NOT PRECEDENTIAL U N IT E D S T A T E S C O URTO F AP P E ALS F O R T H ET H IRD C IRC U IT No. 07-3980 M C G O W A N IN V E S T O R S L P ; T IM L O B A C H ; S T E P H E N J. C H E S E L D IN E ; M A R K E T S T R E E T S E C U R IT IE S , IN C ., ON BEH ALF O F THEM SELVES AN D A LL OTH ER PHLX SEAT OW NER S AS OF DEM UTU ALI ZATI ON I NFO DA TE, A p p e llan ts v. M EYER ( SAN DY ) FRUCH ER; OR M AN STEI SEL; M I CH AEL J UNE M AN, M E M BE R P HL X B OAR D OF GOVE RN OR S ; J OHN F . W A L L A C E , M E M B E R P H L X B O A R D O F G O V E R N O R S ; DANI E L B. O' RO UR KE , M E M BE R P HL X B OAR D OF GOV ERNORS ; M I CHAEL J . CURCI O, M EM BER P HLX BOARD O F G O V E R N O R S ; C O N S T A N T IN E P A P A D A K IS , P H .D ., M EM BER PHLX BO AR D O F GO VER NO RS; I . I SABELLE BEN TON , M EM BER PHLX BO AR D O F GO VER NO RS; CH AR LES P. PI ZZI , M EM BER PHLX BO AR D O F GO VER NO RS; DA NI EL BI GEL OW , M EM BER P HLX BOARD OF GOVERNORS ; LARRY L. PRE SSLER , ESQ . , M EM BE R PH LX BO A RD O F G O V ER N O RS; K EV I N K EN N ED Y , M EM BE R O F PH LX BO A RD O F G O V ER N O RS; RI CH A RD SK LA R, M EM BE R PH LX BO A RD O F G O V ER N O RS; K EV I N CA RR O LL, M EM BE R PH LX BO A RD O F G O V ER N O RS; G EN E SPER LI N G , M EM BE R PH LX BO A RD O F G O V ER N O RS; CH RI STO PH ER R. CA RT ER , M EM BE R PH LX BO A RD O F G O V ER N O RS; W I LLI A M STA LLK A M P, M EM BE R PH LX BO A RD O F G O V ER N O RS; ALBE RT S . DAN DRI DGE, I I I , ES Q. , M EM BER P HLX BOARD OF G OV ERN OR S; W END Y S. W HI TE, ESQ. , M EM BER PHLX BO AR D O F GO VER NO RS; PETE R C. ERI CH SEN, ESQ. , M EM BER PHLX BO AR D O F GO VER NO RS; GA RY E. YETM AN , M EM BER PHLX BO AR D O F GO VER NO RS; W YC HE FO W LER, J R. , M EM BER PHLX BO AR D O F GO VER NO RS; ELEAN OR W . M YER S, ESQ. , M EM BER PHLX BO AR D O F GO VER NO RS; M ERRI LL, LYN CH , PI ERCE,2 FEN N ER & SM I TH , I N C. ; CI TA D EL D ER I V A TI V ES G RO U P, LL C; M ORGAN S TANLE Y & CO I NCORP ORATED; UBS S ECURI TI ES , LL C; CI TI GROUP F I NAN CI AL P RODUCTS , I NC; CRED I T SUI SS E FI RST BOSTON NEX T FUN D, I NC . ; J OH N L. CA N TW ELL , J R. , M EM BE R PH LX BO A RD O F G O V ER N O RS,

I S AAC C. HUN T, J R.

A p p ea l from the U n it ed S tat es D istri ct C o u rt forthe East ern D i s tr i ctof Penns y l vani a ( D . C . C i vi l A ct i on N o. 06- cv- 02558) D i s tr i ctJ udge: H onor abl e A ni t a B . B r ody A r gued J anuary14, 2010 B efor e: A M B R O , C H A G A R E S, and ST A PL E T O N , C i r cui tJ udges

( O pi ni on fi l ed: A ugus t12, 2010) St even B. M i r ow , E s qui r e ( A r gued) 249 Sout h 12th St r eet Phi l adel phi a, PA 19107- 0000 C o u n se l f

o r A p p e llan ts A d am M . F ink elst ein, E sq u ir e St ephen J . K as t enber g, E s qui r e ( A r gued) P au l L an ti eri, III , E sq u ir e E d w ard D . R o g ers, E sq u ir e B a llard , S p a h r, A n d re w s & In g e rso ll 1735 M arketSt r eet , 51s tFl oor Phi l adel phi a, PA 19103 JayB . K asn er, E sq u ir e Skadden, A rps , Sl at e, M eaghe r& Fl om 4 T im es S q u are N ew Y or k, N Y 10036- 00003

P au l J. L o ck w o o d , E sq u ir e Skadden, A rps , Sl at e, M eaghe r& Fl om 05- 01 O n e R o d n eyS q u are P. O . B ox 636 W i l m i ngt on, D E 19899- 0000 K ri sten V . G ri sius, E sq u ir e S teph en J. S en d ero w it z, E sq u ir e Wi n s t o n & S tr a wn 35 W es tW acke rD r i ve, Sui t e 4200 C hi cago, I L 60601- 0000 Jac k L . G rue n stei n , E sq u ir e V ai r a & R i l ey 1600 M arketSt r eet , Sui t e 2650 Phi l adel phi a, PA 19103- 0000 F ran ce s E . B iven s, E sq u ir e Jo h n B . G af

fn ey , E sq u ir e D a v is, P o lk & W a rd w e ll 450 L exi ngt on A venue N ew Y or k, N Y 10017- 0000 S co ttA . E d elm an , E sq u ir e R o b ert C . H o ra, E sq u ir e S tace yJ. R ap p ap o rt , E sq u ir e M i l bank, T w eed, H adl ey& M cC l oy O ne C has e M anhatt an Pl aza N ew Y or k, N Y 10005- 0000 C . P au l Sc h eu ri tzel, E sq u ir e L ar s s on & Scheur i t zel 1500 M arketSt r eet C entr e Squar e W es t , Sui t e 3510 Phi l adel phi a, PA 19102- 0000 Jo h n G . H ark ins, Jr . , E sq u ir e E lean o r M . Il low ay , E sq u ir e H arki ns C unni ngham4

2005 M arketSt r eet 2 8 0 0 O n e C o m m erc e S q u are Phi l adel phi a, PA 19103- 0000 D an iel S eg al, E sq u ir e H a n g ley, A ro n c h ick , S e g a l & P u d lin O n e L o g an S q u are 18th & C herr ySt r eet s , 27th Fl oor Phi l adel phi a, PA 19103- 0000

