A.H. Robins Co., Inc., In re

Decision Date16 June 1989
Docket Number88-1766 and 88-3604,Nos. 88-1755,88-1757,s. 88-1755
Citation880 F.2d 709
Parties, 13 Fed.R.Serv.3d 1239 In re A.H. ROBINS COMPANY, INCORPORATED, Debtor.
CourtU.S. Court of Appeals — Fourth Circuit

Irving R.M. Panzer, Joseph Francis McDowell, III (Cullity, Kelley & McDowell, Manchester, N.H., Sidney L. Matthew, Tallahassee, Fla., John T. Baker, Denver, Colo., Bragg & Dubofsky, P.C., Boulder, Colo., Robert E. Manchester, Manchester Law Offices, P.A., Bradley Post, Post, Syrios & Bradshaw, Wichita, Kan., James F. Szaller, Cleveland, Ohio, Brown & Szaller, Co., LPA, on brief), for appellants.

John G. Harkins, Jr. (Deborah F. Cohen, Philadelphia, Pa., Richard B. Herzog, Gerald P. Norton, Mark Schattner, Pepper, Hamilton & Scheetz, Washington, D.C., on brief), Joseph Stuart Friedberg (Joseph S. Friedberg, Chartered, Ronald I. Meshbesher, Meshbesher, Singer & Spence, Ltd., Minneapolis, Minn., John A. Cochrane, Cochrane & Bresnahan, P.A., St. Paul, Minn., Herbert B. Newberg, Martin J. D'Urso, Herbert B. Newberg, P.C., Philadelphia, Pa., James Hovland, Krause & Rollins, Minneapolis, Minn., Douglas W. Thomson, Thomson, Hawkins & Ellis, Theodore I. Brenner, Bremner, Baber & Janus, W. Scott Street, III, A. Peter Brodell, Williams, Mullen, Christian & Dobbins, Richmond, Va., on brief), for appellees.

Before RUSSELL, WIDENER, and CHAPMAN, Circuit Judges.

DONALD RUSSELL, Circuit Judge:

This diversity suit by seven individual claimants, suing on their own behalf and as the proposed class representatives of all injured Dalkon Shield claimants, seeks recovery against Aetna Casualty and Surety Company (Aetna) for injuries resulting from the use of an allegedly defective intrauterine device known as the Dalkon Shield. Aetna was neither the manufacturer nor the vendor of the device; it was the products liability insurance carrier of A.H. Robins Company, Inc. (Robins), the manufacturer and distributor of the device. It is the theory of the plaintiffs that Aetna's conduct, while acting in its role as insurance carrier, was such that it rendered itself liable as a joint tortfeasor with Robins for any injuries sustained by persons using the device. The plaintiffs sought class certification of the suit. During consideration whether to give final certification of the suit, the parties entered into a settlement of the action conditioned on certification. After a duly-noticed hearing, the District Court granted in separate orders final class certification of the action and approval of the settlement of the action so certified. The appeal challenges the two orders. Since the two orders from which the appeals are taken are intimately connected, the two appeals have been consolidated. We affirm both the class certification and the settlement orders.


In the early 1960's, Dr. Hugh Davis, a gynecologist on the staff of the Johns Hopkins Hospital and the Johns Hopkins Medical School, developed an intrauterine device which has been generally described as a Dalkon Shield. In conjunction with some associates, Dr. Davis, in the mid 1960's, began to manufacture and sell on a small scale the Dalkon Shield. This limited operation continued until early 1970 when A.H. Robins Co., Inc. (Robins), which was a well-recognized and successful manufacturer and marketer of pharmaceutical products, acquired the exclusive right to manufacture and market the Dalkon Shield. In his findings in connection with this purchase by Robins of exclusive rights in the manufacture and sale of the Dalkon Shield, the District Judge said:

Prior to that time (i.e., the purchase of the Dalkon Shield), Robins had never marketed any kind of a birth control product and had no gynecologist on its medical staff. Nevertheless, Robins did no further testing, readily accepted the figures of the inventor's testing, and aggressively promoted the device to the medical profession and, uniquely for such a device, to the general public.

