Opinion for the Court filed by Circuit Judge STARR.
STARR, Circuit Judge.
This is a tort action on behalf of Vietnamese orphans for injuries suffered in a tragic aviation accident in South Vietnam in 1975. The suit is over eight years old, and this appeal is the fourth before this court. Seven years after the action was filed, the District Court granted partial summary judgment on a motion on behalf of the Vietnamese children adopted by non-U.S. parents, holding that Lockheed was liable for the cost of diagnostic examinations of the children. Finding that approximately forty adopted Vietnamese children living in France faced irreparable injury unless they promptly obtained diagnostic examinations, the court entered a mandatory injunction pendente lite. The injunction ordered Lockheed to create a $450,000 fund
The first of the two principal issues before us is whether the law of tort of the District of Columbia encompasses a cause of action for diagnostic examinations in the absence of proof of actual injury. Determining that such a cause of action does exist, we then turn to consider whether the existence of any material, disputed facts precludes the entry of summary judgment against Lockheed and whether partial summary judgment is likely to prejudice Lockheed in subsequent jury trials.
The second principal issue requires us to assess the propriety of mandatory preliminary injunctive relief in a common law tort action in which the defendant has already been adjudicated liable but where a trial to determine the amount of liability will be so long delayed that, in the interim, the plaintiffs face irreparable injury. Deciding that in the specific circumstances of this case such an injunction can be justified conceptually under general equitable principles, we then consider whether the injunction abridges Lockheed's constitutional rights to due process and jury trial. Determining that the injunction indeed passes constitutional muster, we then find that the order neither violates the terms of certain stipulations entered into in 1979 between the parties nor impermissibly shifts the cost of litigation to the defendant. Finally, we canvass the traditional factors requisite to the award of interim equitable relief. Upholding the District Court's determination that these factors favor issuance of the injunction, we affirm the judgment below.
This appeal is another chapter in the protracted litigation arising out of an aviation accident during "Operation Babylift," a rescue mission for Vietnamese orphans undertaken in the last days of United States presence in South Vietnam. The tragic circumstances of the aircraft disaster are completely set out in Schneider v. Lockheed Aircraft Corp., 658 F.2d 835 (1981), cert. denied, 455 U.S. 994, 102 S.Ct. 1622, 71 L.Ed.2d 855 (1982), and need not be fully repeated here. Suffice it to say that on April 4, 1975, a Lockheed C5A Galaxy aircraft took off from Saigon en route to the United States. On board the ill-fated flight were 301 passengers, most of whom were Vietnamese orphans. Fifteen minutes after takeoff a locking system failed, causing the aft ramp and cargo doors to fall off the aircraft. The interior compartments of the plane thereupon suffered an explosive decompression and loss of oxygen. Immediately turning the aircraft back toward Saigon, the pilot attempted a crash landing, but on impact the aircraft shattered into four large pieces and countless fragments. Almost all the orphans and attendants in the cargo compartment of the aircraft were killed. However, 149 of the 152 orphans in the aircraft's troop compartment survived. Most of these orphans were infants at the time of this tragedy.
The next day the surviving orphans were flown to San Francisco where they were examined briefly by U.S. military physicians. They were then released to their adoptive parents, about half of whom were Europeans.
On April 2, 1976, an organization called Friends For All Children ("FFAC") filed a complaint in the United States District Court for the District of Columbia, alleging that Lockheed's negligent manufacture of the C5A aircraft was the cause of the disaster. FFAC claimed to be the legal guardian of the surviving children and alleged that as a result both of the decompression of the troop compartment and the crash itself, these survivors suffered, inter alia, from a neurological development disorder generically classified as Minimal Brain Dysfunction ("MBD").
Countering that negligent maintenance and operation of the aircraft by the U.S. Air Force had proximately caused the
On December 6, 1979, over three years after suit was filed, the District Court approved the entry of various stipulations. The express purpose of these stipulations was to save "time and expenses of all parties and of the court," Preamble to Stipulation of Sept. 14, 1979, J.A. 72, and "to accomplish the fair and expeditious compensation of those children injured, without reference to fault or responsibility." Stipulation No. 10, J.A. 77. In the stipulation, the plaintiffs agreed not to seek punitive damages; in return, Lockheed agreed not to contest liability in all cases in which the parents or guardians filed amended complaints.
The 1979 stipulations contemplated that three children would be selected for initial trials. Stipulation No. 11 of Sept. 14, 1979, J.A. 76. The parties and the court anticipated that the trial of these cases would, as frequently happens in such multi-party cases, provide the necessary information about probable litigation results so that settlements in other cases would likely follow. See Friends For All Children v. Lockheed Aircraft Corp., 87 F.R.D. 560, 562 (D.D.C.1980).
The "bellwether" cases contemplated by the stipulations all involved American-adopted children. Following jury trials, two of the plaintiffs, Schneider and Marchetti, secured judgments of $400,000 and $1,000,000 respectively. A third plaintiff, Zimmerly, received nothing for his MBD claim in his first trial, but a retrial ordered by the District Court resulted in a judgment of $500,000.
