Opinion of the Court by LAY, Chief Judge, and BRIGHT and ARNOLD, Circuit Judges.
These appeals arise out of two tort actions claiming serious injuries as a result of the plaintiffs' use of the Dalkon Shield, an intrauterine contraceptive device. The cases were settled, and both complaints have therefore been dismissed with prejudice. The Settlement Agreement, however, obligates the corporate defendant, A.H. Robins Company, Incorporated (Robins), to preserve and produce certain documentary evidence in other cases brought by other plaintiffs represented by the same law firm that is counsel for plaintiffs in the two cases at bar. The district court, over the objection of Robins, approved the Settlement Agreement and entered the notation "So Ordered" on the parties' agreement. Robins appeals, claiming that settlement of individual actions is wholly within the power of the parties, that the district court's action apparently converts a private contract into a decree a violation of which would be a contempt of court, and that the district court had no authority to approve or disapprove the Settlement Agreement. We agree and reverse.
Robins also complains that the district court, without notice or hearing, condemned it and three of its employees by reading to them in open court a "speech" excoriating them for personal and professional misconduct. Among other things, the court accused Robins' medical director of violating "every ethical precept to which ever [sic] doctor under your supervision must pledge," Appendix at A-33 — A-34, and stated that it had concluded that "the plaintiffs are right." Id. at A-48. No trial or evidentiary hearing had been held, nor did Robins and its employees know in advance that they would be thus condemned when they appeared in court to present a consummated settlement agreement. We hold that the district court's actions were a violation of due process. The truth or falsehood of plaintiffs' claims, and the propriety, legal or ethical, of the actions of Robins and its employees are not the point here. The point is that the facts are to be determined only after notice and an opportunity for a hearing. A court must hear before it condemns. We therefore direct that the district court's "speech" and other related comments be stricken from the record.
Plaintiffs commenced these actions against Robins in Minnesota state court, alleging that they suffered various injuries as a result of their use of the Dalkon Shield, an intrauterine contraceptive device formerly manufactured and distributed by Robins. Robins denied plaintiffs' substantive allegations and, on August 17, 1983,
On February 16, 1984, Robins submitted a motion requesting Judge Lord to disqualify himself on the ground that he was biased and prejudiced against Robins. Judge Lord denied the motion on February 23.
During discussions with counsel on February 24 and 27, Judge Lord stated that he would not accept a settlement without the presence of three officers of Robins.
On February 28, 1984, counsel for the respective parties executed the Settlement Agreement and Stipulations of Dismissal with Prejudice of the two Dalkon Shield cases remaining before Judge Lord, pursuant to Rule 41 of the Federal Rules of Civil Procedure. On February 29, counsel for both parties and the three Robins officers appeared before Judge Lord. As anticipated, the Robins officers signed the Settlement Agreement and the parties submitted to the court their Stipulations of Dismissal. Judge Lord ultimately entered orders of dismissal in the two cases confirming the stipulated dismissals.
The parties had not anticipated that Judge Lord would sign the Settlement Agreement, and had not provided a place on the document for the court to do so. At the February 29 hearing, plaintiffs' counsel stated that they had not anticipated the court would indicate its approval on the document:
Appendix at A-10.
Counsel for Robins repeatedly stated that Robins never intended for the court to be involved in the settlement and did not consider the effectiveness of the agreement to be contingent upon the court's approval. Appendix at A-27, A-31, A-48, A-57, A-58. Despite the parties' stated intentions that they had not anticipated court approval of the settlement, and despite Judge Lord's statement the previous day that "technically [he had no] authority to interfere with the settlement," Appendix at A-82, Judge Lord, at a later point during the hearing, threatened to withhold his approval and to "dissolve" the agreement, Appendix at A-27, A-58.
After the Settlement Agreement was signed by the three Robins officers and was submitted to the court, Judge Lord distributed to counsel and the Robins officers copies of a document entitled "The Church's Claim on the Corporate Conscience:
Counsel for Robins objected to Judge Lord's reprimand several times during the hearing. See Appendix at A-26, A-28, A-30 — A-31. Counsel based his objections on the grounds that Judge Lord had exceeded his jurisdiction and abused his discretion. Counsel requested the court to terminate the proceedings, or to stay the proceedings while counsel sought relief from this court. Judge Lord allowed counsel to state his objections but otherwise ignored counsel's requests. After concluding his speech to the Robins officers, Judge Lord stated that he was "going to sign the [dismissal] order and approve the settlement and send the matter to Judge Renner on the cases which he has before him." Appendix at A-62.
Sometime after the Settlement Agreement was submitted to Judge Lord and before he returned the document to the parties' counsel, and without knowledge of the parties, Judge Lord affixed the following notation to the bottom of the agreement:
Appendix at A-73.
