In re EI du Pont de Nemours and Co.

• Decision Date: 21 August 1995
• Docket Number: No. 4:95-cv-36 (JRE).,4:95-cv-36 (JRE).
• Citation: 918 F. Supp. 1524
• Parties: In re E.I. DU PONT DE NEMOURS AND COMPANY — Benlate® Litigation. The BUSH RANCH, INC., a Georgia corporation, and William R. Lawson, Individually, Yellow River Growers, a partnership whose partners are Roy Phillip Barber, Carol H. Barber and Gregory Phillip Barber, and Carol H. Barber, and C. Raker & Sons, Inc., a Michigan corporation, Petitioners, v. E.I. DU PONT DE NEMOURS AND COMPANY, a Delaware corporation, Respondent.
• Court: U.S. District Court — Middle District of Georgia

918 F. Supp. 1524

In re E.I. DU PONT DE NEMOURS AND COMPANY — Benlate® Litigation The BUSH RANCH, INC., a Georgia corporation, and William R. Lawson, Individually, Yellow River Growers, a partnership whose partners are Roy Phillip Barber, Carol H. Barber and Gregory Phillip Barber, and Carol H. Barber, and C. Raker & Sons, Inc., a Michigan corporation, Petitioners, v. E.I. DU PONT DE NEMOURS AND COMPANY, a Delaware corporation, Respondent.

No. 4:95-cv-36 (JRE).

United States District Court, M.D. Georgia, Columbus Division.

August 21, 1995.

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C. Neal Pope, Columbus, Georgia, and Richard H. Gill, Montgomery, Alabama, for petitioners.

Dow N. Kirkpatrick, II and John K. Train, III, Columbus, Georgia and Arthur J. England, Miami, Florida, for respondent.

OPINION AND ORDER

ELLIOTT, District Judge.

A hearing which began on Tuesday, May 2, 1995, and ended on Friday, May 12, 1995, was conducted by the Court in connection with the matter above identified. Following the suggestion made by the Court, counsel for the respective parties have filed proposed findings of fact and conclusions of law. The Court now files this opinion in which the Court's findings of fact and conclusions of law, although not separately categorized, will be readily apparent. The Court will enter a separate order with respect to and deciding all motions of the Petitioners and of DuPont which are still pending.

The Petitioners in this matter are nurserymen who previously were among the named Plaintiffs in separate actions against E.I. du Pont de Nemours and Company (hereafter DuPont) tried as consolidated cases in this court. A total of 14 such actions were filed, and all of the cases were consolidated for the purposes of discovery prior to trial of the consolidated cases. At all times, however, the first four of those actions (the "Bush Ranch cases") clearly were the "lead" cases. The Plaintiffs in those cases contended that DuPont's product, Benlate 50DF, a fungicide, was defective and was contaminated with, among other things, highly toxic herbicides generically called sulfonylureas ("SUs"), manufactured, formulated and/or warehoused by DuPont at the same Belle, West Virginia, plant where benomyl, the active ingredient in Benlate 50DF, is manufactured. It was claimed that such SU-contaminated Benlate caused damages to the ornamental plants and the soils and waters of their nurseries. Therefore, the testing for the presence of SU contamination was the most critical evidence for both the Plaintiffs and the Defendant in the Bush Ranch cases.

This Petition to Show Cause was filed with the Court on March 22, 1995. The Petitioners, three of the four Plaintiffs in the original lead consolidated cases (hereafter "Bush Ranch" cases), are alleging that DuPont, through its conduct, engaged in acts of misrepresentation and concealment as to critical evidence which constituted a fraud on the Court and a contempt of the Court's orders. On reviewing the petition, as well as the memorandum appendix in support and attached Exhibits 1-75, this Court on March 23, 1995, entered an order directing DuPont to show cause on April 24, 1995, why it should not be sanctioned for the conduct described in the petition.

Among the motions filed by DuPont was a motion to recuse this District Court Judge before whom the wrongful conduct stated in the petition was alleged to have occurred. DuPont also filed motions to dismiss and to vacate the show cause order. Thereafter, considering these motions, the Court continued the hearing to May 1, 1995, and, at the request of DuPont's counsel, the Court continued the hearing to May 2, 1995.

On April 26, 1995, the Court denied DuPont's motion to recuse. On April 28, 1995, the Court denied DuPont's motion to stay all proceedings pending review in the appellate court, that motion having been filed on April 27, 1995. DuPont then filed an emergency motion for stay in the United States Court of Appeals for the Eleventh Circuit on April 28, 1995, along with a petition for a writ of mandamus and a writ of prohibition. These motions were denied by the Court of Appeals on Monday, May 1, 1995. As already noted, the hearing on the show cause order began on Tuesday, May 2, 1995, and ended on Friday, May 12, 1995. The sole purpose of the hearing was to determine whether sanctions should be imposed on the Respondent DuPont.

