meeting in Midland on March 24, 1965,

Dow shared with other producers “the medical side of the Dow

experience.” At the meeting Dow showed slides from animal

tests. Its scientists shared techniques for doing chemical analysis

for dioxin and other impurities and discussed industrial hygiene

measures. V.K. Rowe, Dow Chemical Co., “Report on the

Chloracne Problem Meeting on 3/24/65” (Mar. 29, 1965).

During this same time, Dow was sharing samples of its

products with other producers and testing and analyzing other

producers’ products. For example, in a letter to Paul Hoffman

from Dr. R. Emmet Kelly (medical director at Monsanto

Chemical Company), dated March 17, 1965, Kelly described

receiving a sample of dioxin from Dow which was described

as “the most toxic compound they have ever experienced.”

Letter of Dr. R. Emmet Kelly, Monsanto, to Dr. Paul Hoffman

(Mar. 17, 1965).

While sharing chemistry and toxicological information with

its American counterparts, Dow was also working with European

herbicide producers to learn how to reduce the impurities in its

chemical production. Internal Dow documents indicate that in

late 1964, Dow had an agreement to obtain from Boehringer a

secret report about chloracne active substances in chlorinated

herbicide production as well as operating procedures to reduce

them. Letter from Dr. Kudszus and Dr. Merz, C. H. Boehringer

Sohn, to Dow Chemical Co. (Dec. 15, 1964).

Although the focus of Dow’s research in the 1960s was on

2,4,5-T, Dow documents show that since the 1940s it has known

that 2,4-D was also highly toxic and that 2,4-D and other

dichlorophenols were associated with chloracne. Chloracne was

not just associated with the trichlorophenols. A 1945 report on

the handling hazards of 2,4,5-T compared it to 2,4-D and in

some regards found 2,4-D to be even more toxic. Dow Chemical

Co., “Toxicity of 2,4,5-Trichlorophenoxy Acetic Acid”

(Aug. 8, 1945). Other reports from Dow Biochemical Research

concerning the chloracne problem at the Dow plant in Fort

Saskatchewan, Doe researcher Larry Silverstein found that 2,

4-dichlorophenol salts showed slight to moderate chloracnegenic

activity and that laboratory studies on decomposition of

chlorinated phenols indicated “definite possibility of an acne

hazard from overheated or decomposed materials.” Larry

Silverstein, Dow Chemical Co., “Chloracne Problem at Fort

Saskatchewan Plant, Dow Chemical Canada” at Dow Bates

No. 746402 (Mar. 21, 1969).°

SUMMARY OF ARGUMENT

The Agent Orange settlement was legally and factually

unprecedented then and remains so today. For veterans such as

Dan Stephenson and Joe Isaacson who were healthy, and without

any injury at the time, this class action settlement purported to

bind them, without adequate representation, without any right

to opt out and without payment of any compensation because

their injuries became manifest after the settlement funds had

been disbursed. Petitioners knew full well that trying to reach

so far in binding absent parties, who did not yet even have causes

of action, was not supported by any precedent or other authority

and violated the constitutional requirements of Due Process and

standing. Nevertheless, in the face of the known, overwhelming

flaws in their purported settlement, Petitioners went ahead and

entered an agreement with lawyers for plaintiffs who were

desperate and had strong financial incentives to settle.

6. These Dow internal documents suffice to defeat any government

contractor defense. See Boyle, 487 U.S. 500.

When they entered that settlement Petitioners knew also

that medical evidence was likely to increase as the latency

periods for cancers and other diseases were being reached from

exposures to their toxic chemical products. They knew from

their own internal studies that the herbicides used in Agent

Orange were highly toxic and were contaminated with one of

the most toxic materials then known, dioxin. .

Despite entering this settlement with full knowledge of its

legal and factual flaws and full knowledge that it was likely

that there would be many future provable claims, Petitioners

assert that it would be unfair to permit review of this settlement

now. But the passage of time and the payment of nuisance value

money to veterans who had claims then does not, and cannot,

alleviate the severe Due Process violations to Respondents who

have claims now. Petitioners’ pleas for fairness ring hollow in

the light of their knowing violation of the rights of future

claimants such as Respondents.