Counsel for Robins did not discover the notation until sometime after conclusion of the February 29 proceedings. The Settlement Agreement was not docketed nor made a part of the record in the district court and it is not contained in the files of the district court. Both parties possess a copy of the agreement which has on it the notation and signature of the district court. Also on February 29, 1984, the district court entered orders for judgments of dismissal with prejudice to be entered in each of the two instant cases, which confirmed the stipulated dismissals filed by the parties. Sometime after the February 29 proceeding, Judge Lord communicated with the masters by telephone, informing them that the parties had settled.
On March 30, 1984, Robins filed an appeal from the district court's entry of the notation "So Ordered" on the Settlement Agreement underlying the stipulated dismissals. Robins does not appeal the dismissal of these actions. Robins argues that the district court's action was a nullity because it lacked authority to approve or enter an order embodying the private Settlement Agreement. Although Robins claims the entry of the notation is void and that the notation did not convert the private Settlement Agreement into a court order, it argues that the existence of the phrase on the agreement creates sufficient legal prejudice to Robins that this court should exercise its appellate jurisdiction and strike the notation.
This case initially presents a difficult question regarding our appellate jurisdiction under 28 U.S.C. § 1291 (1982), which provides that the "courts of appeals * * * shall have jurisdiction of appeals from all final decisions of the district courts of the United States * * *."
Having the final judgments of dismissal before us, the fundamental jurisdiction issue is whether there is a sufficient showing of prejudice so as to afford Robins a right to appeal from the judgments of dismissal entered by the district court. We think that, by attaching its approval to the parties' private Settlement Agreement which sets forth future discovery obligations of the parties, the district court attached a material condition to the judgments of dismissal. The district court's notation and the reasonable implications arising from it create sufficient legal prejudice so that the dismissals qualify as involuntary adverse judgments against Robins. As such, Robins has standing to appeal the dismissals and we may properly maintain jurisdiction of this case under Section 1291.
The order was "adverse" to Robins in that Robins did not agree to or acquiesce in entry of the court's notation. Short of filing a formal request to set aside the order of dismissal, Robins made its position that court approval of the agreement was not necessary or anticipated quite clear by voicing its view at the February 28 and 29 hearings and by bringing this appeal.
We determine that, given the context in which the notation was added and
Approval of Settlement Agreement
Before considering whether the court erred in entering the "So Ordered" notation on the Settlement Agreement, we address plaintiffs' characterization of the proceedings below. Plaintiffs argue that Judge Lord's involvement in the consolidated Dalkon Shield cases authorized him to assure enforcement of the discovery provisions of the agreement as they affected other cases. Plaintiffs point to the large number of Dalkon Shield cases in the Minnesota court system, and to Judge Lord's interest, as Chief Judge of the District, in efficient judicial administration of this vast amount of pending litigation. In some circumstances these factors might have merit, but here, Judge Lord was not acting in a supervisory or administrative capacity when he entered the notation on the parties' Settlement Agreement. He was signing an order in specific pending cases. All matters relating to the future processing of other Dalkon Shield litigation had been transferred to Judge Renner the day before the notation was added. Judge Renner had agreed to take jurisdiction over the non-destruct order previously issued by Judge Lord. In short, Judge Lord's role in the consolidated Dalkon Shield cases had ended. The chief judge of a district court, merely by virtue of his position, has no authority to enter orders in cases pending before other judges of the district. In any event, we find that, at the time Judge Lord approved the Settlement Agreement, exercise of any supervisory authority he might have had was improper because Judge Lord already had renounced his supervisory capacity by stating that he was prejudiced in these cases. Appendix at A-48. Thus, approval of the parties' agreement cannot be justified on the basis of Judge Lord's supervisory authority over the Dalkon Shield litigation. Plaintiffs' assertion that the court's notation was necessary to terminate the activities of the Special Masters also is contrary to the facts. Counsel for Robins explained at oral argument that Judge Lord communicated to the masters by telephone that the parties had settled sometime after the February 29 proceeding. The district court apparently terminated the masters' activities in a less formal manner than by court order.
