The opinion of the court was delivered by: Weinstein, District Judge:
Plaintiffs consist of two groups: first, those veterans and
family members within the class covered by the Agent Orange
class action pending in this court, and second, civilians
claiming injury from Agent Orange who were never members of the
class. Defendants are the same as those in the class action.
The current suits began as state court actions in Texas. They
were removed to the federal court in Texas and then transferred
by the Multidistrict Panel to the Eastern District of New York.
Plaintiffs now seek to remand their actions to Texas state
court for lack of federal subject matter jurisdiction.
Defendants move to dismiss plaintiffs' claims or for an
injunction prohibiting plaintiffs from continuing their
As explained in this memorandum, the plaintiffs who are members
of the Agent Orange class must have their suits dismissed; they
are free to share in the proceeds of the class action
settlement to the extent they can demonstrate entitlement under
the distribution plans being administered by the court. As it
pertains to the civilian plaintiffs — who are not members of
the class — the plaintiffs' motion to remand raises issues
concerning the scope of 28 U.S.C. § 1442(a)(1) that require
further consideration. These issues will be addressed in a
A. Agent Orange Litigation: 1979-1984
The current controversy is part of a continuing litigation
whose first phase ended in settlement after six years of effort
by scores of lawyers and many court officers — special masters,
magistrates, and judges. Among the hundreds of published and
unpublished decisions, see In re "Agent Orange" Prod. Liab.
Litig., 475 F. Supp. 928 (E.D.N.Y. 1979) (dismissing federal
constitutional and statutory claims, reserving possible federal
claims, denying motion to limit communications to third
parties); In re "Agent Orange" Prod. Liab. Litig.,
506 F. Supp. 737 (E.D.N.Y. 1979) (finding subject matter
jurisdiction on basis of federal common law issues), rev'd,
635 F.2d 981 (2d Cir. 1980), cert. denied, 454 U.S. 1128, 102
S.Ct. 980, 71 L.Ed.2d 116 (1981); In re "Agent Orange" Prod.
Liab. Litig., 28 Fed.R.Serv.2d (Callaghan) 993 (E.D.N.Y. 1980)
(granting motion of terminally ill plaintiff to videotape his
own deposition); In re "Agent Orange" Prod. Liab. Litig.,
506 F. Supp. 750 (E.D.N.Y. 1980) (ordering government to refrain
from destruction of documents pursuant to internal procedure);
In re "Agent Orange" Prod. Liab. Litig., 506 F. Supp. 753
(E.D.N.Y. 1980) (various orders concerning modification of
complaint and answers); In re "Agent Orange" Prod. Liab.
Litig., 506 F. Supp. 754 (E.D.N.Y. 1980) (ordering videotaped
deposition); In re "Agent Orange" Prod. Liab. Litig.,
506 F. Supp. 756 (E.D.N.Y. 1980) (establishing agenda for status
conference); In re "Agent Orange" Prod. Liab. Litig.,
506 F. Supp. 757 (E.D.N.Y. 1980) (requiring plaintiffs to file
individual notices to retain right to bring actions against
federal government); In re "Agent Orange" Prod. Liab. Litig.,
506 F. Supp. 762 (E.D.N.Y. 1980) (dismissing claims against
government as third-party defendant, establishing case
management plan, conditionally certifying Rule 23(b)(3) class,
and denying defendants' motion for summary judgment); In re
"Agent Orange" Prod. Liab. Litig., 91 F.R.D. 616 (E.D.N Y
1981) (establishing committee to review procedures for
videotaped depositions); In re "Agent Orange" Prod. Liab.
Litig., 91 F.R.D. 618 (E.D.N.Y. 1981) (allowing motion to
amend caption, denying motion to amend complaint, denying
defendants' motion for summary judgment on "government
contractor" defense); In re "Agent Orange" Prod. Liab.
Litig., 93 F.R.D. 514 (E.D.N.Y. 1982) (allowing defendant to
proceed with scheduled destruction of documents); In re "Agent
Orange" Prod. Liab. Litig., 534 F. Supp. 1046 (E.D.N.Y. 1982)
(denying reargument on dismissal of government as third-party
defendant, denying interlocutory appeal, provisionally
dismissing claims against non-manufacturer defendants, denying
motion to form steering committee for plaintiffs' counsel,
denying motion for decertification of class, deferring decision
on statute of limitations issues, and establishing elements of
government contractor defense); In re "Agent Orange" Prod.
Liab. Litig., 537 F. Supp. 977 (E.D.N.Y. 1982) (provisionally
dismissing claims against non-manufacturer defendant); In re
"Agent Orange" Prod. Liab. Litig., 94 F.R.D. 173 (E.D.N Y
1982) (appointing special master to supervise discovery); In
re "Agent Orange" Prod. Liab. Litig., 544 F. Supp. 808
(E.D.N.Y. 1982) (denying motion to disqualify defense
attorneys; provisionally dismissing claims against certain
non-manufacturer defendants, and denying motion to implead
suppliers); In re "Agent Orange" Prod. Liab. Litig., 95
F.R.D. 191 (E.D.N.Y. 1982) (clarifying that denial of motion to
implead suppliers was without prejudice); In re "Agent Orange"
Prod. Liab. Litig., 95 F.R.D. 192 (E.D.N.Y. 1982) (affirming
special master's ruling as to location of depositions); In re
"Agent Orange" Prod. Liab. Litig., 96 F.R.D. 578 (E.D.N Y
1983) (adopting special master's protective order for discovery
of government documents); In re "Agent Orange" Prod. Liab.
Litig., 96 F.R.D. 582 (E.D.N.Y. 1983) (rejecting first
amendment challenge to protective order); In re "Agent Orange"
Prod. Liab. Litig., 96 F.R.D. 587 (E.D.N.Y. 1983) (adopting
with modifications special master's order regarding videotaped
depositions), In re "Agent Orange" Prod. Liab. Litig., 97
F.R.D. 424 (E.D.N.Y. 1983) (adopting protective order); In re
"Agent Orange" Prod. Liab. Litig., 97 F.R.D. 424 (E.D.N Y
1983) (adopting special master's protective order for
Department of Agriculture documents); In re "Agent Orange"
Prod. Liab. Litig., 97 F.R.D. 427 (E.D.N.Y. 1983) (adopting
special master's procedures for discovery of documents possibly
subject to executive privilege); In re "Agent Orange" Prod.
Liab. Litig., 97 F.R.D. 541 (E.D.N.Y. 1983) (denying
interlocutory appeal of decision deferring certification of
class and determination of appropriate notice); In re "Agent
Orange" Prod. Liab.
Litig., 97 F.R.D. 542 (E.D.N.Y. 1983) (affirming special
master's denial of discovery request), In re "Agent Orange"
Prod. Liab. Litig., 565 F. Supp. 1263 (E.D.N.Y. 1983) (granting
summary judgment for four defendants on government contractor
defense; denying summary judgment for other defendants); In re
"Agent Orange" Prod. Liab. Litig., 98 F.R.D. 522 (E.D.N Y
1983) (adopting order of special master concerning discovery of
government documents); In re "Agent Orange" Prod. Liab.
