Reply Brief — Stephenson v. Dow Chemical Co (No. 08-461)

TA 1 Supreme Court, U.S.

nw _

' No, 08-461 FEB 10 2009

OFFICE OF THE CLERK

In The

Supreme Court of the United States

¢

DANIEL RAYMOND STEPHENSON, ET AL.,

Petitioners,

ws

DOW CHEMICAL COMPANY,

MONSANTO COMPANY, ET AL.,

Respondents.

. +

On Petition For A Writ Of Certiorari

To The United States Court Of Appeals

For The Second Circuit

o

PETITIONERS’ REPLY

TO BRIEF IN OPPOSITION

+

MARK R. CUKER GERSON H. SMOGER

MICHAEL J. QUIRK Counsel of Record

WILLIAMS CUKER BEREZOFSKY STEVEN M. BRONSON

One Penn Center at MARK BALLER

Suburban Station SMOGER & ASSOCIATES, PC

1617 J.F.K. Blvd., Suite 800 3175 Monterey Blvd., Suite 3

Philadelphia, PA 19103 Oakland, CA 94602

(215) 557-0099 (510) 531-4529

Counsel for Petitioners

(Additional Petitioners’ Coungel Listed On Inside Cover)

COCKLE LAW BRIEF PRINTING CO (800) 225-6964

OR CALL COLLECT (402 342-2451

ADDITIONAL COUNSEL

CHRISTOPHER E. BUCKEY

1 Commerce Plaza

Albany, New York 12260

(518) 487-7600

BERNARD F. DUHON

LAW OFFICE

PF BERNARD F. DUHON

111 Concord Street, Suite B

Counsel for Petitioner Twinam Abbeville, Louisiana 70511

MARK I. BRONSON

NEWMAN, BRONSON & WALLIS

2300 West Port Plaza

St. Louis, Missouri 63146

(314) 878-8200

Counsel for Petitioners

Bauer, Walker, and Hamilton

DAVID E. CHERRY

CHERRY LAW GRouP, LLP

1105 Wooded Acres, Suite 200

Waco, Texas 76702

(254) 776-4040

Counsel for Petitioners

Stearns

JAMES BOANERGES

LUEDERS & BOANERGES, PC.

9432 Old Katy Road,

Suite 100

Houston, Texas 44044

(713) 464-3383

Counsel for Petitioner

Anderson

JOHN H. PUCHEU

PUCHEU, PUCHEU &

ROBINSON, LLP

106 Park Avenue

Eunice, Louisiana 70535

(337) 457-9075

Counsel for Petitioners

Breaux and Plowden

(337) 893-0030

Counsel for Petitioners

Breaux and Plowden

CALLAHAN, FITZPATRICK,

& LA KOMA

5237 West 95th Street

Oak Lawn, Illinois 60453

(708) 423-4500

Counsel for Petitioners

Garncarz

NIRA T. KERMISCH

LAW OFFICES OF

NIRA KERMISCH

36 West Main Street,

Suite 405

Rochester, New York 14614

(585) 232-7280

Counsel for Petitioner

Gallager

STEPHEN B. MURRAY

MURRAY LAW FIRM

909 Poydras Street,

Suite 2550

New Orleans, Louisiana

70112

(504) 525-8100

Counsel for Petitioner

Stephenson

ROBERT B. EVANS

PEDRO ESPINOZA

BuRGOS & EVANS, LLC

3632 Canal Street

New Orleans, Louisiana

70119

(518) 463-3210

Counsel for Petitioner Sampey

JEFFREY D. GUERRIERO

GUERRIERO & GUERRIERO

2200 Forsythe Avenue

Monroe, Louisiana 71201

(318) 325-4306

Counsel for Petitioners

Kidd, Nelson, and Williams

JOAN N. HARROP

GOMIEN & HARROP

First Midwest Bank Building,

Suite 300

220 West Main Street

P.O. Box 708

Morris, Illinois 60450

(815) 942-0071

Counsel for Petitioners

Garncarz

JAMES RUSSELL TUCKER

LAW OFFICES OF

JAMES RUSSELL TUCKER, P.C.