The Second Circuit decision is based on well settled

principles of class action jurisprudence and merely followed

the guidance of this Court from Amchem and Ortiz. Those

decisions, too, broke no new legal ground, despite Petitioners

suggestions to the contrary. The dominant Due Process concern

of this Court in reviewing class actions has always been to protect

the rights of absent class members to ensure that they are not

unfairly bound to judgements or settlements by class

representatives with interests that are not aligned with theirs.

Adequacy of representation is the cornerstone of these Due

Process principles in this context. It cannot seriously be disputed

that these veterans who had no cognizable claim at the time,

who could not opt out, and who could receive no compensation

when their injuries became manifest; did not have adequate

representation of their interests. As such, the decision of the

Second Circuit must be affirmed and Respondent veterans be

permitted to proceed with their claims.

ARGUMENT

I. Because Petitioners KNew At THE Time OF SETTLEMENT

TuHat It Was UNPRECEDENTED AND SEVERELY FLAWED,

Tuat It Vio_atep Tue Due Process RiGuts Or ABSENT,

FuTURE CLAIMANTS, AND FaiLtep To SatisFy THE

REQUIREMENTS OF RuLe 23, Petitioners CANNoT Now

Ciaim TuHat Tey Hap A Ricut To ReEty On Tuat

SETTLEMENT AND Expect Finatity AND No COLLATERAL

Review WHEN VETERANS Mape C.iaims For Diseases

Tuat DEVELOPED AFTER 1994

The 1984 Agent Orange settlement which purported to

include future claimants such as Respondents did not meet the

requirements of Rule 23 violated Due Process because veterans

like Stephenson and Isaacson, who had no manifest injury, were

not adequately represented by someone with interests identical

to theirs, had no notice of the settlement, and had no right to opt

out. They were purportedly bound to a settlement and precluded

from pursuing their rights to their claims in the future, but no

compensation was provided.

It is axiomatic that before one can plead for fairness and

equity, one must come to the bar with clean hands. Petitioners

do not have the “clean hands” that would give them a right to

claim that it would be unfair to them now to affirm the Second

Circuit and allow Respondents their day in court.

The record of the litigation leading up to the Agent Orange

settlement shows that until they jumped at the chance to settle

all present claims for nuisance value and to bind and preclude

all future claims for little or no compensation, Petitioners,

through their counsel, had vigorously — and properly —

objected to inclusion in the class litigation of people without

present injuries or manifest symptoms. They knew that veterans

who were exposed to Agent Orange, but who did not have any

manifest injuries could not have brought a claim to begin with.

Persons without injury would have had no standing under Article

Ill of the United States Constitution to bring a claim at all.

In Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992) this —

Court established an “irreducible constitutional minimum of

standing” which requires that “the plaintiff must have suffered

an ‘injury in fact’ — an invasion of a legally-protected interest

which is (a) concrete and particularized, and (b) ‘actual or

imminent, not conjectural or hypothetical.’” (Citing Warth v.

Seldin, 422 U.S. 490, 508 (1975) and others).

Without injuries and standing to bring a claim, any claims

would have been dismissed. Petitioners knew that the they were

getting more from the settlement than they had any night to

expect. They were settling claims that could not have been

brought in the first place. As Judge Friendly said 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, or burn down a house

never built, or miss a train running on a nonexistent

railroad. For substantially similar reasons, it has

always heretofore been accepted as a sort of logical

axiom that a statute of limitations does not begin to

run against a cause of action before that cause of

action exists.

It is only in that same topsy-turvy land that your claims can be

settled by others, without your knowledge, for no compensation,

before your cause of action exists.

Petitioners knew the settlement of future claims under these

circumstances was unprecedented. They had to know that such

a settlement was at risk due to the many problems it had in

meeting those requirements of Rule 23 which are intended to

protect the due process rights of absent class members.

See, generally, Amchem, 521 U.S. at 625-629.

This Court has previously held that “[a]n elementary and

fundamental requirement of due process in any proceeding

which is to be accorded finality is notice 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.” Mullane v. Central Hanover Bank & Trust

Co., 339 U.S. 306, 314-15 (1950). In a class action for money

damages, rights to receive notice and the subsequent ability

to opt out of the class cannot be abridged: “[WJe 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.” Phillips Petroleum Co. v.

Shutts, 472 U.S. 797, 812 (1985).’

