*Long filed his objections on May 19, 2010. On June 14, 2010

the court invited any party who opposed his objections to file a

written response, but it stated that Long could not file a reply

unless the court requested a reply or granted Long’s request for

 IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF TEXAS

WICHITA FALLS DIVISION

VICTORIA KLEIN, et al., §

 §

Plaintiffs, §

 § Civil Action No. 7:03-CV-102-D

VS. § (Consolidated with 

 § Civil Action No. 7:09-CV-094-D)

O’NEAL, INC., d/b/a O’NEAL, §

JONES & FELDMAN §

PHARMACEUTICALS, et al., §

 §

Defendants. §

MEMORANDUM OPINION

 AND ORDER 

In accordance with the court’s instructions in its memorandum

opinion and order approving the settlement in this class action,

see Klein v. O’Neal, Inc., ___ F.Supp.2d ___, 2010 WL 1435161, at

*42 (N.D. Tex. Apr. 9, 2010) (Fitzwater, C.J.) (“Klein IV”), class

plaintiffs and defendants submitted proposed final judgment forms

for the court’s consideration. The court held a status conference

hearing on June 11, 2010 at which it resolved the differences that

remained between the class plaintiffs and defendants concerning the

terms of the final judgment. Class member Lawrence V. Long, Jr.

(“Long”), who opposes the settlement, also objects to certain

provisions in the proposed final judgment. The court overrules the

objections for the reasons that follow and enters a final judgment

contemporaneously with this memorandum opinion and order.*

 

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leave to file a reply. Because the court concludes that the

positions of the litigants have been fairly presented in the papers

on file, it exercises its discretion to address Long’s objections

without granting him leave to file a reply.

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I

In Klein IV the court described one of the key components of

the proposed settlement: 

As a condition of obtaining an individual

award under the Settlement Agreement, a class

member is required to execute a release of all

liability for defendants and their insurers.

Furthermore, the liability release covers “all

Persons who provided medical or health care

services to any individual who allegedly

received E-Ferol, including but not limited to

hospitals, doctors, [and] nurses.” The

release grants an unconditional release and

discharge of all claims and causes of action

“connected in any manner or fashion with

E-Ferol.”

Klein IV, 2010 WL 1435161, at *6 (quoting settlement agreement)

(citations omitted). When the court approved the settlement

agreement, it overruled Long’s objections to this release. The

court found “that the [release] provision is essential to the

viability of the proposed settlement and that the Settlement

Agreement, with the release included, is fair, reasonable, and

adequate to the class as a whole.” Id. at *28. 

The proposed judgment contains the following two provisions

that seek to implement the release terms from the settlement

agreement. Long objects to them on various grounds. The

provisions state:

 

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4. As provided in the Settlement Agreement,

each Released Claim of each of the

Releasing Parties is hereby forever

released, discharged, and extinguished as

against the Released Persons and the

Medical Releases.

5. As provided in the Settlement Agreement,

all Releasing Parties [class members] are

permanently enjoined from commencing,

continuing, or prosecuting, directly or

indirectly, representatively,

derivatively, or in any other capacity,

and of the Released Claims against any of

the Released Persons or Medical Releases

in this or any other proceeding,

tribunal, or forum. 

Long’s overall concern centers on the impact of these

provisions on a lawsuit that he recently filed in Ohio state court

against the defendants, their insurers, and two physicians (the

“Ohio Suit”). The Ohio Suit is currently stayed pending the

outcome of this class action. 

First, Long asserts that the judgment should not include an

“injunction” that precludes class members from prosecuting actions,

as proposed in ¶ 5. He posits that the settlement agreement, as

approved by the court in Klein IV, calls for a release of claims

against the defendants, their insurers, and third-party medical

providers, not an injunction. Long does not explain the

significance that he ascribes to the distinction between a complete

release of all claims against such parties and an injunction that

precludes suing on released claims. 

Second, Long argues that——even if the court includes the

 

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injunction language in the judgment——the injunction should not

prohibit “continuing” a lawsuit. Because the Ohio Suit is the only

such lawsuit currently pending, Long maintains that the word

“continuing” is directed specifically at the Ohio Suit. He also

argues that, because the Ohio Suit is stayed pending this class

action, there is no need for defendants or class plaintiffs to be

concerned about the Ohio Suit’s being maintained until this class

action is concluded.

Third, Long requests that the court add the phrase “from and

after the Effective Date of the Settlement Agreement” to the end of

¶¶ 4 and 5. He posits that, otherwise, the disputed provisions

could be read to apply immediately upon the issuance of judgment,

and thus would preclude him from maintaining the stayed Ohio Suit

pending an appeal of this case.

