Court Opinion

ID: 2966614
Source: CourtListenerOpinion
Date Created: 2015-09-22 00:52:53.868399+00
Date Added: 2024-06-11T11:37:29.041028
License: Public Domain

PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

In Re: A. H. ROBINS COMPANY,
INCORPORATED,
Debtor.

CHESLENE BLEDSOE; BARBARA
                                                                     No. 95-2662
RAYGOR,
Claimants-Appellants,

v.

DALKON SHIELD CLAIMANTS TRUST,
Trust-Appellee.

Appeal from the United States District Court
for the Eastern District of Virginia, at Richmond.
Robert R. Merhige, Jr., Senior District Judge.
(CA-85-1307-R)

Argued: December 5, 1996

Decided: April 22, 1997

Before RUSSELL, WIDENER, and MICHAEL, Circuit Judges.

_________________________________________________________________

Affirmed by published opinion. Judge Russell wrote the opinion, in
which Judge Widener and Judge Michael joined.

_________________________________________________________________

COUNSEL

ARGUED: Anthony James Nemo, Sr., MESHBESHER & SPENCE,
LTD., St. Paul, Minnesota, for Appellants. Melody Gunter Foster,
DALKON SHIELD CLAIMANTS TRUST, Richmond, Virginia, for
Appellee. ON BRIEF: Michael J. Nemo, Sr., MESHBESHER &
SPENCE, LTD., St. Paul, Minnesota, for Appellants. Anne M. Glenn,
DALKON SHIELD CLAIMANTS TRUST, Richmond, Virginia;
Orran Lee Brown, Richmond, Virginia, for Appellee.

_________________________________________________________________

OPINION

RUSSELL, Circuit Judge:

Cheslene Bledsoe and Barbara Raygor, claimants against the
Dalkon Shield Claimants Trust (the "Trust"), 1 appeal the district
court's order favoring the Trust, and denying their Rule 60(b) motions
to vacate Alternative Dispute Resolution ("ADR") decisions entered
against them. For the following reasons, we affirm.

I.

Cheslene Bledsoe and Barbara Raygor sought compensation from
the Trust for injuries arising from their use of the Dalkon Shield intra-
uterine device manufactured by the A.H. Robins Company. They
rejected the Trust's offers of compensation and elected to proceed
with binding ADR.

Bledsoe sought compensation for uncontrolled bleeding, pelvic
inflammatory disease and infertility. Raygor sought damages for
uncontrolled bleeding and embedment of the Dalkon Shield. As part
of the ADR process, Bledsoe, Raygor, and the Trust submitted State-
_________________________________________________________________
1 On July 26, 1988, the district court approved A.H. Robins' "Sixth
Amended and Restated Plan of Reorganization" (the"Plan"). We
affirmed the Plan's confirmation. In re A.H. Robins Co., 880 F.2d 694,
696 (4th Cir. 1989), aff'g 88 B.R. 742 (E.D. Va. 1988), cert. denied sub
nom. Menard-Sanford v. A.H. Robins Co., 493 U.S. 959 (1989). The Plan
established the Trust, funded by A.H. Robins Company, to compensate
parties injured by the use of the Dalkon Shield intrauterine device. Sec-
tion 8.04 of the Plan directs all persons seeking compensation to follow
the claim procedures set forth in the Dalkon Shield Trust Claims Resolu-
tion Facility document.

                     2
ments of Facts and Issues for the referee's consideration. Prior to their
respective ADR hearings, both women submitted their complete med-
ical records and an affidavit from a board-certified obstetrician and
gynecologist stating that the Dalkon Shield caused their injuries. The
Trust categorically denied the women's assertions.

The referee denied compensation to both women on all of their
claims. Dissatisfied with the outcome of their hearings, and because
the referee's final written decision for each case recited certain seg-
ments of the Trust's pre-hearing Statement of Facts and Issues verba-
tim, Bledsoe and Raygor, pursuant to Federal Rule of Civil Procedure
60(b),2 moved the district court to vacate the referee's ADR decisions
and order new ADR hearings. They maintained that the referee exhib-
ited bias by relying upon and copying some of the Trust's Statements
of Facts and Issues as part of her final decisions.

After examining the purposes and goals of the ADR process, the
district court denied their motions to vacate the ADR decisions. It
concluded that Rule 60(b) was not the appropriate procedural mecha-
nism for seeking relief from a final and binding ADR decision. This
appeal followed.