5505 Celestia! Road

Dallas, Texas 75240

(214) 740-3001

Counsel for Petitioner Patton

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES .0..0cccccccccsseeesessessversoness il

a EY icdicninthty anievcndiseninneteanianianiionsies 1

I. Response to Reiterated “Facts” From Re-

spondents’ Summary Judgment Motion ....... 2

[I.

RE TIE os sscaoc secs cccecsines saccntietinilintnins

A.

Certiorari Should Be Granted to Resolve

the Circuit Split Exacerbated by the

Decision Below, Effectively Applying

the Government Contractor Defense to

Claims of Shoddy Workmanship ............

The Lower Courts Are in Conflict Over

the Degree of Specificity Required Un-

der Boyle’s First Prong .................00.00008

Respondents Fail to Blunt the Split of

Authority Over Boyle’s Third Prong Im-

plicated by the Second Circuit’s Holding

OE I avtccneinica ccacanoarasviscerersurnarone

at NI os rlatircetynravatenencdexsimcounsxtbncnapaaeveres

i

TABLE OF AUTHORITIES

Page

CASES

Bailey v. McDonnell Douglas Corp., 989 F.2d

ES IEE iresipciencccnctenmncmuncenainns 7,8

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

SI i cicsiacnh rdidts eaatepn sea ireei ca aanccaneieeate passim

Carley v. Wheeled Coach, 991 F.2d 1117 (3d Cir.

I sieisshieratiati-wteaalasillaconatieanis eonecs aensnicrae exemmisendtedie 11,13

Harduvel v. Gen. Dynamics Corp., 878 F.2d

Be CNe BI I isin ccc cevcncrimcnsntsiravaseinenenonwen 7,13

Mitchell v. Lone Star Ammunition Inc., 913

Fe RE CI I, TIO vince cvessccecssevernssnessacesens Pet

Snell v. Bell Helicopter, 107 F.3d 744 (9th Cir.

TT alin secrscncccisitndrevete cuvaissanuusineninhanmeacnsandenn 8, 10

Stout v. Borg-Warner Corp., 933 F.2d 331 (5th

SN EE inst dc tananaieicnedisacceaceaaananiecirencinnaseets 13

Trevino v. General Dynamics Corp., 865 F.2d

Be ee et EE anv cccicerabascennenkcecdepeseveuuaconessnsennns 10

United States v. Gaudin, 515 U.S. 506 (1995)........... 12

United States v. Wells, 519 U.S. 482 (1997)............... 12

INTRODUCTION

For forty years, the United States government

has lived with the “toxic” legacy of “Agent Orange.”

This legacy has led people throughout the world to

believe that our government was callous in its self-

interest — willingly poisoning both the Vietnamese

population and our own soldiers. Petitioners’ review

of the evidence, including hundreds of thousands of

pages of documents and citations to over 121 deposi-

tions, reveals that nothing could be further from

the truth. Unlike the callous officials Respondents

and others portray, our government and military

charged with protecting our troops were unaware of

the dioxin contamination and at all times desired an

herbicide that would not even harm animals, much

less humans. See, e.g., AS43; AA6800-18, 6068; RS17.’

This starkly contrasts with the mythology that devel-

oped first when the Second Circuit initially decided

these issues absent any briefing by plaintiffs, then

when the Fifth Circuit confronted them twice in the

absence of any depositions or documents produced by

plaintiffs, and finally when the Federal Circuit relied

on these courts’ legal conclusions that were based on

records bereft of disputed facts. See Pet. 12-13.

' References made are to: the Second Circuit Appellants’

Appendix, designated “AA”; the Stephenson (05-cv-1760) opening

and reply briefs, designated “AS” and “RS”; and the related

Bauer (05-cv-1693) opening and reply, designated “AB” and

RB”

2

The factual matters that the Brief in Opposition

discusses at length are diversions from the key facts

that remain undisputed: The government did not

prescribe the manufacturing method used by Respon-

dents, which was solely responsible for the harmful

presence of dioxin; nor did it know that use of that

manufacturing led to dioxin contamination; and

Respondents never shared the information in their

sole possession about health risks attributable to

dioxin.

In light of these undisputed facts, and in light of

the fact that it has been over 20 years since this

Court decided Boyle v. United Technologies Corp., 487

U.S. 500 (1988), the direct conflict between the deci-

sion below and those of other circuits presents a

perfect opportunity for this Court to clarify the criti-

cal and purely legal issues raised herein regarding

the application of the government contractor defense.

