149 F.3d 387 (5th Cir. 1998), 97-40113, Winters v. Diamond Shamrock Chemical Co.

Docket Nº:97-40113.
Citation:149 F.3d 387
Party Name:Margaret WINTERS, Plaintiff-Appellant, v. DIAMOND SHAMROCK CHEMICAL COMPANY; et al., Defendants, The Dow Chemical Company; Monsanto Company; Uniroyal, Incorporated; Hercules, Inc.; Thompson-Hayward Chemical Company, also known as Thompson Chemical Corporation; T.H. Agriculture & Nutrition Company, Inc.,; Diamond Shamrock Chemical Company, Defendant
Case Date:August 17, 1998
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit

Page 387

149 F.3d 387 (5th Cir. 1998)

Margaret WINTERS, Plaintiff-Appellant,



The Dow Chemical Company; Monsanto Company; Uniroyal,

Incorporated; Hercules, Inc.; Thompson-Hayward Chemical

Company, also known as Thompson Chemical Corporation; T.H.

Agriculture & Nutrition Company, Inc.,; Diamond Shamrock

Chemical Company, Defendants-Appellees.

No. 97-40113.

United States Court of Appeals, Fifth Circuit

August 17, 1998

Page 388

[Copyrighted Material Omitted]

Page 389

Charles Benton Musslewhite, Houston, TX, John F. Winters, Chicago, IL, for Plaintiff-Appellant.

Steven E. Brock, Rivkin, Radler & Kremer, Uniondale, NY, Morris Clifford Carrington, Mehaffy & Weber, Beaumont, TX, for The Dow Chemical Co.

John Carl Sabetta, Seyfarth, Shaw, Fairweather & Geraldson, New York City, for Monsanto Co.

Kurt David Groten, Phillips & Akeers, Houston, TX, Myron Kalish, Parker, Duryee, Rosoff & Haft, New York City, for Uniroyal, Inc.

William Krohley, Steven P. Caley, Kelley, Dyre & Warren, New York City, for Hercules, Inc.

Lawrence T. Daloise, Jr., Clark, Gagliardi & Miller, White Plains. NY, for Thompson-

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Hayward Chemical Co. and T.H. Agriculture & Nutrition Co., Inc.

Lawrence Thomas D'Aloise, Clark, Gagliardi & Miller, White Plains, NY, for Thompson-Hayward Chemical Co.

Richard A. Sheehy, McFall, Sherwood & Sheehy, Houston, TX, for T.H. Agriculture & Nutrition Co., Inc.

Michael Mackin Gordon, Cadwalader, Wickersham & Taft, New York City, John G. Bisell, Strong, Pipkin, Nelson & Bissell, Beaumont, TX, for Diamond Shamrock Chemical Co.

Appeal from the United District Court for the Eastern District of Texas.

Before GARWOOD, JOLLY and HIGGINBOTHAM, Circuit Judges.

E. GRADY JOLLY, Circuit Judge:

This case is part of the Agent Orange saga. This particular appeal presents a question regarding the reach of the offensive collateral estoppel doctrine where the issue sought to be precluded from relitigation was decided in a trial court outside this circuit and the foreign court's decision was not subjected to appellate review. We hold today that the district court properly denied such a judgment preclusive effect under the collateral estoppel doctrine, that we do indeed have jurisdiction under the Federal Officer Removal Statute, and that we therefore may reach the merits of this appeal. In so doing, we affirm the judgment of the district court dismissing the complaint as barred by the Texas statute of limitations.


The defendants supplied the American government with Agent Orange between 1962 and 1971. Agent Orange is an equally mixed herbicidal blend of 2,4-Dichlorophenoxyacetic Acid (2,4-D) and 2,4,5-Trichlorophenoxyacetic Acid (2,4,5-T). The blending production of these two acids can produce varying amounts of 2,3,7,8 Tetrachlorodibenzo-p-dioxin, an extremely toxic substance. The voluminous lawsuits involving Agent Orange, including this one, center around the physical defects and diseases allegedly caused by exposure to this dioxin.

Margaret Winters, now taken from this world by the disease allegedly caused by Agent Orange, worked as a civilian nurse for the United States Agency for International Development ("U.S. AID") in Vietnam in 1966 and 1967. During her 14-month overseas tenure, Winters lived in Saigon and worked at a hospital located in Cholon, a suburb of Saigon. While Winters was living in Vietnam, the American government employed the herbicide Agent Orange as a defoliator, in order to provide its military personnel with some tactical advantage.