II.

Bledsoe and Raygor contend that the district court erred in denying
their Rule 60(b) motions on the ground that Rule 60(b) relief was
unavailable to them. We review denials of Rule 60(b) motions for
abuse of discretion.3
_________________________________________________________________
2 Bledsoe and Raygor sought relief from final judgment pursuant to
subsections b(4) and b(6), which provide in pertinent part:

         (b) Mistakes; Inadvertence; Excusable Neglect; Newly Discov-
         ered Evidence; Fraud; etc. On motion and upon such terms as
         are just, the court may relieve a party or a party's legal represen-
         tative from a final judgment, order, or proceeding for the follow-
         ing reasons: . . . (4) the judgment is void; . . . (6) any other
         reason justifying relief from the operation of the judgment.
3 National Credit Union Admin. Bd. v. Gray, 1 F.3d 262, 265 (4th Cir.
1993).

                     3
Due to the large number of claimants, the Trust created the Claims
Resolution Facility (the "CRF"), which established three options by
which potential claimants could seek and receive immediate compen-
sation for their injuries in lieu of attempting to litigate their claims in
court.4

Bledsoe and Raygor initially tried to settle their claims under a pro-
vision known as Option 3. After evaluating the women's respective
claims, the Trust made each of them a settlement offer. Bledsoe and
Raygor rejected the offers, as they were entitled to do under CRF
§ E.4. Claimants rejecting their Option 3 settlement offers may elect,
instead of trial or arbitration, to have their claims proceed through an
In-Depth Review/Voluntary Settlement Conference or another volun-
tary ADR program. Bledsoe and Raygor elected to submit their
claims to the ADR program.

When Bledsoe and Raygor elected to proceed to ADR, they and
their respective counsel voluntarily signed an "Agreement to Submit
to Binding Alternative Dispute Resolution" (the"Agreement"). The
Agreement stated in pertinent part:

            [The Claimant] has elected to proceed to[ADR] on her
           or his claim against the [Trust]. This election is binding and
           prohibits the Claimant from proceeding through in-depth
           review and settlement conference, commencing or continu-
           ing any litigation or commencing any arbitration or any
           other proceeding or action against the Trust. Both the
           Claimant and the Dalkon Shield Claimants Trust (collec-
           tively the "Parties") agree to submit to ADR in accordance
           with the Claims Resolution Facility (the "CRF") and the
           First Amended Rules Governing Alternative Dispute Reso-
           lution (the "ADR Rules"), which are attached and incorpo-
           rated into this Agreement, and further agree that the ADR
           Rules will govern the ADR proceedings. The Claimant
           acknowledges that she or he has read and understands the
           ADR Rules.
_________________________________________________________________
4 See CRF §§ C, D & E.4 (describing each settlement option available
to claimants); Reichel v. Dalkon Shield Claimants Trust, No. 95-1031,
slip op. at 2-3 (4th Cir. March 26, 1997).

                     4
         By electing to proceed to binding ADR and in consider-
        ation of the Trust's agreement to be bound by any award,
        the Claimant hereby-knowingly and voluntarily waives her
        or his right to seek remedies against the Trust in a court of
        law, including the right to a trial by a judge or by a jury. The
        Claimant also knowingly and voluntarily waives her or his
        option to proceed through in-depth review, settlement con-
        ference and arbitration pursuant to the CRF.

         The parties understand and agree that the maximum
        award that the Claimant can receive in ADR is $10,000 U.S.5

         The Parties agree that the referee's decision is final and
        binding on the Parties.

        ....

         The Trust shall pay the fees and expenses of the referee.
        ...

        ....

         This Agreement shall be construed and determined in
        accordance with the Claimants Trust Agreement, the Plan,
        and the CRF.

        . . .[T]he Trust agrees that if the referee issues an award in
        favor of the Claimant, the Trust will process the award for
        payment within ten (10) business days of receiving the ref-
        eree's decision. (emphasis added).

The ADR Rules attached to and incorporated into the signed
Agreement stated in Rule I: "[t]he purpose of ADR is to allow claim-
ants whose offers are $10,000 or less the opportunity to present their
cases in person to a neutral person as quickly as possible and with as
_________________________________________________________________
5 At the time Bledsoe elected ADR she was only entitled to a maximum
recovery of $10,000. Because Raygor elected ADR under the current
rules, she could recover a maximum of $20,000.

