Burton v. American Cyanamid Co et al

Filing 244

ORDER signed by Judge Lynn Adelman on 11/10/14 granting 233 Motion to Consolidate Cases for settlement purposes; granting 234 Motion for Settlement; granting 235 Motion for Settlement. (cc: all counsel) (dm)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
_____________________________________________________________________
GLENN BURTON, JR.,
Plaintiff,
v.

Case No. 07-cv-0303

AMERICAN CYANAMID, et al.,
Defendants.
_____________________________________________________________________
RAVON OWENS,
Plaintiff,
v.

Case No. 07-cv-0441

AMERICAN CYANAMID, et al.,
Defendants.
_____________________________________________________________________
ERNEST GIBSON,
Plaintiff,
v.

Case No. 07-cv-0864

AMERICAN CYANAMID, et al.,
Defendants.
_____________________________________________________________________
BRIONN STOKES,
Plaintiff,
v.

Case no. 07-cv-0865

AMERICAN CYANAMID, et al.,
Defendants.
_____________________________________________________________________
CESAR SIFUENTES,
Plaintiff,
v.

Case No. 10-cv-0075

AMERICAN CYANAMID, et al.,
Defendants.
_____________________________________________________________________

_____________________________________________________________________
MANIYA ALLEN, et al.,
Plaintiffs,
v.
Case No. 11-cv-0055
AMERICAN CYANAMID, et al.,
Defendants.
_____________________________________________________________________
DEZIREE VALOE, et al.,
Plaintiff,
v.

Case No. 11-cv-0425

AMERICAN CYANAMID, et al.,
Defendants.
_____________________________________________________________________
ORDER
In the above-captioned lead paint cases, plaintiffs and one of the defendants, NL
Industries, Inc. (“NL”), have reached a settlement and ask me to issue several rulings to
effectuate their agreement. Before addressing their requests, I must resolve a jurisdictional
issue. Previously, defendants moved to dismiss for lack of subject matter jurisdiction
arguing that plaintiffs failed to adequately plead citizenship and also to establish complete
diversity. To solve these problems, plaintiffs seek to file a second amended complaint
adequately pleading citizenship and severing the non-diverse plaintiffs. All defendants
agree to plaintiffs’ request, and it will be granted.
With respect to the settlement, plaintiffs and NL have reached an aggregate
settlement agreement pursuant to Pierringer v. Hoger, 21 Wis. 2d 82 (1963), which permits
a plaintiff to settle with a defendant while reserving the right to pursue claims against other
tortfeasors and agreeing to indemnify the settling defendant for any claims for contribution
that the non-settling tortfeasors might bring. Bruner Corp. v. R.A. Bruner Co., 133 F.3d
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491, 494 (7th Cir. 1998). Under the agreement, NL will deposit into a qualified settlement
fund a sum to be distributed to plaintiffs according to an agreed-upon formula.
The non-settling defendants do not object to the settlement but object to plaintiffs’
request that I consolidate the cases for purposes of settlement. Under Fed. R. Civ. P.
42(a), I may consolidate cases which involve a common question of law or fact and may
issue any orders to avoid unnecessary cost or delay. Consolidation “is a matter committed
to the sound discretion of the trial judge.” Canedy v. Boardman, 16 F.3d 183, 185 (7th Cir.
1994). The non-settling defendants argue consolidation is inappropriate because one case,
Gibson v. American Cyanamid, et al., is assigned to Judge Randa, who previously declined
to reassign the case to me. There is, however, a common question which justifies
consolidation. All plaintiffs have collectively settled with NL. Thus, any questions about the
settlement agreement are, by definition, “common.”1 Further, effectuating the agreement
is complicated; the settlement involves cases in front of two federal judges and two state
court judges, and it involves a complex distribution matrix requiring the creation of multiple
funds. Consolidation for the limited purpose of resolving plaintiffs’ settlement-related
motions is efficient and will avoid unnecessary cost and delay. The Gibson case will
remain before Judge Randa for all other purposes.2
The non-settling defendants also argue that I should require the settling parties to

