U.S. District Judge Robert R. Merhige Jr. refused today to disqualify himself in the A. H. Robins Co. bankruptcy, and said he will seek to punish the 10 Dalkon Shield victims' lawyers who accused him of bias in favor of the manufacturer of the contraceptive device.
The lawyers' effort to remove him is "meritless," Merhige said in a 59-page memo and in 85 minutes of comments from the bench. He ridiculed "the suggestion that I could be biased in favor of A. H. Robins" and scorned suggestions that he had engaged in any impropiety.
Merhige said he will seek appointment of "a disinterested judge to review the recusal motion and determine whether sanctions should be imposed" on the 10 lawyers.
One of the lawyers, Douglas E. Bragg of Denver, said he will ask the Fourth U.S. Circuit Court of Appeals to order Merhige to disqualify himself. Merhige denied Bragg's motion to stay all proceedings until the appeals court rules, saying Bragg's chances of success are "not good."
Merhige blamed bickering lawyers for delaying the case, saying, "I think we have lost six months" in unproductive disputes. Robins filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code on Aug. 11.
Merhige said repeatedly during a 7 1/2-hour hearing that, from now on, he will exercise control and move toward a prompt and fair resolution of the estimated 200,000 claims expected to be filed against Robins by women in at least 80 countries who used the Dalkon Shield.
There were these other developments during the hearing:
*Robins responded to Justice Department charges that it improperly spent millions of dollars after the bankcruptcy filing by asking Merhige to order that those who received the money be notifed that they have until May 15 to return it voluntarily. The payments include $1.2 million in deferred compensation paid to company executives.
If the creditors who received the payments don't give the money back, Robins said it will take that money off later obligations to them. Robins also threatened to sue those who fail to return the money.
*U.S. Trustee Richard C. White, a Justice Department official, said he will seek appointment of a shield claimants committee that would include victims of the device as well as their lawyers. The committee, which is expected to have no more than seven members, would replace the original 38-member panel that Merhige dissolved on March 4.
*Merhige indicated that he may find it desirable to extend the current March 31 deadline he had set for Robins to propose a plan to reorganize its fianancial affairs and dispose of the shield claims.
*Merhige said he will hold a hearing on a request for a stenographic recording of all proceedings in the case. The request was made by Bradley Post, a Wichita, Kan., lawyer who signed the motion to remove Merhige from the case.
"Some proceedings in open court, many proceedings in chambers and all telephone conferences have been conducted without being stenographically recorded," Post said in a court filing. "Some attorneys are invited to attend the proceedings in chambers and some are not. Telephone conferences between court and counsel have occurred without the knowledge, authority or consent of the official claimants committee and other lawyers who represent Dalkon Shield victims."
Merhige today dismissed as inconsequential the reasons given by Post for seeking his removal from the case.
Bragg had charged in an Aug. 22 courtroom exchange that company Chairman E. Claiborne Robins, is "probably a social friend" of Merhige. At the time, the judge responded, "Well, I wouldn't say social any more than anybody that I know. But he is a neighbor . . . I think he is a fine man."
Today, the judge said that, "In over 40 years, I have been in his company less than 10 times" and "at the same table only once." He and Robins live a block apart, he noted.
The lawyers lack any evidence that even remotely could be used to draw the conclusion that Robins is a close personal friend, Merhige said.
Merhige also offered a further explanation of a key episode of his Aug. 1, 1985, meeting with Robins.
In a tense courtroom exchange with Bragg the day after the Chapter 11 filing, Merhige confirmed that he had had a meeting with the chairman that "I did not contemplate . . . that was just by accident, I suspect."
Today, Merhige said he had sought a meeting with E. Claiborne Robins Jr., the chief executive officer and president, "to confirm the company's financial posture" before proceeding with his plan for a gathering of 13 shield litigation judges in Wichita on Aug. 6. He explained that Robins' attorneys had been complaining about the company's financial situation.
Both the chairman and his son showed up at his home, Merhige Merhige indicated that he may find it desirable to extend the current March 31 deadline he had set for Robins to propose a plan to reorganize its fianancial affairs and dispose of the shield claims. said, and told him that a Chapter 11 filing would be "a last resort."
Merhige said today that lawyers such as Bragg and Post were not entitled to attend the meeting at his home because they were not involved the particular shield cases then pending in his court.