                  5
few legal complications as possible." ADR Rule XIIA.1 stated that
the referee shall issue a written decision no later than fifteen days
after the hearing. Additionally, the pre-hearing letter sent to Bledsoe
and Raygor introducing them to the ADR program informed them that
a claimant should be able to present her or his case to an independent
referee within six months after certification to ADR, the hearing lasts
no longer than two and one-half hours, and typically the awards are
higher than the settlement offers.

The above evidence demonstrates that Bledsoe and Raygor took
part in a voluntary, less adversarial, less costly, and more efficient
contractual alternative to trial. The ADR procedure was not court-
ordered, nor court-supervised. It was a quasi-judicial proceeding in
which a neutral third party gathered information from the participants
and issued an informal but final resolution regarding the submitted
claims. It operated under few restrictions. Its own rules, not those of
the courts, governed the process.6

Bledsoe and Raygor knowingly and voluntarily rejected the Trust's
Option 3 settlement offers. They elected to resolve their claims
through the ADR program with the obvious hope of securing a higher
award. Entering the ADR program however, was not a"sure thing."
There always existed the attendant risk that their claims could be
denied, and the referee could issue an adverse decision against either
party.

The Agreement, the ADR Rules, and the pre-hearing letter placed
Bledsoe and Raygor on notice that the referee's decision was binding
and final, and that there existed no mechanism by which the referee's
decision could be reviewed. By contractually and voluntarily submit-
ting their claims to the ADR program, Bledsoe and Raygor relin-
quished certain procedural mechanisms associated with a formal court
proceeding, one of which was the right of judicial review.

Neither the Agreement nor the ADR Rules contain a provision per-
mitting either party to seek a new hearing after the referee issues a
_________________________________________________________________
6 Cf. Bernhardt v. Polygraphic Co. , 350 U.S. 198, 203 (1956) ("The
nature of the tribunal where suits are tried is an important part of the par-
cel of rights behind a cause of action.").

                    6
decision. The absence of any provision providing for post-decision
review is not unintentional. We believe that it constitutes a deliberate
omission, because any rule permitting such immediate review would
contravene the very goal of the ADR process -- the efficient, fair, and
final resolution of claims against the Trust. Consequently, we hold
that the district court did not abuse its discretion in finding that Rule
60(b) relief from this particular ADR procedure was not available to
those claimants who elected to have their claims resolved in ADR.

III.

As discussed above, the Agreement and the ADR Rules do not pro-
vide a mechanism for reviewing ADR decisions. Hence, no post-
decisional relief is normally available to either party. Nonetheless, the
district court determined that "individual fairness" required that post-
decisional relief be available in those extreme circumstances "where
the moving party demonstrates flagrant referee misconduct by clear
and convincing evidence."7 In order to review Bledsoe's and Raygor's
claims the district court invoked its exclusive jurisdiction and special
supervisory powers to resolve disputes regarding the implementation
of the Plan.8 It then considered the women's complaints regarding the
referee's decisions as if they had been filed with the court in a Motion
to Enforce Plan and Set Aside Referee's Decision. The district court
found that the record lacked clear and convincing evidence showing
the referee's decisions were biased and improper.

Bledsoe and Raygor do not appeal the district court's decision to
review their complaints as if filed as a Motion to Enforce Plan and
Set Aside Referee's Decision. Rather, they appeal what they believe
to be the unrealistic evidentiary burden required by the district court.
Having carefully reviewed the record, we hold that the district court
did not establish an unrealistic burden. Additionally, the record
reveals that Bledsoe and Raygor failed to present sufficient evidence
of referee misconduct. Accordingly, the district court did not abuse its
discretion in refusing to vacate the ADR decisions on the basis of par-
tiality.
_________________________________________________________________
7 Bledsoe v. Dalkon Shield Claimants Trust, 197 B.R. 550 (1995).
8 § 8.05 of the Plan. See also In re A.H. Robins Co., 972 F.2d 77, 79
n.1 (4th Cir. 1992) (affirming the district court's exclusive jurisdiction).

                     7
IV.

For the foregoing reasons, the order of the district court appealed
from is accordingly

AFFIRMED.

                    8