When it became clear that the bellwether trials were not going to result in a global settlement, the District Court suggested sua sponte that it would entertain motions (1) for summary judgment on the issue of Lockheed's liability for diagnostic examinations and medical treatment, and (2) for preliminary relief ordering Lockheed to pay for such examinations and treatment pendente lite. Responding to this suggestion, the plaintiffs thereafter moved both for summary judgment and interim equitable relief. The District Court held hearings on the plaintiffs' motions, but before the court
Meanwhile, Lockheed appealed the jury verdicts in the three "bellwether cases." In Schneider v. Lockheed Aircraft Corp., supra, this court reversed the judgments in those cases on the ground that the District Court had improperly treated a statement of Lockheed's counsel in a jurisdictional proceeding as an admission that the infants were probably injured as a result of the crash. 658 F.2d at 842-43. Moreover, the Schneider court effectively prevented a plaintiff's victory in one trial from being used in other cases for collateral estoppel (issue preclusion) effect on the issue whether the accident caused other plaintiffs to suffer from MBD. Id. at 852. The plaintiffs were thus faced with the bleak prospect of scores of individual trials.
In light of this court's decision with respect to collateral estoppel, plaintiffs renewed their discovery efforts in order to obtain materials which would more graphically demonstrate the impact of the crash. In this process, plaintiffs discovered approximately 1,000 photographs of the accident scene that had been requested at the outset of discovery but had never been produced. During the course of discovery, it also became apparent that the Air Force had actually destroyed evidence. After these revelations, a general settlement was reached among Lockheed, the Government, and most American plaintiffs. Under a stipulation approved by the District Court on August 28, 1982, Lockheed and the United States agreed to pay $13.5 million in settlement of the claims of forty-five American plaintiffs. Separate settlements with other American plaintiffs resulted in a total recovery of $17 million. The American plaintiffs averaged $300,000 each in settlement, and every American plaintiff has received a substantial recovery.
The foreign plaintiffs, however, were not included in the settlement. Adjudication of the foreign plaintiffs' claims had been delayed by virtue of their having to do battle in various legal skirmishes which the American plaintiffs were spared. First, on June 13, 1980, Lockheed moved to dismiss the cases of all infant plaintiffs adopted by foreign parents on the ground that the District of Columbia was not a convenient forum for adjudication of the disputes. The District Court denied the motion. On November 20, 1980, Lockheed renewed its forum non conveniens motion in the wake of this court's decision on forum non conveniens issues in Pain v. United Technologies Corp., 637 F.2d 775 (D.C.Cir.1980), cert. denied, 454 U.S. 1128, 102 S.Ct. 980, 71 L.Ed.2d 116 (1981). The District Court once again denied the motion and in April 1982, certified its ruling for interlocutory appeal under 28 U.S.C. § 1292(b) in order to facilitate settlement by removing an issue on which "there was substantial ground for difference of opinion." Mem. Op. II at 10, J.A. 15. This court affirmed the District Court's order in Friends For All Children v. Lockheed, 717 F.2d 602 (D.C.Cir.1983). Despite the steadfast efforts of the District Court to bring these cases to a just and expeditious resolution, no general settlement appeared imminent.
Therefore, in the waning days of 1983, almost seven years after this suit was filed and almost eight years after the accident occurred, the parties and the District Court were faced with the prospect of trying approximately seventy cases involving foreign plaintiffs. Even if distributed among the judges of the District Court, the cases would likely take years to try. See Friends For All Children v. Lockheed, supra, 87 F.R.D. at 563. Confronting this unhappy prospect, the plaintiffs renewed their motion for partial summary judgment
In memorandum opinions dated March 16, 1984, and April 4, 1984, the District Court granted plaintiffs' motion for partial summary judgment on the issue of Lockheed's liability for the children's diagnostic examinations. 587 F.Supp. 180. The District Court concluded that although Schneider v. Lockheed, supra, mandated individual trials on the issue whether the accident was the proximate cause of injury, "[i]t cannot be reasonably disputed that the need for some diagnostic examinations ... is itself a proximate result of this particular crash." Memorandum Opinion of March 16, 1984 [hereinafter "Mem. Op. I"] at 7, J.A. 43 (emphasis in original). The District Court, however, denied partial summary judgment on the issue of Lockheed's liability for treatment because any such liability was dependent on a finding that the accident was the proximate cause of injury to each individual plaintiff.
The District Court further found that the cost of the diagnostic examinations was "bitterly disputed" and therefore held that summary judgment would not lie as to the amount of Lockheed's monetary liability. Mem. Op. II at 20, J.A. 25. The court, however, did grant plaintiffs' motion for a mandatory preliminary injunction ordering Lockheed to create a fund from which the costs of diagnostic examinations for the French plaintiffs could be drawn.
