Agent Orange back in court

Is a 1984 settlement for vets final? The answer may impact other class-action suits.

The legal battle over the dangerous health effects of the chemical defoliant Agent Orange in the Vietnam War was supposed to end in 1984.

That year, ailing war veterans reached a settlement in which Dow Chemical and other companies agreed to pay $180 million into a fund to compensate those exposed to the toxic spray during the Southeast Asian conflict.

But now, 19 years later, lawyers are trying to reopen the massive class-action litigation because there is no money left in the fund to care for war veterans who are only now showing symptoms of diseases believed linked to Agent Orange exposure.

Wednesday, the issue arrives at the US Supreme Court, where the justices must decide whether the 1984 settlement is final and binding, or whether the negotiated agreement was legally flawed for not anticipating the needs of veterans who might develop health problems in the future.

The case is important because it may help define how much power individuals have to challenge their inclusion in class-action settlements when their long-term interests clash with the relatively short-term interests of other class members.

Manufacturers, insurance companies, and defense contractors are urging the court to embrace the principle that the 1984 settlement is a legal contract that must be enforced. Courts must avoid the temptation to second-guess class-action settlements years later, they argue.

"[This case] could, at least in principle, threaten to upset the finality of every class action settlement or judgment ever reached," says John Beisner in a friend-of-the-court brief written on behalf of the Product Liability Advisory Council.

Veterans groups, trial lawyers, and consumer advocates argue that the settlement is unfair because it binds thousands of Vietnam veterans to an agreement that never benefited them.

"The lawyers for Dow and all the chemical companies knew in 1984 that what they were doing was wrong," says William Rossbach, who filed a friend-of-the-court brief on behalf of the American Legion and other veterans groups. "When they saw an opportunity to preclude all these future cases, they jumped on it."

Under the 1984 settlement, any Vietnam veteran showing disease symptoms linked to Agent Orange before a 1994 deadline would be entitled to a cash payment. The agreement further provided that anyone showing disease symptoms after 1994 would receive no payment. All remaining money in the Agent Orange fund was used to underwrite research, advocacy, counseling, and other services aimed at assisting an estimated 239,000 veterans who had been exposed to Agent Orange but who had not exhibited symptoms of disease by 1994.

The new lawsuit challenging the settlement was brought by Vietnam veterans Daniel Stephenson and Joe Isaacson, who were diagnosed in 1998 and 1996 with diseases that are believed linked to exposure to Agent Orange.

Their lawsuits were thrown out of court because all issues related to Agent Orange had been resolved in the 1984 settlement, the judge ruled. A federal appeals court in New York disagreed, ruling that Mr. Stephenson and Mr. Isaacson are not bound by the settlement because they were never adequately represented during the 1984 negotiations.

Dow Chemical appealed to the Supreme Court, which agreed to resolve the issue.

Lawyers for the two veterans say they were denied their constitutional right to due process by being included as members of the settlement without their knowledge. The settlement, in effect, forced them to lose rights to sue for potential compensation.

Seth Waxman, former Clinton administration solicitor general, is representing Dow Chemical. He says a federal judge back in 1984 deemed the settlement fair to all class members, and appeals courts should not invalidate that finding. At the time, the federal judge held six "fairness" hearings across the country prior to approving the payout plan.

In effect, Mr. Waxman says, a deal is a deal. "Respondents' approach would subject [Dow Chemical] to new rounds of litigation and the prospect of additional liability after they already have irretrievably paid a substantial settlement on the express condition that they would not face future lawsuits," Waxman says in his court brief.

Gerson Smoger, who is representing the two veterans, sees it differently. He says the agreement was designed to appeal to veterans with current injuries and their lawyers, and those with potential future injuries were added to the agreement later, but without the benefit of a place at the negotiating table.

"You cannot have a settlement and take away the rights of absent parties unless the parties are in court and adequately represented," says Mr. Rossbach. "Class actions were not intended as a way for [chemical companies] to wipe out claims."