I. Response to Reiterated “Facts” From

Respondents’ Summary Judgment Motion

Much of Respondents’ brief argues facts that

never appear in the Second Circuit’s decision. These

should not divert the Court from the inescapable fact

that dioxin was present in Agent Purple/Orange only

because Respondents used proprietary, defective

manufacturing processes that dangerously contami-

nated 2,4,5-T with divxin. Nevertheless, due to the

legal record that developed in other cases, Petitioners

address many of these facts below.

3

2,4,5-T was not chosen for use in Vietnam be-

cause it was a newly discovered, particularly potent

chemical, but rather because every year 50 million

tons of 2,4,5-T were being sprayed commercially, and

purportedly safely in the U.S. AS44; AB18; RS43;

RS66-71. As the official] Air Force History of Opera-

tion Ranch Hand stated: “None of the herbicides ...

were of a new or experimental nature.” RS62-63; see

also AB15-18."

At all times, those involved in selecting and

contracting for the herbicides believed they were

choosing the safest possible product to accomplish the

goal of clearing dense foliage. AS42-43. Not a single

person among more than 100 government personnel

deposed ever testified to knowing that 2,4,5-T was

contaminated with dioxin when it was sold to the

government. AS40-42. Nor has a single document

ever been produced stating that anyone in the

> Opp. 4-5 are erroneous. 2,4,5-T and 2,4-D had been sold

separately or together for almost two decades. AB11-21. They

killed different plants, so they were frequently used in combina-

tion to defoliate places such as railroad rights-of-way. Respon-

dents’ employees testified that the specifications for 2,4,5-T were

the same whether the use was commercial or military. RS27;

AB21-22. Dow even held a patent on Agent Purple. AB19-21;

RS65-RS66. Although Respondents argue that Agent Purple/

Orange were 100% herbicide, the chemical at issue, 2,4,5-T,

constituted only 50% of these “Agents.” Since 2,4,5-T was

invariably sold commercially in stand-alone concentrations of

55% or more, commercial 2,4,5-T had a greater concentration of

2,4,5-T, and hence dioxin, than the 50% in the Agent Purple/

Orange mixture. RS67.

4

government knew that the 2,4,5-T shipped to the

government was contaminated with dioxin. RS13-14.

Indeed, the government did not even have the means

to test for dioxin contamination in 2,4,5-T. RS28.

Respondents, on the other hand, secretly tested

their products for dioxin and hid its extreme toxicity

from the military. AB37-38, 47-56; Pet. 7-8, see also

AA7664. Their briefing does not claim that even one

of their 76 deposed employees testified that he told

the army about the dioxin contamination. RB9; RS20-

22. Instead, they ignore almost all of Petitioners’

briefing and evidence (Pet. 6-7, 43-44a; AS29-33;

AB52), and attempt to minimize their own knowledge

by pointing to an ostensibly “isolated employee who

has speculated about possible dangers.” Opp. 29 n.10.

These so-called “isolated” employees were Dr. Rowe,

Dow Chemical’s head of toxicology, AS29-32, and Dr.

Kelly, Monsanto’s chief of medicine. AS32-33, 36-37;

AA7675.°

Notwithstanding this, Respondents seek to indict

PSAC and the Edgewood Arsenal task force’ for their

* Respondents also misrepresent today’s medical under-

standing of the injuries caused by exposure to dioxin. Instead of

telling this Court that the NAS/IOM has found that numerous

cancers have been related to exposure to dioxin-contaminated

2,4,5-T; RB19-23, they quote a twenty year old Second Circuit

opinion to say: “Even today, ... no ... evidence that Agent

Orange was hazardous to human health.” Opp. 2.

