747 F.2d 1180 (8th Cir. 1984), 84-5061, Gardiner v. A.H. Robins Co., Inc.

Docket Nº:84-5061, 84-5062.
Citation:747 F.2d 1180
Party Name:Karen GARDINER and Bruce Gardiner, Appellees, v. A.H. ROBINS COMPANY, INC., Appellant, F. Anderson Company. Deborah and Morris MICHALIK, Appellees, v. A.H. ROBINS COMPANY, INC., a Virginia Corporation, Appellant, C.F. Anderson Company, Inc., a Minnesota Corporation.
Case Date:November 02, 1984
Court:United States Courts of Appeals, Court of Appeals for the Eighth Circuit

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747 F.2d 1180 (8th Cir. 1984)

Karen GARDINER and Bruce Gardiner, Appellees,



F. Anderson Company.

Deborah and Morris MICHALIK, Appellees,


A.H. ROBINS COMPANY, INC., a Virginia Corporation, Appellant,

C.F. Anderson Company, Inc., a Minnesota Corporation.

Nos. 84-5061, 84-5062.

United States Court of Appeals, Eighth Circuit

November 2, 1984

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[Copyrighted Material Omitted]

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[Copyrighted Material Omitted]

Submitted Sept. 14, 1984.

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Charles Q. Socha, Denver, Colo., and Griffin B. Bell, Atlanta, Ga., for appellant.

Dale I. Larson, Minneapolis, Minn., for appellees.

Before LAY, Chief Judge, and BRIGHT and ARNOLD, Circuit Judges.

Opinion of the Court by LAY, Chief Judge, and BRIGHT and ARNOLD, Circuit Judges.

These appeals arise out of two tort actions claiming serious injuries as a result of the plaintiffs' use of the Dalkon Shield, an intrauterine contraceptive device. The cases were settled, and both complaints have therefore been dismissed with prejudice. The Settlement Agreement, however, obligates the corporate defendant, A.H. Robins Company, Incorporated (Robins), to preserve and produce certain documentary evidence in other cases brought by other plaintiffs represented by the same law firm that is counsel for plaintiffs in the two cases at bar. The district court, over the objection of Robins, approved the Settlement Agreement and entered the notation "So Ordered" on the parties' agreement. Robins appeals, claiming that settlement of individual actions is wholly within the power of the parties, that the district court's action apparently converts a private contract into a decree a violation of which would be a contempt of court, and that the district court had no authority to approve or disapprove the Settlement Agreement. We agree and reverse.

Robins also complains that the district court, without notice or hearing, condemned it and three of its employees by reading to them in open court a "speech" excoriating them for personal and professional misconduct. Among other things, the court accused Robins' medical director of violating "every ethical precept to which ever [sic] doctor under your supervision must pledge," Appendix at A-33--A-34, and stated that it had concluded that "the plaintiffs are right." Id. at A-48. No trial or evidentiary hearing had been held, nor did Robins and its employees know in advance that they would be thus condemned when they appeared in court to present a consummated settlement agreement. We hold that the district court's actions were a violation of due process. The truth or falsehood of plaintiffs' claims, and the propriety, legal or ethical, of the actions of Robins and its employees are not the point here. The point is that the facts are to be determined only after notice and an opportunity for a hearing. A court must hear before it condemns. We therefore direct that the district court's "speech" and other related comments be stricken from the record.


Plaintiffs commenced these actions against Robins in Minnesota state court, alleging that they suffered various injuries as a result of their use of the Dalkon Shield, an intrauterine contraceptive device formerly manufactured and distributed by Robins. Robins denied plaintiffs' substantive allegations and, on August 17, 1983,

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petitioned for removal of the cases, because of diversity of citizenship, to the United States District Court for the District of Minnesota. On December 13, 1983, these cases and approximately nineteen other suits pending against Robins were consolidated before the Honorable Miles W. Lord, United States Chief District Judge, District of Minnesota. Counsel for plaintiffs, Robins, Zelle, Larson & Kaplan (Robins, Zelle), acted as lead counsel in the discovery phase of the consolidated cases assigned to Judge Lord. Other Dalkon Shield cases were pending before other federal judges in the District of Minnesota and in state court in Minnesota. The district court actively participated in various aspects of the pretrial discovery of these consolidated cases. 1

On February 16, 1984, Robins submitted a motion requesting Judge Lord to disqualify himself on the ground that he was biased and prejudiced against Robins. Judge Lord denied the motion on February 23. 2 On February 28, 1984, the parties agreed to settle the two instant cases and five other cases not before Judge Lord but which involved clients of Robins, Zelle. The other Dalkon Shield cases before Judge Lord already had been settled and dismissed. At the time of the agreed settlement, Judge Lord had heard no trial testimony in the cases pending before him. The Settlement Agreement, which was signed by the parties' counsel on February 28, 1984, set forth an agreement by Robins relating to further discovery in other Dalkon Shield cases brought by clients of Robins, Zelle. 3 The Settlement Agreement provided for stipulated dismissals of the cases pursuant to Fed.R.Civ.P. 41(a)(1)(ii).

