Vancouver Women's Health Collective Soc. v. A.H. Robins Co., Inc.

• Citation: 820 F.2d 1359
• Decision Date: 17 June 1987
• Docket Number: Nos. 86-1159,86-1170 and 86-1196,s. 86-1159
• Parties: , Bankr. L. Rep. P 71,879 VANCOUVER WOMEN'S HEALTH COLLECTIVE SOCIETY; Women's Health Clinic, Inc.; Council for the Status of Women of Dublin, Ireland, Plaintiffs-Appellants, v. A.H. ROBINS COMPANY, INCORPORATED, Defendant-Appellee, Official Committee of Equity Security Holders, Intervenor. NATIONAL WOMEN'S HEALTH NETWORK; Ubinig, Plaintiff-Appellant, v. A.H. ROBINS COMPANY, INCORPORATED, Defendant-Appellee, Official Committee of Equity Security Holders, Intervenor. COMMITTEE OF DALKON SHIELD CLAIMANTS, Plaintiff-Appellant, v. A.H. ROBINS COMPANY, INCORPORATED, Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (4th Circuit)

Page 1359

820 F.2d 1359

56 USLW 2044, Bankr. L. Rep. P 71,879

VANCOUVER WOMEN'S HEALTH COLLECTIVE SOCIETY; Women's Health

Clinic, Inc.; Council for the Status of Women of

Dublin, Ireland, Plaintiffs-Appellants, v. A.H. ROBINS COMPANY, INCORPORATED, Defendant-Appellee, Official Committee of Equity Security Holders, Intervenor.

NATIONAL WOMEN'S HEALTH NETWORK; Ubinig, Plaintiff-Appellant, v. A.H. ROBINS COMPANY, INCORPORATED, Defendant-Appellee, Official Committee of Equity Security Holders, Intervenor.

COMMITTEE OF DALKON SHIELD CLAIMANTS, Plaintiff-Appellant, v. A.H. ROBINS COMPANY, INCORPORATED, Defendant-Appellee.

Nos. 86-1159, 86-1170 and 86-1196.

United States Court of Appeals,

Fourth Circuit.

Argued Feb. 4, 1987.

Decided June 17, 1987.

Mark Charles Ellenberg (James F. Wallack, William H. Merrill, Cadwalader, Wickersham & Taft, Washington, D.C., on brief), for plaintiffs-appellants.

James Strother Crockett, Jr. (William R. Cogar, Clifford W. Perrin, Jr., Linda J. Thomason, Mays & Valentine, Richmond, Va., on brief), James MacNeill Nolan (Robert M. Miller, Bishop, Liberman & Cook, Michael L. Cook, Dennis J. Drebsky, Skadden, Arps, Slate, Meagher & Flom, New York City, Ross C. Reeves, Willcox & Savage, Norfolk, Va., on brief), for defendant-appellee.

Before RUSSELL, WIDENER and CHAPMAN, Circuit Judges.

CHAPMAN, Circuit Judge:

This appeal presents another chapter in the continuing saga of Dalkon Shield litigation. The Dalkon Shield Claimants' Committee appeals the denial of its motion for an extension, or abolishment of the Bar Date for foreign claimants. The Committee argues that the notification program which Robins developed at the district court's direction was insufficient to notify users of the Dalkon Shield outside the United States of their legal rights. Because we find that the notification program was adequate under the circumstances, we affirm the order of the district court denying appellant's motion.

I

This occasion marks the fourth time that this court has been asked to review decisions rendered in In Re: A.H. Robins Company, No. 85-1307-R (Bankr.E.D.Va.). The litigation centers around the intrauterine contraceptive device known as the Dalkon Shield which Robins manufactured and distributed. The Dalkon Shield was found to cause a variety of injuries to women. In 1984, Robins undertook a $4.5 million global media campaign, the purpose of which was to alert women to the potential harm which might accompany the use of the Dalkon Shield, and to offer to pay the reasonable medical costs of removing the device. By August 1985, over 5,000 suits seeking compensatory and punitive damages were pending against Robins.

In August 1985, Robins filed a petition under Chapter 11 of the Bankruptcy Code. Because this case is vastly complex and includes the unusual element of hundreds of thousands of personal injury tort claims which are pending against the petitioner, the district court withdrew its standing order of reference to the bankruptcy court and assumed jurisdiction over most proceedings.