Settlement classes, in any setting, present serious

potential for abuse. See, e.g., Manual for Complex Litigation,

Second, supra, § 30.41, at 236 (“As a practical matter, the

dynamics of class action settlement may lead the negotiating

parties — even those with the best of intentions — to regard

the interests of the class members too lightly.”). Indeed, all

participants in class action settlement negotiations have

extraordinary incentive to settle. From the perspective of

defendants, settlement is an opporiunity to cap risk. From

the perspective of the courts, settlement may be an

7. Indeed, few activities are subject to more extensive record

keeping than military service; if the rights of future claimants can be

abolished in this context without individualized notice, then the

implications are unlimited. By contrast, in an early decision regarding

Rule 23 requirements, Eisen v. Carlisle & Jacquelin, 417 U.S. 156

(1974), this Court demonstrated the full extent to which the rights of

individual class members must be safeguarded. Eisen raised the issue of

adequate notice in a Rule 23(b)(3) antitrust and securities class action

with millions of members and a class representative with only a $70

stake. Despite the size of the individual claims, this Court held that the

class could proceed only with individual notice to more than two million

class members whose names and addresses could be identified with

reasonable effort, holding that “[i}ndividual notice to identifiable class

members is not a discretionary consideration to be waived in a particular

case. It is, rather, an unambiguous requirement of Rule 23.” Significantly,

the Court in Eisen stated that such notice was required so that each

individual class member “may request exclusion from the action and

thereby preserve his opportunity to press his claim separately. .. .”

Id. at 176. See also Crown Cork & Seal Co., Inc. v. Parker, 462 U.S.

345, 351 (1983) (“Eisen'’s notice requirement was intended to inform

the class member that he could ‘preserve his opportunity to press his

claim separately’ by opting out of the class.” (emphasis in original)).

opportunity to clear court calendars of tens of thousands of

cases. And, not least of all, from the perspective of class

counsel, the economic rewards of settlement sooner rather

than later can be extraordinarily enticing — regardless of

the inchoate needs of absent class members or future

claimants. For these reasons, adequate representation of

absent claimants has become one of the cornerstones of due

process guarantees in class actions, requiring, among other

things, that class representatives and their counsel are aligned

identically with the interests of absent class members.

As this Court emphasized in Hansberry v. Lee, 311 U.S. 32,

45 (1940):

[S]election of representatives for purposes of

litigation, whose substantial interests are not

necessarily or even probably the same as those

_ whom they are deemed to represent, does not

afford that protection to absent parties which due

process requires.

The record of the litigation leading to the purported class

action settlement of future claims demonstrates the risk of

conflict and collusion which arises when both sides no longer

are adversaries but both now want the settlement to proceed.

That is precisely when adequacy of representation becomes

crucial and all members of the settlement class must have

their day in court. As this Court has stated:

Procedural due process is not intended to promote

efficiency ... it is intended to protect the

particular interests of the person whose

possessions are about to be taken.... ‘[T]he

Constitution recognizes higher values than speed

and efficiency. Indeed, one might fairly say of the

Bill of Rights in general, and the Due Process

Clause in particular, that they were designed

to prot.ct the fragile values of a vulnerable

citizenry from the overbearing concern for

efficiency and efficacy that may characterize

praiseworthy government officials no less, and

perhaps more, than mediocre ones.’

Fuentes v. Shevin, 407 U.S. 67, 90 n.22 (1972) (quoting Stanley

v. Illinois, 405 U.S. 645, 656 (1972)).*

Petitioners knew that when the class was certified there

was no analysis of the adequacy of the class representatives.

Class representatives had not even been named. Petitioners

knew, too, when the class action was settled that there were no

class representatives to represent persons without any manifest

injury — like Stephenson and Isaacson — who had been added

to the broadly re-defined class after the opt out deadline passed.

Petitioners knew it was dangerous to change the class

definition after certification and the opt out period had passed.

Despite their misleading representations to the Court in their

brief, Pet. Br. 35, they knew that persons like Respondents

here, with future claims, never had a chance to opt out at all.

They knew that even though the class definition had been

broadened after the opt out time had passed, the methods of

distribution of the notice would reach much fewer veterans.