Fully recognizing that such an injunction was quite unusual, the court noted several exceptional factors militating in favor of extraordinary relief. First, the court emphasized that Lockheed had stipulated as to its liability for compensatory damages. Inasmuch as the court had granted partial summary judgment holding that the accident was the proximate cause of the need for diagnostic examinations, Lockheed was now, by virtue of its own stipulations, liable for the cost of such examinations. The court stated that plaintiffs had no adequate remedy at law, because the "extreme delay inherent in the complexity of this unique litigation, the number of plaintiffs, and the litigation tactics of the defendant renders any ultimate award of damages inadequate to remedy the immediate needs of the plaintiffs." Mem. Op. I at 12, J.A. 48.
Once the concept of an equitable injunction had been justified in the particular circumstances of this case, the court canvassed the traditional factors governing whether an injunction pendente lite is appropriate. See Washington Metropolitan Area Transit Comm'n v. Holiday Tours, Inc., 559 F.2d 841 (D.C.Cir.1977); Virginia Petroleum Jobbers Ass'n v. FPC, 259 F.2d 921 (D.C.Cir.1958). The District Court first concluded that the approximately forty French plaintiffs would be irreparably injured in the absence of an injunction.
Turning to the element of likelihood of success on the merits, the District Court concluded that plaintiffs had made a strong showing that a jury would award damages equivalent to the cost of reasonable diagnostic examinations. See Mem. Op. II at 24, J.A. 29; Mem. Op. I at 13, J.A. 49. Weighing the balance of hardships between the plaintiffs and defendant, the District Court acknowledged some risk to Lockheed because of the possibility that a jury would award less in damages to a particular plaintiff than he or she had already received from the fund, but the court nonetheless concluded that the threat of leaving undiagnosed the potentially deteriorating medical condition of MBD posed a much greater risk. The court further stated that diagnostic examinations might identify disorders among the plaintiff children that could be treated and minimized, thereby saving the defendant compensatory costs in the long run. Mem. Op. I at 14, J.A. 50.
Finally, the court concluded that the injunction would serve the public interest. Diagnostic examinations, the court observed, "may finally produce the sort of hard data on the medical condition of these children that defendant purports to require before it will even consider settlement of these cases." Mem. Op. I at 15, J.A. 51. In light of the enormous burden that these cases continue to impose on the judicial system, the court held that facilitating settlement of this complex and protracted litigation was clearly in the public interest.
Pursuant to the injunction, the court ordered Lockheed to deposit $450,000 into the Registry of the District Court. The court calculated this amount by prorating the $550,000 amount that plaintiffs claimed would be necessary to fund "screening" and diagnostic examinations for approximately fifty-three plaintiffs. Fully aware that plaintiffs' proffered measure of the amount did not provide a definitive standard, the court nonetheless determined that "[i]n the light of the circumstances ... the examinations should not be delayed to determine these precise costs." Mem. Op. II at 21, J.A. 26.
To minimize hardship to Lockheed and to prevent excessive funds from being expended, the District Court fashioned a "voucher" system to govern disbursements from the fund. Under this system, no funds are to be distributed until (1) the guardian ad litem submits a voucher detailing expenses incurred or anticipated, and (2) Lockheed has had an opportunity to respond to the proposed disbursement. Expenses not directly related to the provision of diagnostic examinations are to be disallowed. Mem. Op. II at 30, J.A. 35. Moreover, the District Court established a procedure whereby a panel of experts is to decide what further diagnostic tests should be given an individual child.
Lockheed unsuccessfully sought a stay of this injunction in both the District Court and this court. Here on appeal, Lockheed contends that summary judgment is improper because (1) no cause of action exists under District of Columbia tort law for placing a plaintiff "at risk"; (2) material
The District Court's entry of interim relief requires us to undertake a two-step analysis. First, we will review the grant of partial summary judgment with respect to the issue whether Lockheed is liable for the cost of diagnostic examinations. Then we will review the propriety of entering a mandatory preliminary injunction for which the grant of summary judgment served as necessary predicate.
Lockheed's first argument is that District of Columbia tort law has not heretofore recognized a cause of action for recompense for diagnostic examinations designed to discover whether an individual has been injured, unless the individual has first proved actual physical injury. Relying upon cases from other jurisdictions suggesting that the common law of tort does not encompass an action for being put "at risk," Lockheed argues that if the District of Columbia courts were presented with this action they likewise would decline as a matter of law to recognize it.
As this action comes before us as a diversity case, we are, of course, obligated to apply District of Columbia law.
