Case Name: Michael F. RYAN, et al., Plaintiffs, v. DOW CHEMICAL COMPANY, Monsanto Company, Hercules Incorporated, T H Agriculture & Nutrition Company, Inc., Diamond Shamrock Chemicals Company, Uniroyal Inc., and Thompson Chemicals Corporation, Defendants. In re "AGENT ORANGE" PRODUCT LIABILITY LITIGATION. Shirley IVY, et al., Plaintiffs, v. DIAMOND SHAMROCK CHEMICALS COMPANY, et al., Defendants; Ronald L. HARTMAN, et al., Plaintiffs, v. DIAMOND SHAMROCK CHEMICALS COMPANY, et al., Defendants
Court: United States District Court for the Eastern District of New York
Jurisdiction: United States
Decision Date: 1991-10-04
Citations: 781 F. Supp. 902
Docket Number: Nos. 79 Civ. 747, 89 Civ. 3361 and 90 Civ. 3928; MDL No. 381
Parties: Michael F. RYAN, et al., Plaintiffs, v. DOW CHEMICAL COMPANY, Monsanto Company, Hercules Incorporated, T H Agriculture & Nutrition Company, Inc., Diamond Shamrock Chemicals Company, Uniroyal Inc., and Thompson Chemicals Corporation, Defendants. In re “AGENT ORANGE” PRODUCT LIABILITY LITIGATION. Shirley IVY, et al., Plaintiffs, v. DIAMOND SHAMROCK CHEMICALS COMPANY, et al., Defendants. Ronald L. HARTMAN, et al., Plaintiffs, v. DIAMOND SHAMROCK CHEMICALS COMPANY, et al., Defendants.
Judges: 
Reporter: Federal Supplement
Volume: 781
Pages: 902–933

Head Matter:
Michael F. RYAN, et al., Plaintiffs, v. DOW CHEMICAL COMPANY, Monsanto Company, Hercules Incorporated, T H Agriculture & Nutrition Company, Inc., Diamond Shamrock Chemicals Company, Uniroyal Inc., and Thompson Chemicals Corporation, Defendants. In re “AGENT ORANGE” PRODUCT LIABILITY LITIGATION. Shirley IVY, et al., Plaintiffs, v. DIAMOND SHAMROCK CHEMICALS COMPANY, et al., Defendants. Ronald L. HARTMAN, et al., Plaintiffs, v. DIAMOND SHAMROCK CHEMICALS COMPANY, et al., Defendants.
Nos. 79 Civ. 747, 89 Civ. 3361 and 90 Civ. 3928.
MDL No. 381.
United States District Court, E.D. New York.
Oct. 4, 1991.
As Amended Nov. 15, 1991.
See also 781 F.Supp. 934.
Robert M. Hager, Washington, D.C., for Ivy plaintiffs.
Kelly L. Newman, Houston, Tex., for Hartman plaintiffs.
Cadwalader, Wickersham & Taft by Michael M. Gordon, New York City, for Diamond Shamrock Chemicals Co.
Clark, Gagliardi & Miller by Morton B. Silberman, White Plains, N.Y., for T.H. Agriculture & Nutrition Co., Inc.
Lord Day & Lord, Barrett Smith by John C. Sabetta, New York City, for Monsanto Co.
Kelley, Drye & Warren by William C. Heck, New York City, for Hercules Inc.
Rivkin, Radler, Bayh, Hart & Kremer by Steven Brock, Uniondale, N.Y., for Dow Chemical Co.
Shea & Gould by Myron Kalish, New York City, for Uniroyal, Inc.

Opinion:
WEINSTEIN, District Judge:
TABLE OF CONTENTS
I. INTRODUCTION . 904
A. Agent Orange Litigation: 1979-1984................................ 904
B. The Settlement Agreement........................................ 908
C. Dismissal of Opt-Out Claims...................................... 908
D. Appeals . 909
II. OPERATION OF THE SETTLEMENT FUND.......................... 909
A. Veteran Payment Program........................................ 910
B. Class Assistance Program......................................... 911
III. THE PRESENT ACTIONS . 911
A. Hartman 1....................................................... 912
B. Ivy and Hartman II.............................................. 912
IV. LAW.................. 914
A. Subject Matter Jurisdiction........................................ 914
1. Adequacy of Notice of Removal............................... 914
2. Court's Retained Jurisdiction................................... 915
3. Court's Power to Enforce Its Injunction........................ 916
4. Federal Nature of Plaintiffs' Claims........................... 916
5. Court's Power to Order Removal.............................. 918
B. Motion to Dismiss . 918
V. EQUITY.............................................................. 918
VI. CONCLUSION........................................................ 920
VII. APPENDICES
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 actions.