Litig., 98 F.R.D. 539 (E.D.N.Y. 1983) (adopting special
master's order to unseal documents in connection with summary
judgment motions); In re "Agent Orange" Prod. Liab. Litig.,
98 F.R.D. 554 (E.D.N.Y. 1983) (denying request for
reconsideration of order to unseal documents); In re "Agent
Orange" Prod. Liab. Litig., 98 F.R.D. 557 (E.D.N.Y. 1983)
(ordering special master to review discovery decisions in light
of court's decision to try causality and liability issues); In
re "Agent Orange" Prod. Liab. Litig., 98 F.R.D. 558 (E.D.N Y
1983) (approving special master's order of additional discovery
to clarify circumstances surrounding document destruction); In
re "Agent Orange" Prod. Liab. Litig., 570 F. Supp. 693
(E.D.N.Y. 1983) (clarifying program for discovery), In re
"Agent Orange" Prod. Liab. Litig., 571 F. Supp. 481 (E.D.N Y
1983) (granting motion of law firm to be relieved as lead
counsel for plaintiffs and appointing new plaintiffs'
management committee); In re "Agent Orange" Prod. Liab.
Litig., 99 F.R.D. 338 (E.D.N.Y. 1983) (approving discovery
recommendations of special master); In re "Agent Orange" Prod.
Liab. Litig., 99 F.R.D. 645 (E.D.N.Y. 1983) (lifting prior
protective order applying to government documents obtained
during discovery); In re "Agent Orange" Prod. Liab. Litig.,
100 F.R.D. 718 (E.D.N.Y.) (certifying Rule 23(b)(3) and Rule
23(b)(1)(B) classes), appeal denied, 100 F.R.D. 735 (E.D.N Y
1983), mandamus denied, 725 F.2d 858 (2d Cir. 1984), aff'd,
818 F.2d 145 (2d Cir. 1987), cert. denied, 484 U.S. 1004, 108
S.Ct. 695, 98 L.Ed.2d 648 (1988); In re "Agent Orange" Prod.
Liab. Litig., 100 F.R.D. 778 (E.D.N.Y. 1984) (denying motion
to implead suppliers of chemical components); In re "Agent
Orange" Prod. Liab. Litig., 580 F. Supp. 690 (E.D.N.Y. 1984)
(finding national consensus law on issues of liability,
government contractor defense and punitive damages); In re
"Agent Orange" Prod. Liab. Litig., 580 F. Supp. 1242 (E.D.N.Y.)
(reinstating third-party plaintiffs' claim for indemnity
against government with respect to claims of veterans' wives
and children), mandamus denied, 733 F.2d 10 (2d Cir.),
appeal denied, 745 F.2d 161 (2d Cir.), cert. denied,
465 U.S. 1067, 104 S.Ct. 1417, 79 L.Ed.2d 743 (1984); In re "Agent
Orange" Prod. Liab. Litig., 101 F.R.D. 97 (E.D.N.Y. 1984)
(ordering in camera disclosure of names of scientists deleted
from government report); In re "Agent Orange" Prod. Liab.
Litig., 597 F. Supp. 740 (E.D.N.Y. 1984) (approving settlement
of class action subject to fairness hearings); In re "Agent
Orange" Prod. Liab. Litig., 603 F. Supp. 239 (E.D.N.Y. 1985)
(dismissing claims of veterans' wives and children against
government), aff'd in part, vacated in part, 818 F.2d 201 (2d
Cir. 1987), cert. denied, 484 U.S. 1004, 108 S.Ct. 695, 98
L.Ed.2d 648 (1988), In re "Agent Orange" Prod. Liab. Litig.,
104 F.R.D. 559 (E.D.N.Y. 1985) (modifying protective orders),
In re "Agent Orange" Prod. Liab. Litig., 105 F.R.D. 577
(E.D.N.Y. 1985) (affirming with modification magistrate's order
that defendants in two non-settled cases produce deponents);
In re "Agent Orange" Prod. Liab. Litig., 611 F. Supp. 1221
(E.D.N.Y. 1985) (dismissing defendants' claim for indemnity
from government for settlement payments to veterans' families),
aff'd, 818 F.2d 204 (2d Cir. 1987); In re "Agent Orange"
Prod. Liab. Litig., 611 F. Supp. 1223 (E.D.N.Y. 1985) (ruling
as to admissibility of opt-out plaintiffs' scientific evidence
and expert testimony and granting summary judgment in favor of
defendants for plaintiffs' failure to establish causation),
aff'd, 818 F.2d 187 (2d Cir. 1987), cert. denied,
487 U.S. 1234, 108 S.Ct. 2898, 101 L.Ed.2d 932 (1988); In re "Agent
Orange" Prod. Liab. Litig., 611 F. Supp. 1267 (E.D.N.Y. 1985)
(same), aff'd, 818 F.2d 187 (2d Cir. 1987), cert. denied,
487 U.S. 1234, 108 S.Ct. 2898, 101 L.Ed.2d 932
(1988); In re "Agent Orange" Prod. Liab. Litig., 611 F. Supp. 1285
(E.D.N.Y. 1985) (dismissing action brought by Hawaiian
civilians), aff'd in part, vacated in part, 818 F.2d 210 (2d
Cir. 1987), cert. denied, 484 U.S. 1004, 108 S.Ct. 695, 98
L.Ed.2d 648 (1988); In re "Agent Orange" Prod. Liab. Litig.,
611 F. Supp. 1290 (E.D.N.Y. 1985) (dismissing claim of civilian
physician for failure to demonstrate exposure to herbicides),
aff'd in part, vacated in part, 818 F.2d 210 (2d Cir. 1987),
cert. denied, 484 U.S. 1004, 108 S.Ct. 695, 98 L.Ed.2d 648
(1988); In re "Agent Orange" Prod. Liab. Litig., 611 F. Supp. 1296
(E.D.N.Y. 1985) (determining class-action plaintiffs'
attorney fees and reaffirming settlement); aff'd in part,
rev'd in part, 818 F.2d 226 (2d Cir. 1987); In re "Agent
Orange" Prod. Liab. Litig., 611 F. Supp. 1396 (E.D.N.Y. 1985)
(establishing plan for disbursement of settlement fund pending
appeals), aff'd in part, rev'd in part, 818 F.2d 179 (2d Cir.