Winters returned to Chicago in October 1967. Nearly ten years later, she began to experience health problems. Specifically, her eyes hemorrhaged and, in 1981, tumors were discovered behind both of them. She was diagnosed in August 1983 with non-Hodgkin's lymphoma ("NHL"). Winters filed suit ten years later after reading an article in the local newspaper reporting a link between NHL and Agent Orange. She alleged that the defendants formulated, manufactured, and sold Agent Orange to the United States military, that the herbicide was defective and unreasonably dangerous, that she was exposed to Agent Orange while in Vietnam, and that the herbicide caused her usually-terminal cancer. During the pendency of this action, Winters succumbed to the disease and the torch was passed to her estate. 1


The defendants removed the state-filed action to federal court in the Eastern District of Texas pursuant to both the Federal Officer Removal Statute, 28 U.S.C. § 1442(a)(1), and the court's original jurisdiction, premised on the federal law governing military procurements, 28 U.S.C. § 1331. The Judicial Panel on Multidistrict Litigation determined that Winters's suit was sufficiently similar to others decided by Judge Jack Weinstein in the Eastern District of New York and transferred the action to that district. Winters

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filed a motion to remand the case to state court, alleging that the defendants' asserted grounds for removal were defective. Judge Weinstein, professing a lack of expertise with Texas substantive law, transferred the case back to the Eastern District of Texas.

The Texas district court denied Winters's motion to remand on the basis that the defendants sufficiently demonstrated that they were entitled to a federal forum under the Federal Officer Removal Statute. The defendants then moved for a judgment as a matter of law, arguing that they were entitled to a judgment on the basis of the military contractor defense and laches. The court granted summary judgment for the defendants on statute-of-limitations grounds without having received a response from Winters. Winters then filed a motion for a new trial and/or rehearing and submitted evidence in support of that motion. The district court declined to reconsider its ruling and Winters timely appealed.


Winters initially argues that the district court erred when it refused to offensively apply the doctrine of collateral estoppel to preclude the defendants from arguing that the case was properly removed from state court. She maintains that the defendants had a full and fair opportunity to argue their position in Ryan v. Dow Chem. Co., et al. 2 and that the Ryan Court's decision to remand should have preclusive effect against the defendants in the present action.


The seminal case setting out the parameters of the offensive use of collateral estoppel is Parklane Hosiery Co. v. Shore, 439 U.S. 322, 99 S.Ct. 645, 58 L.Ed.2d 552 (1979). Before addressing Parklane, however, let us make a few observations generally about the use of collateral estoppel, or issue preclusion. Four conditions must be met before collateral estoppel may be applied to bar relitigation of an issue previously decided by a court of competent jurisdiction:

(1) the issue under consideration is identical to that litigated in the prior action; (2) the issue was fully and vigorously litigated in the prior action; (3) the issue was necessary to support the judgment in the prior case; and (4) there is no special circumstance that would make it unfair to apply the doctrine.

Copeland, et al. v. Merrill Lynch & Co., et al., 47 F.3d 1415, 1422 (5th Cir.1995) (citing United States v. Shanbaum, 10 F.3d 305, 311 (5th Cir.1994)). 3

As noted above, the fourth factor pertinent to application of the collateral estoppel doctrine is whether any "special circumstances" exist that would make issue preclusion unfair. The Supreme Court, in Parklane, set out examples of such "special circumstances" when application is sought offensively. One is whether the plaintiff easily could have joined the previous action, but instead chose to "wait and see" whether a favorable judgment would be rendered. Parklane, 439 U.S. at 330-31, 99 S.Ct. at 651-52. A second consideration is whether the defendant had the incentive to defend vigorously, especially if sued only for nominal damages or if future suits were not foreseeable. Id. Third, offensive collateral estoppel asks whether the judgment upon which the plaintiff seeks to rely is itself inconsistent with a previous judgment in favor of the defendant. Id.

"The general rule should be that in cases ... where, either for the reasons discussed above or for other reasons, the application of offensive estoppel would be unfair to a defendant, a trial judge should not allow

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the use of offensive collateral estoppel." Id. at 331, 99 S.Ct. 645 (emphasis added). The Court specifically noted, however, that a district court has broad discretion to determine whether collateral estoppel is appropriately employed offensively to preclude issue relitigation. Id. at 331, 99 S.Ct. 645; Copeland, 47 F.3d at 1423 (also noting "broad discretion" of district court, particularly with respect to use of offensive collateral estoppel). We thus review the district court's refusal to offensively apply collateral estoppel only for abuse of the broad discretion afforded it. Copeland, 47 F.3d at 1423.

With this general understanding of offensive collateral estoppel, we turn to the specifics of this action. The defendants do not dispute that they had adequate incentive and opportunity to fully and fairly litigate this removal question before the district court in New York. Furthermore, no special procedures inured to their benefit in the action before the Texas court that did not equally apply to the case before the New York court. The removal issue litigated in New York was identical to that litigated in Texas and was integrally related to--indeed, it constituted the crux of--the particular judgment. With all concrete factors, then, being in favor of applying offensive collateral estoppel, we consider whether any "special circumstances" exist that make the application inappropriate.


Judge Weinstein, in Ryan, considered and rejected the defendants' argument that the Federal Officer Removal...

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