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 separate memorandum.
I. INTRODUCTION
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 common law 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) (d enying 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 settlement fund).
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, 98L.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 1980, the court granted the federal government's motion to be dismissed as a third-party defendant on the basis of sovereign immunity. 506 F.Supp. at 762. It also denied plaintiffs' motion to create a "limited fund" class action under Federal Rule of Civil Procedure 23(b)(1)(B), and instead indicated that it planned to certify a "common question" class under Rule 23(b)(3). Id. In addition, the court denied the defendants' motion to dismiss on the ground that the production of defoliants wds ordered by, and met the specifications of, the federal government (the "military contractor defense"). The court indicated the defendants could later attempt to prove the applicability of the defense. Id. Following discovery, the court granted, but did not enter, summary judgment on the military contractor defense for some but not all defendants. 565 F.Supp. at 1263.
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 756.
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 members.
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 hearings 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
After the court preliminarily approved the Settlement Agreement, most of the original 2,500 opt-outs chose to opt back into the class. Two hundred and eighty-two servieepersons did not. See 611 F.Supp. at 1230. Their claims were embodied in seventeen different cases.
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.
D. Appeals
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 plan.
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 servieepersons 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 servieepersons), 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
The court outlined its proposed plan for the use of the Settlement Fund in May of 1985. 611 F.Supp. at 1396. On July 5, 1988, the court announced the final plan for distribution. 689 F.Supp. at 1250. At that time, the fund had approximately $240 million in assets. Some $13 million was used for attorney fees. Five million dollars was set aside for the benefit of veterans from Australia and New Zealand. $170 million was allocated to the Agent Orange Veteran Payment Program designed to compensate disabled veterans and their survivors. The Payment Program compensates for the death or disability of any class member that occurs on or before December 31,1994 or until the Plan's funds run out, whichever comes first.
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 to 1994.
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
Total 53,767
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 Program.
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, IV.
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.
III. THE PRESENT ACTIONS
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.
A. Hartman I
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 complaint 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 Settlement Agreement.
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 25, 1989.
B. Ivy and Hartman II
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 Jar-don, 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 Jar-don, 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.
There is some confusion as to representation of some of the Ivy plaintiffs. Robert Hager, Esq. only claims to represent Donald Ivy, Shirley Ivy, James Deloatch, and Joyce Deloatch. The other plaintiffs in the Ivy action are represented by counsel in Texas who did not appear in this court.
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 "after-manifested" 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 motions:
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 that opportunity.
IV. LAW
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 plaintiffs.
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 (M.D.Pa.1980).
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 discussed below.
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," Fair-fax 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 being exercised.
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 Settlement Agreement was incorporated by the court in the decision upholding its fairness, subject to hearings on attorney fees and consideration of plans for distribution. 597 F.Supp. at 862. The Settlement Agreement was also approved "according to its terms" in the court's order and final judgment. 618 F.Supp. at 624-25. In its final order and judgment of dismissal, the court explicitly retained jurisdiction "for the limited purposes of maintaining, administering and distributing the Settlement Fund, pending its final disposition." 618 F.Supp. at 625. That continuing mandate was broadened when the Court of Appeals for the Second Circuit also directed the court to maintain jurisdiction over the Class Assistance Program and to supervise and manage the distribution of the entire Settlement Fund. 818 F.2d at 185-86.
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 '[vjiolation 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 Sky walk 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 "[ejach 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 another forum.
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 (1977).
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 burdensome on the parties than an injunction or contempt citation would be.
B. Motion to Dismiss
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; accordingly, the court also need not address defendants' motion for a permanent injunction.
V. EQUITY
At the heart of these lawsuits is plaintiffs' belief that it is unfair to bind them to the settlement because the latency of their injuries prevented them from knowing definitively whether or not they were included in the class at the time of the first deadline for opting out of the Agent Orange class action. The law allows them to be so bound. See Kane v. Johns-Manville Corp., 843 F.2d 636, 638-639 (2d Cir.1988) (affirming reorganization plan that binds future claimants with no present injuries). They are in fact bound. 618 F.Supp. at 625, aff'd, 818 F.2d 145 (2d Cir.1987), cert. denied, 484 U.S. 1004, 108 S.Ct. 695, 98 L.Ed.2d 647. Nevertheless, plaintiffs' argument raises significant considerations of justice.