C ouns el forA ppel l ees

OP I NI ON A M B R O , C i r cui tJ udge T hi s cas e i nvol ves the enf or cea bi l i tyof a r el eas e thatw as negot i at ed as partof a court - appr oved s ett l ementi n a r el at ed s t at e courtact i on. T hats ett l ementr el eas ed not o n lysta te la w c laim s, b u t als o f e d e ra l cla im s th a t co u ld n o t h a v e b e e n b ro u g h t in sta te court . O n appea l , the appe l l ant s ar gue thatthi s s ett l ementi s notent i t l ed t o ful l fai th and cr edi ti n fede r al court . Forthe r eas ons thatfol l ow , w e di s agr ee a nd thus aff i r m the ju d g m e n t o f

th e D istric t C o u rt. I . FACTS U nt i l r ece nt l y , the Phi l adel phi a St ock Exchange w as s tructur ed as a mut ual o rg a n iza tio n w ith 5 0 5 “ se a ts,” e a c h o f w h ich p ro v id e d to d e sig n a ted “ se a t o w n e rs” b o th equi tyow ner s hi p and the r i ghtt o t r ade. I n O ct ober2003, the Exchange pr opos ed a demut ual i zat i on pl an t o i t s s eatow ner s . T hi s pl an w as out l i ned i n an I nform at i onT he Str at egi c I nves t or s ar e s i x l ar ge fi nanci al i ns t i tut i ons : C i t adel D er i vat i ves G r oup, 1 C i t i g r o u p F i n a n c i a l P r o d u c t s , C r e d i tS u i s s e F i r s tB o s t o n , M e rr i l l L yn c h , M o r g a n S t a n l e y, and U B S S ecuri t i es. 5 M emora ndum , w hi ch i ncl uded ana l y s i s byan i ndepende ntfi nanci al advi s or , K eef e B ruy ett e & W oods ( “K B W ”) . T he M emora ndum i ncl uded K B W ’ s concl us i on thatthe “vi abi l i tyof [the Exchange] i n i t s curr entoper at i ng s tructur e [w as ] ques t i onabl e, ” and thatdemut ual i zat i on w as the Exchange’ s bes tl ong- t erm opt i on. S. A . 23- 24. I n addi t i on, pr i ort o the demutual i zat i on vot e the Exchange t ol d i t s s eatow ner s thati tw oul d l at ers eek addi t i onal i nves t m ent s i n t he Exchange. I n N ovember2003, the s eatow ner s appr oved th e d e m u tu a liz a tio n p la n , a n d th e E x c h a n g e b e g a n to d e m u tu a liz e . U nderthe pl an, the s eatow ner s r ece i ved 100 s har es of Exchange c om m on s t ock foreac h s eatthattheyhad pr evi ous l yow ned. T he Exchange a l s o cons i der ed var i ous strat egic opt i on s t o b ols t er i t s l on g-t erm viabi l i ty . F or i nst ance, A rchi pelago H oldi ng s, L L C o f f e re d $ 5 0 m illio n to a c q u ir e th e E x c h a n g e o u tr ig h t— a n o f f e r t h a t w a s re

je c te d . In ste a d , the E x c h a n g e p u rsu e d six se p a ra te tra n sa c tio n s w ith so -c a lled “ S tra teg ic I nves t or s ” betw een J une 2005 and A ugus t2005. A s a r es ul tof thes e tr ans act i ons , the 1 S tra teg ic I n v e sto rs o b tain e d sh a re s th a t to tale d 4 5 % o f th e o u tsta n d in g c o m m o n sto c k in th e E x c h a n g e . E a c h S tra teg ic I n v e sto r a lso re c e iv e d a w a rra n t th a t w o u ld in c re a se its ow ner s hi p s t ake i n t he Exchange i f the l att erm etcert ai n per form ance goal s . T he S tra teg ic I n v e sto rs e a c h m e t th e se b e n c h m a rk s a n d th u s in c re a se d th e ir o v e ra ll o w n e rsh ip i n the Exchange t o 89. 4% . I n A ugus t2005, the Exchange a l s o announce d a t enderoffe r6

to p u rc h a se c o m m o n sto c k a t $ 9 0 ,0 0 0 p e r 1 0 0 -sh a re b lo c k . N o n e o f th e a p p e llan ts s o ld an yo f th eir sha res u n d er the tend er o ff er. In th e e n d , the s ea t ow n ers w ere left w ith ap p rox im ately1 0 % o f th e E x ch an g e’s comm on s t ock and a s m al l eramount of the Exchange’ s equi typers har e than theyhad pri or t o d em utual i zat i on . In addit i on , the seat -ow ner app el l ants al l ege thattheyhad “l ess than theyw oul d have ha d i f the more advant ageous deal s had bee n acc ept ed bythe B oar d. ” A ppel l ant s ’ B r . 8- 9. I I . P ROCE DURAL HI S TORY T h i s i s th e s e c o n d c l a s s a c t i o n b r o u g h tb ys t o c k h o l d e r s o f th e E x c h a n g e . T h e t wo cl as s act i ons w er e fi l ed ei ghtday s apart

— one i n D el aw ar e s t at e courtand one i n fede r al court . B oth chal l enges i nvol ve a s i m i l ars etof under l y i ng fac t s , s i m i l ardefe ndant s , and sim il ar p rop o sed rem ed ies. T h e state c o u rtac ti o n sett led, an d the f ed era l acti o n is be fo re us on appea l . Si nce the enf or cea bi l i tyof the s t at e courts ett l ementturns on the r el at i ons hi p betw een thes e tw o s ui t s , w e out l i ne ea ch i n turn. A . T he St at e C ourt A ct i on T he fi r s tcl as s act i on w as fi l ed i n the D el aw ar e C our tof C hance ryi n J une 2006 by a d iffe ren t nam ed p lai n ti ff , w h o w as re p rese n ted b yd iffe ren t cou n sel th an is no w b ef o re us . T hatpl ai nt i ff a s s ert ed s t at e l aw fi duci arycl ai m s agai ns tthe Exchange, i t s B oar d, and the Str at egi c I nves t or s . T hes e cl ai m s w er e bas ed on al l eged br eac hes of fi duci arydut i es b yth e B o a rd m e m b e rs in a p p ro v in g th e tra n sa c tio n s w ith th e S tra teg ic I n v e sto rs, a s w e ll7

as al l egat i ons thatthe Str at egi c I nves t or s i nduced the B oar d’ s al l eged br eac hes . T he p lai n ti ff s so u g h t r esc issi o n o f th e u n d erly ing tr an sac ti o n s (or, alt ern ati v elyd am ag es). I n addi t i on, aft erthe Str at egi c I nves t or s exer ci s ed thei rper form ance - bas ed w arr ant s , the pl ai nt i ffs added a cl ai m bas ed on a vi ol at i on of the Exchange’ s C ert i fi cat e of In c o rp o ra tio n . In M a rc h 2 0 0 7 , the D e law a re C o u rt o f C h a n c e ryc e rtifie d a se ttl e m e n t cla ss o f “ a ll C l as s A comm on s t ockhol der s of the [Exchange ] on A pr i l 20, 2005, and thei rtr ans fer ees ors ucce s s or s i n i nt er es t . ” I n J une 2007 ( and on the eve of tr i al ) , the part i es s ett l ed. T he part i es and the V i ce Chancel l orout l i ned the s ett l ementi n a M emora ndum of Un d e r s t a n d i n g . T h e s p e c i f i c t e r ms o f

