In re Agent Orange Product Liability Litigation

• Decision Date: 05 July 1988
• Docket Number: No. MDL 381 (JBW).,MDL 381 (JBW).
• Parties: In re "AGENT ORANGE" PRODUCT LIABILITY LITIGATION.
• Court: U.S. District Court — Eastern District of New York

689 F. Supp. 1250

In re "AGENT ORANGE" PRODUCT LIABILITY LITIGATION.

No. MDL 381 (JBW).

United States District Court, E.D. New York.

July 5, 1988.

MEMORANDUM AND ORDER ON DISTRIBUTION ON REMAND

WEINSTEIN, District Judge:

                TABLE OF CONTENTS
                  I. PROCEDURAL HISTORY
                     A. Post-Settlement
                     B. Appeals
                     C. Post-Appeal Hearings and Advisory
                          Boards
                 II. SUMMARY OF ALLOCATION OF
                      FUNDS
                     A. Original and Revised Payment
                          Program
                     B. Australian & New Zealand Class
                          Members
                     C. Class Assistance Program
                     D. Attorneys' Fees and Expenses
                     E. Division of Funds
                III. PAYMENT PROGRAM
                     A. Inclusion of Opt-Out Claimants
                          and Late Claimants
                     B. Additions and Modifications
                        1. Exposure Criteria
                        2. Length
                        3. Claims Administrator
                        4. Special Master for Appeals
                        5. Other Implementation Actions
                 IV. CLASS ASSISTANCE PROGRAM
                     A. Original Foundation Concept
                     B. Post-Appeal Modifications
                        1. Veterans Advisory Board
                             Advisor, Executive Director
                             and Staff
                        2. Alternatives Under Consideration
                           a. Information and Referral
                                Network
                           b. Family- and Child-Related
                                Needs
                           c. Homeless and Disadvantaged
                                Veterans
                           d. Genetic Counseling
                           e. Assistance with Rights
                                and Benefits
                           f. Reserve
                           g. Tentative Conclusions
                        3. Data Required
                        4. Avoiding Duplicative Programs
                  V. MONEY MANAGEMENT AND ACCOUNTING
                     A. Present Method
                

                     B. Challenges Confronting Financial
                         Management During Distribution
                     C. Selection of Contractors to Provide
                         Financial Services
                     D. Investment and Depositary Arrangements
                     E. Accounting Services
                     F. Further Details of Distribution
                         Planning
                 VI. APPENDICES
                     A. Sample Letter to Claimants
                     B. Sample "Application for Payments"
                          Kit
                

On June 30, 1988, the Supreme Court denied the last two of the seven petitions for certiorari filed in the multidistrict litigation "Agent Orange" case. The only phase of the case now unresolved, and the subject of this memorandum, is the final distribution of the settlement fund.

After three and a half years of appeals, the distribution of the settlement fund is at hand. The court regrets any inconvenience or harm suffered by members of the class as a result of the delays caused by the legal process. Detailed consideration of the issues raised by the lawyers for plaintiffs on appeal was necessary to ensure fairness to members of the class and to their attorneys, and to guarantee compliance with the law in unique and highly complex circumstances.

Issuance of mandates to this court addressing all appeals made in the "Agent Orange" case had been stayed by the Court of Appeals for the Second Circuit, pending the Supreme Court's determinations on the seven petitions for certiorari. See Court of Appeals' Orders of July 17, 1987 and August 7, 1987; Fed.R.App.P. 41(b). The stay of the mandates was lifted on June 30, 1988 upon denial of the last petitions for certiorari. The case has now been returned to this court for determinations required on remand by the decisions of the Court of Appeals and for implementation of the plan for distribution of the settlement fund.

This order makes necessary modifications to this multidistrict court's earlier order, In re "Agent Orange" Product Liability Litigation, 611 F.Supp. 1396 (E.D.N. Y.1985), on distribution of the Agent Orange settlement fund. These modifications are required in light of the rulings of the court of appeals and subsequent developments. In particular, the affirmance of the grant of summary judgment against plaintiffs who opted out of the class, and the disapproval of the proposed form of the Class Assistance Foundation, require reconsideration of aspects of the distribution plan. See In re "Agent Orange" Product Liability Litigation, 611 F.Supp. 1223 (E.D.N.Y.1985), aff'd, 818 F.2d 187 (2d Cir. 1987), cert. denied sub nom. Lombardi v. Dow, ___ U.S. ___, 108 S.Ct. 2898, 101 L.Ed.2d 932 (1988) (opt-outs); In re "Agent Orange" Product Liability Litigation, 611 F.Supp. 1396 (E.D.N.Y.1985), aff'd in part, rev'd in part, 818 F.2d 179, 184-86 (2d Cir.1987) (addressing, inter alia, Class Assistance Foundation).