Robins filed a multipurpose motion requesting the court to set a Bar Date for claims, to approve an appropriate form of notice for potential claimants, and to approve a procedure by which the notice could be disseminated world wide. The issues raised by the motion were briefed by all interested parties. In November of 1985, after a hearing and much discussion among the parties, the court entered an order which, among other matters, set the bar date as April 30, 1986, established the form of notice to be disseminated to trade creditors, stockholders, and potential Dalkon Shield claimants, and created a procedure by which Robins would disseminate this notice to the world.

The order encompassed the parties' agreement regarding the methods of notice dissemination which would be required, one method aimed entirely at foreign countries and the other focused on the United States. Regarding the foreign notification program, the pertinent portion of the court's order states:

That Robins shall notify all persons or entities of the Bar Date by implementing the following procedure:

* * *

* * *

b. Foreign Notice: On or before January 31, 1986, Robins shall conclude a public-relations program designed to give notice regarding the Bar Date and related matters in foreign countries through news releases, press conferences, public service announcements, and letters to health ministers and medical associations. The program shall be tailored to the specific countries in which the Dalkon Shield was marketed or known by Robins to have been used and Robins shall provide information packets to American embassies located in each of these countries. All elements of this program shall specify U.S.A. when listing the address for claims.

(emphasis added).

Acting, as it is, upon a voluntary petition of bankruptcy, the district court has tried to satisfy its obligation to balance the interests of potential Dalkon Shield claimants against those of both Robins' creditors and actual Dalkon Shield claimants. Therefore, the district court limited the amount of money which Robins could spend on its notification program to five million dollars, but, the cost of implementing both the foreign and domestic programs has been approximately four million dollars.

In December 1985, Robins submitted a detailed outline of its notification program. Implementation of the program began on January 6, 1986, and was largely completed by January 31, 1986. On January 14, 1986 the Claimants' Committee objected to the notice program in a "Supplemental Memorandum Concerning Notice." The Memorandum identified twelve objections to the notification program, only three of which pertained specifically to the foreign notice program. The Claimants' Committee requested a news conference in Cairo, Egypt, sought modification of a background handout that was being distributed in the foreign notice program and, expressed general, unspecified concerns about the budget and scope of the foreign notice program. The news conference in Egypt had been canceled because the Egyptian government had responded to the announcement of a news conference with hostility and threats. The background handout had been before the district court since December 18, 1985 without objection by the Claimants' Committee. Finally, the general concerns about the budget and scope of the foreign notice program were not sufficiently specific to provide Robins with notice of what the Claimants' Committee desired.

In its efforts to satisfy the court's order regarding foreign notification, Robins hired Burson-Marsteller, a public relations agency with offices throughout the world, to design and implement the foreign notification program in ninety foreign countries. Burson-Marsteller was not constrained by budgetary limitations in the planning stages. Instead, Robins asked Burson-Marsteller to devise an appropriate program for disseminating the Bar Date message worldwide and then to estimate the cost of such an undertaking. The estimate of Burson-Marsteller for the foreign notification program it was one million dollars. This figure was subsequently incorporated into the budget order of the district court.

The foreign notification program was designed to disseminate notice of the Bar Date as widely as possible using public relations rather than direct payment advertising. Burson-Marsteller estimated that an international paid advertising program commensurate with the domestic program could cost as much as forty to fifty million dollars. Therefore, a public relations format was devised which offered substantial savings and, it was hoped, certain advantages over the use of paid advertising.

The foreign notification program was premised upon two fundamental principles of public relations. First, the program was intended to utilize fully persons and organizations which could effectively communicate the message of the Bar Date to others. These groups included not only the mass media, but also medical organizations, health officials, government agencies and ministries. Second, by saturating the mass media with press conferences and press releases in a short period of time, the notification program itself was intended to become "news" to be reported by wire services, newspapers, radio and television. This type of information dissemination also lessened the control of Robins respecting the content of the message.

The materials which formed the nucleus of the foreign notification program were a press release, a background handout, a letter to foreign health ministers, a letter to medical associations, a letter to American embassies, a public service announcement for print media, and a script for radio and television public service use. All of the materials, except the letter to American embassies, were translated into every official language of each of the ninety countries--a total of twenty-nine languages. The press release, background handout, and public service announcements comprised a press packet that was issued to all daily media outlets in the ninety countries, including newspapers, and radio and television stations.

Press conferences were held in sixteen countries during January 1986. With one exception, the press conference sites were major international media centers from which the story of the Bar Date could be expected to disseminate beyond the immediate areas. The exception was Wellington, New Zealand, where a press conference was scheduled because of previous interests in the Dalkon Shield in that country. The sixteen press conferences attracted over three hundred and fifty reporters....