th e s e t t l e me n twe r e n e g o t i a t e d o v e rth e n e x ttwo m on ths. P e r th e se ttl e m e n t, th e d e f e n d a n ts a g re e d to th e f

o llo w in g : 1 ) th e S tra teg ic In v e sto rs a g re e d to re tu rn 1 4 % o f th e ir sh a re s; 2 ) th e C E O o f th e E x c h a n g e a g re e d to canc el 14% of hi s r es tr i ct ed s t ock; 3) the Exchange a gr eed t o pay$17. 1 m i l l i on i nt o a s ett l ementfund; and 4) the pl ai nt i ff c l as s obt ai ned pr ot ect i ons agai ns tfutur e s t ock d ilu tio n . A s p a rt o f

th e n e g o tia tio n s , th e E x c h a n g e a g re e d to p ro v id e a n a d d itio n a l $ 3 .1 m i l l i on t o s w eet en the dea l and t o s ecur e “a r el eas e t o the br oades text entpos s i bl e under la w .” I n excha nge, the pl ai nt i ffs agr eed t o a r el eas e thatcover ed al l cl ai m s ar i s i ng outof o r re latin g toA s ap p ell an ts’ co u n sel clarifi ed af ter oral arg u m en t, h e a p p ea red as c o u n sel “b ef o re 2 the C hance r yC our tforboth t he fa i rnes s hear i ng . . . and the al l ocat i on hear i ng . . . , as w el l as befor e the D el aw ar e Supr eme C our tforthe fi r s tpanel hear i ng and then the en banc he ar i ng. ” Suppl ement al C orr ect i ve St at ement , at2. Fur therm or e, “[a ] l l fourof the appel l ant s i n t he ca s e atbar ” w er e r epr es ent ed byappel l ant s ’ couns el atthe fa i rnes s and a llo c a tio n h e a ri n g s . Id . at2- 3. 8 the s ubj ectm att erof [the s t at e court ] [a] ct i on, and i ncl udi ng w i thout lim itatio n a n yc laim s (w h e th e r o r n o t as se rte d ) in a n yw a yre late d to : (i) D em utual i zat i on ; (i i ) the E xch ang e’s decis i on t o rej ecta bu si ness combi nat i on w i th A r chi pel ago; ( i i i ) the Exchange’ s cons i der at i on of any m e rg e r, ac q u isitio n , join t v e n tu re , b u sin e ss c o m b in a tio n , initia l p u b lic offe r i ng, orot hers tr at egi c i ni t i at i ves ortr ans act i ons i nvol vi ng the E xchange as an al t ernat i ve t o a bus i nes s combi nat i on w i th A r chi pel ago or the St r at egi c I nves t m ent s ; ( i v) the TenderO ffe r ; ( v) the val ue orval uat i ons of the Exchange done i n connec t i on w i th ( i i i ) ; ( vi ) anyques t i on of B oar d or m anage m entcompensa t i on and B oar d r eor gani zat i on pr i ort o D ece m ber31, 2006; and/ or( vi i ) the Str at egi c I nves t m ent s ( i ncl udi ng expr es s l yany al l eged vi ol at i ons of A r t i cl e I V of the Exchange’ s C ert i fi cat i on of Inc o rpo rati o n ). S . A . 75 -76. T he p roposed set t l em ent w as subj ectt o a b i furcat ed ap proval process w her ebythe C hance r yC our tcons i der ed the fa i rnes s of the s ett l ementbefor e ana l y zi ng the pr opos ed al l ocat i on pl an. A ft err ece i vi ng not i ce of the pr opos ed s ett l ement , s ever al cl as s m ember s fi l ed obj ect i ons . O ne gr oup of obj ect or s i ncl uded the appe l l ant s i n ourcas e ( r epr es ent ed byt he s ame couns el now befor e us ) . T hes e obj ect or s offe r ed s ever al chal l enges t o the 2 s ett l ement , i ncl udi ng that : 1) the C hance ryC our tl acke d the pow ert o r el eas e the fe der al cl ai m s ati s s ue i n t he pr es entact i on; 2) the r el eas e i t s el f ext ended t o cl ai m s thatw er e not ati ssue i n the st at e cou rtact i on ; 3) the set t l em ent i nad equ at el ycom pen sat ed the cl assT hese obj ect i on s track m anyof the argum ents that the ap pell ants m ake b efore us. 3 S o m e o b

jec to rs, in c lu d in g o n e o f th e a p p e llan ts in th e c u rre n t ac tio n b e f o re u s (T im 4 L o b ac h ), ap p ea led th e C h an ce ryC o u rt ’s de cisi o n to the D elaw are S u p rem e C o u rt . It aff i r m ed. 9 m e m b e rs f

o r th e ir f e d e ra l cla im s; 4 ) th e se ttl e m e n t f a iled to p ro v id e a d e q u a te n o tice to a b se n t cla ss m e m b e rs; a n d 5 ) c las s c o u n se l an d th e c las s re p re se n tativ e s in a d e q u a tely repr esent ed ab sentcl ass m em bers. 3 Fol l ow i ng a r ound of br i efi ng and a f ai rnes s hear i ng, the C hance ryC our tappr oved the s ett l ement . I tconcl uded thati tw as “i nel uct abl ycl earon the r ecor d” thatthe s ett l ementw as fai rbeca us e i t“ac hi eve[ d] a s i gni fi cantbenef i tforthe cl as s . ” S. A . 204, 207. W i th r es pectt o t he r el eas e, the C our trul ed thati tw as “br oad, buts t i l l cons i s t ent w i th [r el at ed s t at e and f eder al pr ece dent ] , ” bec aus e the r el eas ed cl ai m s “ar i s e outof the c o m m o n n u c leu s o

f o p e ra tive fa c ts as s ert ed i n [the s t at e court ] compl ai nt . ” S. A . 210 (em p h asis ad d ed ). T h e C o u rtsp ec ifi ca ll yfo u n d that the o p era ti v e f ac ts of the s tat e c o u rt act i on “i ndi s put abl [y ] . . . i ncl uded the ci r cumst ance s underw hi ch the demutual i zat i on occurr ed” a nd “the pr oces s byw hi ch the [B]oa r d r ej ect ed the [A r chi pel ago] offe r , ” as w el l as “the [S] tr at egi c [I ] nves t ortr ans act i ons . ” S. A . 210- 11. M or eover , the s ett l ement w as “fa i rand r eas onabl e, and i n t he bes ti nt er es t s of the cl as s . ” S. A . 209. I n r eac hi ng 4 thi s concl us i on, the C our tm ade s peci fi c fi ndi ngs , “[b] as ed on the r ecor d . . . , [that ] eac h of the pr ovi s i ons of . . . R ul e 23 ha[ d] been s at i s fi ed. ” S. A . 213. T he C our tthen ce r t i fi ed a no n-opt- ou tcl ass.10