The courts and Congress have long recognized the utility of equity actions in which one party brings suit as the representative of a group of claimants. See 7A C. Wright, A. Miller & M. Kane, Federal Practice and Procedure § 1751, at 7 (2d ed. 1986). Such representative suits provide for, among other advantages, the filing of enforceable claims that would be economically infeasible for one party to pursue, the protection of all parties from inconsistent judgments, and the efficient administration of justice. Id. § 1754, at 54. Class actions are particularly valuable in mass torts where the transactional costs and burdens of individual litigation are great. See In re Joint E. & S. Dist. Asbestos Litig., 129 B.R. 710, 803-39 (E. & S.D.N.Y.1991); Hershenov, The Effect of Equity on Mass Tort Law, 1991 U.I11. L.Rev. 269.
Nevertheless, a representative suit can work unfairness, particularly when the representation binds persons who only become aware that they are class members after settlement rather than persons who, at the time the action is brought and decided, can definitively determine whether they are in the class. One can imagine many genuine conflicts of interest between two such groups within a class action. See In re Joint Eastern & Southern Dist. Asbestos Litig., 129 B.R. at 771-73. For example, current litigants might be willing to achieve a settlement even if it leaves funds inadequate to compensate future victims. Alternatively, future claimants might, in retrospect, disagree with prior litigation strategy or find new evidence in support of their claims.
Although Federal Rule of Civil Procedure 23(a) and (b) sets out criteria designed to ensure that all class members are being properly represented, for Rule 23(b)(3) actions, the "best practicable notice" requirement of Rule 23(c) is intended to provide additional protection of "the interests of individuals in pursuing their own litigations." See Fed.R.Civ.P. 23(c)(2) Advisory Committee's Note to 1966 Amendments. Yet, a plaintiff with a latent injury may even have actual notice and still not receive this additional protection because he or she may not have reason to believe the injury will appear.
Courts are authorized to take steps to alleviate these problems in the interest of fairness. As in the Manville bankruptcy actions, courts can oversee the appointment of a guardian to represent the interests of future claimants in class action litigations and settlements. See In re Joint E. & S. Dist. Asbestos Litig., 129 B.R. at 773. Such a guardian was not necessary in the Agent Orange Settlement because of the way it was structured to cover future claimants. All of the courts which considered the Agent Orange Settlement were fully cognizant of the conflict arguments now hypothesized by the plaintiffs and took steps to minimize the problem in the way they arranged for long-term administration of the Settlement Fund.
In many cases the conflict between the interests of present and future claimants is more imagined than real. In the instant case, for example, the injustice wrought upon the plaintiffs is nonexistent. These plaintiffs, like all class members who suffer death or disability before the end of 1994, are eligible for compensation from the Agent Orange Payment Fund. The relevant latency periods and the age of the veterans ensure that almost all valid claims will be revealed before that time.
Even when it is proper and necessary for the courts to be solicitous of the interests of future claimants, the courts cannot ignore the interests of presently injured plaintiffs as well as defendants in achieving a settlement. Class action settlements simply will not occur if the parties cannot set definitive limits on defendants' liability. Making settlement of Rule 23 suits too difficult will work harms upon plaintiffs, defendants, the courts, and the general public.
No less than in 1978, when the first of the Agent Orange suits was brought, the predicament of the Vietnam veterans and their families is one that warrants national concern and action. The settlement of the Agent Orange litigation promised, and has provided, a partial remedy for many veterans' hardships. But the suffering of the veterans and their families, and the frustration and anger it causes, continues to argue for a more systematic and powerful cure. In 1984 this court urged that "the government join with plaintiffs and defendants in even greater efforts toward this noble goal." 597 F.Supp. at 862. Last year, an important step was taken by the Department of Veterans Affairs, which expanded care provided to Vietnam veterans by establishing an official "presumption" that, in certain circumstances, syndromes such as non-Hodgkin's lymphoma and chloracne resulted from service in Vietnam. 38 C.F.R. § 3.311a (1990). Congress has since codified and expanded this decision in a statute that also establishes a program for federally funded research into the connection between herbicide exposure and various diseases, to be conducted in conjunction with the National Academy of Sciences. See Agent Orange Act of 1991, Pub.L. No. 102-4, 105 Stat. 11 (1991). Present and future claimants alleging exposure to Agent Orange thus may be eligible to receive compensation from both the Agent Orange settlement and the Department of Veteran Affairs.
By their actions, Congress and the Department of Veteran Affairs have recognized that the Agent Orange controversy has become a political rather than a judicial question. See 137 Cong. Rec. H719 et seq. (January 29, 1991) (statements of members of Congress in support of the Agent Orange Act). Except for overseeing the expenditure of the Settlement Fund to ensure that it does the greatest possible good for the veterans and their families, the court can do nothing more for the plaintiffs.