We also reject, for the purpose of reviewing Judge Lord's approval of the agreement, plaintiffs' characterization of the consolidated proceeding as a quasi-class action. The instant litigation may indeed bear many of the characteristics of a class action, however, the record is unequivocal that neither the parties nor the district court regarded the agreement as binding other plaintiffs. The Settlement Agreement was a matter of private contract between Robins and counsel Robins, Zelle on
In ordinary litigation, that is, lawsuits between private parties, courts recognize that settlement of the dispute is solely in the hands of the parties. In City of Miami, the Fifth Circuit described the settlement process in litigation between private parties as follows:
614 F.2d at 1330 (quoting Judge Wyzanski in Heddendorf v. Goldfine, 167 F.Supp. 915, 926 (D.Mass.1958)); see also United States v. Louisiana, 527 F.Supp. 509, 512 (E.D.La.1981) (a trial court ordinarily plays little or no part in overseeing the settlement of a lawsuit); Georgevich v. Strauss, 96 F.R.D. 192, 197 (M.D.Pa.1982), appeal dismissed, 722 F.2d 731 (3d Cir.1983). Courts not only frown on interference by trial judges in parties' settlement negotiations, but also renounce the practice of approving parties' settlement agreements. See City of Miami, 614 F.2d at 1330; Levinson v. Maison Grande, Inc., 553 F.Supp. 350, 352 (S.D.Fla.1982).
In City of Miami, the Fifth Circuit recognized that procedurally, parties can prevent a court from becoming involved in the settlement process by agreeing that plaintiff shall dismiss the lawsuit by stipulation. 614 F.2d at 1330. The court pointed out that Rule 41 of the Federal Rules of Civil Procedure allows a lawsuit to be dismissed at any time by the consent of all parties. Id. at 1330 n. 15.
Under the above legal principles, we determine that Judge Lord improperly interfered in the parties' private agreement by adding the "So Ordered" notation and by signing the Settlement Agreement. The record includes no evidence indicating that the parties mutually agreed to court approval of the document or to the court's retention of jurisdiction over Robins. In fact, the record indicates the opposite: that the parties did not anticipate court approval and that the orders of dismissal "signaled the close of the underlying litigation" before Judge Lord. Thus, the effect of Judge Lord's notation was an attempt to convert the document into something the parties neither anticipated nor negotiated. Such conduct by the district court constitutes interference in the parties' settlement. Judge Lord failed to "stand[ ] indifferent when the parties, for whatever reason
Moreover, Judge Lord effectively deprived the parties of their unconditional right to a Rule 41(a)(1)(ii) dismissal by stipulation. By entering the notation on the parties' agreement without their knowledge or consent, the district court, in effect, imposed a material condition on the parties' right to a stipulated dismissal — that the private Settlement Agreement be approved by court order, enforceable by contempt. Imposition of such a condition directly conflicts with the clear and unambiguous language of Rule 41(a)(1) which contains no exceptions that call for the exercise of judicial discretion by any court. We hold that the district court's entry of the notation on the parties' private agreement was improper.
Denial of Due Process and Judicial Bias.
We now address Judge Lord's comments to the Robins officers, E. Claiborne Robins, Jr., William A. Forrest, Jr., and Dr. Carl D. Lunsford, during the February 29 district court proceeding. We consider the matter in this appeal even though Robins failed to raise the issue initially. Our decision to reach the issue rests on several grounds. First, we note that, on our request, the matter has now been fully briefed and argued by the parties as well as by the Robins officers and Judge Lord, who appear in these proceedings as amici. The pertinent record relating to the district court's comments has been fully developed. Judge Lord's comments arise out of the same judicial proceeding as the matter asserted in Robins' Notice of Appeal — the alleged impropriety of the court's "So Ordered" notation. Indeed, the district court's remarks to the three officers of Robins apparently reveal the reasons for the court's desire to add the notation "So Ordered," so an appeal challenging this notation necessarily involves consideration of the propriety of these remarks. In addition, the propriety of the court's comments is at the heart of a disciplinary proceeding commenced by Robins and its officers against Judge Lord under the Judicial Conduct and Disability Act of 1980, 28 U.S.C. § 372 (1982), now pending before the Judicial Council of this circuit. It is far more desirable for this issue to be addressed in the normal appellate process than in the extraordinary context of a disciplinary proceeding.
In Wright v. Newman, 735 F.2d 1073, 1076 (8th Cir.1984), we recognized our general rule of not considering arguments on appeal that were not advanced in the proceedings below. In that case, however, we found it proper to exercise our discretion in favor of reaching an issue that had not been raised before the district court. In our view, the instant appeal presents a
Robins and its officers assert that Judge Lord's reprimand violated their due process rights under the fifth amendment by depriving them of liberty and property without due process of law. We agree that Judge Lord's comments from the bench during the February 29 proceeding sufficiently implicated the constitutionally-protected liberty interests of the three officers, and property interests of Robins, such that they were entitled to notice and an opportunity to be heard by an impartial tribunal. The reprimand constituted an infringement on the officers' liberty interests because it was a governmental attack on their good name, reputation, honor, and community standing. Wisconsin v. Constantineau, 400 U.S. 433, 437, 91 S.Ct. 507, 510, 27 L.Ed.2d 515 (1971); Sims v. Fox, 505 F.2d 857, 862 (5th Cir.1974), cert. denied, 421 U.S. 1011, 95 S.Ct. 2415, 44 L.Ed.2d 678 (1975).