A fter rec eivin g n o ti ce o f c lass co u n sel’s pro p o sed all o ca ti o n p lan, class m em b ers ( i ncl udi ng the appe l l ant s her e) agai n fi l ed obj ect i ons . I n part i cul ar , theyar gued thatt he pr opos ed pl an i ns uffi ci ent l ycompensa t ed them for thei rr el eas ed cl ai m s . A ft err el at ed br i efi ng and an a l l ocat i on hear i ng, the C hance ryC our tappr oved the pl an. I tfound that ther e w as “more than ade quat e s uppor t ” forcl as s couns el ’ s det erm i nat i on thatthe d em u tualizati o n claim s (at i ssu e in o u r ca se) w ere n o t valu ab le. S . A . 3 0 0 . In p arti cu lar, the C our tnot ed that“i thas been de m ons tr at ed cl ear l yi n otheract i ons thatthe d e m u tu a liza tio n c laim s h a v e little o r n o c h a n c e o f su c c e e d in g a n d , thu s, h a v e lim ited , if any , value. ” S . A . 30 0. Itadd ed thatthe o bject i on s w ere “com plet el yw i tho ut m eri t [, ] [as ] [e] verycourt , both fede r al and s t at e, thatha[d] cons i der ed the[s e] cl ai m s ha[d] di s m i s s ed them. ” S. A . 304. I tobs erved thatthe pl ai nt i ffs ’ obj ect i ons r egar di ng the val ue of the r el eas ed cl ai m s w er e “e s s ent i al l yan att ack on the t erm s of the s ett l ementand on the s cope of the r el eas e ther ei n, w hi ch ha[ d] al r eadybeen appr oved by[the C hance ryC our t ] and by the D el aw are Sup rem e C ou rt . ” S . A . 30 5. F i nall y , the C ou rtrej ect ed the pl ai nti ffs’ ar gum entthatcl as s couns el and cl as s r epr es ent at i ves had a c onfl i ctof i nt er es tw i th abs ent cl ass m em bers, con cl ud i ng that these co un sel and repr esent at i ves w ere “i n the best pos i t i on t o obj ect i vel yand fa i r l ypr opos e a pl an of a l l ocat i on[, ] . . . ha[d] no confl i ct s of i nt er es t. . . , and ha[ d] pr ovi ded s at i s fac t oryr es pons es t o al l obj ect i ons . . . , both [thos e] w i th m er i tand other s . ” S. A . 306. T he D el aw ar e Supr eme C our tl at erappr oved the al l ocat i on pl an.T hough t he l egal cl ai m s pur s ued i n eac h act i on w er e di ffe r ent , the fa ctual al l egat i ons 5 in c lu d e d in e a c h c o m p la in t w e re q u ite s im ila r. 11 B . T he F ederalA ct i on Shor t l yaft erthe s t at e courtact i on w as fi l ed, the part i es i n the curr entcas e fi l ed an act i on i n the U nit ed S t at es D i stri ctC ou rtfor the E ast ern D i stri ctof P enn sy l van i a against th e E x c h a n g e ’s B o a rd , tw o E x c h a n g e o f f ice rs, a n d th e S tra teg ic I n v e sto rs f o r th e ir i nvol vementi n t he demutual i zat i on of the Exchange. T hei rcor e cl ai m w as that 5 “demutual i zat i on and the i nves t m entbythe Str at egi c I nves t or s decr eas ed the val ue of th e ir o w n e rsh ip in ter e sts in th e [ E x c h a n g e ], an d th a t [ th e a p p e llee s] f ra u d u len tly engi neer ed thi s r es ul tforthei row n enr i chment . ” McG ow an I nves t ors LP v. Fr ucher , 481 F. Supp. 2d 405, 407- 08 ( E . D . Pa. 2007) . I n part i cul ar , the i ni t i al compl ai nti ncl uded an SE C R ul e 10b- 5 cl ai m fors ecur i t i es fr aud aga i ns tthe Exchange de fenda nt s and a “fr audul enttr ans fer ” cl ai m agai ns tthe Str at egi c I nves t or s . A s a r emedy , the compl ai nt s oughtr es ci s s i on of the under l y i ng tr ans act i ons ( or , al t ernat i vel ydamages ) . T he ap p ell an ts al so fil ed a m o ti o n fo r a tem p o raryrestrai n ing o rde r an d a p reli m inary i nj unct i on pr ohi bi t i ng the Str at egi c I nves t or s fr om exer ci s i ng thei rper form ance - bas ed w arr ant s , w hi ch the D i s tr i ctC our tdeni ed. T h e a p p e l l a n t s th e n f

i l e d a n a me n d e d c o mp l a i n t , wh i c h i n c l u d e d s i x c o u n t s : two count s agai ns tthe Exchange de fenda nt s ( fors ecur i t i es fr aud underR ul e 10b- 5 and br eac h of fi duci aryduty ) and fourcount s agai ns tthe Str at egi c I nves t or s ( fors ecur i t i es fr audT he D i s tr i ctC our tdes cr i bed the appe l l ant s ’ “ce ntr al al l egat i on” as fol l ow s : “that 6 demut ual i zat i on w as a pl otagai ns tthem t o s tr i p them of t hei requi tyvi a di l ut i on, and that th e [ E x c h a n g e ] d e f

e n d a n ts e n g in e e re d th e e q u ityd e a l w ith th e S tra teg ic I n v e sto rs to acc om pl i s h t hi s goal . ” McG ow an , 481 F. Supp. 2d. at413. 12 underR ul e 10b- 5, “comm er ci al br i bery , ” “f r audul enttr ans fer , ” and a i di ng and abe t t i ng the br eac h of a f

i duci aryduty ) . I n addi t i on t o s eeki ng r es ci s s i on of the under l y i ng tr ans act i ons , the appe l l ant s al s o s oughtr es ci s s i on of the s t ock pur chas es m ade dur i ng t he t enderoffe rand a r ever s al of the demutual i zat i on i t s el f ( agai n, the al t ernat i ve w as m oney d am ag es). 6 I n M ar ch 2007— and pr i ort o the s t at e courts ett l ement