“ Respondents do not dispute that none of those involved in

the selection of the herbicides, the procurement of contracts to

purchase them, or the inspection process were aware that

Respondents’ 2,4,5-T was contaminated with dioxin. AS28-43;

(Continued on following page)

5

supposed willingness to use 2,4,5-T despite alleged

knowledge of health risks. See Opp. 6-7 (“a significant

fact” that the Edgewood task force “knew it had

caused chloracne and liver problems in production

workers.”). This is patently false — Respondents

themselves misrepresented the health effects to both

entities: “Major manufacturers have certified that

none of the workmen in their factories have shown

any ill effects.” AS44; see Pet 45a.°

Respondents even attempt to pass the buck to

President Kennedy, referencing supposed orders for

toxicity testing, Opp. 6, when they know that Cyrus

Vance, Paul Warnke and Secretary Robert McNamara

himself testified that no such orders ever came from

the President. RS16-17. In fact, when Secretary

McNamara testified as to what he would have done if

Respondents’ secrets had been disclosed to him, he

pointedly disagreed with the conclusion of the court

below:

RS1,17-20, 38-41. Instead, they allege that more attenuated

governmental bodies had such awareness — even though four-

teen separate members of the Edgewood task force testified they

had no such knowledge, AS40-41; RS39-40, and PSAC’s techni-

cal assistant from 1958-1969, Spurgeon Keeny, testified that

dioxin in herbicides was never discussed at any meeting. RS48.

* See, e.g., AA3396-97 (letter from Dow’s Lynne to General

Delmore, chief of Edgewood Arsenal: “We have been manufactur-

ing 2, 4-D and 2, 4, 5-T for over 10 years. To the best of our

knowledge, none of the workmen in these factories have shown

any ill effects as a result of working with these chemicals” —

despite Dow and other manufacturers having such knowledge

for two decades. AS28-40).

6

Q: What would you have done?

4

I certainly would have pursued the extent of

the potential adverse affects on human be-

ings.

@: And no such knowledge came to your atten-

tion while you were Secretary of Defense?

A: I have no recollection of it ever coming to my

attention.

AA6139.

Il. Legal Argument

A. Certiorari Should Be Granted to Ke-

solve the Circuit Split Exacerbated by

the Decision Below, Effectively Apply-

ing the Government Contractor Defense

to Claims of Shoddy Workmanship.

The Second Circuit found, Pet. 32-33a, that the

toxic contaminant dioxin was detectable in Respon-

dents’ Agent Purple/Orange end product only because

the manufacturers used temperatures above 165°.

This was substantially higher than those used by the

German manufacturer, Boehringer, and higher than

Respondents knew to be safe. AS24-25; AB44-56.

There also is no dispute that the method of manufac-

turing, including the temperatures chosen, were

not prescribed by any government specifications.

Having so found, Pet. 3la, the Second Circuit’s hold-

ing on summary judgment as a matter of law effec-

tively allows the government contractor defense to

7

immunize shoddy workmanship, starkly contrasting

with the law developed by other circuits.

Respondents contend this split is one of seman-

tics over whether a product-wide defect that arises

during manufacturing is deemed a “manufacturing”

or “design” defect. Opp. 21 (discussing Mitchell v.

Lone Star Ammunition, Inc., 913 F.2d 242, 246-48

(5th Cir. 1990), and Harduvel v. General Dynamics

Corp., 878 F.2d 1311, 1317-21 (11th Cir. 1989)). But

they agree that “a defect that results from ‘shoddy

workmanship’ and is ‘neither approved nor author-

ized by the Government’ is not protected by the

government contractor defense.” Opp. 21 (citing

Mitchell, 913 F.2d at 247 n.10; Harduvel, 878 F.2d at

1317) (emphasis added). Respondents thus either

admit that the Second Circuit’s finding was erroneous

or that there is a clear conflict between the Second

Circuit’s analysis of “shoddy workmanship” and that

of other circuits.

In Bailey v. McDonald Douglas Corp., 989 F.2d

794 (5th Cir. 1993), the Fifth Circuit reversed the

trial court’s grant of summary judgment precisely

because the trial court had erroneously agreed with

defendants that “the question of conformity with

specifications could never be divorced from the ques-

tion of manufacturing defect.” Id. at 799:

[I]t is possible to have an allegedly defective

feature about which the government specifi-

cations are silent. For example, if the gov-

ernment specifications regarding the bellows

canister did not specify the type or quality of

8

metal to be used, a metallurgic defect in the

canister would not be inconsistent with a

finding that the canister conformed to speci-

fications.

Id. at 799. The court considered these principles so

important that it went on to state:

[A] manufacturing defect is not necessarily

equivalent to nonconformity with govern-

ment specifications, because those specifica-

tions may be silent about some features,

making possible the existence of a manufac-

turing defect in spite of conformity with the

government specifications.

