Allen et al v. American Cyanamid Co et al

Filing 204

DECISION AND ORDER signed by Judge Lynn Adelman on 7/5/16 that plaintiffs motions to partially consolidate (No. 07-cv-0303, 331 ; No. 07-cv-0441, 295 ; No. 07-cv-0864, 289 ; No. 07-cv-0865, 270 ; No. 10-cv-0075, 196 ; No. 11-cv-0055, 169 ; No. 11-cv-0425, 121 ; No. 14-cv-1423, 83 are GRANTED. The above-captioned cases are consolidated for the limited purpose of resolving the pending motion for a protective order. Further ordering that plaintiffs motions for a protective order (No. 07-c v-0303, 332 ; No. 07-cv-0441, 296 ; No. 07-cv-0864, 290 ; No. 07-cv-0865, 271 ; No. 10-cv-0075, 197 ; No. 11-cv-0055, 170 ; No. 11-cv-0425, 122 ; No. 14-cv-1423, 84 are GRANTED in part and DENIED in part. Plaintiffs shall produce copies of t he settlement agreements and releases for in camera review within 14 days of this order. Plaintiffs may redact the settlement amount from the copies produced for review. Further ordering that defendants motions for leave to file a sur-reply (No. 07- cv-0303, 342 ; No. 07-cv-0441, 305 ; No. 07-cv-0864, 300 ; No. 07-cv-0865, 280 ; No. 10-cv-0075, 207 ; No. 11-cv-0055, 180 ; No. 11-cv-0425, 132 ; No. 14-cv-1423, 94 are GRANTED. The Clerk of Court shall file defendants proposed sur-reply in each of the above-captioned cases. (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.
AMERICAN CYANAMID, et al.,
Defendants;

Case No. 10-cv-0075

MANIYA ALLEN, et al.,
Plaintiffs,
v.

Case No. 11-cv-0055

AMERICAN CYANAMID, et al.,
Defendants;
DEZIREE VALOE, et al.,
Plaintiffs,
v.

Case No. 11-cv-0425

AMERICAN CYANAMID, et al.,
Defendants;
DIJONAE TRAMMELL, et al.,
Plaintiffs,
v.

Case No. 14-cv-1423

AMERICAN CYANAMID, et al.,
Defendants.
______________________________________________________________________
DECISION AND ORDER
Plaintiffs in these cases allegedly consumed lead-based paint as children. They
now bring negligence and failure-to-warn claims against defendants, companies which
manufactured, sold, or marketed lead-based paint in Wisconsin. In 2014, plaintiffs
settled with one defendant, NL Industries, Inc., utilizing a settlement and liability release
mechanism available in Wisconsin called a Pierringer 1 settlement. The terms of that
settlement agreement were confidential. However, defendants now seek the NL
Industries settlement agreement and liability releases through discovery, and plaintiffs
have filed a motion for a protective order forbidding inquiry into the terms of the
agreement. Plaintiffs have also filed a corresponding motion to consolidate these cases
1

See Pierringer v. Hoger, 21 Wis. 2d 182 (1963).
2

for the limited purpose of deciding their motion for a protective order, and defendants
have requested leave to file a sur-reply. I address these motions now.
I. Motion to Consolidate
Plaintiffs’ motion for a protective order has been filed in all of the abovecaptioned cases. All of the cases are pending before me except Gibson v. American
Cyanamid Co., No. 07-cv-0864, which is before Judge Randa. I have discretion to
consolidate actions when common questions of law or fact exist, and I may issue orders
to avoid unnecessary cost or delay. Fed. R. Civ. P. 42(a); Canedy v. Boardman, 16 F.3d
183, 185 (7th Cir. 1994). I believe that consolidation for the limited purpose of deciding
plaintiffs’ motion for a protective order is appropriate. The legal issue raised in plaintiffs’
motion is identical, and consolidation will therefore avoid inconsistent results and
promote judicial economy. See 8 James Wm. Moore, Moore’s Federal Practice §
42.10(4)(a) (3d ed. 2008) (conserving resources and avoiding inconsistent results weigh
in favor of consolidation). Thus, I will consolidate the actions for purpose of resolving
plaintiffs’ motion for a protective order. The Gibson case will remain before Judge
Randa for all other purposes. 2
II. Motion for Leave to File a Sur-Reply
Defendants have requested leave to file a sur-reply regarding the motion for a
protective order, arguing that plaintiffs’ reply brief raised a new argument. Whether or
not to grant leave to file a sur-reply is in my discretion. See Schmidt v. Eagle Waste &
Recycling, Inc., 599 F.3d 626, 631 n.2 (7th Cir. 2010). Because I prefer to give parties a