— the D i s tr i ctC our tgr ant ed the appe l l ees ’ m ot i on t o di s m i s s w i th pr ej udi ce f orfai l ur e t o s t at e a c l ai m . I n di s m i s s i ng thi s act i on, the C our tnot ed the s hi ft i ng theor i es offe r ed byappel l ant s ’ couns el thr oughout the pr ocee di ngs . I texpl ai ned that“[t ] he A m ended Com pl ai ntgave e veryi ndi cat i on t hat the [a ppel l ant s ] w er e pr ocee di ng s ol el yunderR ul e 10b- 5 fordamages . ” McG ow an , 481 F . S u p p . 2 d at 40 9 . N ev erthe less, the a p p ell an ts l arg elyab an d o n ed their R u le 10 b -5 claim s in resp o n d ing to the d ef en d an ts’ m o ti o n to d ism iss, arg u ing instead “tha t th eyw ere a c tu a lly p ro c e e d in g u n d e r s e c tio n 2 9 (b ) [ o f th e S e c u ri tie s E x c h a n g e A c t, 1 5 U .S .C . § 78cc( b) , ] bas ed on an unde r l y i ng 10b- 5 vi ol at i on. ” I d. at408. E ven af

t erthi s s hi ft , t he C our tnot ed that“[a ] tor al ar gum ent. . . [appe l l ant s ] s eemed t o change cour s e aga i n and as s ertboth a 29( b) cl ai m and an i ndepende nt10b- 5 cl ai m . ” I d. at410. T hes e s hi ft s l ed the D i s tr i ctC our tt o concl ude thatthe appe l l ant s ’ “vac i l l at i ons13

g [ a ]v e [ it] re a so n e n o u g h to d ism iss th is c a se w ith p re ju d ice w ith o u t re a c h in g th e m e rits of ei thercl ai m atal l . ” I d. N o n ethe less, itan aly ze d the m erit s o f P lai n ti ff s’ R u le 10 b -5 and Sect i on 29( b) cl ai m s , di s m i s s i ng both w i th pr ej udi ce be caus e the pl ai nt i ffs “had a m p le o p p o rtu n ityto lit ig a te th e ir se c u rities f ra u d c laim s a n d p ro v id e [ d ] n o re a so n to bel i eve thattheycoul d frui t ful l yadd anythi ng t o thei rcas e. ” I d. at419. T he pl ai nt i ffs fi l ed a t i m el ynot i ce of appea l . U nderourA ugus t2008 O r der , t he appea l atthi s s t age f

ocus es on a s i ngl e i s s ue: w hetherthe s t at e courtr el eas e bar s the c laim s a ss e rte d in th is f e d e ra l ac tio n . F o r th e re a so n s th a t f o llo w , w e c o n c lu d e th a t it do es. I I I . J URI S DI CTI ON AND S TANDA RD O F REVI EW T he D i s tr i ctC our thad j ur i s di ct i on under28 U . S. C . § 1331. W e have j ur i s di ct i on under28 U . S. C . § 1291. W e e x e rc ise p len a ryre v iew o f th e a p p lica b ili tyo f

th e sta te c o u rt re lea se to th is f e d e ra l a c tio n . “ B a s ic c o n tr a c t p ri n c ip le s a p p ly to th e re v ie w o f s e ttle m e n t a g re e m e n ts ,” a n d “ [ w ]e e x e rc ise p len a ryre v iew o v e r a p p lica tio n o f th e c o n stru c tio n o f

a n a g re e m e n t to the fa ct s of a c as e. ” F l em m i ng ex r el . Es tat e of F l em m i ng v. A i rSuns hi ne, I nc. , 311 F. 3d 282, 289 ( 3d C i r . 2002) . T hi s i s true eve n i n the curr entcas e ( w her e the r el eas e w as not befo re the D i stri ctC ou rt ) s i nce w e m ayaffirm the d eci si on below on anygroun d(s) s u p p o rt e d b yth e re c o rd . See Jo hn son v. O rr , 7 7 6 F .2 d 7 5 , 8 3 n .7 (3 d C ir . 1 9 8 5 ). Fur therm or e, even a s the r el eas e w as appr oved af t erthe D i s tr i ctC our tdi s m i s s ed the14

a p p e llan ts’ c laim s o n th e m e rits, th e re c o rd f o r th is a p p e a l “is su b

jec t to [ o u r] rig h t . . . to t ake j udi ci al not i ce of

new devel opm ent s notcons i der ed by[that ] [C ] our t . ” I n r e A m. B i om at er i al

s C or p. , 9 5 4 F . 2 d 9 1 9 , 9 2 2 (3d C ir . 1 9 9 2 ) (i n terna l qu o tat ion m ark s o m itted). IV . A N A L Y S IS A r t i cl e I V of the U ni t ed St at es C ons t i tut i on r eads as fol l ow s : “Ful l Fai th and C r edi ts hal l be gi ven i n eac h St at e t o the publ i c A ct s , R ecor ds , and j udi ci al Pr ocee di ngs o f e v e ryo th e r S tate . A n d th e C o n g re ss m a yb yg e n e ra l L a w s p re sc rib e th e M a n n e r in w hi ch s uch A ct s , R ecor ds , and Pr ocee di ngs s hal l be pr oved, and the Effec tther eof. ” W i th thi s cons t i tut i onal pr ovi s i on i n m i nd, the Ful l Fai th and C r edi tA ctm andat es that j udi ci al pr ocee di ngs “s hal l have the s ame ful l fai th and cr edi ti n everycourtw i thi n the U ni t ed St at es . . . as theyhave byl aw orus age i n the court s of s uch St at e . . . fr om w hi ch theyare t aken . ” 28 U . S . C . § 1 73 8. R el evan tt o o ur case, “a j ud gm ent ent ered i n a clas s act i on . . . i s pr es um pt i vel yent i t l ed t o ful l fai th and cr edi tunderthe expr es s t erm s of the A ct . ” Ma tsu sh ita E lec . In d u s. C o . v. E p ste in , 5 1 6 U .S . 3 6 7 , 3 7 4 (1 9 9 6 ). H e n c e , “[ i]t is now s ett l ed thata j udgm entpur s uantt o a cl as s s ett l ementcan ba rl at ercl ai m s bas ed on the al l egat i ons under l y i ng the cl ai m s i n the s ett l ed ac t i on. ” I n r e Prudent i alI

ns . C o. of A m . Sal es P r act i ce Li t ig. , 261 F. 3d 355, 366 ( 3d C i r . 2001) . T hi s i s true eve n w hen a s ett l ementi n s t at e courtext ends t o cl ai m s overw hi ch the fe der al court s have e xcl us i ve ju ri s d ic tio n . S e e M

a tsu sh ita , 5 1 6 U .S . a t 3 7 5 . U nderthe Ful l Fai th and C r edi tA ct , w e ar e r equi r ed t o “i nqui r e i nt o the s cope of15

s ta te p re c lu s io n la w ” to d e te rm in e th e a p p lic a b ility o f a re le a s e . G r i m es v. V i tal i nk C om m ’ ns C or

p. , 17 F. 3d 1553, 1562 ( 3d C i r . 1994) . T he U . S. Supr eme C our tout l i ned the pr operappr oach i n Ma tsu sh ita . “W h e n f a c e d w ith a sta te c o u rt ju d g m e n t re latin g to an exc l us i vel yfede r al cl ai m , a fe der al courtm us tfi r s tl ook t o the l aw of the r ender i ng St at e t o as cert ai n t he ef fec tof the j udgm ent . ” M a tsu sh ita , 5 1 6 U .S . at 3 7 5 . If sta te pr ecl us i on l aw bar s the cl ai m , “the fe der al courtm us tnextdeci de w hether , as an exce pt i on t o § 1738, i ts houl d r efus e t o gi ve [the j udgm ent ] pr ecl us i ve ef fec t . ” I d. (i n terna l qu o tat ion m ark s o m itted). W i th thatappr oach i n m i nd, “D el aw ar e has tr adi t i onal l ytr eat ed the i m pactof se ttl e m e n t ju d g e m e n ts o n su b se q u e n t li tig a tio n in sta te c o u rt a s a q u e stio n o f c laim pr ecl us i on. ” I

d. at376. I ndeed, D el aw ar e “f ol l ow s the us ual rul e thata j udgm enti n one cas e cons t i tut es a fi nal det erm i nat i on conce rni ng ques t i ons of fa ctl i t i gat ed bythe part i es . ” G r i m es , 17 F. 3d at1563. “To barfutur e cl ai m s , a r el eas e must( 1) appl yt o the pl ai nt i ff; ( 2) ci r cumscr i be the as s ert ed cl ai m s ; and ( 3) be l egal l yenfor cea bl e. ” McG ow an I nves t ors LP v. Keef

e Bruye t t e & W

oods , I nc. , 5 4 0 F . S u p p . 2 d 5 7 1 , 5 7 6 (E .D . P a . 2 0 0 8 ).