Id. at 801.°

Similarly, in Snell v. Bell Helicopter Textron, Inc.,

107 F.3d 744 (9th Cir. 1997), the specifications were

silent as to the feature claimed to be defective. The

Ninth Circuit followed Bailey’s lead, reversing the

grant of summary judgment precisely for this reason.

By contrast, the Second Circuit recognized a

“triable issue of fact as to whether the defendants

could have complied with their contractual obliga-

tions to the government while using what the plain-

tiffs contend was a process that would have resulted

in a defoliating agent substantially less dangcrous to

* See also id. at 801-02 (“Whether [the government contrac-

tor defense] will apply to a particular claim depends only upon

whether Boyle’s three conditions are met with respect to the

particular product feature upon which the claims is based.”).

9

military personnel.” Pet. 33a. Nevertheless, the court

granted summary judgment because it believed that

the shoddy workmanship is irrelevant unless there is

a non-conformity with government specifications. Jd.’

B. The Lower Courts Are in Conflict Over

the Degree of Specificity Required

Under Boyle’s First Prong.

Unquestionably, the Second Circuit jettisoned

Boyle’s requirement that the Government approve

“reasonably precise specifications” before it purchases

a product and extended immunity when such prod-

ucts are later “re-ordered” subsequent to testing, in

this case “acute toxicity” testing. Pet. 35-36a. But

even when it was re-ordered after the testing, the

government still lacked the same necessary informa-

tion about dioxin and its contamination of Respondents’

2,4,5-T through shoddy proprietary manufacturing

processes.

Given that this “acute toxicity” testing was

performed without knowledge of dioxin’s presence or

the health problems Respondents were aware of, the

" The court then recast Petitioners’ “manufacturing defect”

claims as ones involving “design defects.” Pet. 3la-33a. Respon-

dents thus quote Pet. 56a n.9 (see Opp. 20) out of context. The

manufacturing defect claims related to high temperatures and

the failure to use the Boehringer process are thoroughly dis-

cussed at AB43-56 and RS, Section VII, titled “Dioxin was

Produced as a Result of Defective Manufacturing Processes... .”

10

testing could not address the specific adverse medical

endpoints that needed to be evaluated. RS17-19,

RS39-40. There also was never testing for “chronic”

exposure, which Respondents themselves knew had

resulted in systemic disease to their workers. AS28-

44.

Furthermore, by extending this post-purchase

immunity even when post-purchase testing itself

does not discover any defect in question, Pet.

35a-36a, the Second Circuit markedly conflicts with

every other Circuit that has considered the first

prong of Boyle. Respondents acknowledge, for exam-

ple, that the Ninth Circuit in Snell, supra, held that

Boyle’s first prong requires an “exercise of judgment

by the government in the design of the particular

feature at issue.” See Opp. 26 (quoting Snell, supra,

107 F.3d at 747) (emphasis added). This is precisely

what the government never had an opportunity to

do with regard to dioxin in 2,4,5-T. Accordingly,

Respondents cannot explain away the circuit split

over this application of Boyle’s first prong.

Nor do they do so in their cursory treatment of

Trevino v. General Dynamics Corp., 865 F.2d 1474

(5th Cir. 1989). See Opp. 26. Trevino held with regard

to Boyle’s first prong that “the government does not

exercise a discretionary function by merely approving

the contractor’s work.” 865 F.2d at 1485. Here, the

government accepted the contractor’s work without

knowledge of the dioxin contamination of Z2,4,5-T and

without any specifications referencing the dioxin, or

control over the processes creating it.

11

C. Respondents Fail to Blunt the Split of

Authority Over Boyle’s Third Prong

Implicated by the Second Circuit’s

Holding on Materiality.

Complete governmental knowledge of the risks

known by the manufacturer was central to the Third

Circuit’s holding that the contractor failed to satisfy

Boyle’s third prong in Carley v. Wheeled Coach, 991

F.2d 1117 (3d Cir. 1993):

Nor is there any competent evidence indicat-

ing that the government knew that the

height of the ambulance’s center of gravity

might give the vehicle a dangerous propen-

sity to rollover.

