Now Updating

Summarizing by Amir Shachmurove

Dow Corning Corp. v. Caffrey (In re Dow Corning Corp.)

Dow Corning Corp v Caffrey, 6th Circuit, No. 12-1253 (July 29, 2013)
Tex R Civ P 11 requires agreements between parties to be reduced to writing or have been placed on the record of the court. Absent compliance with Rule 11 or qualifying as an exception under Massey v Galvan, 822 SW2nd 309, 318 (Tex App 1992), the Court deems no enforceable agreement was reached.
Procedural context:
Dow's appeal from the US District Court for the Eastern District of Michigan decision finding in favor of Caffrey, et al. (USDC EDMI Case 01-74893-DPH) On May 15, 1995, Dow filed for Chapter 11 bankruptcy protection in the Eastern District of Michigan. (USBC EDMI 95-20512) Claimants filed claims in the bankruptcy case, which were objected to by Dow. In December 2001, the United States District Court for the Eastern District of Michigan removed these claims from the bankruptcy court and subsequently held a trial on the issue. The District Court found in favor of the claimants in February 2012. Dow timely appealed.
Appellee claimant Caffrey and three other claimants asserted injuries caused by breast implants manufactured by Appellant Dow and filed suit in Harris County, Texas in the early 1990s; electing to opt out of a global settlement reached in a class action suit, regarding similar injuries, assigned to the US District Court for the Northern District of Alabama. Claimants elected to negotiate settlement of their claims consistent with a settlement process dubbed "the Marshall Plan", which provided for a mediation/ADR process and a framework for specific calculation of damages. Though the plan was never finalized, consistent with the Marshall Plan, claimants submitted to the mediation process and were awarded damages in early 1995. Dow did not pay claimants pursuant to the settlement award and filed for Chapter 11 bankruptcy protection shortly thereafter, in May 1995. Claimants filed claims in the bankruptcy case, to which Dow objected. A trial was held, during which Dow asserted the mediation awards, on which the claims were based, were not enforceable pursuant to Tex R Civ P 11, which requires that settlement of pending lawsuits must be memorialized in writing and filed with the Court or be set forth on the record in open court. Claimants asserted an exception to Rule 11 under Massey v Galvan, 822 SW2nd 309, 318 (Tex App 1992), which provides for equitable enforcement of unwritten settlements under certain circumstances. In Massey, writings between the parties and testimony indicating the parties’ intent to enter in to binding arbitration, were deemed sufficient to establish an exception to Rule 11. In the instant case, the 6th Circuit, in reversing the district court, found that despite a “working agreement” between counsel for the claimants and Dow’s tort litigation counsel, the facts of claimants’ case were distinguished from Massey as the record “contains neither written documentation nor unequivocal testimony” that Dow intended to be bound by the mediation/ADR process. The 6th Circuit also notes the record of the district court to be contradictory in both testimony and evidence, further supporting it’s finding of facts distinguishable from Massey and therefore precluded from a finding pursuant to Massey. Reversed and remanded for further proceedings.
Norris, Moore, and Donald, Circuit Judges.

ABI Membership is required to access the full summary. Please Sign In using your ABI Member credentials. Not a Member yet? Join ABI now - it is absolutely worth it!

About us in numbers

3526 in the system

3409 Summarized

8 Being Processed