1987); In re "Agent Orange" Prod. Liab. Litig., 611 F. Supp. 1452
(E.D.N.Y. 1985) (denying motion to set aside attorney
fee-sharing arrangement), rev'd in part, 818 F.2d 216 (2d
Cir.), cert. denied, 484 U.S. 926, 108 S.Ct. 289, 98 L.Ed.2d
249 (1987); In re "Agent Orange" Prod. Liab. Litig.,
618 F. Supp. 623 (E.D.N.Y. 1985) (approving settlement of class
action and dismissing with prejudice claims of class members),
In re "Agent Orange" Prod. Liab. Litig., 618 F. Supp. 625
(E.D.N.Y. 1985) (approving plan for Australia and New Zealand);
In re "Agent Orange" Prod. Liab. Litig., 787 F.2d 822 (2d
Cir. 1986) (dismissing claims of non-class plaintiffs against
defendant not named in complaints); In re "Agent Orange" Prod.
Liab. Litig., 800 F.2d 14 (2d Cir. 1986) (denying motion to
disqualify plaintiffs' attorneys from appealing settlement);
In re "Agent Orange" Prod. Liab. Litig., 804 F.2d 19 (2d Cir.
1986) (denying repeal of stay on settlement funds pending
appeal); In re "Agent Orange" Prod. Liab. Litig., 689 F. Supp. 1250
(E.D.N.Y. 1988) (modifying class assistance program as
required by 818 F.2d 179 and granting opt-out plaintiffs
opportunity to opt into class for purposes of benefiting from
Narratives of these events are in print. See, e.g., In re
"Agent Orange" Prod. Liab. Litig., 818 F.2d 145, 148-61 (2d
Cir. 1987), cert. denied, 484 U.S. 1004, 108 S.Ct. 695, 98
L.Ed.2d 648 (1988). Nevertheless, a brief recapitulation of
certain aspects of this history is desirable as background to
the current phase of the Agent Orange litigation saga.
While in the service of their country, hundreds of thousands of
military service personnel were exposed to the defoliant Agent
Orange, which contained trace elements of dioxin. Lawsuits on
behalf of veterans proliferated throughout the country starting
in 1978. The suits — as much a demand for compensation as a
political protest of the treatment of Vietnam veterans by the
government and public at large — were brought against the
various manufacturers of defoliants, who in turn impleaded the
federal government. Between two and three million members of
the armed forces who served in or near Vietnam as well as their
families were potential plaintiffs.
In 1979, the Judicial Panel on Multidistrict Litigation
transferred as MDL 381 over 600 cases involving about 15,000
plaintiffs to the Eastern District of New York for coordinated
and consolidated pretrial proceedings. In the initial
proceedings of MDL 381, the court denied defendants' motion to
dismiss for lack of subject matter jurisdiction because the
complaint raised questions of federal common law. See 506
F. Supp. at 737. When the Second Circuit Court of Appeals
reversed this ruling, see In re "Agent Orange" Prod. Liab.
Litig, 635 F.2d 987 (2d Cir. 1980), cert. denied,
454 U.S. 1128, 102 S.Ct. 980, 71 L.Ed.2d 116 (1981), the litigation
became a suit predicated on diversity jurisdiction.
In December of 1983, the court certified two classes of
plaintiffs and scheduled a trial to commence in May of 1984. A
Rule 23(b)(3) class with opt-out rights was created to try the
fundamental common question of the causal relationship between
dioxin and plaintiffs' injuries. 100 F.R.D. at 718. In
addition, a Rule 23(b)(1)(B) limited fund class without opt-out
rights was created to cover plaintiffs' punitive damage claims.
Id. The 23(b)(3) class was defined as
those persons who were in the United States, New Zealand or
Australian Armed Forces at any time from 1961 to 1972 who were
injured while in or near Vietnam by exposure to Agent Orange or
other phenoxy herbicides. . . . The class also includes
spouses, parents, and children of the veterans born before
January 1, 1984, directly or derivatively injured as a result
of the exposure.
Id. at 729. Pursuant to Rule 23(c)(2), the court ordered
plaintiffs' counsel to notify class members by mail where
possible, and by radio, television, magazine, and newspaper
announcements throughout this country, Australia, and New
Zealand. The mailings and announcements informed class members
that they would be bound by the class action unless they
forwarded a written request for exclusion to the clerk of the
court by May 1, 1984. Id. at 732. Fewer than 2,500
servicepersons filed opt-out requests. See 597 F. Supp. at
B. The Settlement Agreement
On May 7, 1984, a tentative settlement was forged. According to
its terms, the defendants agreed to pay the class $180 million
in final settlement of all claims arising out of exposure to
Agent Orange then or in the future. Concerned with the
potential for new actions and recognizing the need for
finality, the Settlement Agreement expressly stated that "[t]he
class specifically includes persons who have not yet manifested
injury." 597 F. Supp. at 865.
The Settlement Agreement provided that the $180 million be paid
into a Settlement Fund to be established, maintained, and
administered by the court. The agreement also required the
court to retain jurisdiction over the Settlement Fund pending
its final disposition. Id. at 866. The exclusive remedy
provided for all class members was a claim against the
Settlement Fund. Under the Settlement Agreement, class members
were forever barred from instituting or maintaining any action
against defendants arising out of or relating to, or in the
future arising out of or relating to, exposure to Agent Orange.
The Settlement set aside $10 million of the $180 million to
indemnify the defendants from any judgments obtained in state
court actions by members of the class alleging harm caused by
exposure to Agent Orange in or near Vietnam. Any part of the
indemnity fund not used reverts to the benefit of the class
The Settlement Agreement was preliminarily approved on January
7, 1985. See id. at 862. Notice of the proposed settlement
was given to the class. Following eleven days of fairness
hearing in five cities, the court granted final approval of the
Settlement Agreement on June 18, 1985. 611 F. Supp. at 1347.
Subsequently, the court issued an Order and Final Judgment of
Dismissal which: (1) dismissed with prejudice all claims by
class members; (2) barred all class members from instituting or
maintaining any action against defendants arising out of the
subject matter of the class action; and (3) retained the
court's jurisdiction over the class action for the purpose of
maintaining, administering, and distributing the Settlement
Fund. See 618 F. Supp. at 624.
C. Dismissal of Opt-Out Claims
Summary judgment was granted against each opt-out plaintiff on
the grounds, inter alia, that none could prove by the
probability demanded in tort litigation that his or her ailment
was caused by Agent Orange, See 611 F. Supp. at 1260-63; 611
F. Supp. at 1284-85, and that all the claims were barred by the
military contractor defense. See 611 F. Supp. at 1263-64; 611
F. Supp. at 1285.
Various district court rulings including the final judgment
were appealed to the Court of Appeals for the Second Circuit.
The rulings included orders certifying the class action,
approving the Settlement Agreement, outlining the distribution
plan, awarding counsel fees, granting summary judgment against
the opt-out claimants, dismissing untimely claims, and
dismissing all claims of class members who objected to the
Settlement Agreement. Specifically assigned as errors were the
inclusion in the class definition of persons with latent or
"after-manifesting" injuries, the sufficiency of the notices of
class certification and settlement of the action, the adequacy
of the Settlement Fund, and the propriety of the distribution
In nine unanimous opinions dated April 21, 1987, the 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
discovery. Petitions for rehearing were denied. The Court of
Appeals approved the settlement and multiple petitions to the
United States Supreme Court were denied.