To aid our analysis of whether tort law should encompass a cause of action for diagnostic examinations without proof of actual injury, it is useful to step back from the complex, multi-party setting of the present case and hypothesize a simple, everyday accident involving two individuals, whom we shall identify simply as Smith and Jones:
From our example, it is clear that even in the absence of physical injury Jones ought to be able to recover the cost for the various diagnostic examinations proximately caused by Smith's negligent action. A cause of action allowing recovery for the expense of diagnostic examinations recommended by competent physicians will, in theory, deter misconduct, whether it be negligent motorbike riding or negligent aircraft manufacture. The cause of action also accords with commonly shared intuitions of normative justice which underlie the common law of tort. The motorbike rider, through his negligence, caused the plaintiff, in the opinion of medical experts, to need specific medical services — a cost that is neither inconsequential nor of a kind the community generally accepts as part of the wear and tear of daily life. Under these principles of tort law, the motorbiker should pay.
Similarly, in this case, the crash exposed the plaintiffs to the risk of serious brain damage. The District Court explicitly found that, in the opinion of competent medical experts, comprehensive diagnostic examinations are needed to determine whether and to what extent treatment may be necessary. According to the District Court:
Mem. Op. I at 6, J.A. 42. The court's memorandum quoted directly from both the defendant's and the plaintiffs' experts in support of this finding.
Although Lockheed may be able to show that, in individual cases, brain damage was not caused by the accident, the District Court correctly concluded that the crash proximately caused the need for a comprehensive diagnostic examination. The court found that no diagnostic examinations would be necessary "but for the fact that these children endured explosive decompression and hypoxia aboard a plane which subsequently crashed, and that after the crash they received relatively cursory, unspecialized examinations from the Air Force without any systematic follow-up by either defendants." Addressing Lockheed's claim that the need for the examinations existed prior to the crash, the court explained: "Even assuming that [many of the plaintiffs had pre-existing neurological
Lockheed argues that the law of tort does not embrace a cause of action for diagnostic examinations. The cases Lockheed cites for the general proposition that the common law recognizes no action for being put "at risk" are readily distinguishable on the grounds that the alleged injury to be compensated was speculative without the corroborative presence of physical injury. For instance, Mink v. University of Chicago, 460 F.Supp. 713, 716 n. 2 (N.D.Ill.1978), held only that those who had been put at risk through the ingestion of Diethylstilbestrol (DES) as part of an experiment could collect compensation neither for the increased risk of cancer to themselves and their children nor for emotional distress unless they exhibited physical symptoms. The "injury" that stems from having an increased risk of disease is obviously speculative. It is both difficult to quantify the amount of increased risk imposed on an individual who does not yet have a disease and difficult to conceptualize what that risk is worth in money damages. In the absence of physical symptoms, emotional distress caused by potential risk may also be thought too speculative to support recovery. But cf. Davis v. Graviss, 672 S.W.2d 928 (Ky.1984) (holding that an accident victim who had a permanent defect in her skull could recover "for mental suffering and impairment of earning power resulting from the fear caused by the increased risk of future harm") (emphasis added). Here, however, the plaintiffs' need for diagnostic examinations can be shown through competent medical testimony.
Moreover, in light of the Restatement (Second) of Torts' definition of "injury," we are not obliged to accept Lockheed's implicit claim that undergoing diagnostic examinations does not in itself constitute injury. The Restatement broadly defines injury as "the invasion of any legally protected interest of another." See RESTATEMENT (SECOND) OF TORTS § 7. It is difficult to dispute that an individual has an interest in avoiding expensive diagnostic examinations just as he or she has an interest in avoiding physical injury. When a defendant negligently invades this interest, the injury to which is neither speculative nor resistant to proof, it is elementary that the defendant should make the plaintiff whole by paying for the examinations.
Second, Lockheed argues that material facts are in dispute over whether the accident was a but-for cause of plaintiffs' need for diagnostic examinations. Lockheed contends that evidence in the record suggests that, by virtue of their residing in Vietnamese orphanages, the children were already in need of diagnostic examinations for MBD when they boarded the plane. In consequence, the argument goes, Lockheed should not be held responsible for a pre-existing injury.
As principal support for its argument, Lockheed points to a letter which FFAC
Review of the grant of summary judgment, of course, requires us to draw all inferences in favor of the opposing party. See, e.g., Abraham v. Graphic Arts Int'l Union, 660 F.2d 811, 814-15 (D.C.Cir.1981). We are persuaded, however, that this letter is far too weak a reed on which to support an inference that plaintiffs already stood in need of diagnostic examinations for MBD. First and foremost, the letter does not even mention MBD. While it does mention that some children may be hyperactive, which is sometimes a symptom of MBD (as well as other conditions), it does not suggest that this symptom requires a specific diagnostic examination. Indeed, it is abundantly clear that possible psychological problems mentioned in the letter appear in the context of suggesting to the adoptive parents that overcoming such problems will require constant "love and understanding." There is no suggestion whatever that the physical examination mentioned at the beginning of the letter in the context of physical illnesses like diarrhea and lung congestion conveyed to parents the need for a diagnostic examination for a subtle illness like MBD.
Accordingly, we decline the invitation to view FFAC's letter as raising a material issue of fact as to whether the airplane accident caused the need for diagnostic examinations for MBD.