Each of the Petitioner chemical companies also had their

own staff of scientists and toxicologists and internal documents

show Petitioners were well aware of the toxicity of the herbicides

used in Agent Orange. Documents of public record in later

herbicide litigation show a many year pattern of cover-up about

their knowledge of the toxicity of 2,4,5-T and 2,4-D and the

presence of toxic impurities and contaminants such as dioxin

in their herbicide products.

They had to know of the long latency periods often required

for development of cancer and other fatal diseases from

exposures to toxic chemicals. Even the District Court was aware

of that. Thus, with the passage of time since the first agricultural

and production uses of these herbicides, Petitioners had to know

that it was likely there would be increasing incidence of disease

8. See also In re: General Motors Corp. Engine Interchange

Litigation, 594 F.2d 1106, 1133 (7th Cir. 1979), cert. denied, 444 U.S.

870 (1979) (“convenience and expediency cannot justify disregard of

the individual rights of even a fraction of the class”).

and increasing knowledge of the potential association with their

herbicides.

Thus, while the plaintiffs’ lawyers had limited resources

and great incentive to settle, the chemical companies knew that

they needed this protection because they knew they had a ticking

time bomb of medical and other documentary evidence that

would be generated, or come out of their files, to establish

causality by the time that future victim’s medical conditions

associated with Agent Orange exposure developed.

They therefore took a risk. They took the risk that for

payment of a sum of money to provide nuisance value

settlements to persons with present claims, that they could also

buy the rights of unsuspecting future victims to have their day

in court, if and when an Agent Orange associated disease became

manifest.

They cry that they bought their peace, but they should have

known then that it was a defective peace. They cannot have a

legitimate expectation of peace when they knew how utterly

flawed the settlement was and how unprecedented it was to

impose a mandatory class on future claimants that provided no

compensation at all if the claimant had the misfortune of having

his or her disease manifest after 1994.

Petitioners knew that they had no legal bases to take those

rights from the unsuspecting future victims of their wrongdoing.

Nevertheless, they did so and had nearly 20 years of peace.

But they were not bona fide purchasers of these rights.

They can have no legitimate claim to have bought a peace when

they knew that the peace was flawed.

II. Petitioners Hap Tue Ricut ANnp Duty To Attempt To

Cure Tue Derects THEY KNew FLAweD Tuis SETTLEMENT

Amici doubt that there is any way consistent with Due

Process and Rule 23 to cure defects in a class action settlement

that includes future claimants without any present injury, who

have no right to opt out, who have no notice or opportunity to

object and who receive no compensation. Petitioners conceded

in court, several years before the settlement was reached, that

they, along with the court and plaintiffs’ counsel had an

obligation to ensure that any class action was fair to the absent

class members. JA 50-60. Contemporaneous case law confirms

that Petitioners had standing to ensure that the class action

complied with the rules and due process. See Shutts, 472 U.S.

at 798.

Despite their vigorous — and well taken — objections to

the broad and pervasive class that the plaintiffs in the Agent

Orange litigation sought to have certified, and despite their

obvious knowledge of other deficiencies in the settlement,

Petitioners did nothing to correct these flaws. Petitioners could

have protected themselves against the prospect of collateral

attack of the settlement by maximizing the protections for absent

class members. They could have insisted that better notice to

the broader class be given. They could have ensured that there

was adequate representation for each new subclass of persons

that had been brought into the class by the re-definition for

settlement. They could have provided funds to pay the cost of

separate representation for this subclass, or at least required that

a small fraction of the $180 million be designated for that

purpose. -

When Judge Weinstein indicated that he did not want to

water down the available money by paying for multiple counsel,

Petitioners could have volunteered to pay more if they wanted

protection. They could have paid for more notice or sought to

have it come out of the settlement proceeds.

Most importantly they could have made sure that there was

another opportunity for opt out provided for future claimants

after their injuries became manifest. Because they failed to do

anything then to satisfy the requirements of Due Process and

Rule 23 for their settlement, Petitioners are complicit in its fatal

flaws. They had a chance to do what was necessary to try to

protect the settlement, but they did nothing and should not now

be heard to complain that it is subject to collateral review.