Specifically, the Court of Appeals affirmed the adequacy of
notice, the adequacy of the representation given the absent
class members, the fairness of the settlement, and the
dismissal of the opt-out plaintiffs' claims. See 818 F.2d 145
(affirming class certification, adequacy of notice to class,
and approving settlement); In re "Agent Orange" Prod. Liab.
Litig., 818 F.2d 179 (2d Cir. 1987) (approving Veteran Payment
Program but rejecting Class Assistance Program as an
organization operated independently of the court); In re
"Agent Orange" Prod. Liab. Litig., 818 F.2d 187 (2d Cir. 1987)
(affirming summary judgment against opt-out plaintiffs), cert.
denied, 487 U.S. 1234, 108 S.Ct. 2898, 101 L.Ed.2d 932 (1988);
In re "Agent Orange" Prod. Liab. Litig., 818 F.2d 194 (2d
Cir. 1987) (affirming dismissal of Federal Tort Claims Act
claims of servicepersons and their relatives), In re "Agent
Orange" Prod. Liab. Litig., 818 F.2d 201 (2d Cir. 1987)
(affirming dismissal of "direct" claims against the United
States brought by wives and children of servicepersons), cert.
denied, 484 U.S. 1004, 108 S.Ct. 695, 98 L.Ed.2d 647 (1988);
In re "Agent Orange" Prod. Liab. Litig., 818 F.2d 204
(affirming dismissal of manufacturers' claim for indemnity
against United States for settlement payments), In re "Agent
Orange" Prod. Liab. Litig., 818 F.2d 210 (2d Cir. 1987)
(affirming dismissals of Hawaiian civilians' actions), cert.
denied, 484 U.S. 1004, 108 S.Ct. 695, 98 L.Ed.2d 647 (1988);
In re "Agent Orange" Prod. Liab. Litig., 818 F.2d 216 (2d
Cir.) (rejecting plaintiff class attorneys' fee-sharing
agreement and reinstating in part fee award determination of
district court), cert. denied, 484 U.S. 926, 108 S.Ct. 289,
98 L.Ed.2d 249 (1987); In re "Agent Orange" Prod. Liab.
Litig., 818 F.2d 226 (2d Cir. 1987) (affirming district
court's calculations of attorney fees but reinstating certain
fees against which district court had offset discovery costs).
II. OPERATION OF THE SETTLEMENT FUND
Another $42 million was designated to the Agent Orange Class
Assistance Program. It distributes funds in the form of grants
to organizations that provide services to children with birth
defects and their families and assistance to Vietnam veterans
who are not otherwise able to obtain needed assistance. The $10
million indemnity fund will be added to the fund for the Class
Assistance Program if it is not used for state litigation prior
A. Veteran Payment Program
In light of the dismissal of the claims of the opt-out
plaintiffs, the court ruled, as a matter of equity, that any
person who had opted out of the class action settlement was
automatically eligible to participate in the Payment Program
unless he or she "opted-out" a second time by January 1, 1989.
See 689 F. Supp. at 1262. Initially, the court required a
veteran or his or her survivor seeking compensation from the
Payment Program to request an Application Kit within 120 days
of learning of the death or injury or by January 1, 1989,
whichever was later. The date was extended and then abolished
altogether as a condition for sharing in the fund. All fully
completed applications received prior to the termination of the
Program will be considered timely. Berman, The Agent Orange
Veteran Payment Program, 53 Law & Contemp. Probs. 49 (1990),
provides an account of the basic operation of the Program.
As of September 30, 1991, the Payment Program has received
applications from more than fifty thousand persons.
Approximately 80% of these applications were filed by veterans
seeking disability payments; the other 20% were filed by
surviving family members. The following chart outlines the
status of the applications:
Number approved and paid 26,727
Number denied 19,882
Number pending 1,967
Number inactive 5,191
See Report of the Special Master on the Distribution of the
Agent Orange Settlement Fund, Third Annual Report (October,
1991). As of September 30, 1991, a total of $86,255,351 had
been disbursed to eligible applicants under the Payment
About 80% of the claims submitted to the Payment Program are
disability claims. Of these, 12,091 (roughly 28%) resulted from
disabilities occurring after May 7, 1984 (the settlement date).
9,350 of those claims have been approved for payment. The
remaining 20% of filed claims are for survivor payments. Of
these, 6,350 (about 53%) are for deaths occurring after May 7,
1984. 4,242 of these claims have been approved. See Third
Annual Report, supra.
Applicants who disagree with the disposition of their
applications may file an appeal with the court-appointed
Special Master for Appeals. As of September 19, 1991, 10,396
appeals had been filed and a total of 9,816 decisions had been
rendered. Of the decisions on appeal, 6,890 affirmed the
determination below and 2,926 overruled or modified the
decision. For each case, the court's approval is required
before the Special Master's determination becomes final.
In overseeing the Payment Program the court has received
thousands of letters and telephone inquiries from veterans or
their families. Many seek information about the processing of
their claims; others request specific relief such as an advance
payment because of hardship or necessity. The court responds to
each inquiry by either contacting the disbursing agent for the
Agent Orange Payment Program, the Special Master for Appeals,
or, where appropriate, granting the requested relief. As
mentioned above, the court has passed upon almost 10,000
appeals in individual cases. It receives frequent reports from
the bodies administering the program and its financial
advisors. All disbursements
from investment funds are approved by the court. It is also in
frequent contact with Special Master Kenneth Feinberg about
such matters as the successful legislative and administrative
decisions to exempt settlement funds from taxation and from
liens of the Department of Veterans Affairs and others. The
court has also consulted with the Advisory Board to the Payment
Program, which is composed of veterans Albert S. Dandridge,
III, Esq., Donna-Marie Boulay, Esq., Charles T. Hagel, Vincent
Martin, and John McElrath.
B. Class Assistance Program
The Class Assistance Program provides services to large numbers
of possibly exposed veterans and their families with special
emphasis given to children with birth defects. The Program is
administered by the court with the advice of Executive Director
Dennis K. Rhoades, Deputy Director Michael Leveck, and a board
of unpaid Vietnam veteran advisors currently consisting of Rev.
Robert Certain, Steven Champlin, Ronald Gardner, Charles T.
Hagel, Mary Lou Keener, Gary E. May, Frank McCarthy, Hon.
Matthew Railey, Dr. Oscar Salvatierra, and Solomon B. Watson,
Continuing supervisory responsibility requires the court to
review each of the proposed grants. The court also attends
regular meetings with the Executive Director and advisory
board. The Executive Director reports to, and requests advice
and authority from, the court in specific matters in frequent
phone and face-to-face consultations. The court also has
physically inspected the operation of a number of the
institutions funded by the program and meets with the leaders
of many more of these organizations.
