On January 21, 2014, objectors to a class action settlement over contamination from Monsanto Agent Orange herbicide filed a Petition for Writ of Certiorari with the Unites States Supreme Court. The Petition asked the Court to entertain the objectors’ request to reverse the West Virginia Supreme Court’s November 22, 2013 decision, which affirmed the trial court’s approval of a proposed class settlement as fair, adequate and reasonable.
The case involves two separate plaintiff classes—a medical monitoring class and a property class—each of which claimed damages from exposure to the chemical dioxin produced by a Monsanto plant in Nitro, West Virginia from 1949-1969. The trial court certified both classes in 2008, but decertified the property class in 2011 after excluding the class’ sole expert on property remediation damages. After decertification of the property class, the medical monitoring class moved forward to trial. At the end of jury selection, the parties reached a tentative settlement and persuaded the trial court to conditionally vacate the decertification of the property class (i.e., conditionally recertify) for purposes of settlement.
The deal struck would have Monsanto pay $21 million toward a fund for medical monitoring for between 2,000 and 5,000 members of a projected class of 80,000 (plus the potential for another $63 million if certain benchmarks are triggered). The deal would also have Monsanto pay for a separate $9 million fund for cleaning and remediation of roughly 4,500 eligible homes out of the 12,000 owned by class members.
The objectors’ primary argument in seeking review is that the settlement would provide no benefits for up to 94% of the medical monitoring class or for up to 62% of the property remediation class, while still binding those class members to a complete release. According to the objectors, this lack of benefits to many class members effectively created sub classes of beneficiary and non-beneficiary class members, which, in turn, created representational conflicts of interest and violated the non-beneficiaries’ due process rights.
The objectors base their argument largely on the U.S. Supreme Court’s 1997 decision in Amchem Products, Inc. v. Windsor, 521 U.S. 591, which they read for the proposition that a settlement must be beneficial to each class or subclass, and that adversity among subgroups can run afoul of Rule 23(a)(4)’s adequacy of representation requirement where the class representative attempts to represent an adverse group. Amchem concerned “currently injured” and “exposure only” asbestos claims, which the Court viewed as having divergent goals of immediate payment and future funds respectively. In other words, both groups were entitled to relief, but the relief they sought was different.
Effectively distinguishing Amchem, the West Virginia Supreme Court concluded in the Monsanto case that the beneficiary and non-beneficiary de facto “subclasses” did not have divergent interests because they all sought the same relief on the same evidence, and the only difference was that the non-beneficiaries had insufficient evidence on entitlement to relief. If the U.S. Supreme Court decides to hear the case, the fundamental questions will likely be (1) whether the only real difference between beneficiaries and non-beneficiaries was entitlement to relief and (2) if so, whether entitlement (or lack thereof) to class-wide relief creates conflicts defeating adequacy of representation.