As a party to the litigation, Robins was entitled to due process, the essence of which is a fair trial before a tribunal free from bias or prejudice. In re Murchison, 349 U.S. 133, 136-37, 75 S.Ct. 623, 625-26, 99 L.Ed. 942 (1955); United States v. Sciuto, 531 F.2d 842, 845 (7th Cir.1976).
Judge Lord attempts to justify his remarks to the three officers as a permissible comment on pending litigation. Indeed, many federal decisions recognize the power of judges, within reasonable limits, to comment on the evidence and to express fair opinions. See United States v. Womack, 454 F.2d 1337, 1342 (5th Cir.1972), cert. denied, 414 U.S. 1025, 94 S.Ct. 450, 38 L.Ed.2d 316 (1973). In this instance, however, we think Judge Lord crossed the line separating permissible judicial comments from impermissible public accusations against a litigant, Robins, and nonlitigants, Messrs. Robins, Forrest, and Lunsford. As this court has stated in other litigation involving Judge Lord:
Reserve Mining Co., 529 F.2d at 185-86.
Judge Lord asserts his reprimand was intended as a "sanction" for discovery abuse and a "censure" of the "tactic of A.H. Robins of insulating its chief operating officers from any knowledge as to the widespread disability and death caused by the company's product." He also claims the reprimand was directed at the three officers' "demeanor of undisguised disdain for the Court." We find these proffered rationales for the court's reprimand unpersuasive. As counsel for Robins points out, the bulk of the reprimand reflects Judge Lord's views on the merits of the underlying litigation, a personal attack on the officers, and his assertions that the Dalkon Shield caused catastrophic damage. A relatively small part of the reprimand dealt with alleged discovery abuse and management of the litigation by Robins. Moreover, the record contains no evidence of conduct constituting an affront to the district court on the part of these officers. If, in fact, Robins or its officers did engage in discovery abuse, the district court had available to it procedures to enforce its discovery orders and to punish noncompliance. Such procedures incorporate the due process protections of notice and a hearing before any sanction may be imposed. If the district court had decided to punish Robins for abusive litigation practices, it was bound to do so by the judicial procedures established for that purpose. See Fed.R.Civ.P. 37 (sanctions for discovery).
We do not evaluate the truth or falsity of any allegations made during this litigation. This is no more the proper forum for that determination than the district court was when the Settlement Agreement was presented to Judge Lord. The trial court was not sitting as the factfinder in these cases during the subject proceedings. Although Judge Lord had participated in a limited amount of discovery, the lawsuit was still in the pretrial phase, Judge Lord had not yet held an evidentiary hearing, and Robins had not yet had an opportunity to challenge plaintiffs' allegations by cross-examination. While Judge Lord claims he had formed an opinion based on the record before him, this judgment was premature. Judge Lord's action ordinarily would not be subject to review because no trial had been held. Once Judge Lord lost his neutrality, he was obligated to refrain from further action in a judicial capacity in the cases before him.
We speak now in our supervisory capacity over the district courts. At the time of the February 29 proceedings, there were pending in the federal district courts in Minnesota as well as in the Minnesota state court system, many other cases brought against Robins based on similar contentions of causation and injury. It should have been obvious to Judge Lord that any comments he made might be publicized (defense counsel asserts that Judge Lord invited the press to attend the proceedings) and therefore could prejudice the orderly trial of other pending cases. Such pretrial publicity could materially affect the ability of the parties to solicit fair jurors, thereby impairing the orderly administration of trial dockets in both federal and state courts. Under these circumstances, we must disapprove of Judge Lord's comments. If proof exists to show Robins has been derelict in its corporate management by producing a defective product, Robins
Accordingly, we find the district court erred by entering the "So Ordered" notation on the parties' private Settlement Agreement and by reprimanding the three corporate officers and Robins during the February 29 hearing. We therefore direct that Judge Lord's "So Ordered" notation and his condemnation and reprimand be stricken from the district court's records in this case. They are to have no legal effect.
It is so ordered.
Id. at A-57.
Appendix at A-86.
Id. at A-84.
Appendix at A-82.
Appendix at A-27.
Appendix at A-33 — A-34.
Id. at A-38.
Appendix at A-78 (emphasis added).
Appendix at A-30.
Appendix at A-45 — A-46.
Appendix at A-47 — A-48.
Rochin v. California, 342 U.S. 165, 171-72, 72 S.Ct. 205, 209-10, 96 L.Ed. 183 (1952).
Shakespeare, Measure For Measure, Act II, sc. ii (G.B. Harrison ed. 1968).