Since its inception, the Class Assistance Program has awarded
134 grants worth a total of almost $24 million. Of these
grants, 71 are active, providing $13.5 million in services to
veterans and their families in 46 states. Third Annual Report
of the Agent Orange Class Assistance Program (October 3,
1991). Recipients include local and national Vietnam veterans'
groups, agencies serving adults and children with disabilities,
and agencies providing family counseling. See Appendix 1. The
various programs in these areas provide services ranging from
counseling and other direct assistance to help in obtaining
services and benefits from government and private providers for
which veterans and their families are eligible. See Appendix
2. All organizations that receive funds file quarterly reports
and undergo annual evaluations both to assist them in achieving
their goals and to ensure that grant money is being used
effectively. The Class Assistance Program estimates that, in
the last three years, grantee-organizations have served about
46,000 veterans and family members. See Appendix 3.
In the summer of 1991, students from Touro Law School,
volunteers, and Program staff examined some 250,000 claims
files of the court and obtained the names of about 75,000
birth-disabled children of Vietnam veterans who may have been
exposed to Agent Orange. Their families will be contacted in an
attempt to assist them with the network of social and medical
agencies cooperating with the Class Assistance Program.
The staff of the Class Assistance Program, working with state
bodies, veterans' groups, academic institutions, and national
and local social service institutions, also conducts training
programs. A major thrust of these programs is to educate
agencies and workers in the helping professions on the needs of
veterans as family members.
The two actions in which motions to remand are pending are, in
effect, a direct challenge to the validity of the settlement
and the programs now financed by the Settlement Fund. Those
plaintiffs who are class members have now sued the same
chemical companies who were defendants in the original Agent
Orange litigation on the same grounds and for the same relief
as was originally sought and compromised in the class action.
If plaintiffs are successful, they will automatically reduce
the sums available for other class members,
since the terms of the settlement set aside $10 million for
indemnification of the defendants against suits of this kind.
In starkest terms, the cases present the question of whether
members of a class whose action was brought and is still
pending in federal court can circumvent the effect of a federal
judgment by bringing new actions in a state court relying
exclusively on state law. The need to protect other class
members, the importance of maintaining the class action as
viable litigation device, and the interest of all litigants in
the finality of settlements require that the question be
answered in the negative.
In June 1988, Hartman v. Diamond Shamrock Chemical Co.
(Hartman I) was commenced in Texas state court. The plaintiffs
were Ronald Hartman and his wife and children. Mr. Hartman is a
Vietnam veteran who was diagnosed in 1988 as having
non-Hodgkins lymphoma. His children, Jeffrey Alan Hartman and
Angela Marie Hartman, both suffer from birth defects. Katherina
Hartman, his wife, claims emotional injury arising out of her
husband's and children's conditions.
The Hartman compliant was the same in all substantive respects
as the class action complaint in Agent Orange. Plaintiffs
sought compensatory and punitive damages on behalf of a class
of veterans exposed to Agent Orange in Vietnam who allegedly
manifested injuries after the May 7, 1984 settlement date or
who discovered their injuries after that date. The defendants
were the same chemical companies sued in the Agent Orange
class action. The Hartman I action was filed by Benton
Musslewhite, Esq., an attorney who participated in the
representation of the Agent Orange class and signed the
Hartman I was removed to the United States District Court for
the Eastern District of Texas. The case was transferred to this
court by the MDL panel on February 1, 1989. See In re "Agent
Orange" Prod. Liab. Litig., MDL-381 (J.P.M.D.L. Feb. 1, 1989)
(unpublished order). At plaintiffs' request, this court
dismissed the Hartman I action without prejudice on September
In May 1989, a group of 34 plaintiffs commenced Ivy v. Diamond
Shamrock Chemicals Co. in Texas state court. Like the Hartman
I plaintiffs, most of the plaintiffs in Ivy assert that they
suffered injuries as a result of exposure to Agent Orange
during service in the Armed Forces in Vietnam and that their
injuries did not manifest themselves or were not discovered
until after May 7, 1984. Charles Jardon, Gary Thomas, James
Kent, Earl Thompson, James Donald Deloatch, and Emile Annibolli
claim injury from exposure to Agent Orange during military
service in Vietnam from 1963 to 1971. Family members include
Shirley Ivy, Verda Wilson, Shirley Zalewaski, Dawn Marie Inman,
Peggy Sands, Ursula Margot Parry, and Laura Jenkins, who bring
actions on behalf of themselves and the estates of deceased
veterans Donald Ivy, Isaiah Wilson, Jr., Yen Zalewaski, Bobby
Joe Inman, Martin Sands, James D. Parry, Sr., and Eddie
Jenkins. Toni K. Jardon, Charles Jardon, Jr., Robin Jardon,
Warren Jardon, Sharon Jardon, Mary Lee Thomas, Emma Kent, Judy
L. Thompson, and Joyce Deloatch also sue as family members. All
of these plaintiffs fall within the class as defined in the
original Agent Orange litigation.
Two of the claimants in the Ivy action allege injuries from
exposure to Agent Orange while acting in a civilian capacity.
Charles Brown and Clarence White (whose estate is being
represented by James White) served as civilian employees in
Vietnam and claim to have been injured from exposure to Agent
Orange. Since these civilian plaintiffs did not serve in a
military capacity, they are not members of the class bound by
the 1984 settlement and order.
Shirley Ivy is attempting to be a class representative of a
class of veterans and survivors who manifested or discovered
injury after the May 7, 1984 opt-out deadline. Ronald Hartman
is attempting to do the same in Hartman II.
James Deloatch, Joyce Deloatch, Tamara Deloatch, James L. Kent,
Sr., Emma Kent, Charles E. Brown, Gary F. Thomas, and Mary Lou
Thomas purported to opt out of the Agent Orange class by
filing notices with the Clerk of the Court in August of 1988.
Shirley Ivy also filed an opt-out notice on behalf of herself
and her deceased husband, Donald Ivy, with the Clerk of the
Court on August 25, 1991.
Some Ivy plaintiffs have availed themselves of the Veteran
Payment Program. Shirley Zalewaski apparently filed a notice
purporting to opt out of the class but later requested an
application for the Payment Program. In March 1989, Verda
Wilson applied for a survivor payment from the Agent Orange
Veteran Payment Program on behalf of her late husband, Isaiah
Wilson, Jr. In September she was denied relief but that
decision was overruled by the Special Master for Appeals. On
January 15, 1991, the court approved payment to her of a
survivor award. She received $3,400 in March of this year. In
May 1990 Laura Jenkins also applied for survivor payments on
behalf of her late husband, Eddie Jenkins. She was approved for
payment and received $2,040 in February, 1991. Plaintiffs
Ursula Margot Parry and Shirley Zalewaski have applied for
payment from the Settlement Fund and have been sent application
kits which they have not yet returned.