Lockheed further argues that partial summary judgment is inappropriate here because it will confuse the jury and prejudice Lockheed in the trials to be conducted with respect to the plaintiffs' principal claims.
We have every confidence that the District Court will frame the instructions in terms more artful than those Lockheed pessimistically contemplates so as to minimize any potential prejudice. For instance, an appropriate instruction might state that
Moreover, we cannot overlook the fact that the jury instructions in the trial of Magali Maupoint — the only French plaintiff as yet to have gone to trial — do not bear out Lockheed's fear of substantial prejudice. In relevant part, the jury instructions provided:
Maupoint Trial Transcript at 3957. At the Maupoint trial, the District Court therefore did not allude at all to the grant of partial summary judgment.
At oral argument, Lockheed conceded that it interposed no objection to this portion of the Maupoint jury instructions. Instead, Lockheed contended that the failure to make use at trial of the partial summary judgment demonstrated that its entry was pointless. We do not agree. The entry of partial summary judgment with respect to Lockheed's liability for diagnostic examinations was a necessary predicate to the entry of the preliminary injunctive relief here. Lockheed contends that for various reasons such relief is impermissible. It is to those contentions that we now turn.
Lockheed claims that even if partial summary judgment was appropriate, the entry of a preliminary mandatory injunction, ordering it to pay $450,000 into the Registry of the District Court, was improper. Lockheed argues that it is always impermissible for a court to provide interim equitable relief in a suit the ultimate objective of which is the recovery of money damages — the classic remedy at law.
291 F. at 707-08 (citations omitted).
Judge Hand's remarks have enjoyed wide and lasting currency. In Enercons Virginia, Inc. v. American Security Bank, N.A., 720 F.2d 28 (D.C.Cir.1983), this court recently had occasion to quote Sims in reversing a temporary restraining order enjoining a bank from refusing to honor a cashier's check payable to the plaintiff. The Enercons court emphasized that since the plaintiff's action was a "straightforward action on a negotiable instrument," the plaintiff possessed an adequate remedy at law and the injunction was impermissible. Id. at 29. See also In re Arthur Treacher's Franchisee Litigation, 689 F.2d 1137, 1144-45 (3d Cir.1982) (reversing the District Court's injunction ordering the defendant franchisee to pay back royalties to the franchisor, which was on verge of bankruptcy; the "short answer" to the franchisor's claim for injunctive relief "was provided some sixty years ago by Judge Learned Hand"); Schlosser v. Commonwealth Edison Co., 250 F.2d 478, 481 (7th Cir.), cert. denied, 357 U.S. 906, 78 S.Ct. 1150, 2 L.Ed.2d 1156 (1958) (affirming the District Court's refusal to grant a preliminary injunction ordering an employer to pay a retirement annuity to his former employee who alleged that he would suffer irreparable injury without interim relief).
We have no quarrel whatever with Sims' result. But, critically, the Sims line of cases differs from the instant case in one vital respect: in those cases liability had not yet been determined, whereas here the defendant has already been adjudicated as liable for the costs of reasonable diagnostic testing. Only the computation of the amount of damages remains for the trier of fact. In our view, the Sims rule should not rigidly be erected as an absolute bar to a limited intervention by equity designed to prevent irreparable harm in those circumstances where, as here, the defendant's liability has already been determined through stipulation or partial summary judgment prior to trial. The invocation of equity in such a case reflects a common-sense notion of fairness that undergirds equity jurisprudence: it is more just that a defendant already adjudged liable bear the risk that an interim computation of damages will be fixed too high by the court than to have the plaintiff bear the risk of receiving damages too late to be of any use.
To be sure, the language of Sims and other cases cited by Lockheed seems to announce flatly that courts should not entertain interim equitable relief when a remedy at law — money damages — is deemed adequate to provide final relief in the plaintiff's action. In short, equity is perceived in these cases as an interloper threatening to trample law's well-cultivated garden.
Moreover, in the circumstances of this case, we believe that a slavish adherence to Sims' dictum would be inconsistent with the deep-rooted power of equity to do what is necessary and appropriate to achieve justice in the individual case.
We also have no hesitation in rejecting Lockheed's argument that such preliminary
Lockheed nevertheless contends that even if the letter of the rule does not bar the injunction, the spirit of the rule suggests that money damages are not to be paid over before the case is completed. Despite its facial appeal, this argument, on careful analysis, begs the question: since the policies behind Rule 62(a) are applicable only to remedies at law, Rule 62(a) simply does not represent an implicit policy statement on how and when equity should intervene to prevent irreparable injury.
Finally, appropriate to the novelty of the case before us, we emphasize the narrowness of today's holding. We hold only that a preliminary injunction requiring the defendant to create a fund to pay for diagnostic exams is proper when the defendant has been held liable for the cost of such examinations and when the delay inherent in trying the case to compute the amount of the defendant's liability will result in irreparable injury. Moreover, under our holding, plaintiffs must show that they meet the traditional standards governing the award of equitable relief, and the District Court must seek to minimize the prospect that a plaintiff will receive any funds that a trier of fact will subsequently fail to award.
