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Stephenson v. Dow Chem. Co. - 273 F.3d 249 (2d Cir. 2001)

Rule:

The doctrine of res judicata dictates that a final judgment on the merits of an action precludes the parties or their privies from relitigating issues that were or could have been raised in that action. Res judicata ordinarily applies if the earlier decision was (1) a final judgment on the merits, (2) by a court of competent jurisdiction, (3) in a case involving the same parties or their privies, and (4) involving the same cause of action.

Facts:

Daniel Stephenson and Joe Isaacson were two Vietnam War veterans who alleged that they were injured by exposure to Agent Orange while serving in the military in Vietnam. In the late 1990s, Stephenson and Isaacson and their families filed separate lawsuits against manufacturers of Agent Orange. In 1984, however, some 12 years before the current suits, virtually identical claims against these defendants, brought by a class of military personnel who were exposed to Agent Orange while in Vietnam between 1961 and 1972, were globally settled. The Isaacson and Stephenson actions were brought in 1998 and 1999, respectively. Judge Weinstein, who presided over the 1984 settlement, dismissed the claims of Stephenson and Isaacson, concluding that the prior settlement barred their suits. On appeal, plaintiffs chiefly contend that they were inadequately represented and, therefore, due process considerations prevented the earlier class action settlement from precluding their claims.

Issue:

Does the 1984 Agent Orange settlement preclude Stephenson and Isaacson from asserting later claims?

Answer:

No

Conclusion:

The United States Court of Appeals agreed that Supreme Court precedent in cases Amchem and Ortiz prevented the application of res judicata to bar plaintiffs' claim. Specifically, the court found that plaintiffs' collateral attack, which sought only to prevent the prior settlement from operating as res judicata, was permissible because there had been no prior adequacy of representation determination with respect to individuals whose claims arose after the depletion of the settlement fund. The district court's judgment was vacated and remanded.

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