VI. CONCLUSION
Decision on the plaintiffs' motion for remand as it affects the two civilian plaintiffs, Charles Brown and Clarence White, is reserved for further consideration. The motion for remand is denied as to all other plaintiffs. They are members of the class previously certified in the Agent Orange litigation. The claims of (or on behalf of) Shirley Ivy, Donald Ivy, Charles Jardon, Toni K. Jardon, Charles Jardon Jr., Robin Jardon, Warren Jardon, Sharon Jardon, Verda Wilson, Isaiah Wilson, Jr., Shirley Zalewaski, Yen Zalewaski, Gary Thomas, Mary Lee Thomas, James L. Kent, Emma I. Kent, Dawn Marie Inman, Bobby Joe Inman, Earl Thompson, Judy L. Thompson, James Donald Deloatch, Joyce Deloatch, Peggy Sands, Martin Sands, Emile Annibolli, Ursula Margot Parry, James D. Parry, Sr., James D. Parry, Jr., James Christopher Parry, Laura Jenkins, Eddie Jenkins, Ronald L. Hartman, Katherina H. Hartman, Jeffrey Alan Hartman, and Angela Hartman are dismissed.
No costs or disbursements are awarded. The court will not entertain a Rule 11 motion for sanctions. It has considered the issue and finds sanctions not warranted.
So ordered.
APPENDIX 1
Agent Orange Class Assistance Program Grants Awarded Through September 30, 1991
Grant Awards Active as of September 30,1991
Slate
Award
American Association of University Affiliated Programs NAT S262.352
Alivianc/Inner Resource Recovery System TX S121.409
American GI Forum NVOP TX S250.553
American Gl Forum NVOP CA SI 74,259
The American Legion IL, IN, KS KY, MI, MN MO, NM, NY PA, OK,OR FL,NC,SD S904.932
Association for Retarded Citizens/GA GA 5169,889
ARCH Training Center Inc. DC S157.871
Bayaud Industries Inc. CO 564,880
Base Camp Inc. TN SI 29,271
Community and Family Services Inc. IN SI 52,637
Community Health Center, Inc. OK SI 55,934
COPIN Foundation NY S182.210
Community Outreach to Vietnam Era Returnees VA, WV S368.099
Easter Seal Society of Iowa Inc. IA S56.191
Albert Einstein College of Medicine NY SI 88,667
Family Service Association of Brown Co. WI 574,890
Family Service Assn, of Central Connecticut CT 575,422
Federation for Children With Special Needs MA SI 35,034
Family Services of Tidewater Inc. VA SI 54,832
Florida State University FL, AL 5134,943
Kennedy Institute MD 5231,270
Lower Eastside Service Center NY 5239.522
Logan County Vietnam Veterans Inc. WV 588,358
Mountain Comprehensive Care Centcr/PLUS KY SI 39,549
McLean Hospital MA SI 69,900
Mental Health Law Project NAT S160.119
Montana Univ Affiliated Rural Inst, on Disabilities MT SI 79,030
The Navajo Nation Department of Veterans Affairs AZ S171.938
National Handicapped Sports NAT SI 69,990
Center for Developmental Disabilities SC S772,627
American Red Cross NM 5141.643
National Veterans Legal Services Project NAT 5941,113
Occupational Center of Essex County NJ S74,759
Puerto Rico Vietnam Veterans Assistance Program PR 5239,027
Paralyzed Veterans of America NAT S318,125
Philadelphia Vets. Multi-Service Center" - PA S205.493
Rehabilitation Enterprises of N.E. Wyoming WY SI 00,351
Saratoga County Rural Preservation Co. NY S77,615
Southern California Veteran Service Center CA S150.653
Suffolk County Youth Bureau NY 5109.522
Department of Human Resources City of Seattle WA 5152,608
Second Start Inc. CA 5144,568
Shriver Center University Affiliated Program MA, ME, NH VT 5217.643
Skagit Community Mental Health Center WA S67.473
Southeast Oregon Rural Health Network (SORHN) OR S69.439
Spina Bifida Association of America MD S423,238
Swords to Plowshares CA S241,997
Team of Advocates for Special Kids CA $139,545
United Cerebral Palsy NY 562,780
United Cerebral Palsey Associations, Inc. NAT S291,423
Universal Family Connection, Inc. IL S158,219
University of Alaska AK SI 36,539
University of Mississippi UAP MS 5174,518
University of North Carolina UAP NC S138.886
Utah State University UT 5150,831