1

The fact that the non-settling defendants do not object to concurrent review of
the settlement motions in each separately-assigned case supports the conclusion that
commonality exists for settlement purposes.
2

Nothing in this decision should be construed as a ruling on whether a common
question of law or fact exists under Fed. R. Civ. P. 20(a)(1). I do not presently address
the misjoinder issue raised in Allen v. American Cyanamid.
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disclose to them the terms of the settlement by placing such terms in the record under a
protective order. Generally, only documents which form the basis of the parties’ dispute
and the court’s resolution of the dispute must be part of the record. Goesel v. Boley Int’l
(H.K.) Ltd., 738 F.3d 831, 833 (7th Cir. 2013). Settlement terms need only be disclosed if
they require judicial approval, if they become an issue in a subsequent lawsuit, or if a party
seeks enforcement. Id. at 834. Further, under Wisconsin law, parties are not required per
se to disclose the terms of a Pierringer settlement. See, e.g., Olson v. Darlington Mut. Ins.
Co., 296 Wis. 2d 716, 720 n.3 (Ct. App. 2006) (concluding that the trial court erred in
compelling disclosure of settlement terms and noting that “[f]orcing disclosure of the
settlement amount . . . may work to impede future settlements”).
Plaintiffs are not asking that I approve the terms of the settlement agreement with
NL, and my approval is not required. Rather, plaintiffs ask me to authorize the creation of
funds needed to effectuate the agreement and to authorize the guardian ad litem to settle
the minor plaintiffs’ claims. To decide these motions, I do not need to know the terms of
the agreement, and such terms do not factor into my decision. Thus, at this time, I will not
require plaintiffs to disclose the terms of their settlement agreement with NL. The nonsettling defendants also argue that keeping the settlement terms confidential is improper
because the Pierringer releases affect their rights to contribution from NL. However,
nothing in this decision precludes the non-settling defendants from asking for disclosure
of the settlement terms at a later date, for example, during or after trial, should such terms
become relevant.
Finally, the non-settling defendants object to plaintiffs’ characterization of

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Wisconsin’s risk contribution rule and express concern that their failure to object might later
be interpreted as acquiescence. Their objection is noted. I stress that in granting plaintiffs’
settlement-related motions, I do not decide any issues relating to Wisconsin’s risk
contribution rule.
THEREFORE, IT IS ORDERED that in Allen v. American Cyanamid, Case No. 11cv-055, plaintiffs’ motions for leave to file a second amended complaint (ECF No. 39) and
to sever (ECF No. 40) are GRANTED.
IT IS FURTHER ORDERED that in Allen v. American Cyanamid, Case No. 11-cv055, defendants’ motion to dismiss for lack of jurisdiction (ECF No. 16) is DENIED.
IT IS FURTHER ORDERED that in all above-captioned cases:
(1) The joint motion to partially consolidate cases for purposes of settlement of all
claims against NL Industries, Inc. is GRANTED. The above-captioned cases are partially
consolidated for the limited purpose of settling all of the plaintiffs’ claims against NL
Industries, Inc., on a Pierringer basis.
(2) The joint motion to establish a qualified settlement fund and appoint trustee, and
dismiss all claims of plaintiffs against NL Industries, Inc. is GRANTED.
(a) The Lead Paint Settlement Fund is established as a qualified Settlement
Fund as described in Treas. Reg. § 1.468B-1, and within the meaning of 28
U.S.C. § 468B of the Internal Revenue Code.
(b) Seventh Amendment Holdings, LLC, is appointed as Trustee of the fund.
(c) The Lead Paint Settlement Fund is authorized through its duly appointed
Trustee to settle all claims of the Plaintiffs in the underlying actions against