“ [ T ]h e lim iti n g p rin c ip le is th a t a s e ttl e m e n t ca n re lea se c laim s th a t w e re n o t sp e c if ica lly as s ert ed i n t he s ett l ed ac t i on, butonl yi f thos e cl ai m s ar e ‘ bas ed on the s ame i dent i cal fac tual pr edi cat e orthe s ame se tof oper at i ve fa ct s as the under l y i ng act i on. ’ ” I n r e Phi la. St ock Exch. , I

nc. , 945 A . 2d 1123, 1146 ( D el . 2008) ( en banc ) ( quot i ng U ni Super, Ltd. v. N ew s C or p. , 8 9 8 A .2 d 3 4 4 , 3 4 7 (D e l. C h . 2 0 0 6 )). In o th e r w o rd s, “ a re lea se is o v e rly16

b ro a d if it rele a se s c laim s b a se d o n a c o m m o n se t o f tan g e n tial f

a c ts, a s o p p o se d to oper at i ve orcor e fa ct s . ” U ni Super , 898 A . 2d at347. T urni ng now t o t he s t at e courtpr ocee di ngs i n ouract i on, the obj ect or s chal l enged th e re lea se lan g u a g e “ o n lyin so f a r a s it w o u ld re lea se c laim s re latin g to

‘ D emut ual i zat i on. ’ ” P hi la. St ock Exch. , 945 A . 2d at1147. T he C hance ryC our tr ej ect ed th i s c h a l l e n g e , c o n c l u d i n g th a ti twa s “ i n d i s p u t a b l e ” th a tth e d e mu tu a l i z a t i o n c l a i ms

“ a rise o u t o f

th e c o m m o n n u c leu s o f o p e ra tiv e f

a c ts a ss e rte d in th e [ sta te c o u rt] compl ai nt . ” S. A . 210. T he C hance l l oradded thattheyw er e partof the “e nt i r e mi x of claim s tha t w ere b ef

o re this C o u rtin o n e f

ash ion , fo rm o r an o ther, an d that I he ard count l es s ar gum ent s abouti n di s coverydi s put es and i n m ot i on pr act i ce, and I am con fi den tno w are pr op erl yencap sul at ed u nd er D el aw are l aw bythe scop e of the rel ease in th is s e ttle m e n t.” A .A . 2 1 1 . O n appea l , the D el aw ar e Supr eme C our tagr eed. I texpl ai ned that“the D emut ual i zat i on w as both t he s ubj ectof cl ai m s of w r ongdoi ng i n the compl ai ntand of i nt ens i ve pr etr i al di s covery. . . . I n addi t i on, the D emut ual i zat i on w as the s ubj ectof documentdi s coveryr eques t s , i nt err ogat or i es , and depos i t i on ques t i ons of [Exchange ] w i tnes s es . ” P hi la. St ock Exch. , 945 A . 2d at1147- 48. G i ven thi s , the C our tconcl uded that“the D emut ual i zat i on w as nota tr ans act i on thatw as ‘ unr el at ed’ or‘ t angent i al ’ t o or

‘ r emot e’ fr om the conduc tthatform [ed] the bas i s forthe s peci fi c cl ai m s forr el i ef a s s e rt e d ” in th e s ta te c o u rt a c tio n . I d. at1148. I ns t ead, i tw as atthei rcor e.17

In th e e n d , itis u n d isp u ted th a t th e a p p e llan ts b e f o re u s w e re m e m b e rs o f th e sta te c o u rt c las s a n d th a t th e C h a n c e ryC o u rt (a f f irm e d b yth e D e law a re S u p re m e C o u rt) co n clud ed that “a ll m em b ers o f th e C lass are b o u n d ” b ythe ju d g m en t. S . A . 2 1 3 . F u rth er, the br oad r el eas e negot i at ed bythe part i es i n s t at e court , byi t s veryt erm s , cover s the cl ai m s thatthe appe l l ant s have br oughti n thei rfede r al act i on. I ndeed, the s ett l ement release d all claim s arisi n g o u t of o r relat ing to “th e su b

ject m att er [ o f th e state c o u rt act i on] , i ncl udi ng w i thoutl i m i t at i on anycl ai m s ( w hetherornotas s ert ed) i n anyw ay re late d to : (i) D e m u tu a liza tio n .” S .A . 7 5 -7 6 . F in a lly , the re lea se itse lf is c o n sis ten t w ith b ro a d re le a s e la n g u a g e th a t w e h a v e u p h e ld in p re v io u s c a s e s . See, e. g. , I n r e Prudent i al I ns . C o. of

A m . Sal es P r act i ce Li t ig. , 2 6 1 F .3 d a t 3 6 7 ; G r i m es , 17 F . 3d at15 63 . A s a re su lt, th e o n lyre m a in in g q u e stio n is w h e th e r a n ye x c e p tio n to th e F u ll F a ith a n d C re d it A ctappl i es t o t he fe der al act i on. W i thouts uch an e xcept i on, the appe l l ant s ar e pr ecl uded bythei rr el eas e fr om br i ngi ng thatact i on. Forthe r eas ons thatfol l ow , w e di s cern none. A . D ue P roce s s and P ers onal Juri s di ct i on W e turn fi r s tt o t he appe l l ant s ’ due pr oces s chal l enges . I n r el evantpart , theyar gue that“the manneri n w hi ch the D el aw ar e court s pr ocee ded r es ul t ed i n s uch a de ni al of due pr oces s . . . thatful l fai th and cr edi tm us tbe deni ed t o the D el aw ar e j udgm ent . ” A p p e llan ts’ B r. 3 6 . T h e ir sp e c if ic a rg u m e n ts in c lu d e sc a ttere d c h a llen g e s to : 1 ) th e sta te c o u rt’s ju risd ictio n to re lea se th e f e d e ra l cla im s b ro u g h t in th e c u rre n t su it; 2 ) th e sta te court ’ s appl i cat i on of D el aw ar e C hance ryR ul e 23 i n cert i fy i ng the non- opt - outcl as s ; 3)18