2

In May, plaintiffs also filed a motion to partially consolidate the above-captioned cases
for pre-trial purposes. That motion is not yet fully briefed, and my decision today does
not in any way decide or indicate my opinion on the merits of that motion.
3

full opportunity to be heard and to decide motions based on as much information as
possible, I will grant defendants’ request.
III. Motion for Protective Order
Parties are entitled to “discovery regarding any nonprivileged matter that is
relevant to any party’s claim or defense.” Fed. R. Civ. P. 26(b)(1). To determine whether
plaintiffs’ settlement agreements and releases with NL Industries are relevant, I must
look to Wisconsin substantive law.
Under Wisconsin law, the general rule in cases involving multiple tortfeasors is
that when a plaintiff settles with one joint tortfeasor and releases that settling tortfeasor
from liability, he also releases claims against all other joint tortfeasors for the same
incident unless the settlement agreement contains language expressly reserving his
claims against non-settling tortfeasors. Brown v. Hammermill Paper Co., 88 Wis. 2d
224, 233–35 (1979). A Pierringer release is one way of achieving this. “[A] Pierringer
release operates to impute to the plaintiff whatever liability in contribution or indemnity
the settling joint tortfeasor may have to the nonsettling joint tortfeasor and to bar
subsequent contribution or indemnity actions the nonsettling joint tortfeasor might assert
against the settling joint tortfeasor.” Imark Indus., Inc. v. Arthur Young & Co., 148 Wis.
2d 605, 621–22 (1989). In doing so, it satisfies the settling joint tortfeasor’s portion of
liability while reserving the balance of plaintiff’s cause of action against non-settling
tortfeasors. Id. at 621. In order to be a valid Pierringer release, the settlement
agreement must state that plaintiffs (1) completely release the settling defendant, (2)
expressly reserve their claims against non-settling defendants, and (3) indemnify the
settling defendant against claims for contribution and indemnification. Bloyer v. KTM N.

4

Am., No. 13-cv-828-wmc, 2015 WL 364737, at *1 (W.D. Wis. Jan. 27, 2015); Tudjan ex
rel. Tudjan v. Wis. Dep’t of Health & Family Servs., No. 05-CV-970, 2008 WL 3905677,
at *2 (E.D. Wis. Aug. 19, 2008).
Here, defendants argue that the specific terms of the Pierringer release may be
relevant to several of their affirmative defenses if plaintiffs did not properly word the
settlement agreements to comply with Pierringer. First, they argue that if the agreement
does not contain an express reservation of claims against non-settling defendants,
plaintiffs have released their claims against the non-settling defendants, which is highly
relevant to their asserted affirmative defense that plaintiff has waived claims via
settlement, release, or compromise. See, e.g., Allen v. Am. Cyanamid Co., No. 11-cv0055, Def. E.I. Du Pont’s Answer at 37 (ECF No. 162). Next, they argue that they need
to know whether plaintiffs properly worded the Pierringer releases to determine whether,
at trial, the non-settling defendants’ liability will be reduced by the percentage of
wrongdoing the jury apportions to NL Industries, which is relevant to their asserted
affirmative defense of comparative negligence. Id. Thus, if the Pierringer releases were
not properly worded, they are relevant to a defense and discoverable under Rule 26.
The fact that plaintiffs and NL Industries agreed to keep the terms of the releases
confidential does not shield them from discovery. Gotham Holdings, LP v. Health
Grades, Inc., 580 F.3d 664, 665 (7th Cir. 2009); see also Thermal Design, Inc. v.
Guardian Bldg. Prods., Inc., 270 F.R.D. 437 (E.D. Wis. 2010) (concluding that
confidential settlement agreement was discoverable because it likely contained relevant
information). “No one can ‘agree’ with someone else that a stranger’s resort to
discovery under the Federal Rules of Civil Procedure will be cut off.” Gotham Holdings,

5

580 F.3d at 665. Further, plaintiffs’ argument that settlement agreements are not
admissible under the Federal Rules of Evidence is unpersuasive because the Federal
Rules of Evidence govern admissibility and not discoverability, and a document need
not be admissible to be discoverable. See Thermal Design, 270 F.R.D. at 438–39; In re
Subpoena Issued to Commodity Futures Trading Comm’n, 370 F. Supp. 2d 201, 211
(D.D.C. 2005).
Plaintiffs provide affidavits from attorneys for both sides of the settlement
agreement which aver that the settlement agreement complies with Pierringer and
properly preserves plaintiffs’ claims against non-settling defendants. However, under
Wisconsin law, when the effect of a release becomes an issue, courts must examine the
actual language of the release to determine its scope and effect. Brown, 88 Wis. 2d at
233–34; see also Brandner by Brandner v. Allstate Ins. Co., 181 Wis. 2d 1058, 1076
(1994) (examining “the wording of the documents themselves” to determine that
although titled a Loy-type release, document actually functioned as a Pierringer-type
release for some defendants).
In situations such as this, where the settlement agreement has been designated
confidential, Wisconsin courts first examine the document in camera to determine
whether the agreement unambiguously functions as a Pierringer release. See Estate of
Hegarty ex rel. Hegarty v. Beauchaine, 297 Wis. 2d 70 (Ct. App. 2006); Bloyer, 2015
WL 364737, at *1. Only where the language of the release is ambiguous or unclear as
to its scope do courts then require disclosure to the requesting party. See Hegarty, 297
Wis. 2d 70, 140–41 (Ct. App. 2006) (only ordering disclosure of settlement agreement
because the release language was unclear); Bloyer, 2015 WL 364737, at *1 (not