Lockheed also argues that the entry of preliminary relief violates its constitutional rights to due process and jury trial. Before turning to the specifics of these claims, it should be emphasized that the preliminary injunction here does not purport finally to adjudicate the amount of Lockheed's liability. The ultimate determination of that amount will be made, barring settlement, at a jury trial, where Lockheed will be armed with the full panoply of procedural rights.
Relying on Fuentes v. Shevin, 407 U.S. 67, 92 S.Ct. 1983, 32 L.Ed.2d 556 (1971), Lockheed nevertheless contends that the interim injunction deprives it of property without due process of law. Fuentes v. Shevin, of course, held that the Due Process Clause prohibited a private party from seizing another's goods through a prejudgment writ of replevin, which was obtained through a summary process of ex parte application to a court clerk. The Court held that the Due Process Clause requires that the party whose goods were to be seized be provided with notice and an opportunity to be heard.
We are frankly nonplussed by Lockheed's reliance on Fuentes. Lockheed, of course, had notice of plaintiffs' motion for pendente lite relief. Before entering the preliminary injunction, the District Court held twelve days of hearings filling thousands of pages of transcript with testimony from both plaintiffs' and defendant's experts. A full hearing before an Article III judge obviously bears no resemblance whatever to the summary, ex parte procedures that the Court found constitutionally deficient in Fuentes.
Lockheed nevertheless seems to contend that its due process rights were violated because insufficient evidence was adduced
Lockheed also claims that the injunction ordering it to pay for diagnostic examinations prior to trial violates the Seventh Amendment. In Lockheed's view, under the Seventh Amendment's strictures only a jury may determine the amount of appellant's liability for those examinations. The short answer to this argument, however, is that, barring settlement, a jury will in fact ultimately determine the amount Lockheed is obligated to compensate the plaintiffs for those examinations. The preliminary injunction simply creates a fund from which plaintiffs can draw to pay for diagnostic examinations before trial.
It is manifest that the right to jury trial does not preclude the entry of interim equitable relief designed to prevent irreparable injury. For instance, in Dairy Queen, Inc. v. Wood, 369 U.S. 469, 82 S.Ct. 894, 8 L.Ed.2d 44 (1962), the Supreme Court refused to disturb a trial court's preliminary injunction. In that case, the plaintiff sought (1) an accounting of amounts the defendant had earned through the use of its trademark, and (2) a preliminary injunction to restrain the defendant from the use of the trademark pendente lite. The defendant made a timely demand for a jury trial, but the trial judge granted the plaintiff's motion for a preliminary injunction and struck the defendant's demand for a jury trial. The Supreme Court reversed the District Court's order striking the defendant's jury-trial demand on the factual issues with respect to the plaintiff's damages claim for breach of trademark. Critically for our purposes, however, the Court left standing the lower court's order granting a preliminary injunction. Justice Black, albeit keenly sensitive in his judicial career to the central role the jury plays in our legal system, stated in writing for the Court that "[the right to jury trial] does not, of course, interfere with the District Court's power to grant temporary relief pending a final adjudication of the merits." 369 U.S. at 479 n. 20, 82 S.Ct. at 901 n. 20.
Lockheed also argues that the preliminary injunction violates the September 14, 1979 supplemental stipulation entered into by the parties. Lockheed seems to contend that since that stipulation provided each plaintiff $5,000 before trial for purposes
We do not believe that Lockheed's interpretation represents a fair reading of the stipulation. The relevant portion of the stipulation provides:
Supplemental Stipulation of Sept. 14, 1979, No. 2, J.A. 80.
The language of the stipulation does not expressly place limits on the equitable remedies plaintiffs may seek, nor does it announce that plaintiffs may not receive more than $5,000 each from Lockheed before trial if legal grounds support such interim funding. Lockheed's counsel was well aware of the method by which the defendant could be relieved entirely of a specific kind of liability. Another stipulation entered into by the parties expressly provided that plaintiffs could not seek punitive damages against Lockheed. In view of the absence of similar language specifically preventing plaintiffs from seeking a mandatory preliminary injunction, we decline to hold that plaintiffs signed away one of their legal rights.
Moreover, the action of Lockheed itself suggests that it did not understand the stipulations to preclude the relief entered here. When plaintiffs first moved for partial summary judgment and a mandatory injunction pendente lite, Lockheed entered into a tentative settlement in which it agreed to provide funds for diagnostic examinations and medical treatment pending trial. This agreement, however, was vetoed by the Government. Lockheed's willingness to pay out such additional funds suggests that it did not regard the $5,000 payment pursuant to the 1979 stipulations as an absolute limit to what a plaintiff could receive from pretrial remedies nowhere mentioned in those stipulations.