During discussions with counsel on February 24 and 27, Judge Lord stated that he would not accept a settlement without the presence of three officers of Robins. 4 On February 28, 1984, counsel for both parties appeared before Judge Lord and Judge Robert G. Renner to advise the court that they had reached a settlement of the cases. During that proceeding there were discussions regarding a non-destruct order relating to discovery documents which had been previously issued by Judge Lord. Because Judge Lord's non-destruct order would terminate if the cases were settled, counsel for plaintiffs requested Judge Renner to take over enforcement of that order in the cases pending before him. The transcript of this proceeding makes clear that Judge Lord's involvement in the consolidated Dalkon

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Shield litigation would end when the Settlement Agreement was signed by the Robins officers on the following day. 5 During the February 28 proceeding, counsel for plaintiffs inquired whether Judge Lord intended to review the Settlement Agreement. Judge Lord responded that he had no authority to interfere with the settlement and that reaching such an agreement was a private matter to be entrusted to the parties. 6

On February 28, 1984, counsel for the respective parties executed the Settlement Agreement and Stipulations of Dismissal with Prejudice of the two Dalkon Shield cases remaining before Judge Lord, pursuant to Rule 41 of the Federal Rules of Civil Procedure. On February 29, counsel for both parties and the three Robins officers appeared before Judge Lord. As anticipated, the Robins officers signed the Settlement Agreement and the parties submitted to the court their Stipulations of Dismissal. Judge Lord ultimately entered orders of dismissal in the two cases confirming the stipulated dismissals.

The parties had not anticipated that Judge Lord would sign the Settlement Agreement, and had not provided a place on the document for the court to do so. At the February 29 hearing, plaintiffs' counsel stated that they had not anticipated the court would indicate its approval on the document:

THE COURT: I anticipate--is there a place on that document for my signature?

MR. LARSON: There is not at this time, Your Honor.

THE COURT: Is it anticipated that I will have to approve it?

MR. LARSON: It is not anticipated, Your Honor. But it is perfectly all right, if Your Honor would like to do so.

Appendix at A-10.

Counsel for Robins repeatedly stated that Robins never intended for the court to be involved in the settlement and did not consider the effectiveness of the agreement to be contingent upon the court's approval. Appendix at A-27, A-31, A-48, A-57, A-58. Despite the parties' stated intentions that they had not anticipated court approval of the settlement, and despite Judge Lord's statement the previous day that "technically [he had no] authority to interfere with the settlement," Appendix at A-82, Judge Lord, at a later point during the hearing, threatened to withhold his approval and to "dissolve" the agreement, Appendix at A-27, A-58. 7

After the Settlement Agreement was signed by the three Robins officers and was submitted to the court, Judge Lord distributed to counsel and the Robins officers copies of a document entitled "The Church's Claim on the CorporateConscience:

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Toward a Redefinition of Sin." The document contained a written speech which Judge Lord originally delivered to a meeting of clergy in November 1981. The speech presents a critical view of American corporations, including drug companies. Judge Lord instructed the officers to remain in the courtroom and to read the document while the court took a recess. After the recess, Judge Lord proceeded to read to the officers another speech which accused the officers of personal misconduct, of engaging in deceptive and dilatory litigation tactics, and of committing "transgressions" for which they should "confess" and "beg forgiveness." During his reprimand of the Robins officers, Judge Lord acknowledged that he had, in his own mind, concluded that plaintiffs' allegations concerning the Dalkon Shield were true and that he was therefore prejudiced against Robins. Appendix at A-30, A-45--A-46, A-47--A-48.

Counsel for Robins objected to Judge Lord's reprimand several times during the hearing. See Appendix at A-26, A-28, A-30--A-31. Counsel based his objections on the grounds that Judge Lord had exceeded his jurisdiction and abused his discretion. Counsel requested the court to terminate the proceedings, or to stay the proceedings while counsel sought relief from this court. Judge Lord allowed counsel to state his objections but otherwise ignored counsel's requests. After concluding his speech to the...

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