Robins, however, did not begin the marketing of the device until early 1971. Whether as a result of the promotional efforts of Robins or not, the product received wide public acceptance, and its sale was brisk. Between 1971 and mid-1974 when sales were discontinued, some 2,200,000 Dalkon Shields were sold. These sales generated a gross revenue for Robins of $11,240,611.00 and a gross profit of $505,499.00. 1

The product, however, had hardly been introduced into the market before what the District Court herein described as "an extraordinary volume" of complaints of injuries suffered by reason of its use began to surface. By 1973, the complaints had reached such a level that Robins felt compelled to send its first "Dear Doctor" letter to the medical profession advising the profession of a septic abortion problem arising out of the use of the device along with a suggestion for reducing the risk of such problem. The complaints from users of the device, however, continued at such a pace that by mid-1974 Robins finally withdrew the product from the market. Robins did not, though, issue any product recall until September 1980, when it addressed its second "Dear Doctor" letter to the medical profession. In this letter it recommended that the devices be removed from all continuing users, even those with no manifest problems, and it noted, as summarized by the District Court, that "long-term users of all IUD's had a higher risk of exposure to actinomyces, a virulent strain of microorganism implicated as a cause of pelvic inflammatory disease." However, there was no realistic recall of the Dalkon Shield until 1984.

The early complaints of injury from the use of the device quickly generated lawsuits against Robins in various parts of the country. Aetna Casualty and Surety Company (Aetna), as the products liability insurance carrier, was obligated to defend the suits filed against Robins in that connection. The first action to come to trial against Robins charging injuries from the use of the Dalkon Shield arose in the state court in Kansas and resulted in a verdict in February 1975 in favor of the plaintiff in the amount of $85,000, including a $75,000 punitive damage award. This verdict was widely publicized and the filing of actions against Robins quickened. 2 This multiplication of suits--such, for instance, as approximately two hundred at the same time in the Northern District of California 3 and in the District of Maryland, 4--posed a serious problem of manageability for the courts before which the suits were pending.

Many of the courts referred the multiplicity of suits in their district for consolidated pre-trial proceedings under the direction of the Judicial Panel on Multi-District Litigation in the hope that such action might reduce the difficulties of disposing expeditiously of the mounting Dalkon Shield case burden. See In re A.H. Robins Co., Inc. "Dalkon Shield" IUD Products Liability Litigation, 406 F.Supp. 540 (J.P.M.D.L.1975); 419 F.Supp. 710 (J.P.M.D.L.1976); and 438 F.Supp. 942 (J.P.M.D.L.1977). After the entry of a number of such orders of transfer, the Judicial Panel finally concluded that their previous orders accepting transfers had accomplished as much as could be achieved in reducing pre-trial proceedings and it began vacating later transfer orders, returning the cases for further proceedings to the respective transferor courts. In re A.H. Robins Co., Inc. "Dalkon Shield" IUD Products Liability Litigation, 453 F.Supp. 108 (J.P.M.D.L.1978); and 505 F.Supp. 221 (J.P.M.D.L.1981). While these proceedings before the Judicial Panel had aided the problems of discovery in the Dalkon Shield cases, they did nothing to relieve the clogging of court calendars by the constantly increasing stream of Dalkon Shield cases to be tried, nor did they reduce substantially the trial time of the cases. It was manifest that other measures were required if this overloading of the courts with Dalkon Shield cases was to be relieved.

District Judge Miles Lord of the Minnesota District Court, to whom had been assigned in the late 1970's and early 1980's a large number of Dalkon Shield cases, determined to try his hand at expediting the disposition of such cases as were before him. He consolidated a large number of such suits and appointed a lead counsel to handle discovery. He prodded the counsel so appointed to proceed aggressively, and he named two masters to sift through all the material discovered and to prepare a report for counsel and the court based on all material discovered and any developed in their independent investigations. The masters did conduct considerable independent investigations. Thus, they reviewed carefully the relevant records in the files of Robins and inquired into the possible involvement of Aetna with Robins in the defense planning and activity. All of this discovery, along with that developed by lead counsel, was catalogued by lead counsel appointed by the Court. The suits in litigation before Judge Lord, however, were at this point settled for $38 million and no further proceedings were had in Judge Lord's court (and that of his successor). The lead counsel in this litigation before Judge Lord withdrew from any subsequent Dalkon Shield litigation but made available to counsel in other cases the discovery developed in that case.


Other courts took another tack in an effort to manage expeditiously and fairly the mass of Dalkon Shield cases. They turned to the class action procedure provided by Rule 23, Fed.R.Civ.P. The great volume of cases which were inundating the court system and the similarity of the issues in all the cases, it was thought, provided a proper basis for class treatment both in the interests of the parties and of the courts. The first case in which this procedure was invoked was Rosenfeld v. A.H. Robins Co., Inc., 63 A.D.2d 11, 407 N.Y.S.2d 196 (N.Y.App.Div.), appeal dismissed, 46 N.Y.2d 731, 413 N.Y.S.2d 374, 385 N.E.2d 1301 (1978). In that case, the plaintiffs...

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