The court now (1) orders that the opt-out claimants and the claimants who filed late be included within the class which may receive benefits of the Agent Orange Settlement Fund, (2) makes modifications to the Payment Program, (3) appoints a claims administrator for the Payment Program, (4) appoints a Special Master for Appeals from denials of Payment Program benefits, (5) establishes the basis for a set of Class Assistance Programs in place of the Class Assistance Foundation, (6) formally appoints Veterans Advisory Boards for the Payment Program and the Class Assistance Program, (7) takes steps for the prompt funding of projects designed to assist the class, (8) establishes a reserve fund, (9) appoints investment managers and a depositary to hold funds subject to the court's control, (10) appoints an accounting consultant, and (11) reallocates the settlement fund in light of the decisions of the court of appeals and in order to distribute the interest earned during the appeals.

I. PROCEDURAL HISTORY

A. Post-Settlement

Early on the morning of May 7, 1984, the class of veterans exposed to Agent Orange reached a $180 million settlement with the several defendant chemical companies. No payments could be made from the settlement fund to class members or to plaintiffs' attorneys because of the pendency of the appeals. Investment of the settlement funds during the period from settlement on May 7, 1984 to the present has yielded interest which has increased the total amount of the fund from the original $180 million to some $240 million, after payment of interim expenses.

Following the settlement, the court held extensive hearings on the fairness and adequacy of the settlement, in New York, Chicago, Houston, Atlanta and San Francisco, at which some 500 witnesses were heard. The court has considered hundreds of additional written communications from veterans, members of their families, veterans' organizations, and others.

In September of 1984 the court issued a preliminary memorandum and order approving the settlement as fair, reasonable and adequate under the circumstances. See In re "Agent Orange" Product Liability Litigation, 597 F.Supp. 740 (E.D.N.Y. 1984) (Preliminary Memorandum and Order on Settlement). After the further determinations required by that order were made —the plan for distribution to eligible class members and the amount of reasonable attorneys' fees awards to plaintiffs' attorneys —final approval of the settlement was granted. See In re "Agent Orange" Product Liability Litigation, 611 F.Supp. 1396 (E.D.N.Y.1985) (Memorandum, Order and Judgment on Distribution of the Settlement Fund), aff'd in part, rev'd in part, 818 F.2d 179 (2d Cir.1987); In re "Agent Orange" Product Liability Litigation, 611 F.Supp. 1296 (E.D.N.Y.1985) (Memorandum and Order on Attorney Fees as Modified and Final Judgment), aff'd in part, rev'd in part, 818 F.2d 216 (2d Cir.1987) and 818 F.2d 226 (2d Cir.1987), cert. denied sub nom. Newton Schwartz v. Dean, ___ U.S. ___, 108 S.Ct. 289, 98 L.Ed.2d 249 (1987).

The original total settlement was $180 million. Since that time, the funds have been held by the Clerk of the Court for the Eastern District of New York, and additional interest has been earned, bringing the total to approximately $240 million on June 30, 1988. On the advice of Special Master for Investment Policy Richard Davis, Esq. and financial consultants to the court, the court has directed that investments be made in short-term federal Treasury Bills for maximum security and liquidity. These consultants and Special Master Davis gave extensive time to the investment and fund protection problems without any receiving fees or reimbursement for expenses. The court is grateful for these unselfish services as well as for the assistance provided by the advisors and consultants named in the body of this opinion and by the numerous persons who advised the court at hearings and by letters.

B. Appeals

Appeals were taken from numerous orders including the orders certifying the class action, approving the settlement, outlining the distribution plan, awarding counsel fees, granting summary judgment against the opt-out claimants, dismissing untimely claims, dismissing all the claims against the United States, and unsealing discovery materials.

In nine unanimous opinions dated April 21, 1987 a panel of the Second Circuit Court of Appeals disposed of all of the numerous individual appeals except those from the order of the district court providing for public access to documents sealed from public view during the discovery phase of the litigation. Following the denial of several petitions for rehearing and for rehearing en banc, six petitions for writs of certiorari were filed with the Supreme Court by the opt-out plaintiffs, by class members who objected to the settlement and distribution, by other plaintiffs whose claims were dismissed, and by one of plaintiffs' attorneys who sought reversal of the appellate court's rulings on counsel fees. The petitions for writs of certiorari were all denied by the Supreme Court. See In re "Agent Orange" Product Liability Litigation, 818 F.2d 145 (2d Cir.1987) (affirming class certification and approving of settlement), cert. denied sub nom. Pinckney v. Dow, ___ U.S. ___, 108 S.Ct. 695, 98 L.Ed. 2d 648 (1988), and Krupkin v. Dow, ___ U.S. ___, 108 S.Ct. 2899, 101 L.Ed.2d 932 (1988); 818 F.2d 179 (2d Cir.1987) (approving Payment Program but rejecting Class Assistance Foundation); 818 F.2d 187 (2d Cir.1987) (affirming summary judgment entered against opt-out ...