Ill. Amcuem AND Ortiz Dip Not Cuance THe WELL

SetTLep Due Process PrincipLes UNDERLYING THE

REQUIREMENTS OF RuLe 23 Wuich Have ALways

REQuiReD THaT CLASS REPRESENTATIVES SHARE IDENTICAL

Interests With Assent CLass Memsers Berore THE

ABSENT Members Can Be Bounpb

Petitioners charge it would be unfair to apply a new standard

of review to their 1984 Agent Orange settlement based on what

they claim is a major change in the law of class actions after the

settlement was approved in 1985. They contend that Amchem

and Ortiz changed the law and thus should not be applied

retroactively. That characterization of Amchem and Ortiz is

simply wrong. Indeed, what Petitioners are doing is trying to

excuse their own complicity in the failures of the 1984

settlement. Petitioners knew in 1984 that the settlement for future

claimants failed to meet the requirements of Rule 23 and Due

Process. Those requirements were well known to them then and

they argued for them at the time during the certification hearings.

However, now that they are trying to defend this flawed

settlement they want this Court to believe that somehow Amchem

and Ortiz added some new requirements for approval of class

settlements that should not be applied with hindsight.

Review of those cases shows clearly that both decisions

were grounded on prior precedent that had been well settled for

years before 1985. The only new aspect of either case was that

for the first time the Court was asked to apply these well settled

Due Process principles to a class action where lawyers for

plaintiffs and defendants had agreed to settle both present and

future claims as a part of a single class action. Nearly 50 years

before the Agent Orange settlement was made and approved,

this Court set forth clear guidance about the Due Process

principles applicable to class actions. In Hansberry v. Lee, 311

U.S. 32, 40 (1940), the Court stated at the outset that before

prior litigation will be deemed to have res judicata effect on

later suits the Court must perform a collateral review of both

cases to ascertain whether the litigant has been afforded such

notice and opportunity to be heard as are requisite to the due

process clause. (Citing Western Life Indemnity Co. v. Rupp, 235

U.S. 261, 273 (1914)).

This Court then explained that class actions suits were an

exception to the general rule “in Anglo American jurisprudence

that one in is not bound by a judgment in personam in a litigation

in which he is not designated as a party or to which he has not

been made a party by service of process.” Jd. Class actions were

developed in equity as an exception to that rule where the number

of parties is so great that joinder is impracticable. However,

Hansberry set forth very clearly that for this exception to be

constitutionally valid, the procedures for creating and litigating

the class claims must ensure that the interests of the absent

members and the class representatives are the same so that the

latter fairly represents the former. Due Process has not been

met when the procedures adopted do not ensure protection of

the absent parties interests. /d. at 42.

Adequate representation is at the core of these constitutional

concerns. Absent parties would be bound only if “the named

parties adequately represented the absent class and the

prosecution of the litigation was within the common interest.”

Id. at 41. Conflicting interests among class representatives and

absent class members “does not afford that protection to absent

parties which due process requires.” Jd. at 45. Indeed, more

than 50 years ago now, this Court expressed its strong concern

that where there were such conflicting interests: “It would afford

fraudulent and collusive sacrifice of rights of absent parties.”

Id.

Subsequently the Rules Committee adopted the numerous

specific requirements of Rule 23. In both Amchem and Ortiz

this Court showed that those requirements were bottomed on

these same due process concerns. The principles articulated in

Hansberry have thus been repeatedly re-affirmed both before

1985 and after.

In Amchem, the inquiry into the propriety of a future class

began by looking at the historical roots of class actions under

Rule 23. This Court found that the drafters of Rule 23 “had

dominantly in mind vindication of ‘the nights of groups of people

who individually would be without effective strength to bring

their opponents into court at all.’” Amchem, 521 U.S. at 617

(quoting Kaplan, Prefatory Note 497). This Court cited with

approval language from a recent Seventh Circuit opinion:

The policy at the very core of the class action

mechanism is to overcome the problem that small

recoveries do not provide the incentive for any

individual to bring a solo action prosecuting his or

her nghts. A class action solves this problem by

aggregating the relatively paltry potential recoveries

into something worth someone’s (usually an

attorney’s) labor.

Id. (quoting Mace v. Van Ru Credit Corp., 109 F.3d 338, 344

(1997)).

In Amchem, this Court affirmed that in evaluating the

propriety of any class action the dominant concern is that there

must be sufficient unity so that absent members of class will be

bound by representatives decision. Amchem, 521 U.S. at 621.