Id. at 1127. Carley and the Fifth Circuit’s decision in

Mitchell v. Lone Star Ammunition, Inc., 913 F.2d 242,

246-247 (5th Cir. 1990) demonstrate, contrary to

Respondents’ assertion, that other Circuits have

addressed “independent government studies of prod-

uct” as part of their Boyle analysis. See Opp. 18. In

Mitchell, the defendant unsuccessfully argued that,

because the defectively manufactured mortar shell

survived a “government-approved assembly and

inspection process,” this demonstrated the govern-

ment’s ratification of the manufacturing defect. The

Fifth Circuit rejected the argument, noting that,

“because of the potential of the government contrac-

tor defense to displace large chunks of the states’

traditional prerogative over tort law, the defense

must be applied with caution.” /d. at 247 n.9.

12

A second basis for Respondents’ contention that

the Circuits are not split is that some of these cases

do not involve “(cJhemical exposures that allegedly

produced long-term risks of which,” they allege, “no

one was aware at the time of contracting.” Opp. 19.

As a factual matter, there is substantial evidence to

show that Respondents were very much aware of long

term risks to those exposed to their 2,4,5-T product.

See AS28-44, supra at 3-4, Pet. 13-14 (citing Pet. 6la

n.21). Moreover, Boyle’s use of the word “risk” is very

deliberate — Respondents were unquestionably aware

of the dire potential health risks to those exposed to

dioxin in their products. Id.

Finally, Respondents argue that there is nothing

novel in the Second Circuit’s ruling that the third

prong of Boyle requires that information knowingly

withheld from the government be “material to the

government’s assessment of the alleged defect.” Opp.

30. Yet, no other Circuit confronted with analyzing

the government contractor defense is in accord with

the Second Circuit on this point. Moreover, this Court

has recognized in other settings that a “matenality

inquiry, involving as it does ‘delicate assessments of

the inferences a “reasonable [decisionmaker]” would

draw from a given set of facts and the significance of

those inferences to him’ [is] peculiarly one for the

trier of fact.” United States v. Gaudin, 515 U.S. 506,

512 (1995) (emphasis added) (citations omitted); see

also United States v. Wells, 519 U.S. 482, 494-95

(1997) (“[Ijt does not lie with one knowingly making

false statements with intent to mislead the officials of

the corporation to say that the statements were not

13

influential or the information not important.”) (cita-

tion omitted).

Respondents do not address why it is in this

government’s public policy interest to immunize a

manufacturer that intentionally fails to disclose all

known risks of their product. Nor is there Secretary

McNamara’s testimony that he thought the informa-

tion wowd have been material. Supra at 5.

In light of the foregoing, Respondents have failed

to harmonize the Second Circuit’s decision applying a

materiality requirement as a question of law (or even

fact) with either this Court’s precedent treating

materiality as a factual determination or the other

circuit court authority that “consistently has refused

to hold that the government contractor defense is

established as a matter of law absent a substantial

showing that the manufacturer informed the govern-

ment of known risks in the use of its product.” Carley,

supra, 991 F.2d at 1127; see also Stout v. Borg-Warner

Corp., 933 F.2d 331, 337 (5th Cir. 1991) (“([Blecause

the Army had knowledge of the risk involved in

repairing the unit in the manner which resulted in

Stout’s injuries, the district court’s summary judg-

ment award holding that Fairchild was entitled to

immunity under the government contractor defense

was not erroneous.”); Harduvel, supra, 878 F.2d at

1321 (“The final Boyle condition requires that the

supplier warn the United States about dangers in the

use of the equipment that were known to the supplier

but not to the United States.”).

o

14

CONCLUSION

The petition for a writ of certiorari should be

granted.

Respectfully submitted,

GERSON H. SMOGER

Counsel of Record

STEVEN M. BRONSON

MARK BALLER

SMOGER & ASSOCIATES, PC

3175 Monterey Blvd., Suite 3

Oakland, CA 94602

(510) 531-4529

MARK R. CUKER

MICHAEL J. QUIRK

WILLIAMS CUKER BEREZOFSKY

One Penn Center at

Suburban Station

1617 J.F.K. Blvd., Suite 800

Philadelphia, PA 19103

(215) 557-0099

Counsel for Petitioners

February 10, 2009