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NL Industries, Inc., on a Pierringer basis, and to make payments to the
Plaintiffs in accordance with the matrix described in the Lead Paint
Settlement Fund Escrow Agreement.
(d) The Lead Paint Settlement Fund is authorized to effect qualified
assignments of any resulting structured settlement liability for any individual
Plaintiff, at the request of a minor Plaintiff’s guardian ad litem or at the
request of any adult Plaintiff within the meaning of §§ 130© and 130(d) of the
Internal Revenue Code to the qualified assignees, subject to the limitations
herein.
(e) All claims of the Plaintiffs against NL Industries, Inc. shall be dismissed
with prejudice, on a Pierringer basis, upon the funding of the Lead Paint
Settlement Fund by NL.
(3) The joint motion for an order authorizing minor plaintiffs’ guardian ad litem to
settle all claims of minor plaintiffs against NL Industries, Inc., and an order authorizing the
creation of special needs trusts is GRANTED.
(a) The minor plaintiffs’ guardian ad litem is authorized to execute Pierringer
releases on behalf of each minor plaintiff in accordance with the terms and
conditions of the Confidential Settlement Agreement.
(b) It is further required that Sub-Accounts in the WisPACT Trust I be
established for the benefit of each minor plaintiff, and this Order incorporates
by reference the Declaration of Trust of the WisPACT Trust I dated July 1,
2004, and any amendments occurring before or after the effective date of the

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Order as well as the Contribution Agreement-Application to be completed by
the guardian ad litem: Maniya Allen, Daveon Archibold, Damian Arias,
Kwamaine Barlow, Kennedy Bland, Keyshawn Broom, Lasharia Broom,
Porscha Brown, Shateivia Bruce, Glenn Burton, Hazel Carabajal, Anjuan
Coleman, Jadah Conner, Ian Cooper, Delaneo Craig, Luis Curet, Diamond
Davidson, Leah Davis, Rio Duran, Arleatha Evans, Garqwain Evans,
Geonandre Evans, De'Mario Fleming, Isaiah Friemoth, Ernest Gibson,
Charlia Grant, Donta Harvey, Amber Haugen-Schmitt, Joshua HaugenSchmitt, Arieyana Hedwood, Raul Hernandez, Jr., Kayla Hollins, Laquisha
House, Celisa Houston, A'nya Humphries, Faith Itsaleumsack, Jada
Jamison, Anthony Johnson, Keith Johnson, Qua-Shawn Jones, Ranesha
Keyes, Aniyah Kimble, Moet Knowles, Dejone Lampkin, Carmale Lee,
Dontrel Lee, Donzel Lee, Adam Leek, Camonie Lewis, Emaurieon Lewis,
Orzell Long, Cyresse Lewis, Naiza Love-Roy, Kaleel McCray-Clark, Kimanzi
McCray-Clark, Tyann McHenry, Yahynez McHenry, Essence McKinnie,
DeShayla Milton, Gabriel Miranda, Makaelia Missouri, Chante Mitchell, Jyaire
Murphy, Demond'dre Myers, Denver Nitsch, Titus Owens, Sieana Pleester,
Khadedra Rimmer, Shyrelle Rimmer, Tieanna Rimmer, Jacob Ruedinger,
Jamara Ruffin, Perrion Ruffin, Tailyiah Rush, Marshia Scott, Santana Scott,
Tarayia Scott, Cesar Sifuentes, Maurice Sloan, Jr., Sammie Smith, Shamar
Smith, Sheliyah Smith, Shmyah Smith, Brian Stewart, Brionn Stokes,
Dawson Taylor, Gerald, III Tennant, Brian Thomas, Camarion Thomas,
D'Angelo Thompson, Destiny Thompson, Detareion Valoe, Deziree Valoe,
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Quentella Walker, Teriontae Walker, Daniel Wheless, Jerrell Williams, JimMya Williams, Makayla Williams, Tyvoni Williams, Isaiah Williams, Jr., Briana
Zarate.
Dated at Milwaukee, Wisconsin this 10th day of November, 2014.

s/ Lynn Adelman
________________________
LYNN ADELMAN
District Judge

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