Finally, the stipulations here were based upon the central assumption that they would promote swift settlement of all cases. The guardian ad litem thereafter exercised his discretion to employ the Lockheed-provided funds to prepare for the "bellwether" trials expressly contemplated by the stipulations. The assumption that these trials would facilitate settlement has unfortunately proved erroneous. We thus hesitate to embrace Lockheed's interpretation where, as here, material assumptions presupposed by the stipulations lost their validity long ago.
Lockheed also contends that the preliminary injunction violates the rule against shifting costs to one's adversary in litigation. Lockheed extracts this "rule" from Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 94 S.Ct. 2140, 40 L.Ed.2d 732 (1974). In the Eisen litigation, the District Court, recognizing that paying the costs of
The Second Circuit reversed the District Court's order, and the Supreme Court affirmed. The Court held that Fed.R.Civ. P. 23 conferred no authority on the District Court "to conduct a preliminary inquiry into the merits of a suit in order to determine whether it may be maintained as a class action." Id. at 177, 94 S.Ct. at 2152. The Court concluded that "[t]he usual rule is that a plaintiff must initially bear the cost of notice to the class." Id. at 178, 94 S.Ct. at 2153.
To state the holding of Eisen is to show how manifestly inapposite it is to this case. Here, the District Court was not abusing its powers under the Federal Rules of Civil Procedure, but was properly employing its inherent equitable powers. See supra II. The District Court's order, like any preliminary injunction, was intended to prevent plaintiffs from suffering irreparable injury. Its purpose therefore was not, as in Eisen, to shift the costs of the action to the defendant.
Lockheed also contends that the injunction fails to satisfy the traditional criteria governing the issuance of injunctive relief. These criteria are, of course, well-established. The plaintiffs must demonstrate that, on balance, the consideration of four factors — plaintiffs' potential irreparable injury, plaintiffs' likelihood of success on the merits, the balance of hardships between plaintiffs and defendant, and the public interest — favors granting an injunction. See Washington Metropolitan Area Transit Comm'n v. Holiday Tours, Inc., supra, 559 F.2d at 841. The District Court canvassed these factors and concluded that all four favored the issuance of interim relief. Lockheed on appeal vigorously contends that no factor favors such relief.
Our review of the District Court's issuance of this injunction is narrow.
First, Lockheed contends that plaintiffs have not sufficiently demonstrated that each child needs a diagnostic examination. To the contrary, Lockheed argues that the evidence suggests that most French plaintiffs in fact do not need further examinations. Lockheed emphasizes in this respect that the District Court conceded that "it may well be that many of the foreign infant plaintiffs will need no further examination." Mem. Op. II at 18, J.A. 23.
We believe, however, that the evidence sufficiently supports the plaintiffs' present need for diagnostic examinations for MBD to warrant a finding of irreparable injury. We emphasize that in the context of the preliminary injunction here the District Court was simply not in a position to assess the medical history of each plaintiff to determine whether past examinations were sufficient.
An expert in French medicine testified for plaintiffs that MBD was not recognized by most practitioners in France and that a centralized system of referral to appropriate well-recognized institutions was necessary for treatment.
Lockheed also contends that no finding of irreparable injury is proper because plaintiffs can afford to pay for the examinations themselves. The District Court, however, justifiably concluded otherwise. In discussing the amount of bond plaintiffs were to post, the court stated that plaintiffs did not have "such extensive resources" as to afford either examinations or a bond covering their cost. Mem.Op. II at 27, J.A. 32. This finding is not "clearly erroneous." It is supported in the record by the sworn statements of Charles Work, the guardian ad litem. Mr. Work met with a number of families which adopted the Vietnamese orphans and submitted an affidavit stating that the infants would not receive "medical services" unless the District Court set up a fund to pay for such services. Affidavit of Charles Work (undated), J.A. 152-53.
Nevertheless, Lockheed argues that plaintiffs can afford a comprehensive diagnostic examination for MBD because one of plaintiffs' experts, Dr. Gittleman-Klein, assessed the cost of the needed diagnostic examinations by a pediatrician, a clinical psychologist, a psychiatrist, and a neurologist at a range from $250-$1,000. Transcript of Plaintiffs' Motion for Summary Judgment and a Preliminary Injunction at 884 [hereinafter "Tr."]. However, in view of the testimony that most practitioners in France do not even recognize the concept of MBD, it is extremely doubtful that a comprehensive diagnostic examination for MBD may be obtained through visits to ordinary pediatricians, psychologists, psychiatrists and neurologists. In fact, Dr. Gittleman-Klein testified that a "complete work-up" could cost as much as $5,000. Id.
Moreover, the District Court could quite properly conclude that medical expenses running into thousands of dollars would likely constitute a formidable obstacle to families of moderate means. Although Friends For All Children screened the adoptive parents for financial capability, that screening was obviously not designed to ensure that children would all be adopted by Croesuses, able and willing to bear extraordinary medical expenses for subtle diseases such as MBD.