The Rule 23 predominance requirement is not satisfied by simply

shared exposure or by common interest in compensation without

trial. Jd. at 624-25. Focus must instead be on questions that are

actually at issue and which create a genuine controversy. /d.

Class representatives are not adequate under Rule 23 and due

process when there are real or potential conflicts of interest. Jd.

In affirming these well settled principles, this Court relied

on case precedent that largely antedated the approval in 1985 of

the Agent Orange settlement. The Court pointed out that the

adequacy inquiry serves to uncover conflicts of interest. General

Telephone Co. of Southwest v. Falcon, 457 U.S. 147, 157-58,

n.13 (1982). The inquiry focuses on whether the injuries of the

class representatives and the absent class members are the same

or diverse. See also East Texas Motor Freight System v

Rodriguez, 431 U.S. 395, 403 (1977) (“[A] class representative

must be part of the class and ‘possess the same interest and

suffer the same injury’ as the class members.”’)

In General Telephone this Court found that “[t}he class-

action device was designed as ‘an exception to the usual rule

that litigations is conducted by and on behalf of the individual

named parties only.’” 457 U.S. at 155 (quoting Califano v.

Yamaski, 442 U.S. 682, 700-701 (1979). When issues are

common and result turns on questions that are applicable in the

same manner to each member of the class, then class action

saves resources and permits economical litigation. /d

In Ortiz the Court pointed out that Hansberry had articulated

a core constitutional requirement that “the named plaintiff at

all times adequately represent the interests of the absent class

members.” (citing Shutts, 472 U.S. at 812 (citing, in turn,

Hansberry, 311 U.S. at 42-43, 45)).

Similarly, in Shutts, the Court relied extensively on

Hansberry, finding that in 1985 the same constitutional

principles were applicable and the same practical bases for class

actions remained: class actions are proper where there are too

many plaintiffs for proper joinder and class actions permit “the

plaintiffs to pool claims which would be uneconomical to litigate

individually.” 472 U.S. at 809. The Court, based on Hansberry,

held that Due Process requires that the named plaintiff at all

times adequately represent the interests of the absent class

members. /d. at 809-10.

Class action litigation developed as an exception to general

rules requiring individual standing and litigation to provide a

means for individuals with small claims to join together, when

joinder was impractical, to make pursuit of justice economically

feasible. It was not developed, as Petitioners suggest, simply to

provide defendants in litigation “utility,” Pet. Br. 17, as a device

to resolve masses of claims at one time, thereby binding many

absent class members at the same time. While binding absent

class members to a settlement or judgment is a necessary

corollary to allowing persons with sufficiently similar claims

to aggregate them in a class, it was not the reason that class

actions developed. In fact, it is this binding of absent members

which has consistently troubled this Court for many years from

a constitutional and Due Process perspective. Consistent with

the Due Process elements in the determination of adequacy under

Rule 23, class representatives can only bind absent class

members when their interests in the real issues in controversy

are sufficiently identical to permit the conclusion that those

representatives will aggressively advocate for the absent class

members, without conflict.

In all the above cases decided during or before 1985, the

Supreme Court rejected class action certification or settlement

because the class representative’s interests were not sufficiently

aligned with absent class members. Thus, it is entirely

disingenuous to suggest that Amchem worked some sea change

in class action law. With the highest quality lawyers representing

them in 1985, Petitioners had to know that there were fatal

adequacy and due process problems with a settlement of future

claims, with no opt out right, and no class representative or

counsel in court who could adequately represent their interests:

someone who was without conflict of interest and whose interest

and injuries were identical. Petitioner had to know in 1985 that

it was a well settled and fundamental principle of class action

law that the absent parties cannot be bound by such a class action

settlement. It is not Amchem and Ortiz which worked a change

in the law, it is Petitioners’ unprecedented settlement which, if

upheld to bind Stephenson and Isaacson, would radically alter

this Court’s prior class action jurisprudence.

