RICHMOND, NOV. 3 -- An order citing A.H. Robins Co. for criminal contempt of court will be changed to a civil citation, says U.S. District Judge Robert R. Merhige Jr.
The company sought to have Merhige change the contempt citation because of concern that a criminal finding might jeopardize its ability to keep or renew business licenses.
The $10,000 fine Merhige imposed on E. Claiborne Robins Jr., the company's president, was not affected. It has been paid.
Merhige found the company in criminal contempt Oct. 12 after saying it had stopped obeying a previous order to recover money it paid illegally to certain creditors for prebankruptcy debts. The company sought Chapter 11 reorganization in August 1985 in the face of mounting claims against its Dalkon Shield birth control device.
James S. Crockett Jr., an outside attorney for Robins, said during a hearing in Merhige's chambers Monday that a lawyer's reading of the laws in at least two major states -- New York and California -- showed that the issue was not clear-cut and that a distant state might revoke or fail to renew a license. He said the licenses are essential to the company's operation.
Assistant U.S. Attorney S. David Schiller said Robins has frequently responded to allegations of misconduct by arguing that a penalty would hurt the chances of a successful Chapter 11 reorganization. He said Robins pushed too far in this instance and was punished appropriately.
Merhige said he was "satisfied that what we did was right," but said he would change the citation to civil contempt because of a recent Supreme Court ruling that overturned a citation in a case in which "a less than disinterested person" conducted the prosecution.
The Dalkon Shield claimants' committee and the U.S. attorney's office prosecuted this case and both are interested parties. The judge said that did not seem to meet the standard set by the high court.