3:86-cv-06160
N.D. Cal.May 20, 2025Background
- The case stems from a longstanding settlement regarding disability compensation for Vietnam War veterans exposed to Agent Orange.
- The settlement (the "consent decree") requires the Department of Veterans Affairs (VA) to reopen claims if new diseases are recognized as service-related.
- This process has resulted in over $4.5 billion in payments to veterans or their survivors as new diseases have been recognized.
- Plaintiffs now seek to distribute $63 million owed to 1,137 deceased veterans whose survivors or estates cannot be located or are closed.
- The proposal is to use a cy pres award (directing funds to a related charitable cause) since the named recipients cannot be found, but the consent decree specifies payment to survivors, then estates.
- The VA opposes the cy pres approach, arguing neither the consent decree nor any statute or case law allows for such distribution.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Can cy pres awards be made for unclaimed funds under the consent decree? | Cy pres should be used to allocate unclaimed funds to organizations supporting veterans. | Not allowed; the consent decree does not authorize cy pres and federal courts cannot reappropriate congressionally appropriated funds. | Not permitted; cy pres relief is not authorized. |
| Were reasonable efforts made to locate eligible survivors? | Reasonable efforts were made, further searches would yield diminishing returns. | More should be done, especially given the large sums owed. | Not yet; court requires additional efforts (e.g., advertising) to find survivors before considering other options. |
| What should happen with funds if no eligible survivor is found? | Cy pres should be used if survivors cannot be located. | Funds should go to the veteran's estate, including reopening estates if needed. | Funds must be directed to estates, using state law processes if necessary. |
| Can the court order funds to be paid to third parties not specified in the consent decree? | Yes, through cy pres as an equitable solution. | No; only survivors or estates are authorized recipients. | No; court lacks authority to order distribution to others. |
Key Cases Cited
- Nehmer v. U.S. Veterans’ Admin., 712 F. Supp. 1404 (N.D. Cal. 1989) (early ruling that shaped the scope of presumptive diseases for Agent Orange claims)
- Nehmer v. U.S. Dep’t of Veterans Affs., 494 F.3d 846 (9th Cir. 2007) (affirmed ongoing obligations under the consent decree)
- Nehmer v. U.S. Veterans’ Admin., 284 F.3d 1158 (9th Cir. 2002) (affirmed consent decree's requirements for handling claims)
- In re Google Inc. St. View Elec. Commc’ns Litig., 21 F.4th 1102 (9th Cir. 2021) (explained cy pres doctrine in class actions)
- Nachshin v. AOL, LLC, 663 F.3d 1034 (9th Cir. 2011) (set criteria for cy pres distributions in class actions)