The show cause order was issued following consideration of a petition and voluminous exhibits, which alleged that DuPont had committed a fraud on this Court in connection with discovery matters, trial conduct, and a post-settlement application to the Court to vacate previous sanctions orders. As set out in detail in this opinion, the Court finds and concludes that DuPont did commit the fraud, the discovery abuses, and the violations of this Court's orders averred in the petition. DuPont has failed to show any sufficient cause why it should not be sanctioned for the conduct detailed herein.

The Court has heard the testimony and has reviewed the documentary evidence. The Court takes judicial notice of all of the pleadings, submissions, hearing transcripts, orders, and trial transcripts in the Bush Ranch cases. The Court has observed the demeanor of the witnesses and considered any inconsistencies in the evidence. The Court has determined that evidence from other cases involving allegations that DuPont's Benlate 50DF caused damages, which evidence in most instances consists of trial or deposition transcripts, court orders, or in judicio statements by DuPont, properly should be considered where it concerns what happened in this court, or where it concerns actions or positions taken by or on behalf of DuPont with respect to the Alta data and documents, or where it bears on the credibility of DuPont. The essentially identical conduct of DuPont in concealing and misrepresenting Alta tests and documents in other courts immediately after the Bush Ranch trial is, however, strong evidence of DuPont's intent and motive, and establishes a pattern of concealment and false representations on this crucial issue. That pattern of concealment has continued through the show cause hearing here.

It is without dispute that the core, almost the ultimate, issue in the Bush Ranch trials was whether or not the soils and or waters of the Bush Ranch Plaintiffs' lands where their nursery businesses were conducted were contaminated by the use of DuPont's Benlate product which itself was defective due to contamination by sulfonylureas ("SUs") which were also manufactured by DuPont. DuPont was confronted with hundreds of claims and lawsuits throughout the United States alleging damage by Benlate, thus establishing a significant economic risk for DuPont if Benlate was found to be defective through contamination. While there was much circumstantial and indirect evidence of SU-contamination, throughout the bulk of the pretrial discovery Plaintiffs had not been able to produce direct test results of their soils and waters. This was due principally to the fact that such testing could not generally be performed on scientific equipment available to Plaintiffs' experts. The Plaintiffs agreed to allow agents of DuPont onto their properties where their nurseries were located for the purpose of taking soil samples. The Defendant agreed, however, that in return for being allowed access to the soils, waters, and plants of the Plaintiffs for purposes of taking samples, DuPont would furnish Plaintiffs with all materials generated in connection with any tests conducted on those soil, water, and plant samples.

In an effort to bolster the defense contention that there were no SUs in Plaintiffs' soils or waters, DuPont engaged Alta Laboratories, Inc. (hereinafter "Alta") to perform sophisticated analytical chemistry tests, which few other laboratories, if any, in the country could perform. Although all materials generated in connection with such tests were to be furnished to Plaintiffs, both as a matter of discovery and pursuant to order of this Court, and as a matter of conditions made clear as a predicate to the entry of DuPont onto Plaintiffs' lands to obtain samples for these tests, the only documentary materials ever furnished were some tables or charts which the Defendant referred to and called "Summaries." Some of those summaries were given to Plaintiffs on the eve of trial. The remainder of them were not furnished until after Plaintiffs had rested their case and not until just before the Defendant was about to call its only witness through whom it would seek to elicit the information which was purportedly contained in the tables. It is the conduct of DuPont surrounding the preparation and use of these "summaries," when taken together with the conduct generally of the agents and attorneys of DuPont, which gives rise to many of the allegations of fraud upon the Court currently before the Court.

For a year preceding the Alta tests, the Bush Ranch Plaintiffs and DuPont had been engaged in a protracted series of discovery disputes, as the result of which this Court had repeatedly found DuPont to be in flagrant violation of discovery orders and duties. This Court had found Dupont's conduct to be the most serious abuse in its years on the bench and the most serious abuse reflected in the legal precedents. A conditional sanction of, first, $500,000.00, then $1,000,000.00 had been set, without, it is now clear, altering DuPont's conduct toward the Court, the civil justice system, or the opposing parties.

During the lengthy discovery period in this case this Court was forced by the obstructive practices of DuPont to hold numerous hearings. Those hearings took place on the following dates: July 8, 1992; August 5, 1992; August 26, 1992; October 9, 1992; February 19, 1993; April 9, 1993; May 14, 1993; May 27, 1993; June 11, 1993; and June 29, 1993. As a result of the hearings held, the...