IV. Any UNnFairnNess THAT WouLD REsuLt To Petitioners By

AFFIRMING THE SECOND Circuit Paces In Comparison To

THe UNFAIRNESS TO RESPONDENT VETERANS IF THis Court

SHOULD Reverse More Tuan 50 Years Of Sett_ep Cass

ACTION PRECEDENT AND Deny THEM THEIR Day IN Court

Veterans of the armed services of the United States who

served in Vietnam dedicated-their-hearts, minds, and bodies to

protect the rights of all citizens of this country, to uphold the

way of life of this country and the constitution of the United

States. No group of citizens has a greater right to expect that in

return for their dedication to preserving these rights, they would

be able to enjoy for themselves the full protection of the laws of

this country. Veterans have a right to rely on the judicial system

of our democratic and constitutional government and, in

particular, their right to their day in court to have wrongs done

to them while on active duty addressed fairly and fully, with

zealous advocates fighting for them and them alone. What

veteran would have expected that he or she could lose all rights

to their day in court, without any compensation, as a result of

a long ago class action settlement about which he or she had no

knowledge or notice and no opportunity to opt out.

In Ortiz this Court took note of the tension between class

actions, which can usurp the rights of absent class members to

a trial by jury and “our ‘deep-rooted historic tradition that

everyone should have his own day in court.’” Ortiz v. Fibreboard

Corp., 527 U.S. 815, 846 (1999) (quotation omitted). “Although

‘we have recognized an exception to the general rule when, in

certain limited circumstances, a person, although not a party,

has his interests adequately represented by someone with the

same interests who is a party,’ ... the burden of justification

rests on the exception.” /d. Petitioners have not met that burden.

In Marbury v. Madison, Chief Justice Marshall asked:

“If he has a right, and that right has been violated, do the laws

of his country afford him a remedy?,” Marbury v. Madison, |

Cranch 137, 162, 2 L. Ed. 60 (1803). Chief Justice Marshall’s

response was clear: “The 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.” /d. at 163,

2L. Ed. 60.

Petitioners lament the “pernicious” effects that will result

to the “utility” of the class action device if this Court affirms

the Second Circuit. They claim that no class action settlement

will ever be safe from attack, and finality and resolution of claims

will never be achieved. This view of class actions that underlies

Petitioners’ argument turns class action law on its head. The

class action “device” was not developed to protect wrongdoers

who could, with one collusive settlement, sweep away all past

and future liability.

Petitioner chemical companies plead that it would be unfair

to them now after they have paid their money in reliance on

an expectation of finality to allow Stephenson and Isaacson

to proceed on their claims. These pleas for fairness ring hollow

in the light of Petitioners knowledge of the fatal constitutional

and Rule 23 flaws in that settlement and their knowledge of

the toxic properties of their products that were sprayed

indiscriminately and in massive quantities during the Vietnam war.

In contrast, veterans like Stephenson and Isaacson who

survived the bullets and bombs of the enemy, are now suffering

life threatening diseases, or are dying, without any chance

of redress, even though they had no injuries at the time of the

settlement and no basis therefore for making a claim then.

How fair is it to these veterans that Petitioners want them to

lose all right to have their day in court without compensation

when they had no right to opt out of the expanded class for

settlement and received no notice of the class settlement at

all? How fair could it be, even if they had received notice, to

require these veterans to intelligently evaluate the prospects

of litigating the case for their injuries when their injuries had

not yet manifested? How fair is it to require veterans without

then a vested claim — a concrete injury in fact— to bear the

expense in time, effort and money to investigate and litigate

the propriety of a settlement which may never apply to him?

Given this expense there would be no reason that a then

totally healthy veteran would choose to bear that expense on

the speculative possibility that at some future time he might get

some sickness from a long before exposure. While finality is

certainly a proper goal of class action litigation that must be

respected, it must not come as a result of violations of Due Process.

CONCLUSION

For all the foregoing reasons, amici respectfully pray

this Court affirm the judgment of the Court of Appeals for the

Second Circuit.

Respectfully submitted,

WiLuiaM A. RossBACH

Counsel of Record

ROsSBACH BRENNAN P.C.

401 North Washington

Missoula, MT 59802

(406) 543-5156

P.B. ONDERDONK, Jr.

NATIONAL JUDGE ADVOCATE

THE AMERICAN LEGION

P.O. Box 1055

Indianapolis, IN 46206

THomas A. O’ CONNOR

O’Connor, MacDona_Lp & Maza

FOR VETERANS OF THE

VIETNAM Wak, INC.

61 North Washington Street

Wilkes-Barre, PA 18703

Attorneys for Amici Curiae

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