Motion by class action Plaintiffs' Management Committee to disqualify, on grounds of conflict of interest, counsel representing certain class members appealing from district court's approval of settlement of the litigation. Motion denied.
Before: NEWMAN, KEARSE, and MINER, Circuit Judges.
Stephen J. Schlegel, Esq., a member of the Plaintiffs' Management committee ("PMC") in the "Agent Orange" product liability litigation, moved in this Court for an order disqualifying the law firm of Ashcraft & Gerel ("Ashcraft") and the Law Offices of Benton Musslewhite ("Musslewhite"), Inc., from representing in the captioned appeals certain class members and other plaintiffs who challenge the settlement of the litigation approved by the district court. Schlegel contends principally that Ashcraft and Musslewhite, as a result of their prior representation of parties supporting the settlement, have conflicts of interest requiring their disqualification as appellate counsel. In an order filed on April 3, 1986, we denied the motion, indicating that this opinion would follow.
The Agent Orange lawsuits began in late 1978 and early 1979 when several individual veterans of the Vietnam War and their families brought suit in the Northern District of Illinois and the Southern and Eastern Districts of New York, Names as defendants were several chemical companies that had manufactured Agent Orange and other herbicides for use by the military as defoliants in the Vietnam War. The plaintiffs alleged that they had sustained various physical injuries by reason of the veterans' exposure to Agent Orange. By order of the Judicial Panel on Multidistrict Litigation, these actions were transferred to the Eastern District of New York for consolidation of pretrial proceedings pursuant to 28 U.S.C. § 1407 (1982). Later-filed actions were also transferred to the Eastern District.
Pursuant to Fed. R. Civ. P. 23(b)(3), the district court certified a plaintiff class consisting of members of the armed forces of United States, New Zealand, and Australia who were injured while in or near Vietnam by exposure to Agent Orange or similar herbicides, and their spouses, parents or children who were directly or derivatively injured as a result of the exposure. Notice of the class certification was given, and potential class members were allowed to opt out. See In re "Agent Orange" Product Liability Litigation, 611 F. Supp. 1223, 1229 (E.D.N.Y. 1985).
A. Representation of Class Plaintiffs
For purposes of this motion, most of the pertinent facts relating to the representation of individual plaintiffs and the plaintiff class have been stipulated or are not disputed.
Schlegel became counsel to various plaintiffs in the litigation as early as November 1978. He has been designated as one of plaintiffs' counsel of record throughout the Agent Orange litigation. Musslewhite became involved as plaintiffs' counsel in Agent Orange litigation as early as January 1979. He represents some 1,500 Vietnam veterans as individual clients. Ashcraft has represented plaintiffs in Agent Orange litigation on an active basis since early 1980. It represents more than 2,000 plaintiff class members, as well as 386 individuals who originally opted out of the class; 60 of those opt-outs later rejoined the class.
In 1980, after tentatively granting the class certification, the district court appointed Yannacone & Associates ("Yannacone"), a consortium of New York-area lawyers, as lead counsel to the class. Thereafter, Ashcraft acted as class action counsel under an agreement with Yannacone in early 1983, Schlegel, Musslewhite, and Ashcraft became member of the PMC. All functioned for a time thereafter as class counsel. In addition, Schlegel and Musslewhite were designated by the court as lead counsel.
Ashcraft was never appointed lead counsel, but as a member of the PMC and as class action counsel, it undertook a number of tasks on behalf of the class, including attending depositions, reviewing documents obtained through discovery, and writing, filing, and opposing motions in the district court. During Musslewhite's tenure as a member of the PMC, he was listed as counsel of record in numerous filings with the district court and joined in motions concerning class certification, proposed forms of notice to class members, and other substantive issues in the litigation.
In September 1983, Yannacone moved for and was granted permission to withdraw as lead counsel and a member of the PMC. Ashcraft also withdrew from the PMC in September 1983. The order of the district court approving the withdrawal of Yannacone provided that the PMC would function as lead counsel. The ...