The Ivy complaint, which seeks compensatory and punitive
damages for "aftermanifested" injuries, expressly disclaims
reliance on federal law. Defendants nevertheless removed the
Ivy action to federal court on federal question grounds.
In April 1990, a second action was filed by the Hartman I
plaintiffs in Texas state court. With one exception, the
complaint in Hartman II is essentially identical to Hartman
I; like the complaint in Ivy, it disavows reliance on any
right or recovery under federal law. Hartman II was also
removed to federal court. While the Ivy and Hartman II
actions have not been consolidated, the plaintiffs in both
actions will be referred to collectively as "plaintiffs."
In both the Ivy and Hartman II notices of removal, the
defendants offered two grounds for federal subject matter
jurisdiction. First, the court was said to have jurisdiction
over this action "because most of the plaintiffs' claims have
already been asserted and adjudicated in federal court and
plaintiffs' petition is merely an artful pleading to avoid
federal jurisdiction." Second, the court's jurisdiction was
invoked "pursuant to 28 U.S.C. § 1331 based on the doctrine of
complete federal preemption."
On January 31, 1990, the plaintiffs petitioned the United
States Court of Appeals for the Second Circuit for a writ of
mandamus directing the MDL Panel to vacate the transfer order
for lack of federal subject matter jurisdiction. The petition
was denied on March 28, 1990. See In re Ivy, 901 F.2d 7 (2d
Cir. 1990). The Court of Appeals directed that the issue of
subject matter jurisdiction be considered in the first instance
by the transferee court. Id.
In October 1990, plaintiffs moved in this court for an order
remanding both actions to the Texas state courts on the ground
that federal subject matter jurisdiction was lacking. In
December 1990, defendants moved under the All-Writs Act,
28 U.S.C. § 1651, for an injunction prohibiting the plaintiffs,
their attorneys and certain non-parties from prosecuting Ivy
and Hartman II and from commencing any new actions
compromised by the Settlement Agreement.
A second mandamus petition that sought to prevent this court
from ruling on the merits of the case was denied without
opinion in December 1990. In re Ivy, No. 90-3065 (2d Cir.
Dec. 12, 1990). A third mandamus petition seeking relief
similar to the second petition was denied in March of 1991. In
re Ivy, No. 91-3011 (2d Cir. Mar. 5, 1991).
Oral argument on the motion to remand was heard on March 6,
1991. Given the complexity of the legal issues and the
questions posed by the court, time for further briefing was
requested by the defendants. The motion to remand and any
additional dispositive motions were rescheduled to be heard on
May 6, 1991.
Prior to the May 6 return date, defendants moved to dismiss
plaintiffs' claims. Defendants further moved for leave to amend
their notice of removal to add 28 U.S.C. § 1442(a)(1) (removal
of cases involving federal officer or persons acting under such
officer) as a basis for jurisdiction. Plaintiff Hartman moved
for an order consolidating the Ivy and Hartman II actions
for trial purposes.
On May 6, 1991 the court heard oral argument on the following
1. Plaintiffs' motion to remand to the Texas state courts. 2.
Defendants' motion under the All-Writs Act for an injunction
prohibiting further state court litigation. 3. Defendants'
motion to dismiss. 4. Defendants' motion for leave to amend the
notice of removal to add an additional basis for jurisdiction.
At the hearing, the parties requested additional time for
supplemental briefing. The court gave the plaintiffs until July
6, 1991 and the defendants thirty days from that date. No
further argument was scheduled. Plaintiffs requested and
received a two-month adjournment to September 6. A further
application for another 30 day extension was made by the
plaintiff on August 28, 1991; it was denied in view of the
desirability of a final decision.
Defendants most recently requested still more time to respond
to plaintiffs' extensive scientific submissions. The court
granted thirty days to both parties to supplement their
scientific documentation. While the court believes the
scientific contentions on both sides are irrelevant, and, if
relevant, not dispositive, the parties desired to make a record
for purposes of appeal. The court saw no reason to deny them
A. Subject Matter Jurisdiction
The sole basis advanced to justify remand is the alleged lack
of federal subject matter jurisdiction. Since diversity
jurisdiction is lacking and the complaints disavow reliance on
federal law, plaintiffs maintain that the cases belong in state
court. With respect to all the plaintiffs who fall within the
definition of the class in the Agent Orange litigation, this
position is without merit. This court retained jurisdiction
over the class action and has authority to ensure that its
prior orders and the Settlement Agreement are enforced. If an
independent basis for jurisdiction were necessary, the
complaint itself calls into question federal law by undermining
a final federal class action judgment.
The two civilian plaintiffs in Ivy are, however, in a
separate category. They are not members of the class and are
therefore not bound by the Settlement Agreement. Their cases
are severed from the claims of the remaining plaintiffs. The
question of the court's jurisdiction over these plaintiffs will
be addressed in a separate memorandum. For the remainder of
this opinion, the term "plaintiffs" refers only to the veteran
1. Adequacy of Notice of Removal
Defendants' removal was proper because the court retains
jurisdiction over the Settlement Agreement and because it must
enforce its bar on subsequent suits by class members against
the defendants. In addition, plaintiffs' state law complaint is
an artfully pleaded attempt to avoid a prior binding federal
judgment. Defendants' removal notices in Ivy and Hartman II
expressly identify only the last of these grounds. Although the
notices are somewhat less clear than they might have been as to
the other bases of subject matter jurisdiction, this court is
charged with the duty, consistent with the general rules of
notice pleading, to construe removal notices, like all
pleadings, liberally and in accord with substantial justice.
Rachel v. Georgia, 342 F.2d 336, 340 (5th Cir. 1965),
aff'd, 384 U.S. 780, 86 S.Ct. 1783, 16
L.Ed.2d 925 (1966); Harlem River Produce Co. v. Aetna Cas. &
Sur. Co., 257 F. Supp. 160, 163-64 (S.D.N.Y. 1965), cf. Curley
v. Brignoli, Curley & Roberts Associates, 915 F.2d 81, 85 (2d
Cir. 1990) (court will look beyond face of complaint to
establish diversity jurisdiction), cert. denied, ___ U.S.
___, 111 S.Ct. 1430, 113 L.Ed.2d 484 (1991). Jurisdiction on
grounds not explicitly stated in the notice of removal is
appropriate where the grounds are implicit in the situation.
See Walker v. Gibson, 604 F. Supp. 916, 919 (N.D.Ill. 1985);
Harper v. National Flood Insurs. Ass'n, 494 F. Supp. 234, 236
Defendants' notices properly stated one adequate ground for
removal: plaintiffs' artful pleading to avoid a final federal
judgment. Defendants' claims that plaintiffs' actions are
removable under the doctrine of federal preemption and have
already been asserted in federal court in a pending federal
action, taken in context, support the additional grounds
2. Court's Retained Jurisdiction
Plaintiffs are members of the Agent Orange class. The
veterans all served in Vietnam between 1961 and 1972 and claim
injuries from exposure to the herbicide. Family member
claimants also fall within the plain terms of the class. For
all of these plaintiffs, the Settlement Agreement compromised
their claims. By bringing new actions in state court, the
plaintiffs seek to avoid the effect of the Settlement Agreement
and the judgment issued by this court.