6

requiring disclosure because the court concluded after in camera review that the
agreement unambiguously met the requirements of a Pierringer release). This is the
approach I will take. I will order plaintiffs to produce the settlement agreements and
releases for in camera review. 3 If the language indicates that the releases are, in fact,
proper Pierringer releases, I will inform the parties, and defendants will not be entitled to
them as I will have determined that they are not relevant to any potential defenses. If
the language is unclear or does not comply with Pierringer, I will inform the parties and
require plaintiffs to produce the agreements to defendants because improperly-worded
releases will be relevant.
When plaintiffs submit the agreements for in camera review, they may redact the
settlement amount. This information is in no way relevant to whether plaintiffs properly
reserved their claims against non-settling defendants. Further, it is in no way relevant to
defendants’ comparative negligence defense. If the release functions as a true
Pierringer release, the jury will be asked to apportion to NL Industries, along with all
other defendants, its percentage of responsibility for the harm caused, and non-settling
defendants will only be responsible for their assigned percentage of the damages. The
jury does not need to know the settlement amount in order to apportion responsibility,
and the court does not need to know the settlement amount in order to calculate non-

3

Plaintiffs should electronically file the agreements as well as provide courtesy copies to
my chambers. Documents can be electronically filed for in camera review by using the
“sealed and viewable only by the judge” restriction on ECF. For information on how to
use this restriction, see the Eastern District’s instructions on filing restricted and sealed
documents, http://www.wied.uscourts.gov/e-filing-restricted-and-sealed-documents, and
Electronic Case Filing Policies and Procedures Manual, http://www.wied.uscourts.gov/efiling/ecf-policies-and-procedures#Privacy. Because I am ordering plaintiffs to file the
documents in camera, they do not need to file an accompanying motion to seal.
7

settling defendants’ portion of damages after trial. Olson v. Darlington Mut. Ins. Co., 296
Wis. 2d 716, 726 (Ct. App. 2006).
THEREFORE, IT IS ORDERED that plaintiffs’ motions to partially consolidate
(No. 07-cv-0303, ECF No. 331; No. 07-cv-0441, ECF No. 295; No. 07-cv-0864, ECF
No. 289; No. 07-cv-0865, ECF No. 270; No. 10-cv-0075, ECF No. 196; No. 11-cv-0055,
ECF No. 169; No. 11-cv-0425, ECF No. 121; No. 14-cv-1423, ECF No. 83) are
GRANTED. The above-captioned cases are consolidated for the limited purpose of
resolving the pending motion for a protective order.
IT IS FURTHER ORDERED that plaintiffs’ motions for a protective order (No. 07cv-0303, ECF No. 332; No. 07-cv-0441, ECF No. 296; No. 07-cv-0864, ECF No. 290;
No. 07-cv-0865, ECF No. 271; No. 10-cv-0075, ECF No. 197; No. 11-cv-0055, ECF No.
170; No. 11-cv-0425, ECF No. 122; No. 14-cv-1423, ECF No. 84) are GRANTED in
part and DENIED in part. Plaintiffs shall produce copies of the settlement agreements
and releases for in camera review within 14 days of this order. Plaintiffs may redact the
settlement amount from the copies produced for review.
IT IS FURTHER ORDERED that defendants’ motions for leave to file a sur-reply
(No. 07-cv-0303, ECF No. 342; No. 07-cv-0441, ECF No. 305; No. 07-cv-0864, ECF
No. 300; No. 07-cv-0865, ECF No. 280; No. 10-cv-0075, ECF No. 207; No. 11-cv-0055,
ECF No. 180; No. 11-cv-0425, ECF No. 132; No. 14-cv-1423, ECF No. 94) are
GRANTED. The Clerk of Court shall file defendants’ proposed sur-reply in each of the
above-captioned cases.

8

Dated at Milwaukee, Wisconsin, this 5th day of July, 2016.
s/ Lynn Adelman
________________________________
LYNN ADELMAN
District Judge

9