the abi l i tyof cl as s couns el and the cl as s r epr es ent at i ve t o r epr es entadequa t el ythe in ter e sts o f

th e a p p e llan ts in sta te c o u rt; an d 4 ) th e a d e q u a c yo f c las s n o tice p ro v id e d to absent cl ass m em bers. W e rej ecteach o f t hese ch al l eng es. W h en p rese n ted w ith a se tt lem en t i n the c lass ac ti o n co n text, “the co u rth as m o re than a mi ni s t er i al dutyt o ent erthe negot i at ed s ett l ementand r el eas e as a j udgm ent . ” G r i m es , 1 7 F .3 d a t 1 5 5 7 . In d e e d , it“ h a s a n e lev a ted d u tyto e n su re th a t th e se ttl e m e n t is fai rand ade quat e t o al l the pl ai nt i ff c l as s m ember s , notj us tthe named r epr es ent at i ves w ho negot i at ed i t s s ubs t ant i ve t erm s . ” I d. “Thi s dutyi s part i cul ar l yacut e w hen . . . t he cl as s m ember s have be en deni ed an opportuni tyt o optoutof the put at i ve cl as s , ” as w as th e c a s e h e re . I

d. a t 1 5 5 7 -5 8 . E v e n if c las s m e m b e rs w e re “ n o t p ro v id e d w ith a n o p p o rtu n ityto o p t o u t, th e sta te courtha[s ] the r equi s i t e pow ert o bi nd abs entcl as s m ember s as l ong as theyhad m i ni m um cont act s w i th t he forum and theyw er e nototherw i s e deni ed due pr oces s . ” I d. at1558. T o s at i s fydue pr oces s , “the D el aw ar e s t at e courtneed onl yhave pr ovi ded

‘ not i ce pl us an opportuni tyt o be hea r d and part i ci pat e i n the l i t i gat i on. ’ ” I d. at1560 ( quot i ng P h ill ip s P e tro leu m C o . v. Sh u tts , 472 U . S. 797, 812 ( 1985) ) . N ot i ce s at i s fi es due pr oces s w hen i ti s “s entbym ai l t o eac h cl as s m ember , ” “c ont ai n[s ] a ful l di s cl os ur e of the p ro p o se d se ttl e m e n t an d its ra m if ica tio n s,” a n d “ n o tifie [ s] a ll cla ss m e m b e rs th a t a hear i ng t o det erm i ne the fa i r nes s and r eas onabl enes s of the s ett l ementha[s ] been s chedul ed. ” I

d. a t 1 5 6 0 . “O n c e a c o u rt h a s d e c id e d th a t th e d u e p ro c e ss p ro tec tio n s d id19

occurfora part i cul arcl as s m emberorgr oup of cl as s m ember s , the i s s ue maynotbe r el i t i gat ed. ” I

n r e D i et D r ugs , 4 3 1 F . 3 d 1 4 1 , 1 4 6 (3d C ir . 2 0 0 5 ). In o ther w o rds, “[ n ]o col l at er al r evi ew i s avai l abl e w hen cl as s m ember s have ha d a ful l and fa i rhear i ng and have ge ner al l yhad thei rpr ocedur al r i ght s pr ot ect ed dur i ng the appr oval of the Sett l ement A gr eement . ” I

d. T h is w a s th e c a s e h e re . W e ar e gui ded i n ouranal y s i s byourpr evi ous deci s i on i n G r i m es . T her e, an ac ti o n w as b rou g h t i n fe d era l cou rtrelati n g to a m erg er a g ree m en t betw ee n tw o D elaw are corpor at i ons . T he fe der al act i on i nvol ved cl ai m s forvi ol at i ons of s ect i ons 10( b) and 1 4 (e ) o f th e E x c h a n g e A c t. P a ra llel a c tio n s w e re b ro u g h t in sta te c o u rt, cla im in g sta te la w v io la tio n s . B e f

o re th e f e d e ra l a c tio n w a s re s o lv e d , th e p a rt ie s s e ttle d in s ta te c o u rt . T hi s s ett l ementi ncl uded a br oad r el eas e of “ al l cl ai m s ar i s i ng fr om the mer ger tr ans act i on. ” G r i m es , 17 F. 3d at1563. G r i m es and otherobj ect or s oppos ed the s ett l ement , butthe C hance r yC our tul t i m at el yappr oved i t . G r i m es l at erappea l ed t o t he D el aw ar e Supr eme C our t( w hi ch af fi r m ed) and fi l ed a pe t i t i on fora w r i tof cert i orari (w h ic h th e U .S . S u p re m e C o u rt d e n ie d ). I n G r i m es , the over ar chi ng ques t i on befor e us w as “w hethera s t at e court , w hi ch does nothave s ubj ectm att erj ur i s di ct i on t o hearexcl us i ve fe der al cl ai m s , m ay neverthel es s appr ove a s ett l ementand r el eas e of thos e cl ai m s bythe part i es . ” I d. a t 1 5 5 7 . W e hel d thati tcoul d, expl ai ni ng that“the D el aw ar e courtdi d notpurpor tt o exer ci s e any i nher entpow ert o r el eas e ca us es of ac t i on thati thad no j ur i s di ct i on t o ent ert ai n. ” I d.T he n oti ce prov i ded i n the st at e cou rtact i on sat i sfi ed an yreas on able due p rocess 7 conce rns . T he C hance r yC our tconcl uded as m uch, not i ng thatthe s ett l ementnot i ce w as “more than ade quat e. ” S. A . 210. T he D el aw ar e Supr eme C our tal s o added thatthe s ett l ementnot i ce “ di s cl os e[d] al l the i nform at i on neede d forcl as s m ember s t o m ake a n i nform ed dec i s i on r egar di ng the fa i rnes s of the s ett l ement . ” P hi la. St ock Exch. , 945 A . 2d at1135 n. 13. W e agr ee. A tthe veryl eas t , i tpr ovi ded the appe l l ant s ( as w el l as other obj ect or s ) w i th s uffi ci entnot i ce t o chal l enge the fa i rnes s of the s ett l ement , as w el l as t he p ro p o se d a llo c a tio n p lan , in s tate c o u rt. F in a lly , w e c o n c lu d e th a t n o tice in th e sta te c o u rt a c tio n d id n o t n e e d to c o m p ly wi th r e q u i r e me n t s o f