A federal court retains the power to enforce and to consider
challenges to settlements entered into in cases originally
filed with the court. See Fox v. Consolidated Rail Corp.,
739 F.2d 929, 932 (3d Cir. 1984), cert. denied, 469 U.S. 1190,
105 S.Ct. 962, 83 L.Ed.2d 968 (1985); Pearson v. Ecological
Science Corp., 522 F.2d 171 (5th Cir. 1975), cert. denied,
425 U.S. 912, 96 S.Ct. 1508, 47 L.Ed.2d 762 (1976). If there is
no independent basis for jurisdiction, absent some special need
of the parties, the settlement must have been "incorporated
into an order of the court," Fairfax Countywide Citizens Ass'n
v. Fairfax County, 571 F.2d 1299, 1303 (4th Cir.), cert.
denied, 439 U.S. 1047, 99 S.Ct. 722, 58 L.Ed.2d 706 (1978), or
there must have been a "deliberate retention of jurisdiction,
as by issuing an injunction or by stating that jurisdiction is
retained for a particular purpose." McCall-Bey v. Franzen,
777 F.2d 1178, 1190 (7th Cir. 1985); see United SteelWorkers
v. Libby, McNeil & Libby, 895 F.2d 421, 423 (7th Cir. 1990),
cf. Aro Corp. v. Allied Witan Co., 531 F.2d 1368, 1371 (6th
Cir.) ("Even in those instances in which the court's original
jurisdiction may have been questionable, it has jurisdiction
over settlement agreements, the execution of which renders the
prior controversy academic."), cert. denied, 429 U.S. 862, 97
S.Ct. 165, 50 L.Ed.2d 140 (1976).
By any standard this court has jurisdiction over both removed
actions: a state suit will reduce the funds available to the
class, providing a special need for exercise of federal
jurisdiction; the settlement now sought to be circumvented by
plaintiffs was embodied in a judgment of this court after full
fairness hearings; and, since the class action is still pending
in this court, jurisdiction was deliberately retained and is
The practical effect of the new actions will be harmful to
other class members. Any judgments in state court against the
defendants will be paid from the indemnity fund. When parties
to a federal action are being adversely affected, the court may
not allow its judgment and orders to be flouted. See Meetings
& Expositions, Inc. v. Tandy Corp., 490 F.2d 714, 717 (2d Cir.
1974) (court has duty to enforce settlement it approved). This
is especially true in class actions. "In a class action, the
district court has a duty to see that any settlement it
approves is completed, and not merely to approve a
promise. . . ." In re Corrugated Container Antitrust Litig.,
752 F.2d 137, 141 (5th Cir.), cert. denied, 473 U.S. 911,
105 S.Ct. 3536, 87 L.Ed.2d 660 (1985).
The intimate involvement of the court with the administration
of both the Payment Program and the Class Assistance Program
evidences the court's continuing jurisdiction over the class.
On a daily basis, the court responds to inquiries of class
members. When necessary, it assists them in obtaining
compensation from the Settlement Fund. It continues to review
the thousands of decisions of the Special Master of Appeals.
Each grant developed by the Class Assistance Program is
examined and must be approved by the court. Current scientific
literature and legislative action are reviewed and made part of
the court file. The number of entries on the case docket has
grown from approximately 8,000 at the time of settlement to
over 13,000 today. These activities are more than sufficient to
support a finding that the court retained jurisdiction.
Since the court has retained jurisdiction over the class action
it has authority to ensure that the Settlement Agreement it
previously approved is enforced according to its terms. Under
the circumstances, a new and independent basis for subject
matter jurisdiction is not necessary for the court to rule on
the merits of plaintiffs' claims. The claims are a challenge to
the integrity of the Settlement Agreement and the authority of
this court. This court has the power and the obligation to
protect and effectuate its orders and final judgments in the
Agent Orange litigation.
3. Court's Power to Enforce Its Injunction
As part of the Order and Final Judgment of Dismissal, the court
enjoined all class members from commencing any action arising
out of or related to exposure to Agent Orange. 618 F. Supp. at
624. The plaintiffs are all members of the class barred from
instituting new actions against the settling defendants.
A federal court, as a court of equity, has the authority to
enforce its injunction "with or without an explicit reservation
of jurisdiction. . . ." McCall-Bey v. Franzen, 777 F.2d 1178,
1183 (7th Cir. 1985). "The mandate of an injunction issued by a
federal district court runs nationwide, and `[v]iolation of an
injunctive order is cognizable in the court which issued the
injunction regardless of where the violation occurred.'"
Waffenschmidt v. Mackay, 763 F.2d 711, 716 (5th Cir. 1985),
cert. denied, 474 U.S. 1056, 106 S.Ct. 794, 88 L.Ed.2d 771
(1986) (citation omitted) (quoting Stiller v. Hardman,
324 F.2d 626, 628 (2d Cir. 1963)).
The fact that the judgment is not labeled an injunction is
irrelevant. "The determination of whether an order is an
injunction depends upon the substantial effect of the order
rather than its terminology." In re Federal Skywalk Cases,
680 F.2d 1175, 1180 (8th Cir. 1980), cert. denied,
459 U.S. 988, 103 S.Ct. 342, 74 L.Ed.2d 383 (1982). By barring "[e]ach
and every plaintiff and member of the . . . class . . . from
instituting or maintaining any action against any of the
defendants," 618 F. Supp. at 624, the court effectively issued
an injunction which bars the current actions.
The plaintiffs are all subject to the court's bar against
instituting new actions against these defendants. Plaintiffs
have violated the court's order by bringing a new action in
4. Federal Nature of Plaintiffs' Claims
The plaintiff is normally the master of its complaint, and a
federal question will not be found if it is not in the
complaint. Louisville & Nashville R.R. v. Mottley,
211 U.S. 149, 29 S.Ct. 42, 53 L.Ed. 126 (1908). Nevertheless, this court
must "determine whether the real nature of the
claim is federal, regardless of plaintiff's characterization."
Travelers Indem. Co. v. Sarkisian, 794 F.2d 754, 758 (2d
Cir.) (quoting 14A C. Wright, A. Miller & E. Cooper, Federal
Practice and Procedure § 3722, at 268-75), cert. denied,
479 U.S. 885, 107 S.Ct. 277, 93 L.Ed.2d 253 (1986). An action
relying on state law is essentially federal in nature where a
plaintiff has had its rights determined by a federal court and
the subsequent state action is an attempt to avoid the prior
federal judgment. See Federated Dept. Stores, Inc. v. Moitie,
452 U.S. 394, 397 & n. 2, 101 S.Ct. 2424, 2427 & n. 2, 69
L.Ed.2d 103 (1981).
