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As the Supreme Court headed into the final weeks of its term, the justices handed down a series of opinions June 9 on Agent Orange, employment discrimination, and the composition of appellate judicial panels. With the rulings, the Court was left with 14 opinions remaining, and only two more scheduled decision days — June 16 and June 23. It is likely to schedule additional sittings on an ad hoc basis during those weeks to complete its docket. In the Agent Orange ruling, the Court sided with Vietnam War veterans who want to recover damages from Agent Orange-related illnesses that began after payments under a class action settlement ended in 1994. With Justice John Paul Stevens recused, the Court divided 4-4, which had the effect of affirming a ruling of the U.S. Court of Appeals for the 2nd Circuit that said claims of the recently ill veterans were not precluded by the settlement. Stevens did not explain his reasons for sitting out Dow Chemical Co. v. Stephenson, No. 02-271, but the Associated Press noted that Stevens’ only son, John Joseph Stevens, a Vietnam War veteran, died of cancer in 1996. The Dow ruling is not a full-blown opinion, but it was applauded by veterans — and lamented by business as an invitation to reopen class action settlements, at least in the New York-based 2nd Circuit. “I am sure there will be some attorneys trying to reopen old cases in the 2nd Circuit, especially where they can say the science or the factual background has changed” says D.C. O’Melveny & Myers partner John Beisner, who wrote a brief in the case for the Product Liability Advisory Council. Gerson Smoger of Dallas’ Smoger & Associates, who has been litigating on behalf of Agent Orange claimants for a dozen years, proclaims the Court’s action a “fabulous total victory” even though it was not a full decision. The Court’s decision to affirm the 2nd Circuit ruling, rather than vacate it or dismiss the case, gave Smoger the ammunition he says he needs to go back to lower courts and seek damages from the makers of Agent Orange, an herbicide used to clear foliage during the Vietnam War. “There is nothing they could have written that would have been better for my clients,” Smoger says, also claiming that the ruling will help plaintiffs in a broad range of cases who filed too late to be included in class actions. But former Solicitor General Seth Waxman, a Wilmer, Cutler & Pickering partner who argued the case for Dow, says the ruling “has no precedential value whatever” and only puts the cases back where they were before they went to the Supreme Court. “We have a number of defenses — including government contractor liability — that we can still use.” Waxman says Dow has been “very sensitive to the needs of veterans” and has paid $200 million in Agent Orange claims in spite of doubts over its real liability. The issue of finality of settlements “will be back,” according to Waxman, who says it is “regrettable” that the recusal and the 4-4 split left the Court unable to render a full decision. The settlement fund established in 1984 ran out of money in 1994, and courts have struggled with how to deal with claimants who were unaware of the settlement or whose illnesses materialized after payments ended. Daniel Stephenson, a Florida retiree, and Joseph Isaacson, a New Jersey educator, became ill with cancer in 1998 and 1996, respectively. They filed suit, asserting that their interests as future claimants had not been adequately represented in the earlier settlement. U.S. District Senior Judge Jack Weinstein of the Eastern District of New York, who supervised the original settlement, dismissed their claims on the grounds that the settlement was final. But the 2nd Circuit reversed, finding that the veterans were not proper parties to the earlier settlement, so were not prevented by res judicata — finality of judgments — from making their claims. “Such collateral review would not, as defendants maintain, violate defendants’ due process rights by exposing them to double liability,” the 2nd Circuit panel concluded. “Exposure to liability here is not duplicative if plaintiffs were never proper parties to the prior judgment in the first place. We therefore hold that a collateral attack to contest the application of res judicata is available.” While finding that the veterans’ claims were still viable, the panel did not rule on their actual merits. MIXED-JUDGE PANELS RULED OUT OF BOUNDS A visit to Guam and the Northern Mariana Islands by the U.S. Court of Appeals for the 9th Circuit ended with a rebuke last week by the Supreme Court. With a 5-4 vote, the high court on June 9 vacated an appeal decided by the 9th Circuit following a 2001 island-hopping visit, during which the court invited federal judges from each territory to help review each others’ decisions. The problem is, territorial judges are not Article III judges. “Construing the relevant statutory provisions together with further aid from historical usage, it is evident that Congress did not contemplate the judges from the Northern Mariana Islands to be ‘district judges’ ” eligible to participate on appellate court panels, Justice John Paul Stevens wrote. “ It necessarily follows that the appointment of one member of the panel deciding petitioners’ appeals was unauthorized.” The Supreme Court unanimously agreed that the 9th Circuit shouldn’t have invited their participation. The four dissenters wrote separately to argue that the error did not substantially affect the defendants’ rights, especially since they didn’t raise any objections to the panel. The decision also means that judges from other U.S. territories — the U.S. Virgin Islands, for example — cannot sit on panels. It also likely means that other non-Article III judges — bankruptcy judges, for example — won’t be allowed to sit either. Federal district judges as well as appellate judges from other circuits are eligible. During its island trip, the 9th Circuit heard a total of five cases. U.S. District Judges Alex Munson and John Unpingco traded