th e P r i v a t e S e c u r i t i e s Li t i g a t i o n Re f o r m Ac t( “ P S LRA” ) , 1 5 U. S . C. § 7 8u -4, for sett l em ents i n fed eral securi t i es act i on s. A l tho ug h p erhaps reas on able as a 20 I ns t ead, i t“onl yact ed t o ent era s ett l ementagr eementthatw as i ni t i at ed, negot i at ed, and adopt ed bythe part i es t o a l aw s ui tthatw as pr oper l ybefor e i t . ” I d. In su c h a c o n tex t, “the s ett l ementand r el eas e of c l ai m s [w a] s a contr actthatnotonl y[w a] s agr eed upon by the part i es , butal s o [w a] s s t amped w i th the i m pr i m aturof the courtw i th j ur i s di ct i on over the part i es and the s ubj ectm att erof the l aw s ui t . ” I d. A s t o due pr oces s , w e not ed that“obj ect i ng cl as s m emberm us tbe gi ven an oppor tuni tyt o addr es s the courtas t o the r eas ons the pr opos ed s ett l ementi s unfai rand i nadequa t e. ” Id . at1558. “[T] he fe der al pl ai nt i ffs . . . w er e pr ovi ded w i th s uch an oppor tuni tyi n t he s t at e courtl i t i gat i on. ” I d. A s such, w e con cl ud ed thatthe clas s m ember s “had be en gr ant ed al l the pr oces s thatw as due . . . . [They ] w er e pr ovi ded an o p p o rtu n ityto b e h ea rd, ac tuallyli ti g ated , an d lost on the issu e o f w h ethe r th eyw ere depr i ved due pr oces s i n t he s t at e courtpr ocee di ng. ” I d. T h e sa m e m a yb e sa id h e re , as th e a p p e llan ts h a v e re c e iv e d sim ilar p ro c e ss , as w e ll as adequa t e not i ce. I ndeed, theypart i ci pat ed ext ens i vel yi n the s t at e courtl i t i gat i on 7m att erof pol i cy , the appe l l ant s offe r ed l i t t l e l egal s uppor tforthei rar gum entt o the

contr ary . I ndeed, the obj ect or s even c oncede d i n C hance ryC our tthatther e w as “no m andat ed obl i gat i on” t o fol l ow thes e s t atut oryr equi r ement s . S. A . 199. I ns t ead, the obj ect or s r eques t ed thatthe C hance ryC our tadoptthe PSL R A ’ s r equi r ement s as “a pol i cy

. . . in D elaw are . ” S . A . 1 9 9 (em p h asis ad d ed ). T h e C h a n c e ryC o u rt w e n t o u t o f its w a yto n o te th a t “[ t]h is c a se h a s b e e n re m a rk a b ly 8 con t enti ou s i n ev eryph ase, from the li t i gati on st age ri gh tdo w n to the set t l em ent phase and, nott o be out done, now atthe al l ocat i on phas e. ” S. A . 288. 21 pert ai ning t o the fai rness of the set t l em ent and all ocati on plan. T his i s al l the p rocess 8 th a twa s d u e t o th e m. On a p p e a l , th e a p p e l l a n t s h a v e l a r g e l yr e c y c l e d ma n yo f th e s a me d u e p ro c e ss a rg u m e n ts th a t th e yh a d ra ise d a lre a d yin sta te c o u rt (a n d th a t th e sta te c o u rts h ad rejected ). U n d er G r i m es , the appe l l ant s ar e notperm i t t ed t o “r el i t i gat e i n fede r al courtthe . . . fai r nes s of the s ett l ementthat[w as ] concl us i vel ydet erm i ned i n the D el aw ar e pr ocee di ng. ” I d. a t 1 5 6 2 . I n addi t i on, as i n G r i m es , the appe l l ant s had s uffi ci entm i ni m um cont act s w i th t he s ta te f o ru m to s u p p o rt th e s ta te c o u rt ’s ju ri s d ic tio n o v e r t h e m (a n d th e irre la te d c la im s ). I n s hor t , the appe l l ant s ow ned D el aw ar e s t ock and “ purpos eful l yavai l ed [themsel ves ] of th e p riv ileg e o f

h a v in g th e D e law a re C o u rt o f C h a n c e ryf

in a lly , an d in a sin g le la w su it, det erm i ne the ade quacyof the s ett l ementagr eement . ” I d. a t 1 5 5 9 . T h e a p p e llan ts obj ect ed t o the s ett l ementand the al l ocat i on pl an, appea r ed i n the C hance ryC our tfor both hear i ngs , and ( i n t he ca s e of one of the appe l l ant s ) appea l ed the fa i rnes s of the se ttl e m e n t all th e w a yto th e D e law a re S u p re m e C o u rt. I n the end, the appe l l ant s ’ chal l enges t o the s t at e courtr el eas e on due pr oces s andI ndeed, the appe l l ees ar gue thatthe appe l l ant s offe rs o l i t t l e s uppor tforthi s ar gum ent 9 th a t th e yh a v e e f

f e c tiv e lyw a iv e d it. 22 ju risd ictio n a l g ro u n d s f a il. B . T he F ul l F ai t h and C redi t A ct F inally , the a p p ell an ts argu e tha t th e P S L R A an d S ec u ri ti es L it igation U n ifo rm S tan d a rd s A c t (“ S L U S A ” ), 1 5 U .S .C . § 7 8 b b , im p lied lyre p e a led th e F u ll F a ith a n d C re d it A ct . T his argum ent al so fai l s. I n M a tsu sh ita , the S u p re m e C o u rt a c k n o w led g e d th a t ith a s “ se ld o m , if e v e r, h e ld th a t a f e d e ra l s ta tu te im p lie d ly re p e a le d [ th e F u ll F a ith a n d C re d it A c t] .” 5 1 6 U .S . a t 3 8 0 . T he C our texpl ai ned thatthi s w as “due t o the r el at i vel ys tr i ngents t andar d fors uch fi ndi ngs , namel y , thatther e be ‘ i r r econc i l abl e conf l i ct ’ betw een the tw o fede r al s t atut es . ” I d. T he C our thel d t hatthe exc l us i ve fe der al j ur i s di ct i on pr ovi s i on of the Exchange A ct d id n o t im p lied lyre p e a l th e F u ll F a ith a n d C re d it A c t. T he appe l l ant s offe rl i t t l e s uppor tforthei rar gum ent s underthe PSL R A and SL U SA

— w hetheri n t he form of s t atut oryt ext , l egi s l at i ve hi s t ory , ordoctr i ne. I ns t ead, 9 the yof fe rva gu e a r gu ment s fr om s t a tut orypu rpo s e , no t i ng tha tthe PSLR A a nd SLU SA w er e ena ct ed t o vi ndi cat e a l ar gerpol i cypr efe r ence of gr ant i ng contr ol of fe der al s ecur i t i es act i ons t o t he cl as s m emberw i th the l ar ges tfi nanci al i nt er es t . T hi s i s not enough t o m eetthe hea vybur den of e s t abl i s hi ng thatthes e s t atut es i m pl i edl yr epea l ed the F u ll F a ith a n d C re d it A c t.W e al s o denythe appe l l ant s ’ m ot i on forl eave t o fi l e a s uppl ement al br i ef. W e agr ee 10 w ith the a p p ell ee s tha t add it ion al brief ing is un n ec essa ry , as th e re ce n t Su p rem e C o u rt d e c isio n s ra ise d b yth e a p p e llan ts in th e ir m o tio n d o n o t alte r th e d isp o sitio n o f th is a p p e a l. 23 * * * * * F o r th e se re a so n s, w e a f f irm th e ju d g m e n t o f

th e D istric t C o u rt. 10