Opinion ID: 2585525
Heading Depth: 2
Heading Rank: 2

Heading: The Matsuuras' Settlements and Subsequent Litigation

Text: On April 26, 1994, the Matsuuras executed settlement agreements with DuPont, in which David Matsuura received $1 million, and Stephen Matsuura received $500,000. As previously indicated, the Alta test results were disclosed in May 1994, and the Keeler documents were released in June 1994. On November 23, 1994, the Matsuuras' suits were dismissed with prejudice by stipulation. In other words, the settlement agreements were executed before the Alta test results and Keeler documents were released, but the stipulated dismissal was not filed until after the evidence was finally disclosed in the Kawamata Farms trial. On December 10, 1996, [9] approximately two years after the dismissal of their claims and fifteen months after the Kawamata Farms plaintiffs filed their motion for relief under HRCP Rule 60(b)(3) based on discovery fraud, the Matsuuras filed a complaint in the U.S. district court against DuPont, alleging fraud, racketeering, abuse of process, infliction of emotional distress, interference with prospective economic advantage, spoliation of evidence, and punitive damages based on DuPont's alleged fraud in the discovery and settlement processes. Essentially, the Matsuuras claimed that they were harmed by DuPont's alleged fraudulent conduct because they would have requested more money or refused to settle had they known about the concealed data. DuPont filed a counterclaim, requesting damages pursuant to the clause in the settlement agreement that indemnified DuPont from any future litigation by the Matsuuras. The U.S. district court granted judgment on the pleadings in favor of DuPont, ruling that the Matsuuras' claims were barred by the terms of the settlement agreement. On appeal, the United States Court of Appeals for the Ninth Circuit [hereinafter, Ninth Circuit] reversed. Matsuura, 166 F.3d at 1012. [10] The Ninth Circuit held that, under Delaware law (which governed the terms of the settlement agreement), the release provision in the settlement agreement did not bar the Matsuuras' fraud and other claims. The case was remanded to the U.S. district court, and the parties filed a series of motions. On March 1, 2001, the Matsuuras filed a Motion for Collateral Estoppel to Preclude Defendant from Re-Litigating Previously Adjudicated Findings of Fraud, Discovery Abuse, and Intentional Withholding of Evidence in the Kawamata Farms case (motion for collateral estoppel). Therein, the Matsuuras seek to preclude DuPont from re-litigating the following issues: (1) that DuPont fraudulently and intentionally withheld the Alta test results from Benlate litigants; (2) that DuPont intentionally withheld the Keeler documents from Benlate litigants; and (3) that the Alta test results included analytical findings, which some experts would construe as evidence that Benlate was contaminated with SUs. The Matsuuras claim that issues (1) and (2) have already been decided in Kawamata Farms and that issue (3) was decided by the Eleventh Circuit in Bush Ranch II. [11] On April 19, 2001, DuPont responded by filing two related or counter motions: (1) a Motion for Judgment on the Pleadings as to All Plaintiffs' Claims Based on Litigation Conduct (motion for judgment on the pleadings); and (2) a Motion for Summary Judgment Based on Plaintiffs' Inability as a Matter of Law to Establish Reasonable Reliance (motion for summary judgment). [12] In its motion for judgment on the pleadings, DuPont asserts that all of the Matsuuras' state law damages claims and their federal RICO claims are barred by the doctrine of litigation immunity. In other words, DuPont argues that it cannot be held liable in a separate tort action for conduct arising from prior litigation. DuPont further asserts that Hawai`i does not recognize a separate tort of spoliation of evidence, and, thus, any claims based on such a tort must be dismissed. In its motion for summary judgment, DuPont asserts that reasonable reliance is an element of the Matsuuras' fraud claim and that the Matsuuras are unable, as a matter of law, to establish that they reasonably relied on DuPont's litigation conduct. Specifically, DuPont maintains that the Matsuuras knew, at the time of settlement, that DuPont had been repeatedly and extensively accused of making false and inadequate discovery responses, and that DuPont was embroiled in motions and proceedings contending that DuPont had engaged and was engaging in discovery fraud, the suppression and destruction of evidence, and other forms of alleged dishonest conduct in discovery. Accordingly, DuPont submits that the Matsuuras could not have reasonably relied on any representations made by DuPont. [13] On May 10, 2001, less than one week before the hearing on the substantive motions, DuPont filed a Motion for Certification of Questions to the Hawai`i Supreme Court, requesting the U.S. district court to certify questions presented in its two related countermotions. At a hearing on May 16, 2001, the U.S. district court determined that Hawai`i law applied to the Matsuuras' complaint (as opposed to Delaware law, which had applied to the construction of the settlement agreement) and that several of the issues raised by the parties in this case presented novel issues of Hawai`i state law. Therefore, the court indicated its intention to certify these questions and ordered the parties to confer regarding the precise language of the questions to be certified. On June 20, 2001, the U.S. district court filed a certificate requesting this court to answer the three questions listed supra. On June 28, 2001, this court filed an order stating that the certified questions were amenable to answer by this court and ordering, among other things, the parties to submit the record and briefs. On February 8, 2002, this court consolidated this case with Exotics Hawai`i Kona, Inc. v. E.I. du Pont de Nemours and Co., No. 24626, for purposes of oral argument, which was heard on April 18, 2002.