Veterans Assistance Center Inc. CA S174.215
Veterans Benefits Clearinghouse Inc. MA 5176,921
Vets House, Inc. WI $109,235
VETS Inc. MI $143,714
Vietnam Era Veterans Assn, of Rhode Island RI $104,300
Veterans Outreach Center Inc. MA $81,700
Vietnam Veterans of Brevard Inc. FL $188,793
Vietnam Veterans of America Ohio State Council OH $126,921
Vietnam Veterans Agent Orange Victims Inc. CT SI 84,522
Vietnam Veterans of California Inc. CA $278,773
VVLP-St. Louis MO S121,268
VVLP-Arkansas AR S49,079
Vietnam Vets of San Diego CA S262.468
Community Service Programs of West Alabama AL S87.090
Wilderness Inquiry Inc. MN S62,013
Total Active Grant Awards $13,518,951
Grants Expired or Terminated as of September 30,1991
AL Alabama VVLP SI 40,000
TX American GI Forum NVOP 5238,622
NM American Red Cross $102,176
NM American Red Cross S127.191
IL, IN, KS KY, MI, MN MO, NM, NY PA, OK,OR The American Legion S699.621
ARCH Training Center Inc. DC S 100,000
ARCH Training Center Inc. DC $154,910
Association for Retarded Citizens/GA GA S162.078
Base Camp Inc. TN S67.890
Bayaud Industries Inc. CO S60,664
Center for Developmental Disabilities SC S267.920
Center for Developmental Disabilities SC S388,505
Community Outreach to Vietnam Era Returnees VA S246,991
Community Outreach to Vietnam Era Returnees VA S331,164
COPIN Foundation NY S182,354
County of Santa Cruz CA S25,000
Department of Human Resources City of Seattle WA S 149,813
Albert Einstein College of Medicine NY SI 15,903
Family Service Assn, of Central Connecticut CT S71,772
Family Service Association of Brown Co. WI S54,629
Family Service Association of Brown Co. WI S65,341
Family Services of Tidewater Inc. VA S132,330
Federation for Children With Special Needs MA S 127,043
Federation for Children With Special Needs MA S50,324
Help-Aid-Direction Inc. NY 392,410
Kennedy Institute MD S217.208
Logan County Vietnam Veterans Inc. WV 352,480
McLean Hospital MA 5152.034
Mental Health Law Project NAT 3128,608
Mountain Comprehensive Care Centcr/PLUS KY S 129,745
National Handicapped Sports MD S194.153
National Veterans Legal Services Project DC $50,000
National Veterans Legal Services Project DC $692,272
National Veterans Legal Services Project DC 3883,777
Occupational Center of Essex County NJ 371.000
Occupational Center of Essex County NJ 374,759
Vietnam Veterans of America Ohio Slate Council OH 3120,705
Paralyzed Veterans of America DC 395,200
Philadelphia Vets. Multi-Service Center PA 5165,185
Saratoga County Rural Preservation Co. NY S44.591
Southern California Veteran Service Center CA 3147,305
Spina Bifida Association of America MD 3359,255
Swords to Plowshares CA 390.000
Swords to Plowshares CA 325.000
Team of Advocates for Special Kids CA 3126,109
The American Legion DC S544.962
Touro College - Jacob D. Fuchsberg Law Center NY 516,333
United Cerebral Palsy NY SI 12,003
Utah State University UT 3142.035
Veterans Assistance Center Inc. CA 325.000
Veterans Assistance Center Inc. CA S76,887
Veterans Benefits Clearinghouse Inc. MA 3166,907
VETS Inc. MI 5128,771
Vietnam Era Veterans Assn, of Rhode Island RI S82.816
Vietnam Veterans Agent Orange Victims CT 3101,800
Vietnam Veterans of America Ohio State Council OH 377.000
Vietnam Veterans of Brevard Inc. FL 3129,920
Vietnam Veterans of Brevard Inc. FL 3205,174
Vietnam Veterans of California Inc. CA 3249,950
Vietnam Vets of San Diego CA 3249,968
VVLP-Arkansas AR 379,883
VVLP-Arkansas AR S106.602
VVLP-St. Louis MO 396,928
Woodlawn East Community and Neighbors IL SI 54,666
Total Expired or Terminated Grant Awards $10,397,375
Total Assistance Program Grant Awards $23,916,326
APPENDIX 2
Agent Orange Class Assistance Program
Summaries of Active Grants
October 1, 1991
APPENDIX 3
Agent Orange Class Assistance Program Participants Through 6-30-91
Source for all appendices: Third Annual Report of the Agent Orange Class Assistance Program (Oct. 3, 1991)