In Moitie plaintiffs brought a federal antitrust action and
the claim was dismissed on the merits. Plaintiffs then used the
same facts to assert a state law claim against the same
defendants. The action was removed to federal court and
dismissed on res judicata grounds. While there was no federal
claim apparent on the face of the complaint, the Supreme Court
endorsed the lower courts' finding that the claim was
considered "federal in nature" because it was merely an "artful
pleading" to avoid the prior federal judgment. Id.
The Second Circuit Court of Appeals in clarifying Moitie has
identified two criteria for determining when a state action
will be considered federal in nature. First, the elements of
the claim must be "virtually identical" to those in the prior
federal action. Sarkisian, 794 F.2d at 760. Second, the
plaintiff must have chosen the federal forum in the earlier
litigation. Id. The second element is critical in rendering
the state claim "federal" since it implies that "plaintiff's
choice of a state forum is motivated by the desire to evade the
consequences of prior federal litigation." Bowlus v. Alexander
& Alexander Servs. Inc., 659 F. Supp. 914, 918-19 (S.D.N Y
1987); see Sarkisian, 794 F.2d at 760.
Both of the Sarkisian criteria are present here. Plaintiffs
are members of the Agent Orange class action. Although
plaintiffs affirmatively disclaim reliance on federal law and
assert state law as the sole basis for relief, these claims are
identical to the claims raised by the class action complaint.
The class plaintiffs chose the federal forum to manage the
class action. These new plaintiffs cannot now `abuse the dual
court system by filing in state court a second lawsuit. . . ."
Sarkisian, 794 F.2d at 761.
Plaintiffs object to the application of Sarkisian for two
reasons. First, they argue that the rule of that case controls
only if the first federal court litigation is brought under
federal question rather than diversity jurisdiction. Since the
Agent Orange litigation was a diversity action, plaintiffs
contend that it does not fall within the Sarkisian rule.
While it is true that Sarkisian itself involved a prior
federal question claim, there is no indication that the Court
of Appeals intended to so limit its reach. Such a limit would
be unjustifiable in light of the policy behind the Sarkisian
doctrine of preventing "double-dipping." Surely it is a worse
abuse to litigate exactly the same state law claims twice
than it is to litigate parallel, though perhaps not identical,
federal and state law claims.
Second, the plaintiffs contend that they never "chose" to
proceed in the earlier litigation in this court and therefore
cannot be said to be seeking avoidance of the Settlement. Since
plaintiffs allege that they did not gain definitive knowledge
of their membership in the Agent Orange class until their
injuries manifested after the 1984 opt-out deadline, they argue
that, as individuals, they did not actively choose to proceed.
But the concept of the class action is that it is a
representative litigation. If plaintiffs did not choose to
litigate, their class representatives chose on their behalf.
In short, the plaintiffs' current actions challenge the
viability of Rule 23 of the Federal Rules of Civil Procedure
and of class action settlements. If the plaintiffs, as class
members, are allowed to undermine a settlement agreement and
set aside a federal court's judgment through new state court
suits, it is hard to imagine any future defendant in a federal
court class action considering settlement since the agreement
would always be open to attack by class members in state court.
Because plaintiffs' actions are in reality artful pleadings to
avoid a prior federal court decision, this court has
jurisdiction over plaintiffs' removed actions.
5. Court's Power to Order Removal
The All-Writs Act, 28 U.S.C. § 1651(a), authorizes federal
courts to "issue all writs necessary or appropriate in aid of
their respective jurisdictions. . . ." In re Baldwin-United
Corp., 770 F.2d 328, 335 (2d Cir. 1985); see In re Joint E. &
S. Dists. Asbestos Litig., 120 B.R. 648, 656 (E. & S.D.N Y
1990); In re Joint E. & S. Dist. Asbestos Litig., 134 F.R.D.
32, 37 (E. & S.D.N.Y. 1990). The Act authorizes federal courts
to exercise jurisdiction over persons "`who . . . are in a
position to frustrate the implementation of a court order or
the proper administration of justice.'" Yonkers Racing Corp.
v. City of Yonkers, 858 F.2d 855, 863 (2d Cir. 1988) (emphasis
omitted) (quoting Benjamin v. Malcolm, 803 F.2d 46, 53 (2d
Cir. 1986)), cert. denied, 489 U.S. 1077, 109 S.Ct. 1527, 103
L.Ed.2d 833 (1989). The Act even permits a federal court to
remove state court actions to federal court in situations where
specific statutory removal authority is absent. City of
Yonkers, 858 F.2d at 863; see United States v. New York
Tel., 434 U.S. 159, 172, 98 S.Ct. 364, 372, 54 L.Ed.2d 376
By bringing new suits in state court, the plaintiffs challenge
the binding effect of the Settlement Agreement and the order of
this court prohibiting new suits by class members. The new
suits are a direct threat to the continuing viability of the
judgment settling the class action. The suits will also consume
the $10 million set aside to indemnify the settling defendants
and reduce the recovery of the remaining class members.
If the cases had remained in state court, the court would have
had the authority to order their removal. Moreover, any rulings
inconsistent with the prior federal order would have been
subject to further injunction by this court. See City of
Yonkers, 858 F.2d at 864 (citing Swann v.
Charlotte-Mecklenburg Bd. of Educ., 501 F.2d 383, 384 (4th
Cir. 1974)). Taking jurisdiction of the cases after their
voluntary removal is a "less drastic, and therefore preferable
result." City of Yonkers 858 F.2d at 864.
The removal of these actions to this court is a mechanism for
protecting this court's judgment and order. Under the
circumstances, it is the preferred method of enforcement, since
it affords greater comity to state courts and is less
burden-some on the parties than an injunction or contempt
citation would be.
The terms of the Settlement Agreement, incorporated in this
court's order, bar plaintiffs from proceeding with this action.
That these plaintiffs' injuries were not discovered until after
the initial opt-out deadline of May 1, 1984 is irrelevant. The
Settlement Agreement expressly included "persons who have not
yet manifested injury." 597 F. Supp. at 865. The agreement was
approved by this court, upheld by the Second Circuit, and left
undisturbed by the Supreme Court. 618 F. Supp. at 624-25,
aff'd, 818 F.2d 145 (2d Cir. 1987), cert. denied,
484 U.S. 1004, 108 S.Ct. 695, 98 L.Ed.2d 647 (1988). Defendants' motion
to dismiss is therefore granted with respect to all plaintiffs
(other than the civilian plaintiffs).
Since the court has found that it has subject matter
jurisdiction and has granted defendants' motion to dismiss, it
need not decide defendants' motion to amend the notices of
removal with regard to the plaintiffs who are class members.
There has been, and continues to be, a court-ordered bar on
suits by class members against the defendants; ...