Lockheed argues that even if the plaintiffs themselves are incapable of paying for MBD diagnostic examinations, the French public health service will cover the cost. The District Court, however, expressly found that France, as opposed to other European countries, was not likely to provide appropriate diagnostic examinations. Mem.Op. II at 18, J.A. 23.
Once again, this finding of the District Court is not clearly erroneous. It is supported by one of plaintiffs' medical experts, who specifically testified that such diagnostic services are not readily available in that country. See, e.g., Tr. at 852-57, 868-73 (Testimony of Dr. Gittleman-Klein). Moreover, from the overwhelming testimony that MBD is not even recognized by most practitioners in France, it is permissible to infer that most plaintiffs would have to travel outside their own locales to obtain the services of the few available experts. Plaintiffs' French law expert furnished an affidavit stating that France's social security system does not cover the costs of medical diagnosis and treatment provided by a physician chosen by the patient "outside his town of residence, or the next town." Affidavit of Antoine A. d'Orano (Dec. 30, 1983), J.A. 210. Finally, the District Court's finding is supported by the fact that few, if any, of the French children have received comprehensive neurological examinations through that country's public health care system.
Having disposed of Lockheed's claim that the District Court improperly found irreparable injury, we have no difficulty in concluding that the other factors in the preliminary injunction calculus favor granting relief. Lockheed contends that plaintiffs have not shown a likelihood of success on the merits, but we agree with the District Court that plaintiffs are likely ultimately to recover at least the amount they have withdrawn from the fund established by the injunction. In the previous trials involving the American plaintiffs, Lockheed has not won a single verdict which has been upheld. Moreover, each American plaintiff received substantial compensation when a settlement was finally reached.
Nor does Lockheed's argument that the balance of hardships militates in its favor fare any better. Lockheed is receiving interest on the funds that it has been ordered to deposit. The only potential hardship to which Lockheed can point is the loss of funds that may be paid out to
Finally, Lockheed contends that the public interest does not favor injunctive relief, because the availability of preliminary monetary relief will lead plaintiffs to choose this circuit as a forum, thereby disrupting the orderly administration of justice in this jurisdiction. Because our affirmance of the injunctive relief awarded here is rooted in traditional equitable principles, we believe that other courts would award similar equitable relief when faced with a situation comparable to the peculiar circumstances of this case. No incentive for forum shopping will thus be created. Moreover, it is clear that diagnostic examinations will provide information that will hopefully facilitate settlement and thereby relieve the unusual congestion created by this massive litigation. No one can doubt that ending in a prompt and just manner this eight-year-old litigation will substantially aid the administration of justice in the federal courts of this District. The issuance of the injunction is thus clearly in the public interest.
Having concluded that the traditional factors favor the granting of equitable relief, we affirm the judgment of the District Court.
We should observe that it is not surprising that, so far as we are aware, no court has yet spoken directly to the issue whether a tort action to recover solely the costs of diagnostic examinations should be recognized. When the diagnostic examinations disclose actual injuries there is, of course, no difficulty in recovering their costs as part of the normal compensation of physical injury. When no injury is discovered, the cost of the diagnostic examinations will usually not be so great as to warrant a lawsuit, or at least a lawsuit that is worth pursuing to the stage at which a judicial opinion is written.
Toledo, A.A. & N.M. Ry. Co. v. Pennsylvania Co., 54 F. 730, 741 (C.C.N.D. Ohio 1893). In this case, if the District Court's finding that plaintiffs will suffer irreparable injury without diagnostic examinations is correct, it is clear that the status quo here is a "condition of action."
Letter of Dr. Dugas to Charles Work (March 5, 1984), quoted in Appellees' Brief at 38-39.
Tr. at 1663.
Lockheed also argues that the plaintiffs should not be heard to complain of delay, because their request that Judge Oberdorfer try all the individual cases is the real cause of the judicial congestion that threatens irreparable injury. However, even if the individual trials were dispersed among all the judges of the District Court, ultimate relief for these plaintiffs would likely be some time away. See Friends For All Children v. Lockheed Aircraft, supra, 87 F.R.D. at 564. This is true even with the recent development, since the time of the District Court's entry of the preliminary injunction, of several cases being assigned to other District Judges, with trial dates likely to be set in the remaining months of 1984. But trial dates for the remaining thirty-four plaintiffs are as yet not in sight.
In view of the complex testimony adduced at the preliminary hearing, the amount needed to cover diagnostic examinations is in the sound discretion of the trial court. Moreover, by requiring funds to be placed in an interest bearing account the District Court, as we have previously observed, has minimized the injury to Lockheed that may be caused by the deposit of excess funds. Still, in view of the apparent discrepancy in the determination of the amount required, the District Court may elect to reconsider the amount Lockheed has been required to deposit in the Registry of the District Court to conform more closely with likely or possible disbursements from the fund.