II

The court overrules Long’s objections. The court agrees that

the words “injunction” or “enjoin” do not appear in the settlement

agreement approved in Klein IV. But this does not mean that the

judgment cannot include an injunction as a means of enforcing the

terms of the settlement. “It is now settled that a judgment

pursuant to a class settlement can bar later claims based on the

allegations underlying the claims in the settled class action.” In

re Prudential Ins. Co. of Am. Sales Practice Litig., 261 F.3d 355,

366 (3d Cir. 2001). In Prudential Insurance the Third Circuit held

 

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that where, as here, a class action settlement agreement provides

for a comprehensive release of certain claims, a district court may

enjoin such litigation as an exercise of its “exclusive

jurisdiction to oversee the implementation of the settlement and

the judgment.” Id. at 367. Such a power is necessary to “protect

the integrity of a complex class settlement.” Id. at 367-68. The

panel concluded that “[a]s part of the settlement agreement class

members such as the [objectors] agreed to release certain claims

against Prudential. The agreement could not have been enforced

without the injunction that the [objectors] now challenge.” Id. at

370 (holding that issuance of such injunctive relief was consistent

with both the Anti-Injunction Act, 28 U.S.C. § 2283, and the AllWrits Act, 28 U.S.C. § 1651(a)).

 The court holds that the injunctive relief is consistent with

the settlement agreement and necessary to protect the integrity and

enforcement of this complex class settlement. As discussed in

Klein IV, there was significant evidence presented at the fairness

hearing that defendants insisted on a full release of claims

covered by this class action. Class plaintiffs’ counsel “testified

that the release of third-party medical providers was a key demand

that defendants made from the beginning of the negotiations.”

Klein IV, 2010 WL 1435161, at *27. Likewise, the mediator who

assisted the parties in reaching the settlement averred that

defendants “were adamant that they would not pay substantial

 

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amounts of money if they would have to continue to litigate[.]”

Id. Defendants’ counsel testified that the complete release of all

claims was a non-negotiable point for his clients. Id. at *28. In

Klein IV the court gave weight to his testimony that “[t]he

insurers were concerned that, if the release were not included, the

sizeable payouts under the Settlement Agreement would fail to

provide finality.” Id. Defense counsel concluded that “the

insurers believe that if the medical providers’ claims are not

dismissed we could be paying 110 million dollars and still have to

deal with a lot of the same issues we’ve been dealing with for a

lot of years.” Id.

The court found that “defendants’ desire to settle on terms

that eliminate the risk of further liability or additional E-Ferol

litigation is reasonable.” Id. The court noted in a previous

opinion in this case that, “[i]n a class action settlement setting,

defendants seek and pay for global peace——i.e., the resolution of

as many claims as possible.” Klein v. O’Neal, Inc., 2009 WL

1174638, at *3 (N.D. Tex. Apr. 29, 2009) (Fitzwater, C.J.).

Defendants’ willingness to settle was motivated by the fact that

doing so would avoid additional lawsuits, even ones where liability

was doubtful. “[E]ven if defendants could not be held liable, they

might face the expenses and burdens of litigation, despite paying

millions of dollars to settle with the very plaintiffs who would

bring the lawsuits.” Klein IV, 2010 WL 1435161, at *28.

 

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Although the settlement agreement did not explicitly refer to

an “injunction” as a means of effecting the release from future

liability, such relief is consistent with the agreement and with

the parties’ presentations at the fairness hearing. Defendants

insisted on the release to avoid additional litigation. Although

without an injunction defendants would prevail against such claims,

they would still be required to incur litigation costs. And if,

under the law that applies to such a lawsuit, release is an

affirmative defense, cf. Fed. R. Civ. P. 8(c)(1) (listing release

as affirmative defense), defendants would face not only the expense

of a lawsuit but the burden of establishing an affirmative defense

before they could secure the lawsuit’s dismissal. Their desire to

purchase global peace through the settlement is founded on avoiding

the costs and other burdens of further litigation. 

By enjoining the filing or prosecuting of released claims, the

court gives effect to the settlement’s terms by relieving

defendants of the potential costs of repeatedly defending new

lawsuits. In exchange for such finality, the plaintiff class

receives a substantial sum in settlement. The court holds that the

necessary finality is best achieved through an injunction rather

than through a liability release alone, and that injunctive relief

is required to implement the terms of the settlement agreement. 

Moreover, Long has not demonstrated that the injunction should

not apply to a class member’s “continuing” a lawsuit that is

 

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covered by the release, or that the court should explicitly

condition ¶¶ 4 and 5 on the “Effective Date” of the settlement

agreement. Both paragraphs begin with the phrase: “As provided in

the Settlement Agreement,” which accomplishes the goal that Long

seeks to achieve through these objections. As Long recognizes, the

settlement agreement provides that it does not have force

(including with respect to any releases) until the “Effective

Date,” which is after this class action and any appeals are

finalized. Thus, consistent with the representation of defendants

in response to Long’s objections, a judgment containing the

proposed language would not impact Long’s “continuing” Ohio Suit

until that time. The court has no reason to believe, and Long has

offered none, that the terms of the release and the injunction

should not immediately become effective in the Ohio Suit as of the

Effective Date. But nothing in the proposed judgment will impact

Long’s Ohio Suit until then, and thus Long is not prejudiced by the

language to which the parties have now agreed.

* * *

For the foregoing reasons, Long’s objections to the proposed

final judgment are overruled, and the court will file today a Rule

 

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54(b) final judgment.

SO ORDERED.

June 18, 2010.

_________________________________

SIDNEY A. FITZWATER

CHIEF JUDGE

 

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