places as the third members of a panel that included Chief Judge Mary Schroeder and Senior Judge Alfred Goodwin. The underlying drug importation cases in Nguyen v. United States, No. 01-10873, and a companion case, Phan v. United States, No. 02-5034, will now go back to the 9th Circuit for what Stevens called “fresh consideration.” Guam solo practitioner Howard Trapp, who represented Khanh Phuong Nguyen, hopes that this choice of words means a new panel will be drawn. On the merits, the 9th Circuit unanimously upheld his client’s conviction. “What we want to do is win the appeal, of course. My client is not a constitutional lawyer and has no interest” in who can sit on the federal appellate courts, Trapp says. The decision caused one of the oddest lineups in recent memory. Stevens’ majority opinion was joined by Justices Sandra Day O’Connor, Anthony Kennedy, David Souter, and Clarence Thomas. Chief Justice William Rehnquist wrote the dissent, joined by Justices Antonin Scalia, Ruth Bader Ginsburg, and Stephen Breyer. — Jason Hoppin, The Recorder JOB BIAS PLANTIFFS GET A LIFT Employment discrimination lawyers on both sides of the aisle seem to agree that the Supreme Court’s unanimous decision last week in Desert Palace Inc. v. Costa, 02-679, will make it easier for plaintiffs to get their cases before a jury. At issue was a fundamental question about the plaintiff’s burden of proof at trial in the complex burden-shifting that occurs in Title VII cases. Some federal appellate courts — the 1st, 4th, 8th and 11th circuits — had ruled that once a defendant meets its burden by articulating a legitimate, nondiscriminatory reason for its actions, the plaintiff must have “direct” evidence in order to secure a “mixed motive” jury instruction. Now the Supreme Court has ruled that an en banc panel of the U.S. Court of Appeals for the 9th Circuit got it right when it refused to follow that trend and held instead that circumstantial evidence is enough to get a mixed-motive charge. “I think it lightens the load on summary judgment,” says Philadelphia plaintiffs attorney Alice Ballard. “The problem is that direct evidence is very hard to come by,” says Ballard. “People generally don’t come right out and say that they’re discriminating against you. This decision will help [plaintiffs] a lot on the summary judgment front because it teaches trial judges that circumstantial evidence is proof enough.” Defense attorney Stephen Wall of Morgan, Lewis & Bockius says he, too, believes the decision is likely to result in more cases going to the jury. “It’s no longer enough to say ‘we didn’t do it,’ ” Wall says. “ More cases will now be going to a jury than otherwise would have.” In the suit, plaintiff Catharina Costa claimed that when she was working as a truck driver and heavy-equipment operator at Caesars Palace Hotel and Casino in Las Vegas, she was fired due to a fight with another employee. Costa sued for sex discrimination and sexual harassment. At trial, Costa’s lawyers presented evidence that she received harsher discipline than men for the same conduct; that she was treated less favorably than men in the assignment of overtime; and that supervisors repeatedly “stacked” her disciplinary record and “frequently used or tolerated” sex-based slurs against her. The case was tried as a mixed-motive case, and a jury awarded her $364,000 in backpay and punitive damages. The 9th Circuit at first voted 2-1 to overturn the award, but an en banc panel of the court later upheld the verdict, finding that Costa’s case was properly submitted to the jury on a mixed-motive charge. The Supreme Court clears the way for all plaintiffs to secure a mixed-motive charge if there is enough evidence of any sort — direct or circumstantial — to challenge the employer’s stated reasons for its actions. Writing for a unanimous Court, Justice Clarence Thomas found that the issue was one of statutory construction. The Civil Rights Act of 1991, Thomas said, “unambiguously states that a plaintiff need only ‘demonstrate’ that an employer used a forbidden consideration with respect to ‘any employment practice.’” As a result, Thomas concluded, “on its face, the statute does not mention, much less require, that a plaintiff make a heightened showing through direct evidence.” Thomas found that Congress “explicitly defined the term ‘demonstrates’ in the 1991 act, leaving little doubt that no special evidentiary showing is required.” The law defined “demonstrates” as to “meet the burdens of production and persuasion.” Thomas concluded that “if Congress intended the term ‘demonstrates’ to require that the ‘burdens of production and persuasion’ be met by direct evidence or some other heightened showing, it could have made that intent clear by including language to that effect. . . . Its failure to do so is significant, for Congress has been unequivocal when imposing heightened proof requirements in other circumstances.” Thomas noted that the circuits that had required direct evidence were relying on language in a concurring opinion by Justice Sandra Day O’Connor in the 1989 decision in Price Waterhouse v. Hopkins. But the Civil Rights Act of 1991 effectively overruled Hopkins, Thomas found, because Congress passed the law in response to a series of decisions from the high court. Specifically, Thomas said, §107 of the 1991 act responded to Hopkins by “setting forth standards applicable in mixed motive cases.” Since the law says nothing about “the type of evidence required in mixed-motive cases,” Thomas concluded that “we should not depart from the conventional rule of civil litigation” that generally requires a plaintiff to prove his case by a preponderance of the evidence — using direct or circumstantial evidence. “The reason for treating circumstantial and direct evidence alike is both clear and deep-rooted: circumstantial evidence is not only sufficient, but may also be more certain, satisfying and persuasive than direct evidence,” Thomas wrote. — Shannon P. Duffy, The Legal Intelligencer

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